Philadelphia Business Journal – Coworking operator signs lease at Wanamaker Building

By Natalie Kostelni, Reporter, Philadelphia Business Journal

The 435,000-square-foot space that covers the first three floors of the Wanamaker building at 1300 Market St. that is occupied by Macy’s sold for $40 million, according to Philadelphia property records.

The Philadelphia Business Journal reported on the transaction in December but the sale price was not yet public.

TF Cornerstone Inc., a New York real estate company that owns real estate throughout New York and Washington D.C., bought the retail space.

Separately, the owner of the Wanamaker building leased 42,000 square feet, or a half of a floor, to Mindspace, an Israeli-based coworking firm.

The lease backfills space on the fourth floor left by United Healthcare’s departure in 2018 and helps to shore up much of the vacancy in the building, said Stephen Card, director of investments at Rubenstein Partners, which owns Wanamaker with Amerimar Enterprises. In addition to Mindspace, AdMed leased 7,500 square feet in the building. The deals bring the building to nearly full occupancy.

The addition of Mindspace is one of many changes the owner has been making to the 12-story building at 100 Penn Square East since buying it in late 2016. Wanamaker has about 1 million square feet of office space in addition to the 435,000 square feet retail space Macy’s occupies.

Rubenstein has invested $15 million in renovations to the building that included upgrading and reconfiguring the lobby, adding new lighting and revamping the atrium on the ninth floor into lounge and meeting areas. A fitness center on the eighth floor was also upgraded. The addition of Mindspace completes its multiphased repositioning of the building.

Rubenstein’s strategy is to enhance a building through capital improvements that includes providing several amenities for tenants and Mindspace is part of that effort. Rubenstein considered roughly eight different coworking operators before deciding to go with Mindpsace. Wanamaker will be its third U.S. location.

“We were very selective,” Card said. “It won’t be competitive to Wanamaker but provide an amenity to the building.”

In addition to coworking space and hot desks, Mindspace will also have conference space.

Part of Rubenstein Partners strategy for Wanamaker also included selling the commercial condominium housing Macy’s.

This deal was the first acquisition in Philadelphia for TF Cornerstone, which primarily owns apartments, office and retail properties in New York and D.C.

The Macy’s (NYSE: M) lease runs through October 2027 and it is not on an early and partial list of stores that its parent company, Macy’s Inc, plans to close. The company intends to shutter 125 of its least productive locations over the next three years.