Macquarie Group is moving the headquarters of its investment management arm to the former Dow Chemical Co. building near Independence Hall in a deal that will make it the mid-century landmark's new namesake tenant, as it seeks to elevate the global business' profile in the city.
Macquarie Investment Management will occupy 145,000 square feet at the historic 100 Independence Mall West building at Sixth and Market Streets beginning in 2020, Shawn Lytle, the division's deputy global head, said in an interview Tuesday.
The deal gives the asset-management firm naming rights to the nine-story building, its top three floors, a private entrance lobby and — possibly — a roof deck overlooking the city's historic core, according to the property's owner, Keystone Property Group.
"We'll have beautiful views of Independence Hall and the Liberty Bell and the Ben Franklin Bridge," Lytle said. "It's an iconic location and it's an iconic building and it really will help differentiate us."
Macquarie Investment Management was formed in 2010 when Sydney, Australia-based Macquarie acquired Delaware Investments, which was founded in Philadelphia 89 years ago, and combined it with its other global asset-management operations. Now, with $249 billion under management, it is the largest asset manager in the city by the number of people it employs.
The division is now headquartered at the Commerce Square office complex at 20th and Market Streets. Its eastward move comes amid a burst of new development in the area known as Market East and an uptick in interest from businesses attracted to its less-buttoned-down vibe and its proximity to Philadelphia's historic sights.
The American Bible Society selected the area for its new home when it moved to Philadelphia from New York, and discounter Five Below recently opened its new headquarters and Center City flagship store there.
The Jefferson hospital network and medical school, meanwhile, cemented its longtime presence in Market East with a decision last year to consolidate operations at what is now known as Aramark Tower after the food-service company relocates later this year.
And the former Dow building has itself been enlivened by the addition of a branch of the La Colombe Torrefaction Inc. coffee chain on its ground floor and, during summer, the Independence Beer Garden on its patio.
"This is where the cool kids are now going, and that's what we're trying to develop," said Richard Gottlieb, Conshohocken-based Keystone's president and chief operating officer.
The increased desirability of Market East office space is being reflected in rents. During the three months that ended June 30, it cost an average of $1.96 a square foot more to rent Center City office space west of Broad Street than east of Broad Street, down from $3.47 during the period two years earlier, according to data from real estate services firm CBRE.
In the past, "Market Street East was a blighted area," said Bill Luff, founder of the commercial consultancy CRE Visions. "It's now got a revitalization that continues and will even be enhanced with more robust amenities," as projects including the Gallery at Market East mall revamp and the East Market residential and commercial complex are concluded.
Macquarie Investment Management's soon-to-be new home, the 54-year-old former Dow building, is still known to many by the name of its original main tenant Rohm & Haas Co., which was acquired by Dow in 2009. It was designed by architect Pietro Belluschi, whose other works include New York's MetLife Building.
After Dow announced in 2015 that it was relocating 350 employees from the 400,000-square-foot building to Collegeville, Keystone enlisted the help of commercial real estate firm JLL to find a new anchor tenant.
Macquarie Investment Management employs about 550 people at its office in Commerce Square. While its lease at the former Dow building will be for a similar amount of space, its large, uninterrupted floors can be configured to accommodate new hiring, as well as closer collaboration among its staff, Lytle said.
"We wanted to have a more collaborative continuous space," he said. "This space just turned out to be a really good fit for us."
Mitch Marcus, Tom Weitzel, and Ashley Parrillo of JLL represented Keystone in the deal with Macquarie. Macquarie was represented by Glenn Blumenfeld and Scott Crumley of Tactix Real Estate Advisors LLC.