The going rate for prime commercial real estate around City Hall ranges from $50 to $100 a square foot, some experts said. There was belief that Borders was paying well below those prices and that the rates would rise considerably as the lease renewed.
Broad One L.P., a New York company, bought the building from Wall Street bank J.P. Morgan in 2003 for $48 million.
The building, which for several decades was the Philadelphia National Bank headquarters, is managed by KTR Capital, which did not respond to an e-mail for confirmation. Office-space leasing at the property is handled by Jones Lang LaSalle.
"It's not unusual to raise the rent for prime space at renewal time," developer Carl Dranoff said.
Dranoff, who is negotiating leases for his residential buildings 777 South Broad St. and Symphony House, farther south along Broad, said finding commercial tenants in this market was getting more challenging.
"National retailers have retrenched, so you are dealing with local entrepreneurs," he said. "It takes longer, and landlords are spending more money on improvements for tenants."
But even in a down economy, don't expect that space at Broad and Chestnut to be vacant for long.
"It is not the worst thing in the world to have a large, attractive space in Center City Philadelphia," said Steven H. Gartner, president of Metro Commercial Real Estate Inc. in Conshohocken.
He added that he was working with several unidentified clients whom "shoppers and city fathers will be happy with."
"There is a line of people forming who want it," said Gartner, pointing out, as many in commercial real estate here do as well, that "there are a whole lot of retailers who want" this kind of large three-level space.
