Friday, October 17, 2014

Philadelphia Area Office Vacancy Stays at 11.0% for 3rd Quarter

The Philadelphia Office market ended the third quarter 2014 with a vacancy rate of 11.0%.

The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 131,961 square feet in the third quarter. That compares to positive 760,857 square feet in the second quarter 2014. Vacant sublease space increased in the quarter, ending the quarter at 1,388,566 square feet.

Tenants moving into large blocks of space in 2014 include: The Vanguard Group moving into 204,000 square feet at Great Valley Corp Center; The Harrisburg University of Science & Technology moving into 149,820 square feet at Harrisburg University Academic Center; and Beneficial Mutual Bancorp, Inc. moving into 95,764 square feet at 1818 Beneficial Bank Place.

Rental rates ended the third quarter at $21.62, an increase over the previous quarter.

A total of two buildings delivered to the market in the quarter totaling 219,036 square feet, with 3,506,297 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. National Office vacancy rate, which decreased to 11.2% from the previous quarter, with net absorption positive 27.56 million square feet in the third quarter. Average rental rates increased to $22.38, and 233 buildings delivered to the market totaling almost 13.2 million square feet.

Commercial Real Estate Conshohocken- What's going on? (Video)

Thursday, October 16, 2014

Kislak Completes $42 Million Eastern PA MF Sales

by Steve Lubetkin,
The Kislak Company has sold three multifamily properties in eastern Pennsylvania for nearly $42 million.

The transactions include the $31.1 million combined sale of Belair Townhomes, a 208-unit property, and Mayfair Manor Apartments at Grandview, a 60-unit property, both in Lancaster. Kislak also handled the $10.6 million separate sale of Auburn Station, an 85-unit loft-style property with land to build an additional 49 units in Allentown. Robert Holland, Kislak’s president, represented the sellers and purchasers, longtime Kislak clients, in both transactions.

Belair Townhomes, Lancaster, PA
“The central and eastern PA market is very hot for both buyers and sellers,” Holland tells exclusively. “It was a good time for the sellers to sell given the premium pricing. It was also a good time for the buyers to buy given the growth potential amid low interest rates with an eye toward long term hold.”

Belair Townhomes is a 208-unit luxury apartment complex that includes large one-, two-, three- and four-bedroom units with private entrances and patios in 26 three-story buildings on 32 acres. Approximately 95% of the units have been renovated and all units include individual HVAC units, eat-in kitchens, walk-in closets and laundry rooms. The complex includes ample parking and garages are available to select units.

Kislak president Robert Holland handled all three sales.
Mayfair Manor Apartments at Grandview is a 60-unit garden apartment complex located less than ten minutes from Belair Townhomes and includes large one-, two-, and three-bedroom units. Ample amenities include eat-in kitchens, balconies or terraces, and laundry facilities. The property is also 97% renovated.

Berkadia arranged Freddie Mac financing. At the time of closing, the properties were approximately 95% occupied.

Auburn Station, Allentown, PA
Auburn Station is an 85-unit loft-style apartment building with on-site parking and land to build an additional 49 units. The property contains two two-story mill-style buildings and was recently gut renovated. Units have large, open and spacious floor plans.

Scott Lipson, Esq. of Norris, McLaughlin & Marcus, PA represented the seller, and Jason Weiss, Esq. represented the buyer. Eastern Union arranged financing through Investors Bank. At the time of closing, the property was 100% occupied.

Blatstein-Steelman Agree to Buy Caesars Pier

By Joseph N. DiStefano, Inquirer Staff Writer

Philadelphia developer Bart Blatstein said Sunday he and casino architect Paul Steelman had agreed to buy the four-story, 300,000-square-foot, half-empty Caesars Pier shopping center in Atlantic City for a small fraction of its construction cost.

A person familiar with the deal said Blatstein and Steelman agreed to pay $2.8 million. That's less than 2 percent of the $200 million-plus that developer Taubman Centers of the Detroit suburbs and other investors plowed into the project in the mid-00s. The partners hope to close the deal this year.

"I love Atlantic City. I grew up going to the Shore. And this is the best time to buy there," with casinos shutting down and property values cratering, Blatstein said. "For those who think A.C. is done for, they are out of their minds. This is a great opportunity to come back into Atlantic City." He declined to comment on specific plans until after the deal is done.

Taubman had imagined 85 retailers selling Apple smartphones, Baccarat crystal, Gucci and Hugo Boss accessories, Louis Vuitton luggage, and Tiffany jewelry, as well as middle-class clothing brands such as Banana Republic and Guess, and branches of Philadelphia's Buddakan and Continental restaurants would appeal to gamblers looking to spend casino winnings, as well as to other visitors.

But the 2008 recession and the rapid increase in competition from casinos in Pennsylvania and other states crippled Atlantic City retailing.

In 2009, Taubman wrote off $108 million it and others had invested in Caesars, and said it would stop subsidizing the mall's operations; stores began to close. In 2011, a group of lenders foreclosed on the center, canceling $135 million in debt and interest Taubman still owed, and put the glass-walled center up for sale.

Blatstein said he and Steelman weren't planning gambling or residential uses, but were open to other commercial tenants.

Steelman, a Longport native and Atlantic City High School graduate whose clients include gambling mogul Steve Wynn and Brookfield Property Partners L.P., which recently bought Atlantic City's twice-bankrupt Revel casino for a fraction of its construction cost, is also the designer for Blatstein's proposed Provence casino at The Inquirer's former plant on North Broad Street.

"Paul's from down the Shore," Blatstein said. "He's got such a creative, brilliant mind. He's got projects in Vietnam and Macau and Moscow. I love working with him; he sees it all."
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