Just when you thought that real estate prices in Center City couldn’t get more bananas, another newsworthy purchase has reset the bar for breathtakingly pricey square footage. This time, we’re not talking about a gleaming steel-and-glass penthouse in a skyscraper, but rather a medical tower. News broke last week that University of Pennsylvania Health System, alias Penn Medicine had snapped up the building in Washington Square for an astounding $648 per square foot, which sets a new record for commercial real estate in the city.
Liberty Property Trust, based in Wayne, sold the twelve-story tower to the hospital network for the phenomenal price of $99.25 million. For those who don’t want to break down the math, that’s 153,242 square feet, each at the cost for which you could buy 2,592 Wendy’s chicken nuggets, a new washer and dryer combo, or a really crappy car. Liberty broke the news in a press release.
The price per square foot is a modest bit higher than the previously most-expensive office space in the City of Brotherly Love, the current U.S. headquarters of GlaxoSmithKline at the Philadelphia Navy Yard, sold also by Liberty to Korea Investment Management Co. for $628 per square foot. The Seoul-based management group was interested in expanding their U.S. portfolio after acquiring the 870,000-square-foot former 30th Street Station post office building, currently an office building called Cira Square.
The tower at 800 Walnut Street was custom built by Liberty in 2013 for Penn Medicine to occupy as a tenant. It was a mutual decision for the medical association to purchase the building outright, as Liberty is currently in the process of divesting itself of its remaining office building inventory to focus on the very lucrative arena of industrial landlording. The retail space underneath the tower and the adjacent parking structure were not included as part of the deal as they are under separate ownership.