Welcome to the Philly 411, our monthly column onreal estate happenings in the Metro area supplied with intel fromDavid Jacobs, a director at Llenrock Group, a localcommercial real estate investment-banking firm. You can also followtheir blog here.Opinions are the author's own

A New Life for 2040 Market?

The principles of Sant Properties, also principles of sistercompany World Acquisition Partners (WAP), tried to rock thePhiladelphia landscape a few years back when they announced plansto develop the Schuylkill River waterfront in Logan Square, whichwas met with public backlash. Now, they're the ones getting rocked.Sant has been forced to sell some of their assets, as financiersfor some of their halted development projects have come calling.Among those projects is 2040 Market St., in the heart of thePhiladelphia CBD. The former AAA headquarters building was boughtby developer John Turchi in 2004 for about $10.5 million and heflipped it to World Acquisition Partners in 2006 for roughly $20million dollars. Sant/WAP had a similar vision, offering theproperty in 2007 for $30 million, with the potential to verticallydevelop the asset into a true high rise office tower. Yet, it hasremained vacant since acquisition. In an ironic twist of fate, theseemingly failed project may have new life being breathed into it.According to multiple sources, a major accounting firm is in talksto occupy the entire four story office component, and the twolargest drug store chains in the country are in preliminary talksto occupy the ground floor retail component. Sant/WAP may not beable to fully recoup the benefit of this purported activity due toCAP rate expansion. However, if rumors are accurate, the activityshould at least create vibrancy in a once dead block of thecity.

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