A Walnut Street building where John Lennon and Roger Ailes once worked just sold for a steep discount

Another Philadelphia office building has sold for a small fraction of what it last changed hands for, this time in the heart of Center City’s retail district.

The six-story property at 1619 Walnut St. was purchased by Marc Zollinger, a Swiss investor and CEO of the company MZP AG, which is listed as the purchaser. Zollinger’s LinkedIn profile shows that he formerly worked in Philadelphia for Miller Investment Management.

The property sold for over $5 million, a dramatic decrease from when the seller Nuveen Real Estate purchased it in 2013 for over $19 million, according to a person familiar with the sale.

Neither Nuveen or Zollinger responded to a request for comment.

The office space in 1619 Walnut is wholly vacant, although real estate firm Keller Williams still holds a lease for two floors of now empty office space.

The retail picture at the property is more positive, with shoe seller New Balance occupying nearly 4,000 square feet on the ground floor with a lease that expires in 2035.

The sale price is seen as an unusually good deal for the location. Although the second tier office space available in the building is the exact kind of product that has been hard hit by the rise of hybrid work since the COVID-19 pandemic, the upper floors of 1619 Walnut are seen as ideal for conversion into apartments.

“The sale price is an anomaly. … [Zollinger] bought it at an astoundingly good price,” said Larry Steinberg, head of the urban retail division for real estate services firm Collier’s Philadelphia office, who was not involved with the deal. “It would make a lovely residential conversion.”

The property’s sale was handled by a JLL, a real estate services company, which advertised the building as an ideal office-to-residential conversion. The property enjoys the most flexible zoning in Philadelphia’s code, making such a transition relatively simple.

“With rectangular floorplates measuring approximately 4,900 square feet, the floor plan of the building makes it an ideal candidate for a conversion to boutique residential,” reads JLL’s promotional materials for the sale. “Given the existing layout of each floor, the redevelopment would accommodate a variety of modern open layouts with access to an abundance of natural light.”

JLL estimates that the office floors could accommodate up to 20 residential units, depending on the size of the apartments.

The building was purpose built for KYW radio in 1937 and, later, its television division. The influential Mike Douglas Show was based out of the building for much of its run, employing Roger Ailes, later of Fox News fame, in the late 1960s. In the early 1970s, John Lennon and Yoko Ono guest-hosted the show from the building for a week, interviewing people including Chuck Berry and Ralph Nader.

More recently, between 1997 and 2009, 1619 Walnut was home to the influential French restaurant Brasserie Perrier.

JLL’s Jim Galbally, who led the sales team, told real estate analytics firm CoStar that the purchase represented a “rare opportunity to acquire a retail, mixed-use asset along Walnut Street, Philadelphia’s premier high avenue.”