The Rittenhouse hits $1,000 per square foot

Posted: July 21, 2014

One thousand dollars per square foot. That's what raw space on the 19th floor of the Rittenhouse Hotel & Condominiums is now fetching - for the first time in the building's history.

Rittenhouse Square and the surrounding blocks have hit the $1,000-per-square-foot price level before, particularly in 1706 Rittenhouse and at 10 Rittenhouse, buildings ringing the historic park.

But the Rittenhouse itself, completed in 1989 as a hotel and condos, at 210 W. Rittenhouse Square, had not hit that price level for raw space. Until now.

The 19th floor was for years the offices of the Rittenhouse's original developer, David Marshall, who owned the entire floor. Up until a few months ago, he and his staff were still working there in cubicles under drop ceilings.

Now it's a blank canvas, with floor-to-ceiling windows and wraparound terraces. Real estate agents Diane Bryant and Margie Wilde are showing the famed Rittenhouse's last remaining open floor as three units. But one buyer could take the whole floor, as well.

What's driving up the price?

"There's little or no inventory" of floors of raw space with terraces and high ceilings around Rittenhouse Square, Wilde says. Cities such as New York, Boston, and Washington "have seen those prices for years. So out-of-town buyers come to Philly and think it's a value." And 1706 and 10 Rittenhouse across the park are sold out.

As a hotel, the Rittenhouse competes with luxury brands such as the Ritz Carlton and the Four Seasons. The Hersha Hospitality Trust purchased the Rittenhouse Hotel in 2012 for $42 million. The condos are owned separately by individuals, but share with hotel guests the main lobby, fitness center, spa, and services such as pet-walking (not just dogs), a chauffeured Mercedes, and restaurants with house accounts.

Whoever buys the Rittenhouse's 19th floor will pay $1,000 to $1,100 per square foot, plus an estimated $300 to $400 a square foot on top of that for a custom, high-end build-out, Bryant estimates. "They can almost build a home in a condo high-rise."

Many purchases at that price are cash deals, the agents add.

"[Buyers] fly in private jets, they have three or four other homes, maybe in Florida, Colorado, or the Shore, and they are busy with their companies," Wilde says. "Sometimes they only see the property once or twice before they buy, and then bring in their architects, lawyers and contractors to do the rest of the meetings."

Why is the original building developer, Marshall, selling the floor now? The price was finally right.

"He always knew he was going to sell. We've overcome the economic turmoil. He saw 1706 and 10 Rittenhouse selling out. And it's an opportune time," says Bryant.

Marshall is selling his 19th floor as three separate units, all with 9- to 12-foot ceilings, views of the park from the east-facing side, and views of West Philadelphia landmarks such as Boathouse Row from the opposite side.

"The first time David [Marshall] talked about selling the 19th floor was 2002," Wilde recalls. "A gentleman living at the Barclay discussed buying the entire floor. David's intention always was that it was great real estate, because the 19th floor was better served as residential than office space."

There's now about 8,800 square feet of blank space, and Philadelphia architect SgRA came in to help design floor plans. One unit on the west side is 2,845 square feet with 520 feet of terrace. The 1902 unit is 3,045 plus 590 square feet of terrace. Estimated price? A cool $3.35 million plus estimated condo fee of $2,700 a month. Buyers can apply for a 10-year tax abatement.

When does Rittenhouse Square break the $1,500-per- square-foot price barrier? "I don't know," Bryant says. "But I hope we sell it."



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