Brian Tierney, chief executive officer of Philadelphia Media Holdings L.L.C., said today that the company would sell the Inquirer Building*, which also houses the Philadelphia Daily News and Philly.com, and downtown property to reduce debt and reinvest into the company’s media businesses. The company will offer the 18-story building for sale to real estate developers in an offering memorandum mailed nationwide in September.
The company also is soliciting in the memorandum ideas for where to put the 950 journalists, ad people, executives, computer technicians, clerks and others who now work in the building, company officials said. The property entails the 470,000 square foot building at 400 North Broad and the company’s parking on Callowhill Street, between 15th and 16th. The total area is 4.2 acres.
The Inquirer building is about half vacant, said Richard Thayer, PMH executive vice president of finance, because of downsizing and the fact that many employees staff suburban news bureaus and a printing plant in Montgomery County.
The company and its broker, Jones Lang LaSalle, declined to say how much they are seeking for the property. The city’s Board of Revision of Taxes has placed a value of $16.7 million on the real estate, based on its use as lower-grade office space and parking. Eugene Davey, director of assessments, said the agency’s market value “doesn’t mean much” to a developer, who could convert the site into condominiums.
PMH believes it’s a good time to sell because the expansion at the Convention Center is focusing attention on the area, Thayer and William Luff, of Jones Lang, said. But weakening credit markets and near-panic over defaults in the subprime mortgage markets has led some to believe that now’s a tough time for real estate deal-making. “If we don’t get the right price, we won’t sell,” Thayer said. He said he’d like to have a deal “substantially completed” by the end of the year.
The new local owners, which bought the newspapers and Philly.com in 2006 for $515 million, with more than $300 million of the purchase price borrowed, had planned from the beginning to sell the downtown property to raise cash, Tierney said.
He was leaving open the option of where to relocate the Inquirer and Daily News newsrooms and corporate functions. They could relocate to a new building constructed behind the Inquirer building – on land that is now parking and will be part of the deal. Signing a lease as a tenant for this new building could be a sweetener for an interested buyer, Tierney said.
*Flying pigs not included