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PHILADELPHIA-Under a 60-year ground lease from the University of Pennsylvania, Houston-based Hanover Co. will break ground this Friday for a mixed-use residential rental property with ground-floor retail at 34th and Chestnut streets. University of Penn acquired the land from Redevelopment Authority of Philadelphia, an organization created to facilitate the development of underutilized property, and has been operating it as a parking lot.

The all-in cost of the project is estimated at $100 million. The property will contain 290 residential rental units, 300 parking spaces and approximately 25,000 sf of street-level retail and connect with the Sheraton Hotel to the west. It is "part of the university's real estate development strategy of offering more residential and retail opportunities in University City," according to a U of Penn spokesman, who adds that the streetscape will also "connect Penn to the Science Center and Market Street to the north.

"The plan is to open apartments for leasing in spring 2007 with a full opening in fall 2007," the spokesman tells GlobeSt.com. "Retail tenants are not yet secure, but brokering is under way." Hanover stepped in after an initial bidder's plan fell through, according to Brandt Bowden of Hanover. The building footprint is approximately 325,000 sf, and units will range in size from about 700 sf to 1,650 sf with rental rates of about $2 per sf a month.