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PHILADELPHIA-Welcome to the Philly 411, our monthly column on real estate happenings in the Metro area supplied with intel from David Jacobs, a director at Llenrock Group, a local commercial real estate investment-banking firm. You can also follow their blog here. Opinions are the author’s own.

Citibank entered the Philly market in the fall of 2006 with vigor, continually growing their presence here with 20 branches in 18 months. Nothing showed this commitment more than in January 2008 when they opened the Walnut Street Financial Center at 1211 Walnut Street.

However, according to rumor in a recent article in the Wall Street Journal, Citibank will be looking to close an undisclosed number of its 1,001 US branches, choosing to focus more on their core markets where they already have higher branch concentrations. The bank’s network is clustered in New York, California, Miami, Chicago and Washington, DC, with a smaller presence in Texas, Boston and Philadelphia. As the article was ambiguous as to whether their smaller markets were on the chopping block as a whole, one can only infer that this option is under consideration.

But according to a Citibank insider, this is not the case. It is true that they are selling a portfolio of Texas bank branches that they had recently acquired, however the Boston and Philly rumors are patently false. According to the insider, “Both Boston and Philadelphia are profitable markets for Citibank. Are they as profitable as New York City? Of course not. There’s a Citibank on every other corner in Manhattan. But both markets are profitable and they aren’t going anywhere.” At least until Vikram Pandit tells us otherwise.

2000 Market St. is back Under Contract

2000 Market Street, the iconic black CBD tower is under contract once again. Two years ago, owner RREEF had it under contract to sell to CBRE Real Estate Investors for $92 million. CBRE attempted to retrade the deal, and RREEF balked, killing the transaction. But now, Amerimar has put in an acceptable bid which is rumored to be in the low $50-million range.

Exact pricing is unknown, partially because of the move of the building’s largest tenant, law firm Fox Rothschild LLC, from lower floors to upper floors of the building. The original offering suggested that the buyer would have to assume the costs of tenant improvements for moving Fox Rothschild, which is set to occur in December.

With closing likely to occur around the same time period, it will be interesting to see how the deal ends up being structured. Will the cost be factored into the sales price, or will it be addressed as a sideline item to avoid an increase in transfer taxes? Either way, this deal is an interesting case study for the local Philly market in terms of asset devaluation.

Law Firms Leasing

According to rumor, Philadelphia law firm Hangley Aronchick, which among other things specializes in real estate, bankruptcy, tax and estate planning, is rumored to be expanding their presence at One Logan Square by 10,000 square feet. In July, they acquired six lawyers from DLA Piper, including their top litigator, but with no recent announcements of new hires, one can only speculate that they are adding a practice group from an external source. There was no comment by Hangley Aronchick as of the date of this publication.

Another Center City law firm, Galfand Berger LLP, has signed a 10,886 square foot lease for the 27th floor of 1835 Market Street, moving from 1818 Market St. The 11-year lease allows the law firm the ability to upgrade its office space while reducing its rent at the same time, one of the great advantages of having a lease expire during the recession. They plan to take occupancy in January, 2010.

Movers & Shakers

Joe O’Donnell, formerly a vice president with Beacon Commercial Real Estate, has decided to venture out on his own by forming OMEGA Commercial Real Estate, a full-service real estate brokerage company focusing on tenant and landlord representation and investment sales.

The company, headquartered in Norristown, will primarily serve the Philadelphia Metro area. Not fearing the economic circumstances that are always tied to starting a new business in a recession, O’Donnell said “I’ve had my broker’s license for a couple years, and it’s something I’ve always wanted to do. Bill Gates started Microsoft during a recession…now’s as good a time as any.”

In other brokerage news, Robert Fahey, Lizann McGowan and Doug Rodio of CBRE’s Capital Markets team recently transacted two multi-family deals totaling 444 units in Greater Philadelphia: Oxford Gateway Apartments in West Chester (PA) and Burrough’s Mill Apartments in Cherry Hill (NJ). What is so significant about this? To date, these have been the ONLY true class A multifamily sales in Greater Philadelphia in 2009.

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