Approximately $2.5 of $5 million capital improvement plan is complete; 1818 Market Street is positioned for market challenges

One year after The Ashforth Company announced the launch of a $5 million capital improvement initiative at 1818 Market Street, the company’s newest Philadelphia-area asset is 90% leased, and Ashforth executives believe the building is well positioned for future market challenges. A commercial real estate investor and operator, The Ashforth Company purchased a majority interest, along with GE Asset Management, in the limited liability company that owns 1818 Market Street in June, 2002.

When Ashforth announced the planned capital improvement initiative in January of last year, 1818 Market Street, a 981,743 square foot building located in the heart of Philadelphia’s Central Business District, was 78% leased. “By enhancing the amenities of this building while focusing on a diversified tenant mix, we are now 90% leased, and well poised for the future,” says Darrell Harvey, Co-Chief Executive Officer of The Ashforth Company.

According to Frank Kozak, Vice President of Ashforth’s management services division, Albert B. Ashforth, Inc., “In the last year, we’ve completed an impressive renovation to the building’s lobby, installed signature street signage, and dramatically improved the building’s parking efficiency and safety features. After completing this phase of the capital improvement effort, 1818 Market Street now offers all the ingredients of a downtown ‘Trophy’ property – a desirable Market Street address with exceptional views, multi-level parking, an efficient floor plan, outdoor plaza, and ground floor retail – at a competitive price.”

The most prominent of the capital improvements at 1818 Market Street has been the $1.5 million redesign and restoration of the building’s expansive, 132-foot wide, two-story lobby, creating a striking first impression for visitors and tenants alike. A deep black Nero Marquina marble focal wall is juxtaposed against Rockville White granite walls in the lobby and elevator vestibules. A dramatic glass art piece by renowned Rhode Island artist Paul Housberg adds a bright splash of color to the windowless eastside wall. Further evidence of the dramatic changes at 1818 Market Street can be found on the building’s exterior, where new signage and lighting has been installed at the Market Street and 19th Street entrances. Large stainless-steel signage arcs outward from the entrances, significantly increasing the building’s presence.

1818 Market Street’s self-contained, 6-level, 385-space parking garage has been restored and renovated, and security has been dramatically improved. A new means of egress from the building’s parking garage to the lobby requires all visitors and tenants to pass the main security desk before entering the upper-floor elevators. New property surveillance equipment and the installation of parking automation technology ensures the highest level of safety and convenience.

According to Louis Lombardi, Vice President and General Manager for 1818 Market Street, “These are examples of how Ashforth wisely manages a building, providing the utmost in security and convenience, allowing us to confidently compete with downtown Class A buildings.”

Remaining capital improvements scheduled for 2004-2005 include the renovation of the building’s outdoor plaza, façade restoration work, and the installation of a larger power generator.

Last year, more than 100,000 square feet of space was leased through 1818 Market Street’s exclusive leasing agent, Jones Lang LaSalle Inc. Among the larger transactions were law firm McKissock and Hoffman, taking a 33,900 square foot lease, and the American College of Radiology, leasing 37,000 square feet. Currently, there is approximately 100,000 square feet of space available. Prominent tenants include Merrill Lynch, ABN Amro, Swiss Re, Zurich, Day and Zimmerman, Philadelphia Magazine, GE Capital, Fleet Bank, Herman Miller, Mitchell Titus, and Booz Allen. Originally constructed in 1974, 1818 Market Street is within close proximity to Suburban Station, City Hall and Amtrak’s 30th Street Station, and within walking distance of upscale retail, dining and hotel services, including Rittenhouse Square. In addition to 32 stories of office space and a 385-space parking garage, the building houses ground floor retail amenities including a full-service restaurant, bank, dentist, sundry shop and printing service.

As for the future, Harvey believes “1818 Market Street is well positioned against future market downturns because of our balanced tenant mix, varied lease expirations and the superior value this building represents.”

The Ashforth Company’s strategy is to acquire quality assets in markets with good long-term fundamentals, and to enhance value through the company’s operating expertise. Ashforth has investment interests in locations throughout the country, including commercial office complexes in Fairfield County, Connecticut; Seattle, Washington; Boston, Massachusetts; and Portland, Oregon.

The Ashforth Company is a 108-year-old diversified real estate firm that owns, develops, and invests in assets on the East and West Coasts, and provides third party services including asset and property management, brokerage, general contracting and construction management. Directly and through its affiliates, the company owns over five million square feet and manages nearly ten million square feet of office space nationwide.