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PHILADELPHIA-The developer of the 33-story residential tower that takes its name, 10 Rittenhouse Square, from its prestigious address, has signed a lease with Barneys Co-Op, the edgy offshoot of upscale Barneys New York, for a 9,500-sf store. The 140-unit tower is the first residential tower to have broken ground on the square in more than 25 years.

It is an L-shape building that wraps the historic Van Rensselaer mansion at the corner of Walnut and 18th streets, across from the park, and incorporates the facades of other existing historic properties. The Developer, ARCWheeler, is a JV between locally based Wheeler Brothers Holdings LLC and ARC Properties Inc., which is based in Clifton, NJ. It owns the existing properties, which include a Barnes & Noble under long-term lease, and the flagship Anthropologie store, which is located, also long term, in the mansion.

When 10 Rittenhouse Square was announced in mid-2004, the construction cost was estimated at $140 million. Now, Roger Friedman, an ARCWheeler principal, says, “It’s closer to $200 million.” He says the residential units are 50% pre-sold, and negotiations are underway for the remaining retail space. He tells GlobeSt.com, “There will be a 4,000-sf restaurant, a florist and a coffee shop.”

He declined to disclose the value or rate of the Barneys lease. “The asking retail rate along Walnut is between $100 per sf and $150 per sf,” he says. “This is premier space, and we got a pretty good rate.” This will be Greater Philadelphia’s first Barneys.

Prices for the residential units range from $850 per sf to more than $1,000 per sf, he says. “The few 650-sf studios were snapped up right away, and we held two back for use as hotel rooms for guests of tower residents.” They will be fully serviced by building staff.

The asking price for penthouses, which are approximately 10,500 sf, “is over $15 million,” he says, which puts them in direct competition with the highest price for condos that are being converted from former office space on the top 20 floors of Two Liberty Place. Friedman expects 10 Rittenhouse Square to open in fall 2008 and be fully complete the following spring.

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