PHILADELPHIA-With the pick-up in Center City office leasing, tenants are shifting to prime locations and securing long-term deals in the face of rising rent rates. Two unrelated transactions for an aggregate of 69,580 sf exemplify the game of musical chairs now under way.

The law firm of Deasey, Mahoney & Bender Ltd. has signed a long-term lease for 20,186 sf at 1601 Market St. and will relocate there from its current quarters at 1800 JFK Blvd. this August. CitiGroup Global Markets Inc., better known as Smith Barney, has inked a long-term renewal at One Liberty Place. It will relocate from within the building to the entire 42nd and 43rd floors this November, following fit-out of the new space, which begins next month.

Chicago-based Transwestern Investment Co. acquired the 36-story, 681,000-sf 1601 Market St. property in a two-building portfolio from Equity Office Properties in November 2004. The other building is 1700 Market St., and Transwestern paid $172.2 million for its share of 1.5-million-sf portfolio in which Chicago-based Equity retained a minority stake.

It undertook significant upgrades at the 1601 location, including a lobby renovation and security system enhancement, and handed lease-up of both buildings to the local office of Grubb & Ellis. Craig Scheuerle, Jack Soloff and Matthew Guerrieri of Grubb negotiated the law firm’s transaction with Joe Wolff of the local office of CB Richard Ellis, who represented the tenant. Guerrieri tells the building is now 93% occupied.

The value of this lease and Smith Barney’s renewal are undisclosed. However, area brokers tell that West Market rates in class A properties average $25.50 per sf, and the higher floors of 61-story One Liberty, which is located at 1650 Market St., reach to above $30 per sf.

Bill Hirschfeld, senior director, and Sun Park of the local office of Cushman & Wakefield represent One Liberty’s owner, identified as Philadelphia Liberty Place LP. Grubb SVP Scheuerle and Wayne Fisher, SVP and director, represented Smith Barney.

Scheuerle says his client conducted an exhaustive market survey, but decided to stay in One Liberty, “given they are a long-time tenant in the building and its image and location is a known commodity to their clients.” Some new tenants under agreement for space in the 1.2-million-sf tower won’t move in until later this year, yet current occupancy is just north of 80%.

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