D.C. firm buys controlling stake in the Bourse, plans $40M renovation
MRP Realty is placing a big buy order on Philadelphia's original trading floor, the Bourse building. America's first formal commodities exchange is the main draw in a package of buildings in which the Washington developer acquired a controlling stake Monday.
MRP Realty is placing a big buy order on Philadelphia's original trading floor, the Bourse building.
America's first formal commodities exchange is the main draw in a package of buildings in which the Washington developer acquired a controlling stake Monday.
MRP's plans for the 10-story Bourse include higher-end dining and cocktails on the ground floor, with the offices above revamped into what it hopes will be some of the city's most enticing workspaces.
The renovations are part of $40 million in improvements to be made to the Bourse and two nearby midcentury office buildings that MRP now possesses in a venture with Philadelphia's Kaiserman Co., the properties' previous sole owner.
"It's a huge, old, beautiful relic," MRP managing director Charley McGrath said of the 121-year-old Bourse. "When you can find buildings to renovate like this, it's exciting."
The Bourse is the latest office building to change hands over the last few years in the ring of architectural gems that surround Independence National Historical Park.
The buildings, which also include the 1927 Public Ledger building and the midcentury Dow building, are vying to attract high-paying tenants to the Independence Mall area.
It's a neighborhood that's been seeing higher rents as new owners lure bigger-name tenants with renovations, said Jay Joyce, managing director in Philadelphia for commercial brokerage Savills Studley.
The Dow building, for example, is said to be asking more than $30 a square foot, up from as little as $25 before 2014, Joyce said.
If MRP invests wisely, "there is certainly an opportunity to capitalize on what's happening around them," he said.
McGrath declined to discuss how much MRP paid for a majority stake in the package of properties, which also includes 325 Chestnut St. and 400 Market St., as well as the Bourse parking structure and movie theater.
The agreement is a bold first step into Philadelphia's office market for MRP, which is in the midst of several residential projects here. Its work in Washington has included redeveloping the Washington Harbour retail and office center.
The Philadelphia projects are a homecoming for McGrath, who grew up in Lansdowne and Springfield, Delaware County, before leaving for college in Washington. (He took his high school sweetheart, who became his wife, to the Cosi at 325 Chestnut for one of their first dates.)
The key to elevating the Bourse, which has gone through multiple revitalization attempts since its acquisition by Kaiserman in 1979, will be to boost the quality of its ground-floor retail, McGrath said.
Now, kitschy souvenir shops and fast-food counters serving stir-fry and pizza from under heat lamps predominate. McGrath envisions upscale eating stalls and sleek cocktail bars, like the Gansevoort Market in New York City's Meatpacking District.
"You can have oysters, you can have champagne, you can have beers, you can have a brat," he said.
The Bourse's overhead beams and neoclassical columns will be restored, and its 1980s-era brown and orange tiles replaced with dark wood under plans by BLT Architects of Philadelphia. Upstairs, the building's offices will be redone with open floor plans, higher ceilings, and exposed brickwork, to appeal to tech companies and other creative users.
All three buildings in the deal will get new lobbies, roof decks, gyms, and other amenities for office tenants.
Other improvements at 325 Chestnut include restoration of its weatherworn glass and metal facade with new window tintings and a fresh coat of dark paint. The vintage terrazzo floor at 400 Market will be refurbished, as will the lobby's concrete mural by Italian sculptor Costantino Nivola.
"When you offer all these amenities, you're going to crush it," McGrath said.
Bill Luff, executive managing director for Colliers International's Philadelphia office, said MRP is wise to stake a claim near Independence Hall, an area popular with employers looking to hire young, well-educated creative types.
But the success of the Bourse's offices will turn on the difficult task of refashioning its retail floor, while the swarm of idling tour buses and sightseeing vans at its main entrance may be a turnoff for tenants, he said.
"The biggest Achilles heel of that project is the retail," Luff said. "And not just the retail, but the traffic that goes with the retail. It really has become a tourist mecca."
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