Philly Development Site Under Master Lease on Market for Sale
Rittenhouse Realty is marketing the property as a development opportunity to build 208 apartments (147,070 square feet) above the garage, which will be master leased to Sonder Inc.
PHILADELPHIA—A development parcel in the Rittenhouse Square neighborhood here that is master-leased to short-term rental apartment company Sonder Inc. is on the market for sale.
The development site at 1620 Sansom St. is owned by Bridge Funding of New York City and is being marketed by Rittenhouse Realty Advisors. The property has a CMX-5 zoning and is currently a mixed-use building with 300 garage parking spaces and retail tenants. Rittenhouse Realty is marketing the property as a development opportunity to build 208 apartments (147,070 square feet) above the garage, which will be master leased to Sonder Inc.
Ken Wellar, managing partner of RRA, says, “1620 Sansom Street is a very unique opportunity. It’s the first of its kind in which the site is being sold based on the master lease. It is also one of the last remaining CMX-5 parcels left to develop in Rittenhouse Square.”
Sonder has been expanding its presence in Philadelphia. Rittenhouse Realty’s Chris Egan, senior associate, and Seth Douglas, associate, recently sold 222 Vine St., a 15-unit building in the Old City neighborhood of Philadelphia, which also has a master lease in place with Sonder, to an out of state buyer.
“The sale of 222 Vine further illustrates the trend of out of town investors seeking tremendous value in the Philadelphia market,” Rittenhouse’s Egan notes. “Sonder’s master lease bridged the gap between the developer’s otherwise potentially lengthy lease-up period and the buyer’s 1031 timeline to acquire the asset.”
Douglas adds that Sonder sees the value in Philadelphia’s growth as a “Meds & Eds” city that is sparking increased popularity and demand to both the traditional hotel and short-term rental markets in the city.