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PHILADELPHIA-Birmingham, AL-based AIG Baker Real Estate LLC sold the 30,000-sf retail property at 1723-1729 Walnut St. to New York-based Midwood Management Corp. for $15 million or $500 per sf. The property consists of Talbot's and the former Borders Books store, which was vacated when Borders moved to Chestnut and Broad streets nearly two years ago.

Steven Brown, Midwood's director of operations, tells GlobeSt.com his company plans to divide the space into smaller units for upscale retailers. "We absolutely have tenants in mind and negotiations are under way," he says, adding, "We have more tenant interest than there is space." Larry Steinberg of locally based Michael Salove Co. negotiated the transaction.

Brown declined to identify Midwood's full Center City portfolio, but says it includes approximately 20 retail properties on Walnut and Chestnut as well as the office building at 1530 Chestnut. All of its retail properties, with the exception of just under 1,000 sf at 123 S. 16th St., are leased, according to Brown.

"The renewed trend for in-city living has many retailers frantically seeking locations in prime areas, such as Center City and Rittenhouse Square," according to the Philadelphia portion of the Marcus & Millichap 2005 National Retail Report. The newly acquired Midwood property is a block east of Rittenhouse Square, and Walnut is the city's premier retail street.

"Generally speaking, existing urban retail locations are a hot commodity," the report continues, "and when offered for sale, they typically receive multiple offers and sell for above list price." In contrast to the overall Philadelphia MSA retail vacancy rate of 8.8%, "Center City vacancies have continued to decline and are currently a region-low 5%," according to the report.

Instant Insights /

Midwood Pays $500 Per SF for Center City Retail Site

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