FS Investments is leaving the Navy Yard to move to Schuylkill Yards
FS Investments, one of the few large money managers based in Philadelphia, says it’s leaving its 10-year-old headquarters in the Navy Yard for larger offices in the transit-friendly Schuylkill Yards north tower near 30th Street Station.
The move — to nearly 120,000 square feet in West Philly from 80,000 at 201 Rouse Blvd. in South Philly — will make it easier for FS’s growing staff of around 600 to travel between its base and the company’s second- and third-largest offices in Darien, Conn., and New York, company officials said.
The company also considered sites in Connecticut, New York, and the Philadelphia suburbs, but leaders were glad to find a “vibrant area” and convenient location within the city at Schuylkill Yards, said Michael Forman, FS chairman and CEO, in a statement. Company officials say FS, which requires most staff to be on site four days a week, has filled the building and needs more space.
“It was our hope that our global headquarters would remain in Philadelphia, and we’re excited we will continue to grow the firm” in the city where Forman and Campus Apartments chief executive David J. Adelman founded FS in 2007, he added.
FS manages $83 billion in private equity, private credit, troubled-credit, and real estate funds, for wealthy individuals and for institutions such as the Pennsylvania teachers’ pension fund (PSERS). The company roughly doubled in size with its 2023 acquisition of Darien, Conn.-based hedge fund manager Portfolio Advisors.
Brandywine Realty Trust’s Schuylkill Yards development is on the eastern edge of University City near the Drexel and University of Pennsylvania campuses. Brandywine is the Philadelphia area’s dominant office landlord, with Class A towers in Center City, University City, and the Main Line area.
“This is a big win for Philadelphia” and the state, and marks Philadelphia as “a premier destination for financial services firms,” said Rick Siger, Gov. Josh Shapiro’s secretary of community and economic development, in a statement.
High city business, wage, and sales taxes helped swell the list of big financial companies that started in Philadelphia but moved to the suburbs, including Susquehanna International Group, Lincoln Financial Group, and Vanguard Group’s predecessor. FS, which stands for Franklin Square, bucked that trend by cutting its tax costs with help from state and local “opportunity zone” tax breaks, which are due to expire at the Navy Yard site this year.
FS had approached officials about trying to extend the tax breaks and building a second building at the Navy Yard, but ended up opting for the new construction at the train-friendly University City location instead, qualifying for new tax breaks.
The Schuylkill Yards site is both a Qualified Opportunity Zone (QOZ), enabling developers like Brandywine to collect property value gains, and some revenues, free of federal taxes. It is also a Keystone Opportunity Improvement Zone (KOIZ), which allows tenants to apply for relief from Philadelphia taxes on business income, net profits, real estate, sales, and occupancy; and from Pennsylvania state income, sales, and investment taxes.
Mayor Cherelle L. Parker called FS “very engaged civically.” The new office will be headquarters for Financial Scholars, which focuses on financial education for students, teachers, and families in 39 city high schools, among other nonprofits, FS has said.
City Councilmember Jamie Gauthier, whose district includes Schuylkill Yards, called the area “a model mixed-use development that’s driving job growth” and not displacing residents. It includes stores and apartments as well as business space.
“I am excited to have a great company like FS Investments move to my district,” with prospects of “major growth,” added State Sen. Vincent Hughes, (D., Philadelphia). The lease is for 16 years, the company said in a statement Monday. There are provisions for FS leaving a few years earlier.
The Navy Yard property, currently owned by the Ensemble real estate investment group, wasn’t eligible for renewal of the Keystone tax breaks under state rules, said Kevin Lessard, a spokesperson for the Philadelphia Industrial Development Corp., a partnership between the city and the Chamber of Commerce for Greater Philadelphia that oversees redevelopment of city-owned business properties. There are other KOZ-eligible sites elsewhere at the Navy Yard, Lessard added.
The FS founders have backed a string of Philadelphia-area enterprises. Forman is a veteran securities lawyer. Adelman, besides running Campus Apartments, headed the former campaign to build a new Sixers arena in Center City.
FS has recruited to its fund boards members of the region’s business elite — including Temple President John Fry, Comcast Spectacor chief executive Dan Hilferty, Comcast executive Karen Dougherty Buchholz, ex-Delaware Gov. Jack Markell, and Philadelphia Building and Construction Trades Council leader Ryan Boyer. They collect yearly compensation packages of more than $150,000 each.
The company initially focused on selling investments to rich individuals, but boosted sales to institutional investors with the Portfolio Advisors’ acquisition.
FS has also increased efforts to sell its products to middle-income investors, which may become easier if the Trump administration pursues deregulation of financial products.