Mattress Giant occupies the building on a double-net lease, which has six years remaining, according to Brad Nathanson, a director with the national retail group of Marcus & Millichap's local office. He and Elizabeth Rice of the same office represented the seller, Alan Dubin, and the buyer.
"The buyer saw the potential in capitalizing on the below-market rent in a dense infill commercial submarket," Nathanson says. He tells GlobeSt.com the tenant's rate is about 30% below market and that rates in this part of the city now run in the high $20s to $30 per sf.
The location is in an area with about 2.6 million sf of class A and B office space and more than 1,000 hotel rooms, Nathanson says. "There is virtually no vacancy and high tenant demand along City Ave.," he adds.
According to the second-quarter report from Marcus & Millichap, the median price for single-tenant assets throughout the MSA is $179 per sf. The retail vacancy rate in Philadelphia County, according to the report, is 5.5%.
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