Penn State plans to purchase a premium piece of real estate at what a university official called a ‘key gateway’ at the western edge of the University Park campus.
Pending approval from the Board of Trustees on Friday, the university will acquire the .26 acre property at 101 N. Atherton St. for $2.85 million from its current owner, D&P of Ohio. The trustee Committee on Finance, Business and Capital Planning recommended approval at its meeting on Thursday morning.
The property at the corner of West College Avenue and North Atherton Street includes a 6,222 gross square foot building that was most recently leased by a Fedex Office store but is currently vacant. The two-story building was constructed in 1995.
With the purchase, Penn State will control all but one property on North Atherton Street between West College Avenue and Park Avenue. The one exception, Nittany Minit Mart at 106 N. Atherton St., is owned by Nittany Oil Company.
Kurt Kissinger, Penn State associate vice president for finance and business, said that in the short-term the property will be used for ‘much needed swing space’ for displaced units — those that have been moved to temporary offices during construction or renovation of other buildings. It also will allow the university to consolidate some off-campus leased space back onto campus, resulting in some cost savings.
‘The corner encompassing the subject property also forms the critical boundary of the western edge of the campus,’ Kissinger said. ‘This corner also plays an important role in the university’s long-range plans for eventual enhancements along North Atherton Street.’
Acquiring the property, which is zoned in State College’s commercial incentive district, will allow Penn State to control the use and aesthetics of the property, Kissinger said, noting that that the area of College Avenue and Atherton Street ‘is attracting much investor interest.’
The Metropolitan high rise opened in 2017 at the corner of College and Atherton, while The Standard is currently under construction across the street. Both are owned by Landmark Properties. Nittany Minit Mart was rebuilt last year, and limited partnerships associated with Welteroth Property Group have acquired College Park Apartments and the former Imperial Motor Inn over the past two years. A new owner took over the former Atherton Hotel, making improvements and rebranding it as The Graduate Hotel.
Kissinger said he could not disclose the asking price for the 101 N. Atherton St. property, but said there was interest from other parties and the university still was able to negotiate it down.
‘I will tell you that over the course of the last five months we were in intense negotiations and we negotiated this price down very significantly,’ he said. ‘There was other interest in this property and we felt that not being able to secure an agreement that we felt was mutually beneficial to both parties that we would lose this generational opportunity.’
Trustee Robert Fenza, the retired chief operating officer of national real estate investment trust Liberty Property Trust, said the parcel is a valuable ‘Main and Main’ property, sitting at a highly visible location along two prominent streets in State College.
‘In my experience these kinds of locations sometimes go for much more of a premium than an appraised value,’ Fenza said. ‘Especially because of its location it really is a property we need to control. It’s a defensive play and it also, I think, has a great future opportunity for us to control that highly visible corner.’
