A development site in Rittenhouse Square is up for sale

Philadelphia master lease development up for sale

US: A development site in Philadelphia’s Rittenhouse Square neighbourhood that is master leased to short-term rental / aparthotel firm Sonder is up for sale.

The site at 1620 Sansom Street is owned by New York City-based Bridge Funding and is being marketed for sale by Rittenhouse Realty Advisors (RRA). The property is currently mixed-use with an existing 300-space parking garage situated under a designated space for 208 apartments to be constructed and master leased to Sonder.

Bridge Funding says it wants to secure either a joint venture or an outright sale, with RRA managing partner Ken Wellar calling the development venture a ‘very unique opportunity’.

Wellar told “1620 Sansom Street is the first of its kind in which the site is being sold based on the master lease. It is also one of the last remaining CMX-5 parcels left to develop in Rittenhouse Square.”

It is another sign that Sonder is seeking to grow its rapidly-expanding footprint in Philadelphia. Rittenhouse Realty senior associate Chris Egan and associate Seth Douglas recently sold a 15-unit apartment building in the Old City neighbourhood of Philadelphia at 222 Vine Street, which also has a master lease in place with Sonder, to an out-of-state buyer.

Douglas said: “Sonder sees the value in Philadelphia’s growth as a ‘Meds & Eds’ city that brings increased popularity and demand to both the traditional hotel and short-term rental markets.”

Egan said: “The sale further illustrates the trend of out-of-town investors seeking tremendous value in the Philadelphia market. Sonder’s master lease bridged the gap between the developer’s otherwise potentially lengthy lease-up period and the buyer’s 1031 timeline to acquire the asset.”

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