The University City Science Center and its development partners, Ventas Inc. and Wexford Science & Technology, have officially broken ground on One uCity Square, a $280 million, 400,000-square-foot building that is being built on speculation.
While the project will be the 17th in the development of uCity Square, it serves as the first office and lab building to be constructed without any tenants lined up to occupy the space. While any spec building is a gamble, this is a calculated risk for the development team at uCity Square. Each time a new building is developed there, it leases up quickly, routinely has more interested tenants than available space and gets some of the highest rents in Philadelphia.
That was the case with 3675 Market St., which opened in November 2018 with nearly all of its 344,000 square feet fully leased. Three months later, all of the remaining space was filled. It was the same situation for 3711 Market St., a building developed prior to 3675 Market. That 155,000-square-foot structure leased up in spite of being built during the height of the Great Recession. There was so much demand for the space, two floors were added to the structure while it was under construction.
“We feel very bullish on the market and our ability to fill this building,” said Joseph Reagan Jr., senior vice president of Wexford Science and Technology. “We didn’t want to have a situation where we have demand and no place to put people.”
Is Reagan worried about going spec on One uCity Square? “No,” he said. “We’re ready to get into pre-development on the next building.”
Wexford and the Science Center are talking to a number of different firms about the building that comes after One uCity Square, said Curt Hess, senior vice president of real estate at the Science Center. “We have a number of great parcels that are available,” he said. “It will be the prospect that drives the site.”
One uCity Square had been in design for the last couple of years and, in addition to the lab and office space, it will have ground-floor retail, a full-service restaurant, a lobby reminiscent of a hotel and inviting spaces for those using the building to gather. It is expected to get rents close to or exceeding $50 per square foot, new territory for Philadelphia.
“There is a lot of demand and not a lot of supply,” Reagan said. “It’s not purely that. I think we are delivering a superior product.”
A new 45,000-square-foot public park will be developed adjacent to One uCity Square. It was designed by Andropogon Associates and will have hardscapes and softscapes, a water feature and close to 15,000 square feet of retail frontage. Both the park and the new building are expected to be completed by the end of 2021.
While One uCity is under construction and the next office-lab building is being designed, the development team is also moving forward with a new 460-unit apartment building at 3700 Lancaster Ave. That project is expected to break ground in the next couple of weeks.