THE PLAN…
On the corner of 40th Street and Chestnut Street in University City sits three properties, 4001 Chestnut, 4003 Chestnut, and 36 S 40th Street. Stockton Real Estate Advisors (“SREA”) and partner U3 Advisors (“U3”) were selected to redevelop these properties through a competitive RFP process with the University of Pennsylvania (“UPenn”). These three buildings together total approximately 11,890 SF and were 100% vacant before SREA and U3 executed a 50-year ground lease with UPenn. Currently, the properties are being redeveloped with the intent of enlivening and upgrading the area around 40th and Chestnut.
The plan was to convert these properties into retail, commercial, and residential space while also adding an open space park that will blend into the changing fabric of the neighborhood. There will be two stories of commercial retail space, 12 units of multi-family residential, and a green area park. For the residential space there are 12 available units that will be split into 7 units for short term stays lasting 30 days or less, with 5 units left for multifamily stays longer than 30 days. SREA has chosen to work with URHomeinphilly.com, who will manage the residential units. Once in operation, the three properties will operate as one, allowing each building’s tenants access to the park. This opportunity represents the first of multiple projects that SREA will target for the 40th Street area. SREA plans to redevelop and hold this asset until it is fully stabilized and has benefited from additional seasoning through the redevelopment of University City. These buildings are planned to open in the late summer quarter of 2020.
Services Provided:
- Executed leasing & construction management
- Entered and won request for proposal contest at UPenn against strong competitors
- Outsourced residential management with URHomeinPhilly.com
- Strategically structured and constructed long and short-term residential units to maximize rental
revenue - Provided underwriting assumptions and financial returns
- Projected lease and construction budget and project timeline
- Conducted lease negotiations to lease the best possible tenants that will increase value and
popularity of the area - Lease executed for 2,525 rentable square feet for Chase Bank, which opened in March 2020
How SREA Added Value:
SREA took three properties that were 100% vacant at the time and through a competitive process of RFP was selected with partner, U3 Advisors to redevelop these parcels and create a profitable operation out of three dilapidated buildings. Through a few requirements and guidelines from UPenn, SREA was able to create a park, residential units, commercial units, and retail space that will generate income from a site that had no rental income and no tenants before acquisition. Not only did SREA create monetary, tangible value out of deserted buildings, but they also contributed to the redevelopment of the 40th Street corridor, which over the course of this year will not only see these 3 properties coming back to the life, but also the construction of a UPenn Wharton office building and a UPenn undergraduate residential college.