Keystone has obtained $42 million in financing for the office-to-residential conversion of a 175,000-square-foot office building in Plymouth Meeting, Pa. Arbor Realty Trust issued the debt.
The new multifamily community, dubbed Monarq, will encompass 149 luxury units. The first phase is slated for completion in the first quarter of 2026.
CommercialEdge’s Conversion Feasibility Index ranks the potential adaptive reuse of office buildings by analyzing various factors including the property’s age, floorplate shape, location and depth, among others. Monarq scores 79, according to CommercialEdge, making it a strong candidate for adaptive reuse.
Overcoming the dark-space obstacles, the developer will stride to maximize natural light throughout the apartments. Amenities are set to include a gym, coworking lounges and smart home features, along with other features.
Located at 500 W. Germantown Pike, the 1970-built office property is within the Plymouth Meeting Mall campus, about 16 miles northwest of downtown Philadelphia. PREIT, the mall’s owner, received approval to build 275 units on the property’s parking lot and is looking to sell the site following its emergence from Chapter 11 bankruptcy.
Providing debt for office-to-resi projects
Arbor has a history of funding adaptive reuse projects. Four years ago, the lender also issued $20 million for the office-to-residential conversion of 41 Marietta St. in Atlanta. However, last year Arbor filed a notice to foreclose on the then-owner, Wolfe Investments.
Other top multifamily lenders providing liquidity for conversions include Bank of America, which issued a $140 million construction loan for a 460-unit adaptive reuse project in Charlotte, N.C., and Northwind Group. The latter originated $210 million across two mortgages for Manhattan’s largest office-to-residential conversion that’s set to turn Pfizer’s former headquarters into more than 1,600 multifamily units.
Philadelphia’s adaptive reuse pipeline grows
Roughly 28.2 million square feet of office space inside Greater Philadelphia had a Conversion Feasibility Index score of 75 and up as of August 2024, making the buildings strong conversion candidates, according to CommercialEdge data. The figure amounted to 12.5 percent of total stock.
The City of Brotherly Love held an office-to-residential pipeline of 1,232 units underway in January, marking a 26 percent increase year-over-year, according to Yardi Matrix data. One such project is 400 Market, which aims to convert a 173,700-square-foot office building into a 176-unit community, Philadelphia Business Journal reported. Keystone and Lubert-Adler spearhead the development.
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