Hospitality venture Sonder expands in Philly, leasing whole apartment projects for short-term visitors

Hospitality venture Sonder Corp. has deals to take over four Center City-area properties that are being converted into apartments, with plans to offer furnished rooms and hotel-like service to visitors seeking short-term stays in Philadelphia.

The historic Witherspoon Building office property at 1319 Walnut St., the former Frank P. Heid & Co. hat factory on 13th and Wood Streets, and two smaller buildings in Old City and near Rittenhouse Square will contribute a portion of what San Francisco-based Sonder says are 500 apartments that it has under lease citywide.

Sonder, which has raised $135 million from investors to fuel its expanding business, operates in about a dozen cities worldwide, including London, Miami, New Orleans, and San Francisco. In Philadelphia, competitors such as Spokane Valley, Wash.-headquartered Stay Alfred Inc. and locally based Method Co.'s Roost Apartment Hotel also lease blocks of apartments from building owners to offer as furnished guest suites for short-termers.

“We’re bullish on the market,” Eric Kravitz, Sonder’s general manager for Philadelphia, said of the city in an interview ahead of a planned Wednesday announcement about the venture’s push into the area. “It’s not only a good market or a great market, but a growing market, as well.”

Sonder already offers accommodations at the 1600 Callowhill St. apartments and the Mormon-owned Alexander apartments at 1601 Vine St. (41 and 10 units, respectively), although a majority of the units in those buildings are being leased by their landlords under conventional rental terms.

The company also will manage the visitor apartments at the Harper residential tower under construction on 19th and Sansom Streets, where 45 short-term units are planned, owner Pearl Properties has said.

At the 11-story Witherspoon Building, Sonder is working with owner SSH Real Estate to convert the former offices into a 186-unit apartment building that it aims to begin booking for short-term stays by spring 2020.

The building was constructed in the mid-1890s for the Presbyterian Board of Publications and Sabbath School Work and was later fused to the adjacent Wells Fargo Building on Broad Street so the since-downsized bank could use the combined properties for offices.

Pete Soens, an SSH partner, said Sonder has a 10-year lease for the full Witherspoon Building.

Sonder’s 96 units at the eight-story Heid Building north of Center City, meanwhile, are scheduled to begin booking as soon as this summer, Kravitz said. Owner PRDC Properties LLC announced its plans to restore the nearly century-old former factory in September 2017.

Another 14 units are planned at 1704 Walnut St., a three-story building fronted by a now-vacant retail space where a Pearle Vision branch once operated. The property was acquired by Charlotte, N.C.-based investment firm Asana Partners in November for $6.18 million, according to records filed with the city.

And at 257 N. Third St. in Old City, Sonder plans to operate seven apartments in a former rowhouse that Philadelphia-based owner Civetta Property Group is rehabilitating with the help of a $60,000 state historic preservation tax credit awarded last year.