Friday, February 24, 2017

Fully leased and ready to sell: 2300 Chestnut St. hits the market

by Natalie Kostelni, Reporter, Philadelphia Business Journal
With a long-term lease with Vanguard Group secured and demand for creative office space high, the owner of 2300 Chestnut St. in Philadelphia has decided to put the building up for sale.

When Paul V. Profeta bought the 103,905-square-foot building in May 1987, he paid $1.13 million for it and spent another $4 million on renovations that turned an industrial loft structure into multitenant office space and re-branded it the Philadelphia Design Building. The building has come a long way since and with Vanguard recently signing a 10-year lease on 16,000 square feet with options to expand, the building is now 100 percent occupied.

“How many investors hold onto a property for 30 years?” Profeta said in a recent interview. “I’ve loved the building. It hasn’t been a chore owning it and I don’t think it is going to be worth more than it is right now. It’s full, it has the cachet of Vanguard and is a millennial building.”

Profeta believes the building could trade for as high as $30 million, or more than $290 a square foot, though it can be tricky to pin down what an investor will actually pay for the structure. What it does sell for will be telling for the investment market and whether buildings such as these—older, smaller but packed with tenants with a creative bent—will trade at a premium.

While Vanguard is paying rents at $32 a square foot, most tenants are paying about 21 percent below market or about $22 a square foot, giving a buyer an opportunity to boost rents and net operating income as tenant leases come due.
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Sam Zell Sees Surge in Apartment Supply (Video)

So goes NY so goes Philadelphia?

Wednesday, February 22, 2017

Cotiviti Leases 87,000 SF in Blue Bell

Cotiviti leased 86,621 square feet in the office building at 785 Arbor Way in Blue Bell, PA.

The tech firm will occupy the entire first floor of the three-story, 203,049-square-foot Woodlands I building.

Originally built in 1970 on 26.7 acres in the Plymouth Meeting / Blue Bell submarket of Montgomery County, within Arborcrest Park, the asset is currently under renovation in an improvement program that began in 2015 and is expected to be completed in the first quarter of 2018. Cotiviti will take occupancy of its space once the renovations have been completed.

Short Term Sublease Inked at Liberty Business Center II in Alburtis

Herman’s Warehousing has signed a 400,000-square-foot sublease at 8620 Congdon Hill Dr. in Alburtis, PA, through July 2017.

The single-story, 1.2 million-square-foot, 5-Star industrial building delivered in October 2016 on Lot 5 in the Liberty Business Center II, within the Lehigh Valley Industrial submarket. The steel building features a 185-foot truck court, 84 loading docks and two drive-ins, 36-foot clear heights, a 600-foot building depth and up to 57-foot column spacing.

Ryder Systems had pre-leased the entire building from Liberty Property Trust back in July 2016.

Monday, February 20, 2017

Barry Sternlicht on CRE and Trump About Overheating Economy (Video)

Telerx jumps to new office building

by Natalie Kostelni Reporter, Philadelphia Business Journal
After conducting a search that took it to various office buildings throughout Horsham, Telerx Inc. has signed a lease to relocate its headquarters around the corner from its current offices off Dresher Road.

The company, a subsidiary of Merck & Co. Inc., signed an eight-year lease on roughly 45,000 square feet of space at 410 Horsham Road, an 88,045-square-foot building that is vacant and under redevelopment.

Telerx has been based in the Horsham area for 20 years and, though it wanted to stay in the area, the company was ready for a change. It occupies 50,000 square feet at 723 Dresher Road and recently vacated 17,000 square feet at 100 Lakeside Drive. While the size of the Dresher Road building worked for the company, the space, more like a warehouse rather than an office, wasn’t meeting its needs.

“We did consider staying there, but the cost to renovate would have been very high,” said Bud Herrmann, director at Telerx. A renovation would also be too disruptive to its business, Herrmann said. Telerx is a customer service call center operator that focuses on the health care industry.

Since the company has been in Horsham for so long with its 400 local employees familiar with the commute, Telerx decided to focus on the area. It looked at a handful of buildings and selected 410 Horsham because of its location, sufficient parking and access to a bus route, Hermann said.

The lease is a big one for the building, which has been vacant for years though its new ownership was intent on changing that status. PernaFrederick bought the property in the fall of 2015 from First Niagara Bank for $2.45 million and launched a gut renovation of it.

Built in 1990, the property had been fully occupied for years by TNS and Morning Star only to become vacant and taken over by its lender. This is the first attempt by the duo to venture beyond being brokers and trying their hand at also being a landlord.

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AIM Academy buys complex from Buccini Pollin & other recent real estate deals

by Natalie Kostelni Reporter Philadelphia Business Journal
$11.5 million

AIM Academy paid $11.5 million to buy a 71,000-square-foot building on 4.5 acres at 1200 River Road in Conshohocken from Buccini-Pollin Group. AIM, a private school for students with language-based learning differences, moved into the building in 2012. The school was established in 2006 with 24 students and now has 312. The building houses its three divisions as well as administrative and other space. It recently constructed a 23,000-square-foot AIM Community Center on the site that has a full-size gym and stage space.

$4.1 million

Chester Hall, a 40-unit apartment property at 4205 Chester Ave. in the University City neighborhood of Philadelphia, has sold for $4.1 million. The buyer was a partnership between two limited liability corporations, 1118 Spruce St. and Greenzang Properties VII and the seller was an affiliate of Post Brothers, which paid $2 million for the property in 2015 as part of an acquisition of a larger portfolio of apartment buildings in the neighborhood.

$2.3 million

The Estate of Edna Ravikio sold a 48,000-square-foot office building at 505 S. Lenola Road in Moorestown, N.J., for $2.3 million to 505 S. Lenola Road LLC. The property was 90 percent occupied at the time of the sale.

$4.5 million

Wakanek Property Management paid $4.55 million for a partially occupied 109,000-square-foot building in the Byberry West Industrial Park at 2101 Hornig Road in Philadelphia. The seller was Fred Hill & Son Co.

$25 million

Holliday Finoglio Fowler arranged a $25 million, 15-year loan to refinance the construction loan on Station at Manayunk, a 149-unit apartment complex at 1 Parker Road in the Philadelphia neighborhood of Manayunk. J.G. Petrucci Co. Inc. completed developing the multifamily community in 2015. The loan was arranged with Principal Real Estate Investors.
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