The Turk's Head Building, center, was owned by Granoff Associates of Rhode Island until last month.

The Providence Journal / Gretchen Ertl

PROVIDENCE -- A Philadelphia-based firm finds the Renaissance City to its liking, investing here even as a jittery economy shakes confidence in the U.S. real-estate market.

The firm, FB Capital Partners, has purchased two downtown buildings in the last seven months as it invests in state capitals and medium-sized cities in the Eastern United States.

"As a boutique shop, we're focusing on markets that match our size and scope," said Gary S. Brandeis, FB Capital's managing director.

Brandeis is a real-estate veteran who worked for Lincoln Property Co., a major real-estate investment firm headquartered in Dallas. He was in Washington, D.C., for Lincoln before opening its Philadelphia office. In the late 1990s, he helped develop a Web-based management tool that allows Lincoln employees and investors to monitor a property's financial performance.

A city has to have certain fundamental characteristics, he said, for his company to consider buying property there. Among the criteria are that it be a capital city or have a college or university, both of which create stable work forces; that it be easily accessible; and that it has amenities that attract commercial renters.

"Providence is unique," Brandeis said. "It has all these great fundamentals."

He ticked off a list familiar to state residents: the State House, Brown University, Rhode Island School of Design, Johnson & Wales University, the Amtrak station, a riverfront -- and a nearby airport.

"We're very bullish on Providence," he said.

Brandeis, who travels regularly to the city, took the plunge last August as FB Capital paid $6.55 million for the 12-story Union Trust Building at the corner of Westminster and Dorrance Streets, a price that works out to about $101 a square foot. Last month, FB Capital bought the Turk's Head Building in downtown Providence for $17.55 million, about $117 a square foot.

The Turk's Head Building is i! n the he art of the city's financial district -- it's the one with the rounded corner at the intersection of Weybosset and Westminster Streets.

Both buildings were owned by Granoff Associates LLC, run by brothers Evan and Lloyd Granoff.

The two purchases give FB Capital enough space in Providence to support a local property-management team, Brandeis said, including a local leasing agent. The Union Trust Building, which houses the Federal Reserve restaurant, has 65,000 square feet, while the Turk's Head has about 150,000 square feet.

"Our goal is to have enough of a footprint so that we can have an efficient management team," he said.

Downtown Providence commercial properties appear to be retaining their value despite the nation's slowing economy and a deep downturn in the state's residential real-estate market. The average rent for downtown lass A real estate rose last year by $1.16 per square foot , from $29.24 to $30.40. That jump occurred despite a 3-percent increase in space, to 6 million square feet.

FB Capital expects rents in its buildings to be between $20 and $30 a square foot, according to Brandeis.

The company already is looking beyond Providence, to New Haven, Conn., and farther to the west and south for investments, Brandeis said. It's also searching for properties in Columbus, Ohio, and Richmond, Va., both of which are capital cities with universities.

"We do a lot of homework," he said.