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REA
March 27, 2019  

Redeveloped Luxury Rentals on Block in Phila.

After a gut renovation that turned an aging Philadelphia high-rise complex into luxury apartments, the property has hit the market with an estimated value of $320 million.

The 1,017-unit Presidential City encompasses four multi-family buildings that are roughly 90% occupied, as well as 68,000 square feet of offices and some 9,000 sf of retail space. At the estimated value of $315,000/unit, the initial annual yield would be about 4.5%, based on last year’s net operating income. A buyer also would have the right to develop another 1.9 million sf. Cushman & Wakefield is representing the local owner, Post Brothers Apartments.

Post Brothers paid $51 million for the 12- and 13-story apartment buildings, at the city’s western edge, in 2012. It began upgrades a few years later, starting with the addition of a 405-space garage, the resort-style Sora Pool Club and a 12,500-sf clubhouse. The firm acquired the adjacent Monroe Office Building in 2015 for $8.4 million and renovated that as well.

Meanwhile, Post Brothers emptied the apartment buildings and launched a thorough make-over that involved rebuilding unit interiors, creating upper-floor penthouses and modernizing the lobbies and amenities. The renovations, completed in 2017, cost an estimated $165 million.

Units range from studios to three bedrooms, with an average size of 792 sf. Rents average $1,805, or $2.23/sf. The apartments have high-end finishes, quartz countertops, stainless-steel appliances and moveable kitchen islands.

The marketing campaign is highlighting an extensive amenities package. The pool club has three temperature-controlled pools, hot tubs, cabanas and outdoor kitchens. The club’s fitness center offers instructor-led classes, spa treatment rooms, a dry sauna and a steam room. In addition, each of the four buildings houses a fitness center and a resident lounge. Other amenities include bocce and basketball courts, as well as dog parks.

Presidential City is at 3900 City Avenue, the main thoroughfare of the Main Line area, which includes affluent Pennsylvania suburbs such as Bala Cynwyd, Lower Merion and Wynnewood. The sales pitch notes that the three ZIP codes around the property have an average annual household income of nearly $200,000 and a rent-to-income ratio of just under 10%.

The property is 5 miles northwest of Center City, just off Interstate 76, also known as the Schuylkill Expressway. It was Philadelphia’s first high-rise residential complex, built between 1952-1954 by John McShain, whose company also constructed the Pentagon and the Jefferson Memorial. The four apartment buildings are named after Presidents Washington, Adams, Jefferson and Madison. McShain originally planned 48 towers on the grounds of a former golf course. But after completing the four, he sold the rest of the land to other developers.