A new look for a proposed office building on 20th and Arch Street in Philly
Before the pandemic, Parkway Corp. revealed plans for a big new office building in Center City west. It looks as if they still want to move forward with it.
An office building proposed for 20th and Arch Streets in Center City in 2019 is still in the works, as developer Parkway Corp. revealed a glimpse of its COVID-era plans.
More than three years ago, Parkway went public with its plans for a 15-story, 400,000-square-foot office building on this corner of downtown. The site is a surface parking lot north of Market Street and close by Comcast’s high-rise towers.
The project was proposed for a single tenant and what was then described as a 20-year lease. Although Parkway wouldn’t identify the company it was tailoring the building for, it’s widely been reported then (and in the years since) that the insurance giant Chubb Ltd. is the intended client.
This week, new plans released by Philadelphia’s City Planning Commission show a bulked up tower of the same height but with three additional floors and almost 75,000 additional square feet, with a combination of commercial office space and ground-floor retail. The building would include two levels of underground parking with 78 spaces.
“We have seen a very dramatic return to the office these last two weeks, with Comcast and PNC Bank coming back,” said Robert Zuritsky, Parkway’s president and CEO. “You can feel it in town at least three, four days a week. The Eagles are going good. The Phillies [could be] in the playoffs. There’s definitely some spirit and energy downtown in the office market.”
But neither Chubb nor Parkway would comment directly on the project.
“As a growth company, Chubb regularly evaluates its office space to support its expanding operations while ensuring it remains agile in meeting the short- and long-term needs of the business, its customers and employees,” a spokesman said in an email message.
Sources familiar with negotiations between Parkway and Chubb say that a deal has not been formalized between the two parties.
The pandemic has dramatically altered how office work is conducted, with many employers operating hybrid schedules with workers needing to be in the building only a few days a week. Many employers, including The Inquirer, are shedding office space in anticipation of far fewer in-person work days.
Some industries, such as law firms and finance, have been encouraging more in-person days. But insurance and smaller tech companies have been leaning into remote work.
“A lot of firms in the insurance sector do not have 100% of their workforces coming back, because they’ve proven that they could do a significant percentage of it remote,” said Bill Luff, head of the commercial property consultancy CRE Visions and who is not a party to the Arch Street deal.
For those who are returning to the office, there’s been prioritization of a high-end experience. Commercial property insiders refer to this as “the flight to quality.” If employers want their office workers back in-person, they are going to give them the best.
“There’s a real market segmentation that’s going to occur,” Luff said. “The new buildings, the trophies, the 60-story buildings on the skyline. They are going to be in high demand because people that want office space want it to be premier office space.”
The Arch Street project is slated to be reviewed by the city’s municipally appointed Civic Design Review board on Oct. 11. No zoning variances are needed for the project, and it is not eligible for the tax breaks that come with Keystone Opportunity Zones.
Chubb is an international insurance brand, operating in 54 countries, with executive offices in Zurich, Switzerland. Ace Ltd. acquired Chubb in 2016 and assumed its name. Chubb’s local operations trace their roots to an insurance company founded in Philadelphia in 1792.
Although the company has offices in New York, New Jersey, and Delaware, Philadelphia is its largest presence in the United States. Chubb currently splits its local offices between a historic building that it owns at 436 Walnut St., just south of Independence Hall, and leased space in the nearby former Penn Mutual Tower at Fifth and Walnut Streets.