From bisnow.com
The Comcast Technology Center Means More To Philly Than You Might Think
By Matthew Rothstein, Bisnow East Coast
The Comcast Technology Center is open for business, and it could change
more about Philadelphia than its skyline.
The Comcast Technology Center Means More To Philly Than You Might Think
Bisnow
Philadelphia Department of Commerce Deputy Director Lauren Swartz,
Center City District CEO Paul Levy and Nightingale Properties Vice
President Brenton
Hutchinson
Officially the tallest building in the U.S. outside of New York and
Chicago, the CTC was purpose-built for
Comcast
by
Liberty Property Trust,
so it had no real effect on the city's overall office real estate
market. But it is impossible for an object of that size to be dropped
into a city's pool
without making some waves.
“A new building like that shows a lot of the potential of trophy-class
office in Philadelphia,”
JLL Research
Director
Lauren Gilchrist
said at Bisnow's Philadelphia State of Office event Jan. 24.
Although the heart of Philadelphia's economy is still with the
educational and medical institutions that lead employment figures and
innovation across
the city, Comcast has entrenched itself as the city's signature company.
With the "T" in CTC, the company also hopes to have more influence on
tech and
innovation as Philly increasingly foregrounds those elements in pitches
to potential new employers and investors.
In her position as Philadelphia Department of Commerce deputy director,
Lauren Swartz is tasked with meeting and recruiting businesses from out
of state
and even overseas to consider opening offices and investing in
Philadelphia. Since the CTC opened, the expansive public lobby that drew
glowing praise
from Philadelphia Inquirer architecture critic Inga Saffron has become
an important stop on tours Swartz leads.
The Comcast Technology Center Means More To Philly Than You Might Think
Bisnow
CBRE Research Director Ian Anderson, Formcraft Director Jim Beale and
AKF Senior Manager Paul Shapiro
“I bring businesses there to talk about office development in the
city, [Comcast] and what it does,” Swartz said. “From an attraction
standpoint, the more
buildings we have like that, the more shiny things in the sky, the more
it makes Philly feel like a place of prominence.”
In contrast to New York or Chicago, Center City Philadelphia has only
four glassy skyscrapers, which makes each one stand out. Below those
four — Comcast's
two buildings and One and Two Liberty Place — is a downtown filled with
1970sd vintage office buildings that are almost off-putting to a
business or investor
visiting from overseas.
Recent investors such as
Nightingale Properties
at
Centre Square
have worked hard to update the insides of such buildings and had
leasing success, but work like that doesn't impress the visitors Swartz
brings into town.
“[Smart buildings] are normal to the outside investors, and Philly looks
so old-school in comparison," Swartz said. "The old-looking buildings on
the outside,
they expect to look nicer and modern on the inside ... When we’re not
able to deliver at the level of the market they’re coming from, it
affects the whole
city in terms of business attraction and retention from the U.S. and the
world.”
While Philadelphia's
slow-and-steady growth
has
insulated it
from economic downturns in the past, it has also meant that the
improvement to its building stock
has been, well, slow and steady. Nightingale Vice President Brenton
Hutchinson said that adding amenities to projects like Centre Square is
"more of a
'checking the boxes' sort of thing."
The Comcast Technology Center Means More To Philly Than You Might Think
Bisnow
Colliers International Vice President Elizabeth Morrow, JLL Research
Director Lauren Gilchrist and Parkway Corp. Vice President Brian Berson
As impressive as the
Comcast Technology Center
is,
Parkway Corp.
Vice President Brian Berson wondered if it went far enough to truly
drive the city forward in terms of innovation.
"If Comcast hired
Google
and not Norman Foster [as architect], how high-tech could the building
get?" Berson asked. "I challenge everyone in this industry to try to
figure that
out. We talk about smart buildings, but a lot of that technology is 10
years old.”
Even so, the CTC is a needed counterpoint to Philly's dated narrative,
and one that stands out particularly because new construction is so
cost-prohibitive.
The average office rent in Philadelphia is at an all-time high, but
it is still nearly $20/SF below the estimated rent required to justify a
new, build-to-suit
project, Gilchrist said. But the gleaming tower could provide
incremental gains on that front.
“[New construction like] the CTC tends to scare tenants a bit, and it
has kind of dragged Class-B and those sorts of rents up a little bit,”
Gilchrist
said. “It’s a market-setting project.”
There is even an outside chance that by the time the next development
cycle starts up, some new construction may even be justifiable in the
immediate area.
Parkway Corp. is marketing several of its
Center City
parking lots as development opportunities, and Berson sees the
potential through the interest of potential buyers.
“[The CTC] cements the westward gravitational pull on Market St.,
bookended by
Aramark
['s new headquarters] at
2400 Market St."
Berson said. "So for our properties in West Market, our phones are
ringing off the hook.”
The Comcast Technology Center Means More To Philly Than You Might Think
Bisnow
AKF Senior Manager Paul Shapiro, Rubenstein Partners principal Stephen
Card and Brandywine Realty Trust Senior Managing Director Jeff DeVuono
Though Comcast as a company doesn't carry much name recognition
overseas, Swartz said, a giant tower with "technology" in the name sends
a message everyone
can understand. A growing number of international tech firms are coming
to Philadelphia, Swartz said, starting with small groups taking space in
coworking
offices. Comcast has a tech "accelerator" within the CTC that already
boasts some international members.
Comcast has also been reaching out to local tech firms in coworking and
incubator spaces around the city, though its ultimate intentions there
are unclear,
Center City District CEO Paul Levy said.
“We need to watch to see if [Comcast] swallows those firms or helps them
grow,” Levy said.
Whether it pertains to fostering growth for smaller businesses in the
city or attracting investment from outside, the CTC is not the sole
determining factor.
But its arrival near
the end of this economic cycle
makes it an important bellwether for how Philadelphia could perform
amid the coming uncertainty.
Capital from outside of the city has been coming to Philly more than
ever in the past few years, whether
from New York
or overseas, as yields flatten in bigger markets like Manhattan or
Washington, D.C., Levy said. But without more advancements along the
lines of Comcast,
or perhaps an overhaul of the city's onerous tax structure, that
investment might not be here for long.
“We need to capitalize [on that outside investment], because if after
the next downturn, all that capital is back in New York and D.C., that’s
a lost opportunity,”
Levy said.
--
David Goldfield, Assistive Technology Specialist WWW.David-Goldfield.Com