Zurich Insurance Group bought 2.0 University Place, the state-of-the-art Class A Green Office Building at 30 North 41st Street, for $41.25 million, or $420 per square foot, amongst Philadelphia’s highest prices for a commercial property.
The building is fully leased. The U.S. Department of Homeland Security, Citizenship and Immigration serves as the anchor tenant, leasing three floors of the five-story building.
Part of the deal commits the company to completing up to $1.8 million in interior construction work, according to Scott Mazo, founder and managing partner of University Place Associates, LLC.
The building is Zurich’s first Philadelphia real estate acquisition. The structure is one of just a few office buildings in the city with a platinum rating by the U.S. Green Building Council’s LEED program, its highest rating. The edifice includes over 90,000 square feet.
The area is becoming known as The Platinum Corridor, and it is likely that it will soon be surrounded by tech companies. It is already equipped with world-class universities and medical institutions. The neighborhood also includes the expanding Science Center. The intent is to further enhance University City’s emerging status as a premier destination and to demonstrate the commitment to building the highest quality and healthiest workplace.
In October 2015 University Place Associates announced plans to proceed with the construction of 3.0 University Place, at the corner of 41st and Market, adjacent to where 2.0 University Place is now located. Groundbreaking for the new structure is expected to occur later this year. 3.0 University Place is the world’s first commercial office building to be pre-certified LEED v4 Platinum, the highest standard of Leadership in Energy & Environmental Design.
The new building (3.0) will be located at 4101 Market Street, where a Pep Boys used to be. It will incorporate four office floors, covered parking for 106 cars and inviting ground-floor commercial space. It will feature 50,000 square feet of electronically tintable glass from St. Gobain. The glass will help reduce cooling costs. It is capable of changing its tint from almost clear to very dark. The changes are controlled by a small voltage applied to each pane. On hot, sunny days, the glass darkens to control the amount of solar gain transmitted to the interior of the building. That, in turn, means air conditioning costs are lowered by up to 50%.
The existing building (2.0) has lower operation and maintenance costs. The rooftop garden, which overlooks the Philadelphia skyline, improves air quality, conserves energy and reduces storm water runoff. Other features of the building include:
• Efficient heating and cooling systems that reduce internal air pollution.
• Open floor plans that feature an abundance of natural light
• A fitness center
It also incorporates Transit Oriented Development (TOD), a trend that creates walkable communities based near high-quality train systems. This helps lessen the impact of global warming by reducing reliance upon cars and the burning of fossil fuels. High-quality transit further fosters safe and convenient pedestrian and bike-friendly transportation options, thereby supporting the development of vibrant, accessible urban neighborhoods.
This all appeals to socially responsible millennials. In addition, tenants seem to prefer to be in well-run buildings that have the LEED stamp of approval.
2.0 University Place was designed and built under the Keystone Opportunity Zone (KOEZ) program, a unique state sponsored initiative that offers tax incentives to tenants.
Zurich’s acquisition of 2.0 University Place follows Brandywine Realty Trust’s sale earlier this year of the former 30th Street Station Postal building it had renovated into LEED Gold-certified offices for the IRS. Seoul-based Korea Investment Management Company paid approximately $410 a square foot for that building.
Principal/Chief Appraiser of Rittenhouse Appraisals