Friday, November 16, 2018

Multifamily Real Estate Market - Broker and Developer Strategies (Video)

Part 1 Part 2

Retail Real Estate Video Strategies (Video)

NAR Economic and Commercial Real Estate Outlook (Video)

Ivy Realty’s Acquires of 11200 Roosevelt Blvd. in Philadelphia

by Steve Lubetkin,
Ivy Realty’s acquired of 11200 Roosevelt Blvd. in Philadelphia with   $13.1 million in purchase financing. The 452,375-square-foot industrial asset will undergo a full rebranding under its new ownership.

“Ivy Realty capitalized on a value-add opportunity in a thriving submarket. Sustained high demand for industrial product in the Greater Philadelphia/Lower Bucks County region, coupled with our client’s institutional pedigree and track record for successful repositioning projects, led to a competitive marketing process and, ultimately, an excellent execution by RGA.”

The fully leased, multi-tenant 11200 Roosevelt Blvd. currently serves as home to the Philadelphia Charter School and a mix of industrial users. Ivy Realty will infuse $3 million in capital improvements to address deferred maintenance issues – including site work, roofing, painting, and system upgrades – and roll out general enhancements as part of the property’s rebranding as Roosevelt Industrial Center.

“11200 Roosevelt is located in a great area—just off Route 1 and adjacent to a shopping center. Ivy Realty will take advantage of existing North and South entrances to distinguish the campus’ educational and industrial components. In the firm’s signature style, new signage, landscaping and other improvements will serve to elevate this property’s image and competitive positioning.”

Lack of Quality Supply, Pent-Up Demand Driving Industrial Construction in Suburban PA

by Steve Lubetkin,
Speculative development of industrial properties is beginning to ramp up in response to a lack of quality supply in the construction pipeline.

Build-to-suit projects for Solar Manufacturing in Souderton and Global Packaging in Oaks began. Jacquet Mid-Atlantic and Force America have buildings planned in the Linfield Corporate Center.

Herring Properties’ 80,000-square-foot spec building in Bristol Commerce Center was leased to Hughes Enterprises prior to completion. The developer will be breaking ground in the fourth quarter on a 36-40’ clear +/- 300,000-square-foot spec building. Construction has commenced on the first 100,000-square-foot-plus buildings at Pennridge Airport Business Park and Park 309 in upper Bucks County. A 57,600-square-foot bulding is underway in Bristol Industrial Park and a 53,040-square-foot building in Valley View in Coatesville. Multiple other sites are in various stages of the development process in Quakertown, Hatfield, Chalfont, Blue Bell, Souderton, Harleysville, Chichester and Bensalem. There is the potential for 1.2 million of speculative development completions in 2019, the highest level since 2002.

“We are really seeing a lack of quality supply and pent up demand driving new development – and it’s expanding beyond the traditional distribution corridors. In Southern New Jersey, there has been consistent absorption of new product. Developers such as Whitesell, Dermody and Liberty are moving forward with spec projects.  In Philadelphia and suburban PA, there is potential for 1.2 million square feet of speculative construction in the coming year. Prospects seem good—there’s been strong interest in a proposed 300,000 square-foot spec building in Bristol by local developer Herring Properties.”  -

Key Market Trends – Suburban Pennsylvania

  • The vacancy rate remained at 5.2 percent in the third quarter.
  • Year-do-date absorption totaled just over 215,000 square feet, significantly behind last year’s third quarter level of 2.5 million.
  • The weighted average asking rent increased by 1.3% to $6.21 per square foot, triple net. Pro forma rents for new construction have topped $7.00 per square foot.
  • Investment activity was boosted by a large portfolio sale in Bucks County.

Key Market Trends – Southern New Jersey

  • The Southern New Jersey industrial vacancy rate increased slightly during the third quarter from 3.8 to 4.1%.
  • Year-to-date absorption is down year over year, but still strong at 2.5 million square feet.
  • Of the 2.3 million square feet of construction that is scheduled to be completed in the fourth quarter, two-thirds is still available.

Wednesday, November 14, 2018

Friedkin Realty Group Pays $53 Million for 156-Unit Philadelphia Apartment Building

The acquisition of The Isle, a 156-unit apartment building in Philadelphia's Manayunk submarket by San Francisco-based Friedkin Realty Group last month, represents a significant milestone as the highest price per unit ever paid for a major apartment property in Northwest Philadelphia.

The deal, for just over $53 million or about $340,000 per unit, was also the first sale of a large-scale apartment development completed in the Northwest Philadelphia area following the most recent recession. The sellers, Realen and Barings, wrapped up construction on The Isle in early 2017 and brought the property's occupancy to more than 85 percent.

The Isle’s $340,000 per unit sale price trounced the previous record of $223,000 per unit set by the 2015 sale of Madison Hill House, which was built in Chestnut Hill during the 1960s. And, more recently, Goldman Sachs Asset Management paid $170 million this past summer when it purchased two other Chestnut Hill properties, Chestnut Hill Village and Blossom Row, which totaled a combined 821 units and traded at approximately $207,000 per unit.

Philadelphia’s apartment development activity has continued to expand out from Center City into submarkets long devoid of new, large-scale developments. Other multifamily developers considering projects in Northwest Philadelphia are likely eyeing The Isle’s sale as a barometer for the level of pricing that newly-built apartment properties in the area can command following a initial lease-up period.

One such project, Grasso Holdings’ 142-unit Ridge Flats development at 4300 Ridge Ave. in Philadelphia's East Falls submarket, is less than two miles from The Isle. After recent design revisions the project completed Philadelphia’s Civic Design Review process in October and Grasso is aiming to break ground before the end of the first quarter of 2019.

Commercial Real Estate Under Pressure? (Video)