Plans Advence to Convert Tower's Top Floors to Condos

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Plans advance to convert tower's top floors to condos

Philadelphia Business Journal - April 14, 2006

by Natalie Kostelni

 

The new owners of Two Liberty Place are getting closer to finalizing plans for converting the top 20 floors, or roughly 400,000 square feet, from high-end office space into luxury condominiums.

Preliminary plans by America's Capital Partners, a private equity firm in Miami, entail putting in about 140 units from floors 37 through 57 of the 58-story structure at 1601 Chestnut St. (The 58th floor is used for mechanical systems.)

The project is being watched closely by the real estate and architectural communities to see if America's Capital pulls off transforming a portion of one of the city's modern signature skyscrapers into residential space.

If it works, Two Liberty has the potential of serving as a model for the conversion of other trophy office buildings in Center City. If it is a success, it also may bring some added after-work-hours vitality to West Market Street, the hub of the city's office market. That's an issue Center City District has been looking into and the business services organization has even suggested making that part of Market Street run in both directions, with a landscaped median that would create an environment that would enhance street-level retail and even more outdoor caf�s in the "heart of the Central Business District."

Two Liberty was constructed in 1989 as part of the Liberty Place development, which includes One Liberty Place, Two Liberty, a retail center and a hotel. Each office tower has 1.2 million square feet. In the case of Two Liberty, the building has 800,000 square feet of vacant space, opening the door for converting a substantial amount of the building into residences.

Major cities such as Chicago and New York have towers that serve two constituencies, residents and office workers, so the idea of splitting a building between office and residential isn't new. However, transforming a building originally created as office space requires a balancing act to serve both the companies that lease office space and the residents who may pay $850 or more a square foot to live there.

The lobby is one of the key components. The lobby will need to be reconfigured so that it's compatible for office workers and residents. That means creating separate, dedicated entrances and separate elevator banks, said Joe Castner, director of architectural services at Kling, a Philadelphia architectural firm.

"You need to create the sense of exclusivity that's less transient," Castner said about the mood residents want in a luxury condo building.

That issue is being addressed by Agoos Lovera, the architectural firm America's Capital hired to work on the project, said Peter Kelsen, a lawyer with Blank Rome who represents the landlord. Initial plans include modifying the lobby to make it compatible with mixed use, Kelsen said.

Fresh air is also an issue. Residents like natural ventilation -- fresh air -- which is typically brought in through open windows, Castner said. In a building on the scale of Two Liberty, operable windows likely won't be installed for safety reasons and "because the air is swirling around up there because of the height," he said.

That can be resolved by installing mechanical units that allow fresh air to be drawn into a room, Castner said, but those can be tricky to put in if it means tinkering with the building's "curtain wall," or paneling that creates the exterior.

While office users deal with overhead lighting to illuminate their workspace, residents desire natural light. The size of Two Liberty's floors, at roughly 25,000 square feet each, was designed as office space with a universal layout of executive offices around the perimeter with window views, administrative staff cubicles in the interior, along with conference rooms and other common areas.

Such a design and layout "was critical to making the office building work from a leasing standpoint," Castner said.

From a residential standpoint, large floors typically found in high-rise office towers have a potential to inhibit the amount of natural light flowing into a condo unit. However, the floors making up the upper portion of Two Liberty targeted for conversion are smaller and narrower than 25,000 square feet and should allow plenty of light to enter a unit, Kelsen said.

"The [floor] plates do contract a bit as you lay it out and you're not getting these massive linear plates. They are smaller and more articulated so it's not as massive," he said.

Other niggling issues also crop up in conversions like this, and how they are addressed has an impact on both users. Some of those matters include sufficient parking, separate trash disposals that deal with office and residential waste, as well as even bathroom ventilation.