Monday, December 11, 2017

MRP Industrial, Hillwood Tee Up Largest Spec Dist. Ctr. Building in Eastern Pennsylvania

Construction Started on First Two Bldgs. Planned in Hamburg Logistics Park on Former Perry Golf Course

A joint venture of MRP Industrial and Hillwood has begun work on two of the three distribution buildings planned in the Hamburg Logistics Park located off I-78 in Berks County, PA.

The 165-acre project on the site of the former Perry Golf Course is approved for three buildings totaling 1.9 million square feet.

The first phase of construction includes the speculative development of 101 and 201 Logistics Dr. PLans for 101 Logistics call for a 336,000-square-foot, single-loaded distribution center scheduled for delivery in the third quarter of 2018. The second building at 201 Logistics will be a 1,240,000-square-foot, cross dock distribution center with expected delivery by year-end 2018.

At that size, MRP/Hillside said 201 Logistics Dr. will be the largest speculative building ever developed in eastern Pennsylvania.

A second phase of construction will include the development of 301 Logistics Dr., a 324,000-square-foot facility.

"Hamburg Logistics Park’s location is another example of the continued growth of the Lehigh Valley industrial market. In addition to its proximity to a valuable labor pool, the park will provide convenient access to the region’s major third party parcel shipping hubs, responding to steady demand for both traditional distribution requirements and direct to consumer fulfillment operations."

Baltimore-based MRP Industrial, an affiliate of MRP Realty, has quickly become one of the largest industrial developers in the northeastern U.S. having built or started 27 buildings totaling over 10.3 million square feet across Maryland, Pennsylvania and New Jersey.

Texas-based Hillwood has been active in the I-78 market for several years.

Ware Malcomb is the project architect with The Conlan Co. serving as the general contractor. Snyder Secary & Associates, a civil engineering firm based in Harrisburg, PA, developed the master plan.

Endurance Buys Bucks County Industrial Park

An affiliate of Endurance Real Estate Group, LLC (“Endurance”) and Thackeray Partners is pleased to announce the acquisition of the Penn Warner Industrial Park, a four (4) building warehouse/distribution portfolio totaling 240,358 SF in Fairless Hills (Bucks County), Pennsylvania (“Portfolio”). Endurance acquired the Portfolio from an undisclosed institutional seller.

The Portfolio of buildings was constructed between 1968 and 1970, and features brick & block facades, 24’-25’5” clear ceiling heights, and an excellent dock door ratio of one door per 6,000 SF. The Portfolio is strategically situated near the intersections of Route 1 and Route 13, providing easy access to Interstate 95, Interstate 195, 295, and the NJ Turnpike. These optimal logistical connections provide unique access to New York City and Philadelphia metropolitan areas and the affluent consumer base of the northeastern corridor, attracting a number of employers to the surrounding industrial market of Lower Bucks County. Existing users within the area include Rite-Aid, Estee Lauder, Pitney Bowes, XPO Logistics, Tara Tape, and Future Foam.

“The opportunity to acquire this Portfolio at pricing that is well below replacement cost attracted us to pursue this transaction. Our attractive basis will provide the new ownership group with flexibility to invest speculative capital. These strategic investments in base building upgrades are anticipated to expedite stabilization from the current occupancy level of 62%”, stated Albert J. Corr, Senior Vice President of Endurance. “Given the strength of the Lower Bucks distribution market as well as Endurance’s hands-on management platform and local ownership presence, this opportunity was a natural fit given our recent value-add acquisition of buildings in the King of Prussia and Mount Laurel, New Jersey markets.” Endurance previously owned this Portfolio from 2003 to 2007.

Current vacancies range from 20,012 SF up to a full building availability of 60,223 SF.

Law Firms And Banks Confront Changes To Traditional Office Layouts

by Steve Lubetkin,
Demographic and working style changes are creating strong pressure for radical changes in office space buildouts, and these changes are moving rapidly into the legal and financial sectors, according to experts in the design requirements for those professions.

Law firms are seeking new ways to build consensus and affect change to adjust to this evolving reality. Philadelphia law firms are likely to feel the effects of an office space shakeout currently underway in New York.

“New York is going through a legal sector transformation, with some megafirms like Skadden [Arps], Millbank [Tweed], Boies, Schiller [& Flexner] breaking out of the traditional mold of downtown markets,” she says. “All of a sudden they’re saying, ‘the product is old, the floors are inefficient, they don’t have the good window lines, and if we want to reinvent ourselves, we just can’t do it in existing product.’ Hence, we’re seeing a flight to quality in markets all across the United States.”

Philadelphia will feel the impact because many major national law firms are headquartered in New York, and when those firms make office design changes, “it has a domino effect in their other locations. It’s going to influence what’s required by the firm moving forward. If they’re doing something very progressive, they’re going to look to their other locations to do something progressive too.”

Law firm clients are increasingly demanding that law firms drop billable hours and move toward fixed fees for legal services, and that is having an impact on how law firms look at their costs, she says. Adding to that evolution, by 2025, more than half of the lawyers in the US will be Millennials, she says, most of whom view success differently than previous generations, and are less-influenced by the traditional trappings of success such as large private offices.

“When you have a fundamental workforce change, people now are not making decisions for their partners of today, they are making them for their partners of tomorrow. In Philadelphia, where we are going to see development opportunities is west [of the CBD] toward the train station, and we do believe there will be, in the coming years, some firms that are either gutting and renovating their current space, or potentially committing to a new building or two.”

Technological advances are making it possible for law firms to reimagine their space requirements in radical ways. She cites Marshall Dennehy, a large insurance litigation firm, as an example of this kind of forward-thinking.

“They moved from 1845 Walnut Street to 2000 Market Street,” she says. “Two years before they moved, they invested in the technology and developed the protocol, that when they moved, they got rid of 80 percent of their paper. And their goal is to go completely paperless. That’s an insurance litigation firm, that has the most paper of anybody.”

Office floor layouts are changing to a more open design, with core support teams in the center of the floor in open spaces, with attorney offices on the perimeter of the floor completely enclosed in glass so that natural light reaches the entire floor.

“It has a transparency that creates better vitality, better collaboration, better energy, better morale." Even with rising space rates, firms can save money on the per-attorney space cost by reducing the amount of space allowed. “They’re actually determining each partner’s pro-rata share of the space costs.".

Bright Insight, the 2017 National Legal Sector Benchmark Survey, conducted in partnership with ALM Legal Intelligence, polled more than 1,500 individuals from law firms across the United States.

“With real estate being the biggest expense for firms, excluding salaries, we are seeing a continued shift to rightsizing and incorporating new workplace strategies that help firms lower the cost of their footprint, while improving operations and client services."

In Philadelphia, about one-quarter of law firms reduced their overall space when they renewed leases, adding that future space design is likely to embrace

“Philadelphia is a little more parochial than some of the other markets, so we lag a little bit on some of those trends, such as single-sized offices. We’re seeing law firms increase their density, and firms that are able to pick up and relocate are looking at doing that. Not all firms can do it, but within the next three years I anticipate some of them to do that.”

Meanwhile, banks are finding that the space requirements for branches are changing as well.

As bank customers become more comfortable with remote transaction opportunities, including online banking, smartphone apps that even permit check deposits, and standalone ATM machines, banks are moving away from large space requirements for the traditional bricks-and-mortar branch, and even changing the way that space is used.

“Our clients are now building branches of less than 2,000 square feet, but it’s a full-service branch,” says Tim Quinn, branch solution sales specialist for NCR Corporation, a major supplier of financial equipment to the banking industry. Quinn described NCR’s vision of the future of branch banking at the New Jersey Bank Marketing Association’s October meeting in Clark, NJ.

“I actually have a client at the University of Maine, on the college campus, they built a new branch that was 264 square feet,” he says. “That was one office and one interactive teller.”

Quinn says remote interactive teller machines, where clients can make deposits and withdrawals like an ATM machine, but can also interact via two-way video with a live bank teller sitting at a central location, are going to replace many branch interactions in bank branches of the future. Other branch space is being reconfigured to emphasize collaborative meetings between financial specialists and customers, with less space devoted to teller transactions, he says.

Tuesday, December 5, 2017

Super Value Signs Full Bldg Industrial Lease in Carlisle

Super Value, a retailer, has signed a full-building lease for the new 422,400-square-foot industrial building at 192 Kost Rd. in Carlisle, PA.

The warehouse facility sits on 38.8 acres in the Harrisburg Area West Industrial submarket of Cumblerland County, within the New Kingstown Business Park. MRP Realty, Inc. developed the property on spec in June 2016 and sold it to Industrial Property Trust, Inc. before delivery.

Black Creek Divests Centerton Square Shopping Center

Prestige Properties & Development Company, Inc. has acquired the Centerton Square shopping center at 2 - 74 Centerton Rd. in Mount Laurel, NJ from Black Creek Diversified Property Fund Inc. for $129.6 million, or about $304 per square foot.

The shopping center delivered in 2004 and totals 426,415 square feet. It is anchored by a Wegmans, with in-line and outlot space fully leased by multiple tenants including TJ Maxx, DSW, PetSmart, Chipotle, Starbucks, Five Below and JoAnn Fabrics. Target and Costco stores are a part of the center but were not included in the sale.