Fire Sale: School buildings sell for $11 per square foot

Last night, the School Reform Commission approved the sale of 11 shuttered school buildings in Philadelphia, part of the School District’s ongoing effort to raise money by selling off unused real estate.

As Kristen Graham reported for the Inquirer, the sales will net just $2 million for the School District after closing costs and related debts are paid off. That’s just a fraction of the absolute value of the sale prices, which totals $14.2 million, an average of around $1.3 million per school building.

We broke down the sales even further to get a sense of the going rate for surplus Philadelphia School District real estate.

• The eleven schools were assessed at a combined value of $78,293,500, according to the Office of Property Assessment. Their sale for $14.2 million represents a difference of more than $64 million between assessed value and sale price.

• The asking price for the school buildings was closer to the sale price. The School District sought a total of $19.85 million for ten of the schools (no asking price for Reynolds Elementary could be found.) That’s a difference of $5.65 million.  

• In total, the schools sold for 18 percent of their assessed value, and 71.5 percent of their asking price.

• The best sale was that of Leidy Elementary School in West Philadelphia, which will be bought by Belmont Charter for the asking price of $2.3 million. That’s still less than its assessed value of $3,069,600, but by far the most valuable building of the sale, at a price of $34 per square foot.

• On the other end of the spectrum is Bok Technical High School in South Philadelphia, which sold for $2.1 million, which is less than 12 percent of its assessed value of $17.8 million. The building was sold for $6 per square foot, the lowest rate of all the sales, though it did manage to exceed its asking price by $400,000.

• In all, the school buildings sold for $11 per square foot.

See the rest of the sales broken down in this spreadsheet.

Council President Darrell Clarke acknowledged on Friday that the properties likely won’t generate the $200 million that the Office of Property Assessment had estimated their value to be. Nonetheless, he said he is glad to see the School District shrinking its inventory of surplus real estate and that he still believes the property sales will generate more than $100 million, a figure that had been offered last year by a Washington, D.C. firm for the entire portfolio of school buildings.

Clarke said that even though the net revenue gain to the District is small for these sales, eliminating debt obligations on the buildings is just as important. In addition, he said he’s confident that the reuses of the buildings will be a boon for the surrounding communities as well as for the city’s tax base.

Between Thursday’s sale of 11 properties and the sales of University City High School, William Penn High School, and West Philadelphia High School, school buildings have earned a total of $59.3 million. The asking price on five additional properties is just under $10 million.

John Grady of the Philadelphia Industrial Development Corporation, which is managing the sale of the District’s surplus real estate, did not immediately return a call Friday seeking information about the remaining properties.