Public Ledger building owner sells off section of historic structure in Philly

The owners of the Public Ledger office building have sold off a section of the historic Center City structure but retained its Independence Hall-facing portion for development into a luxury hotel, condos, or a combination of the two.

The ownership entity led by Carlyle Development Group of Purchase, N.Y., sold the building's western section in late June to an affiliate of Brooklyn, N.Y.-based Baycrest Properties & Management L.L.C. for $32 million, according to records filed with the city.

Carlyle chief executive Abdi Mahamedi said in an interview Tuesday that his group had originally planned to retain the structure's 235,000-square-foot western section, which is seen as remaining in use as offices accessible via a Chestnut Street entrance.

The company had begun marketing the building's 290,000-square-foot eastern section, with its own entrance on Sixth Street, to developers with plans for dwellings or hotel rooms overlooking the grounds outside Independence Hall.

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Carlyle ultimately decided to sell the office portion instead, so it could develop the eastern section itself, possibly as a luxury hotel and condo hybrid if financing for such a project can be arranged.

"We're still trying to find what is the best course of action, what is the best concept," said Mahamedi, whose group paid $58 million three years ago for the 1927 building, which was constructed for the long-defunct Public Ledger newspaper (1936-1942).

Over the next seven months, the western portion's remaining office tenants will be moved into the eastern section to prepare for the redevelopment, Mahamedi said. After the moves, the western section will be about 70 percent occupied, he said.

The building's occupancy took a hit in 2016, when the U.S. General Services Administration signed a lease to move Department of Health and Human Services operations from the property to the former Strawbridge & Clothier department store building at 801 Market St.

The eastern section's ground floor storefronts, meanwhile, have been broken into a separate property unit that Carlyle and its partners continue to own. A section of the ground-floor property is soon to house Center City's largest Wawa convenience store.

Baycrest, the western section's buyer, also acquired a medical building in King of Prussia, the Philadelphia Business Journal reported earlier this year.