East Market Project Secures $141 Million Construction Financing

PHILADELPHIA, PA—National Real Estate Development and Ullico Inc. have closed on a $141 million construction loan for 1100 Market Street, paving the way for construction to begin at National's East Market project in Center City.

National also named Tutor Perini Building Corp. as the general contractor for the mixed-use project just east of City Hall, awarding it $117.5 million in contracts. East Market is owned by National Real Estate Advisors, JOSS Realty Partners LLC, Young Capital LLC and SSH Real Estate, and developed by National.

“There are a couple of things we are trying to do with this project,” says Daniel Killinger, managing director of National, who spoke exclusively with GlobeSt.com. “One is to have it be large enough that it can help transform Market Street east of Broad. When we do that, we want to connect between the convention center and Reading Terminal Market as a bridge to the neighborhoods to the south. In order to do that right, it's about making a new place that fits, dynamic exciting place where people want to be, to open their restaurants, open their shops, rent an apartment.”

Residential, retail and 160,000 square feet of office space will become available in the second quarter of 2016, Killinger says. He declined to name other prospective tenants except for MOM's Organic Market, whose lease commitment was announced previously.

The developers have cleared the entire block from 11^th to 12^th Streets between Market and Chestnut Streets, and are prepared to begin construction shortly. Initial elements of the development will be two story retail buildings at 1100 Market, with residential building planned for above it, and a similar building at 1200 Market, with either hotel or multifamily space above it to be added later. Halfway between Market and Chestnut Streets, Killinger says, the development will restore the tiny Ludlow Street with cobblestoned walks and access to the residential and office portions of the project. Small “boutique” style retail shops are expected to line Ludlow Street.

The building will span an entire city block and blend new-to-market retail and dining destinations with contemporary apartments. The overall master plan will enable tourists and local Philadelphians alike to benefit from the dynamic street life and unique mix of retail tenants.

The Ullico loan will allow the vertical construction of 1100 Market Street to launch in the next several weeks. This project will focus on the development and leasing of buildings facing Market Street. In addition, National has already begun the development and leasing of the former Family Court Building, 34 S. 11^th Street. The total cost for both projects is $260 million.

When completed, the 1100 Market Street project will include:

• An 18-story, 500,000 gross square-foot mixed-use complex which will include a 16-story, 322 residential tower
• A 19,000 square-foot amenity level and outdoor deck above a two-story, 105,000 square-foot split retail podium
• 187 below-grade parking spaces and centralized loading – a rare feature in Center City

“A critical part of the project's success is choosing partners, like Ullico and Tutor Perini, who understand and support our vision," says Killinger. "We are honored that Ullico has invested so significantly in the restoration of this section of Philadelphia, and have no doubt that Tutor Perini will bring East Market to life with skill and dedication.”