Sonder is no longer planned for Girard and Frankford Avenues, but more apartments are coming
A plan for a Sonder short-term rental building has been scrapped in favor of market-rate apartments, while 6,000 square feet of commercial space are slated for a historic bank.
The former Kensington National Bank building at Frankford and Girard Avenues is being turned into a large retail space and apartments, by the same developers that built the Avant, the new apartment building that wraps around it.
Now, as a gut rehabilitation of the Frank Furness-designed building takes place, adding 6,100 square feet of commercial space and five apartments, the Avant is being leased as market-rate apartments after a deal with short-term rental company Sonder was called off.
“This was intended to be a Sonder building, but Sonder has 11 locations in Philadelphia, which is a lot,” said Henry Sullivan, principal with HK Partners. “I think they were just kind of feeling that crunch.”
Sonder was supposed to move in last October, but instead HK Partners and their partner, Alterra Property Group, have been leasing these 375- to 850-square-foot apartments at market prices.
Although Sullivan says leasing has been slow — perhaps due to the huge numbers of new apartments coming online just to the north and south — activity has ramped up since Valentine’s Day. He says the larger, more expensive units on the upper floors have been leasing first. The highest monthly rent leased so far is $2,950 for a two-bedroom.
When the developers signed the deal with Sonder, they believed that by leasing the whole building to the short-term rental company, they would earn rents 10% above the market.
But as the Fishtown and Northern Liberties rents soared, they realized traditional apartments would be more profitable.
“We’re very bullish about this location as a rental market long-term,” said Connor Burke, vice president of acquisitions with Alterra. “Since we signed that deal with Sonder maybe two years ago, rents have continued to increase even beyond that.”
HK and Alterra also are working together on the new 107-unit building across Girard Avenue at the site of a former 7-Eleven. The two projects will transform the busy intersection, which is also home to Johnny Brenda’s and Frankford Hall.
The developers said they initially hoped the revived historic building would bring a large anchor tenant to the Frank Furness landmark, but current plans are to divide the commercial space to accommodate multiple tenants.
“Commercial [tenants] just don’t have the budgets right now to do a building this big,” Sullivan said. “So it’s got to be chopped up.”
The historic structure included several unusual features, like a bank vault full of safe deposit boxes that had to be blasted out of their longtime lodgings.
On the second floor, there was an early 20th-century firing range. The bankers of yore would apparently unload their pistols into a barrier made of sand bags and backed by a metal plate — which was riddled with so many bullets it had to be environmentally remediated for lead contamination.
On the second and third floors, the developers plan a three-bedroom unit, two two-bedroom units, and two studios. They plan to complete the rehab by the fall.
Sullivan said he isn’t worried about an apartment glut, despite the Avant’s slow lease up and the huge number of units recently completed or under construction in the area. He thinks there will be plenty of demand to fill buildings in the area — despite doubters who say there won’t be enough mid- to high-income renters in the city.
“People always say that about Philadelphia because we are nonbelievers in our own city,” Sullivan said.