Sunday, October 31, 2010

Commercial Real Estate Turnaround

Video on CNBC 10/26/2010:
Debating whether commercial real estate is back in business.
http://www.cnbc.com/id/15840232/?video=1625413863&play=1

Financial Accounting Standards Board (FASB)- Lease Changes

Potential Financial Accounting Standards Board (FASB) changes on how a company reports it's lease liability on its balance sheet.
http://tinyurl.com/2b6nly5

Friday, October 29, 2010

Teva Pharmaceuticals got $4.7 million in state aid for new Philadelphia facility

"Teva Pharmaceuticals USA said Thursday that $4.7 million in state aid helped persuade the pharmaceutical giant to put its new distribution facility in Philadelphia's Bustleton neighborhood, where the company hopes to employ 500 people in the next five years.
Teva, a fast-growing maker of generic drugs, expects to employ 250 people initially at the proposed $295 million facility.

The 1.2-million-square-foot distribution buildings will sit on 136 acres at 1 Red Lion Rd., formerly home to Budd Co.'s railcar division, which closed in the 1980s.

William Marth, chief executive officer of the Israeli company's American operations, said government officials from many places had tried to lure the facility.

Teva favored Philadelphia and Pennsylvania for many reasons besides the state grants and tax credits, Marth said, but, mostly, because "it's our home."

Teva's U.S. headquarters are in North Wales. The new distribution center will not affect those operations, Teva officials said. The company also had considered Willow Grove and Warrington for the new facility.

The Island Green Country Club now at the Red Lion Road site will close, said Greg Rogerson, principal of J.G. Petrucci Co., which is working with Teva on the new facility.

In April, Teva announced that it was eliminating some jobs at its Sellersville manufacturing plant, but the company has not said how many employees were affected.

At Red Lion Road, the company will construct three buildings for distribution, warehouse, and office space. Marth said he expected it to open in 2013.

Mayor Nutter said the construction phase should employ 400 to 600 workers.

Gov. Rendell, who also attended Thursday's news conference announcing the deal, said he believed Teva would employ as many as 1,000 people there in 10 years.

For now, however, Teva says total employment at the Red Lion Road site will reach 500 in the next few years.

Rendell's projections were based on Teva's strong growth. It is the world's largest maker of generic drugs, which are expected to continue to gain market share as patents expire on brand-name products.

Teva Pharmaceutical Industries Ltd. specializes in developing and selling generic and proprietary drugs. It had 2009 revenue of $13.9 billion and net income of $2 billion. Marth said he expected revenue to hit about $16 billion in 2010.

Acquisitions have fueled much of that growth. In 2008, Teva acquired Barr Pharmaceuticals Inc., a maker of generic birth-control pills, for about $7.5 billion.

Generics are federally approved medications that contain the same amount of the active ingredient as brand-name drugs. They are significantly less expensive, making them a popular choice as consumers and businesses seek ways to lower health-care costs."

Point Roll Inks 28,000-SF Office Deal in King of Prussia

"Point Roll, Inc., a leading provider of digital marketing solutions, has signed a lease for 28,638 square feet of office space at 3200 Horizon Blvd.

Located in Renaissance Park, the 90,000-square-foot, single-story office building sits on over 10 acres of land located in the heart of King of Prussia."

King of Prussia Industrial Bldg Sells for $3.6M

"Brandywine Realty Trust sold their industrial building located at 630 Clark Ave in King of Prussia, PA to Red Sea Group for $3.16 million, or about $72 per square foot.

The single-story, 50,000-square-foot brick building was delivered in 1960. The facility features approximately 25 percent office and 75 percent warehouse space, and sits on a little more than three acres of land."

Price Chopper Bldg in Wilkes Barre Sells For $10M

"Ventura Development sold 245 Wilkes Barre Township Blvd in Wilkes Barre Township, PA to H & R REIT for $10 million, or approximately $171 per square foot.

The 58,500-square-foot supermarket retail building has been fully occupied by Price Chopper since 2008, with 23 years left on a 25-year term. The facility was completed in 2008, and sits on 12.15 acres of land with ample parking."

Johnson Controls headed for Valley Forge Corporate Center

"Audubon Land Development signs a third tenant at Forge Avenue in Valley Forge Corporate Center. Audubon has recently completed a lease for the Forge Ave property with Johnson Controls. Johnson Controls will occupy 33,765 square feet for its York Heating and Air Conditioning parts center and office at 950 Forge Avenue. Johnson Controls Inc. is scheduled to open in mid November. Johnson is projecting to employ 20 full time personnel at the site.

Johnson joins Solar Roofing Systems Inc. and Broadwing Communications leaving only 54,000 Square Feet available for lease at the Forge Avenue property. The Forge Avenue property formerly known as the Seton Center is located within the Valley Forge Corporate Center in Lower Providence Township. The convenient location with access to major highway Route 422, Route 76 and the PA Turnpike offers tenants the location and amenities desirable in today's commercial real estate market."

Toll Bros. kin buys Chesco apartments at $99,000 each

"Millview Apartments, a 350-unit complex on the heights above PA 82 on the north end of Coatesville, sold for just $34.5 million, or $99,000 a unit (and $95 a square foot), to Paradise Property Group, a group including Jeff Franz, son-in-law of Toll Bros. boss Robert Toll, the same local developers who last year purchased Oxford Gateway near West Chester.

Builder Carl Chetty, of Kennett Square, at first considered selling the units as condominiums, but rented them instead, and put the project on the market for $42 million in 2007.

Property values plunged that year, and occupancy also fell to a low of 70% in the recession. But the proprtion of occupied units recovered to 93%, before a September fire damaged a 22-unit building at the complex. The fire didn't affect the price because the building was insured, he told me.

"We got a lot of offers," Thomson added. He said the buildings sold at a modest capitalization rate (rent/price) of between 6 and 7 percent.

The units fetched half what Korman group managers paid for units at Cornerstone Terrace in Exton in 2008, before the worst of the real estate collapse. Exton is wealthier, closer to corporate job centers, and generally pricier than Coatesville."

Tuesday, October 26, 2010

Why You Need a Tenant Rep

"DIY…. when Leasing Office Space is a Risky Approach. The process of securing office space for your organization, whether it is a new location or extending a lease at your current location is a complex and time consuming process filled with numerous opportunities to make a decision that doesn’t best compliment your business objectives.

Tackling this process without the benefit of an experienced tenant
representative to guide you the process and structure a transaction that best
serves your operational needs and financial objectives only increases the
chances of making the wrong move.

It is typically the smaller organizations who end to take the do-it-yourself approach, probably because they either
(1) don’t understand the value of the service; or
(2) have a misconception that by eliminating the tenant representative’s fee, they will get a better deal.

What Benefit does the Tenant Representative Provide?The logic behind tenant representation is that in order to reach an equitable
solution to a particular need (leasing office space), the corporate tenant needs
access to market information, transaction expertise and negotiation skills equal to that of the landlord who utilizes professional representation.

A Tenant Representative will:

Analyze your space needs: The tenant rep can assist you in determining your space needs ranging from the optimal amount of space required as well as evaluating various layout options. This will prevent you from spending time
evaluating buildings or negotiating for space that doesn’t best serve your
needs, as well as prevent you from leasing too much space. The building owner or
his agent is not in the business of economizing your office space.

Identify and investigate all property options: This involves more than getting on-line and scanning listing services for availabilities. A tenant rep can identify a property that is not an obvious choice to meet your needs resulting
in lower costs. A tenant rep will know the market inventory, where deals are
being signed and under what leasing terms. They can also provide insight as to
how various building owners operate their properties and the various features of
a particular property.

Create leverage in the negotiation process: Even in a tight market, competition for your tenancy is the great equalizer in negotiations. A tenant rep will implement an effective negotiation strategy designed to win the concessions that
meet your actual needs and structure the best leasing terms attainable in the
marketplace. The mere presence of a respected tenant rep sends a message to
Landlords that you will see all opportunities in the marketplace and you have
someone in charge that understands all the nuances of the process.

Protect your interest in lease negotiations: The tenant rep knows ins and outs of the real estate transaction including all the provisions contained in a leaseagreement. A real estate lease is complex legal document with provisions that contain significant financial implications beyond the rental terms. How operating expenses are handled, interruption of basic services, sublease
provisions, the list goes on and on.

Provide a buffer between you and the Landlord: Lease negotiations can be difficult as each party is attempting to extract concessions (dollars) from each other. The tenant rep can handle the difficult and sometimes tough conversations that arise in the negotiation process and keep emotions out of the dynamic. After all, you have to live with the Landlord for years to come after the dealis done.

Manage and coordinate all the participants in the process: The leasing process involves many participants beyond the Landlord and Tenant to include the building owner’s agent, architect / space planners, interior designers, engineers, contractors, construction managers, property managers, office furniture vendors and lawyers. A single point of contact who understands the process and the role of the various participants in the process best serve the tenant.

These are just a few benefits the tenant representative provides to the
corporate office space user and if I were to note them all, this would be a book
and not a blog post. The tenant rep is an expert in evaluating, selecting and
negotiating for office space. Even the very largest corporations with full
fledged real estate departments and experienced real estate professionals on
staff utilize tenant representatives and understand the costs savings achieved
by utilizing a tenant rep far exceed their fee that is almost always already
budgeted into the rental rate by the building owner.

It is hard to argue to the point that a professional tenant rep will help you
achieve better results in a process the business owner only does every 3 to 10
years."
http://www.omegare.com/
Originally posted 10/16/2010 by Coy Davison, Houston, TX

Performance Radiator Pacific Leases 51,774 SF in Harrisburg

"Performance Radiator Pacific signed a seven-year lease for 51,774 square feet in 3400 Industrial Road, Harrisburg PA.

The one-story Class A office building totals about 294,450 square feet in the Lucknow Industrial Park."

Monday, October 25, 2010

Crisis on Main Street

Chris puts on great videos. This one is great.
http://www.youtube.com/504LoanExperts

Lankenau Hospital to start big expansion

"One of the region's largest suburban hospitals, Lankenau Hospital is set to embark on a half-billion-dollar expansion it says will position it to attract more patients and operate more efficiently.

Groundbreaking is set for later this week on work that will include renovation of the existing 331-bed hospital and construction of a five-story, $208 million, 96-bed pavilion and a 1,308-car parking garage and central utility plant. The hospital has already revamped two cardiac-catheterization labs and two inpatient units and begun roadwork on Lancaster Avenue.

Jack Lynch, president and chief executive officer of Main Line Health, which owns Lankenau and four other hospitals, said the work was fueling a "renaissance" on Lankenau's 92-acre campus. He said the current building was aging and needed to be upgraded to include private rooms and newer technology. Because Lankenau is converting some double rooms into singles, it will have a net increase of only 55 beds, for a total of 386.

Lynch said he believed a revamped Lankenau could attract more patients from throughout the region, particularly those going to other community hospitals. Paoli Hospital, which is also owned by Main Line Health Inc., saw more patients after it opened a $124 million pavilion last year.

"We also understand that with health-care reform, there's going to likely be a decrease in demand for inpatient beds," Lynch said, "but we believe there's an opportunity to capture increased market share."

To put the $529 million project in perspective, an entirely new community hospital being built outside Norristown is expected to cost $355 million. Work on that facility, which is a joint project of Albert Einstein Healthcare Network and Montgomery Hospital Medical Center, began in September. That hospital will have 146 beds.

Lankenau is building at a time when a tough economy has flattened admissions at many hospitals - including Lankenau - and health-care reform threatens to put serious pressure on prices.

"Before the economy changed, projects like this were a dime a dozen," said Alan Zuckerman, president of Health Strategies & Solutions, of Philadelphia. "Then the economy changed, and everything just about was put on hold."

In the last three to six months, he said, bigger hospital building projects started "bubbling up again."

Hospitals sometimes have to invest in new technology, and private rooms are almost a requirement now because of concerns about privacy and dangerous germs that could spread between patients, Zuckerman said.

But he said he thought it was risky to spend millions now because big employers would demand lower prices from hospitals even if the government did not. Hospitals will have to pay more attention to lowering costs, not just attracting more patients. "It's all changing," he said. "It just hasn't changed yet."

Consultant Gerald Katz agreed that reimbursements will go down, but he said that Lankenau needed to make improvements to continue attracting suburban patients. "It needs to be upgraded, without question," he said, "and parking's a problem."

Lynch said Main Line Health leaders debated whether to go ahead with the project, but they decided the work had to be done and "the construction environment was never going to be any better than it is today."

Main Line Health will pay for most of the work with reserves and cash flow, Lynch said. A capital campaign will account for less than 10 percent, and the project will require only $30 million in debt.

Lynch said he worried that health-care reform would tighten bottom lines so severely that many hospitals would not be able to reinvest in their buildings. Even if reform reduces the number of patients staying overnight, he said he thought the region's aging population would need Lankenau enough to support this investment.

The new pavilion will focus on cardiac care, starting with diagnostic tests. Patient rooms were designed to be comfortable and safe for patients and family members, efficient for employees, and big enough - 325 square feet - for teaching new doctors and housing in-room computers. Equipment is laid out identically in each room so nurses and doctors can easily figure out where things are. Patients should need to travel less between various tests and procedures.

Lynch said he thought the new rooms would reduce infections and increase efficiency, both of which will reduce costs.

The entire campus, which includes research and medical-training facilities, will be called Lankenau Medical Center."

Hershey Trust bought neighboring land for well above market value

"The Milton S. Hershey School, whose mission for 100 years has been educating impoverished children, is also the owner of Pumpkin World USA, a roadside attraction north of Hershey where you can buy vegetables, country crafts, and gourds galore.

Pumpkin World sits rather humbly on a 27-acre tract off Route 39, but to the members of the board of the charitable Hershey Trust, which administers the school, the property had value well beyond its bucolic charms.

So in 2006, the Hershey Trust paid a total of $8.6 million in school money for Pumpkin World - a sum more than nine times greater than the property's fair-market value, according to the Dauphin County tax office.

Officials of the Hershey Trust defend the purchase as part of a land-buying strategy to provide "buffer land" for an expansion of the Hershey School campus, and say Route 39 was a fast-growing commercial corridor.

Nonetheless, it is the second purchase of property at what would seem a highly inflated price. The other was $12 million for a money-losing golf course, on which the board then spent $5 million more to build a clubhouse and restaurant/bar.

The deal for the struggling Wren Dale Golf Club was reported by The Inquirer on Oct. 3 and included the fact that Richard H. Lenny, then the chief executive officer of the Hershey candy company, was an original investor in Wren Dale who profited from the golf course's sale.

A spokesman for state Attorney General Tom Corbett confirmed an investigation into a land deal the trust made Oct. 6, without specifying that it was the golf course. Deputy press secretary Nils Frederiksen said the investigation began in September, but sources familiar with the investigation say the Attorney General's Office has not requested records from the trust.

The attorney general is the only official - except people in the trust - who can challenge decisions by the trust in Dauphin County Orphans Court.

Corbett is the Republican candidate for governor. The chairman of the Hershey Trust is LeRoy S. Zimmerman, the former two-term attorney general and a political ally of Corbett. Other prominent Republicans, including former Gov. Tom Ridge, serve on Hershey-related boards and earn hundreds of thousands of dollars a year in director fees.

Frederiksen said Friday that he could not comment on the status of the investigation.

He has said the Attorney General's Office does not "micromanage" charities or run them day-to-day. As to whether it was appropriate for the trust to buy Pumpkin World, Frederiksen said the legal standard is: "At the time the decision was made, was it in the authority of the trust, was it an informed decision, and was it the product of due diligence?"

The purchases of Pumpkin World and Wren Dale Golf Club would seem to violate the strictly worded directives of Milton S. Hershey, the billionaire philanthropist who founded the candy company. His deed of trust emphasizes that the Hershey Trust must spend money only on the direct care and education of the students of the Hershey School. School officials say using the golf course as buffer land to ensure student safety falls under Milton Hershey's mission regarding care of children.

The Hershey realm, which includes the chocolate company and an entertainment company, is complicated. Each is directed by its own board but both exist, in the wishes of Milton Hershey, to subsidize the school, which is administered directly by the $7.5 billion trust.

One complexity in the Pumpkin World purchase was that a third party had an agreement to develop a portion of the property into a Jungle Joey's water park, which could compete with Hersheypark.

If buying Pumpkin World with school money was a hedge against a potential competitor for Hersheypark, that would seem counter to the directives of the deed of trust.

The Pumpkin World property fair-market value of about $920,000, listed in a state tax document, was based on a 2002 county assessment and adjusted for inflation.

County estimates in Pennsylvania are not perfect, but the difference in the property's sale price appears to be well beyond any standard error ranges. Based on data from the State Tax Equalization Board, the Dauphin County estimates of value are typically within 25 percent of actual sales.

The charitable trust has not said whether it independently appraised the property, which includes several buildings and a retail store selling Amish and homemade crafts, lawn ornaments, pumpkins, and gourds. It said that it bought the property as a buffer to ensure student safety between the community and new student housing, and that it bought other property in the area as investments.

"Paying eight to nine times the assessed value requires an extraordinary explanation," said Robert Sitkoff, a Harvard law professor and national expert on trusts. "For example, a competing bidder and a credible private appraisal, plus an urgent programmatic need for the property might justify the purchase."

Sitkoff said trustees in a charitable trust are held to a high standard. "You can be whimsical, feckless, or irresponsible with your own property. But when you are a fiduciary, you are managing the beneficiary's property, hence you must act prudently and in the best interests of the beneficiary. As regards a charitable trust, what this means is that the trustees must act prudently and in the best interests of the charitable purpose and the attorney general is meant to enforce these obligations."

It "strains credulity" that the trust would earn an investment return paying the price it did for Pumpkin World, said William Brown, visiting professor at the Duquesne University School of Law. "Zany with a capital Z," he said of the Pumpkin World purchase.

Pumpkin World was bought while the institution was spending hundreds of millions of dollars to boost its real estate holdings, renovate buildings, and construct student housing. That expansion is now on hold because of the economy. The school enrolls poor students free of charge.

Hershey Trust officials declined to comment directly on Pumpkin World. In an open letter to the community posted on the Hershey School website Oct. 18, Zimmerman said he believed the attorney general would find that the institution acted properly in its land dealings and that the deed of trust gave the charitable board flexibility in buying land.

Zimmerman said the land around its new campus "was of prime interest to developers, and we wanted to ensure that we acquired the critical land we needed for the school's use before we lost the chance to do so."

He noted that the school and its trust board "are required to look at every decision through the lens of perpetuity. We are keenly aware that our actions today must position the school for the students of not just this century, but the next." The school has expanded its enrollment to 1,800 students from 1,250 in 2004, he noted. "We believed this land was absolutely necessary as we planned not just for our current growth, but for potential growth 50 to 100 years from now," he said.

Regarding the investors in Wren Dale who were facing substantial losses before the trust bought the course, Zimmerman said: "Some have suggested that the trust company purchased the property to bail out wealthy friends. It is unfortunate that improper motives are sometimes ascribed where they don't exist."

Though the school says it acquired Pumpkin World and Wren Dale as buffers for student safety, the real estate has been useful to Hershey Entertainment & Resort Co., a for-profit subsidiary of the Hershey School.

Hershey Entertainment, a major leisure and amusement company, operates Hersheypark, Hotel Hershey, the Hershey Lodge, a campground, and golf courses. The company exists to financially support school operations through cash dividends. Since 2006, Hershey Entertainment has generated more than $1 billion in revenue and returned only $2 million in cash dividends to the school, according to IRS records and the Hershey organization.

After buying the Wren Dale course for $12 million, the Hershey School built a $5 million clubhouse, restaurant, and bar on the property, and then leased it to Hershey Entertainment at below-market rates. It is open to the public.

The Inquirer initially reported that the trust bought Pumpkin World from its longtime owner, the Retherford family, for $7.5 million. But the purchase from the Retherfords was only the first part of the transaction, according to property records.

When the trust agreed to buy the roadside market, the Pumpkin World owners were talking with local developer Nick Pendolino, who had proposed the water park on part of the property. Pendolino's partners were his wife, Jodi, and another couple, Donald R. Walker Jr. and Kimberly S. Walker.

Jungle Joey's was to be a Chuck E. Cheese-like facility with an indoor pool, 125-room hotel, and children's restaurant. Hersheypark is about a mile from the planned site.

In a phone interview last week, Pendolino said the Hershey Trust bought Pumpkin World from the Retherford family without his knowledge. Earl Retherford Jr., who runs Pumpkin World, did not return several phone calls seeking comment.

Pendolino said the "thought crossed our mind" that the trust wanted to eliminate potential competition for Hersheypark. But trust officials told him they wanted it for buffer.

The trust agreed to honor his contract with the Retherfords to buy 6.7 acres of the site. Pendolino, in turn, agreed to offer the trust the tract if he opted to sell.

The trust bought Pumpkin World for $7.5 million in February 2006 and then sold the 6.7 acres to Pendolino for $2 million in May 2006, according to property records.

In August, the trust repurchased the same property for $3.1 million, netting Pendolino and his partners more than a 50 percent investment gain in about four months.

Hershey Trust spokeswoman Connie McNamara said, "The new owner presented the trust company with a valid sales agreement in 2006 for $3.1 million. The trust company decided to exercise its right of first refusal." Pendolino said he had an offer from a hotelier for the $3.1 million.

He declined to name the hotel."

Friday, October 22, 2010

Home-energy firm to locate at Navy Yard

"A British company that specializes in home-energy overhauls will locate its U.S. operations in Philadelphia, the latest green company to sign up for the Navy Yard Clean Energy Campus.

Mark Group, which calls itself the United Kingdom's largest installer of domestic energy-saving solutions, announced today that it would open its American headquarters in the former Navy Yard in South Philadelphia.

The company, based in Leicester, England, employs 1,400 people. It said it expects to hire more than 300 people in the next three years as it establishes U.S. operations to sell and install home-energy efficiency systems, including weatherization improvements and renewable-power options.

Gov. Rendell's office offered the company $3.3 million in incentives, including a $2 million Pennsylvania Industrial Development loan, a $500,000 opportunity grant, a $638,000 job-creation tax credit, and $143,550 from WEDnet, a web portal aimed at training and educating workers.

Rendell, Mayor Nutter, and economic-development officials from agencies such as the Philadelphia Industrial Development Corp. and Select Greater Philadelphia welcomed the company at a Navy Yard ceremony today.

Mark Group's services are aimed at individual homeowners, as well as builders, architects, and public authorities. It says it has made two million British properties more energy-efficient since it was founded in 1974.

It also recently expanded operations to Australia.

The Navy Yard Clean Energy Campus is attempting to establish itself as a national center for research, education, and the commercialization of energy-related technologies.

Some of the development's potential has taken longer than promised to be realized.

HelioSphera US, a Greek solar-cell maker, announced last November that it would break ground in 2010 on a Navy Yard manufacturing facility. Rendell promised $49 million in state inducements.

The $500 million plant - which, it was said, would employ 400 people after a projected opening in 2011 - is still on the drawing board.

"They are continuing to work on raising their private financial commitments necessary to move forward with the development," said John Grady, executive vice president of the Philadelphia Industrial Development Corp."

Sales Market Recovery Lags

"Like other property types, industrial sales transaction volume, measured as a percentage of the total market, remains far below historical averages, and well below the trough of the recession 10 years ago. Most markets are plagued by poor liquidity, though a few, including Raleigh-Durham, Richmond, VA, Washington, D.C., Inland Empire, Tampa/St. Petersburg and Charlotte, are seeing higher square footage sold as a percentage of their total market size. Buyers and sellers remain at odds on selling versus asking prices, though the number of properties withdrawn from the sales market by discouraged sellers is starting to level off.

The CoStar Repeat Sales Index, which measures the price differential between properties that have sold more than once, shows that industrial prices remain in decline, though larger investment-grade properties are seeing some price appreciation in the bifurcated market. Those investors returning to the market prefer the safety of those well-leased higher-end properties.

The largest industrial sales in the third quarter were portfolios, with three of the top four acquired by REITs, including the purchase of seven data center properties in Arizona, California and Virginia by Digital Realty Trust from Rockwood Capital for $725 million. Portfolios made up 40.6% of total sales volume in the third quarter.

While bullish on the recovery long term, industrial CRE brokerage executives sampled by CoStar are cautious about what they see as uncertain signals from the economy.

"The summer may have proved to be an inflection point in the industrial leasing market, but we are cautious about the mixed signals we are seeing in important leading indicators, and what they are telling us about the overall direction of the U.S. economy right now," said Craig S Meyer, Jones Lang LaSalle managing director and head of industrial real estate for the Americas.

While there's still significant activity in the big-box sector, manufacturing has lost some of its momentum as inventories have stopped growing as fast, Meyer said. Consumer confidence is being constantly tested and supply chains are expected to run leaner going forward. While imports and cargo volumes through gateway seaport and airport markets have improved, it's uncertain whether these higher volumes are sustainable, Meyer said.

"We are expecting rents to continue to decline through 2011," he said. "The worst of the declines may be over, and while there are pockets of organic growth now beginning to develop, demand has not firmed significantly enough throughout the entire industrial market to envision an overall or sustained uptick yet."

"It will be a long process toward recovery, but the worst appears to be behind us," said David Bercu, principal in the Chicago office of Colliers International.

"The first step was landlord capitulation on rental and sale prices, which started its rebound second-quarter 2010. Owners have acknowledged that prices have dropped approximately 30% since the peak of 2007 and met the market," Bercu said.

Recent economic data indicates a slowdown in manufacturing and a reduction in inventories, however, which could have a direct impact on industrial real estate, Bercu said."

Warehouse Market Sees Gains As Absorption Increases, Vacancies Improve

"Add another commercial property type that is now on the path to recovery. The U.S. warehouse market joined the office market in clear recovery mode after logging another quarter of positive absorption and improving conditions as the national industrial vacancy rate edged down slightly for a second consecutive quarter.

Similar to its office market counterpart, the industrial real estate market is also seeing the pace of recovery vary quite a bit from market to market, according to CoStar Group's Third Quarter 2010 Industrial Real Estate Review & Outlook.

Recovery is slower to take root in the sales market and probably won't be as robust as some would like to see. But with so little new warehouse supply on the horizon, any growth in demand could quickly cause the rate of recovery to accelerate, CoStar Senior Director of Research and Analytics Jay Spivey said in a webinar presentation this week with Hans Nordby, Director of Advisory Services.

"We could be surprised at the level of recovery, given the low levels of supply we've seen," Spivey said.

Seven of the previous eight quarters prior to second-quarter 2010 posted negative absorption. The market has bounced back since earlier this year, absorbing 10 million in the second quarter and 8 million square feet in the third quarter. While far from broad-based, "it's official - we're in recovery," Spivey said.

Leasing activity remains steady. The amount of gross square footage leased quarterly has been a "picture of stability" through the downturn, even spiking to a decade high of 620 million square feet in 2009, one of the worst years for the economy on record. The Inland Empire, (positive 5.6 million square feet), Philadelphia (+5.1 million), Houston (4.6 million) and Phoenix (3.2 million) topped the list for net space absorbed, with Chicago and Cincinnati tied for fifth at 2 million.

While four of the top six markets reporting positive absorption are large distribution hubs, not all the major distribution regions are doing well. Some of the largest, Atlanta, the San Francisco Bay Area and Los Angeles, all posted negative absorption exceeding 5 million square feet in the quarter. New York, Dallas, Chicago and New Jersey also gave back significant space. Seven of the eight markets with the highest negative absorption have been hit hard by the housing and manufacturing busts.

The good news for the market, Spivey said, is that very few warehouse construction starts are on the books for the next couple of years. New supply will hit another all-time low in 2010 -- so low that any significant growth in demand as the economy improves could cause a fairly dramatic decline in vacancy rates, quickly accelerating recovery in the warehouse sector.

A look at the percentage of submarkets with declining vacancies in the third quarter shows how fast industrial occupancy is poised to rise as a result of constrained supply. Submarkets vacancies are a leading indicator for the national warehouse market because they generally start to decline much sooner than the national rate.

Almost 55% of the nation's industrial submarkets saw falling vacancy rates in the third quarter. During the last recession in the early 2000s, it took about 11 quarters to reach that level of submarket recovery, largely due to the huge amount of new space that hit the market early in the decade. With limited supply, declines in submarket vacancy have been much steeper in the current cycle.

Quoted rents have declined steadily for two years in the current downturn, about 11%, a larger drop than the last recession. With quarterly occupancies rising in about half the nation's industrial markets, rent declines appear to be bottoming.

CoStar forecasts relatively mild absorption in the industrial sector through 2014, much lighter than the huge spikes in both absorption and supply that marked the last recovery. "Overall, we're going to see improving fundamentals, declining vacancies and rising rental rates," Spivey said."

Thursday, October 21, 2010

Kimpton completes purchase of Lafayette Building

"Kimpton Hotels has closed on buying the Lafayette Building for $11.5 million. That paves the way for the hotel company to convert the building into a new high-end hotel. See articles on the topic here and here.

Between the new National Museum of American Jewish History and a redeveloped Lafayette building, the area across from Independence Mall will become stabilized and once the hotel opens a couple of years from now, there will be a whole new feel to that part of the historic area."

SMH Leases 50,000 SF in Harrisburg

"Systems Material Handling, a distributor and manufacturer of lift truck replacement parts and accessories, signed a seven-year lease for 50,000 square feet at 1530 Bobali Drive in Harrisburg, PA.

The one-story industrial building totals 110,000 square feet."

Cabot Properties, Inc Adds Another Property to Investment Portfolio

"Cabot Properties Inc recently purchased 12285 McNulty Road in Philadelphia for $3.58 million, or just under $48 per square foot. The property was about 85% occupied at the time of sale.

12285 McNulty Road is located in the Byberry East Industrial Park and easily accessible from I-95 and the Pennsylvania Turnpike. The 75,000-square-foot industrial building on 7.20 acres has 75 parking spaces and was built in 1988. The property has a maximum ceiling height of 25 feet, nine loading docks, five levelators and four drive-in bays."

Friday, October 15, 2010

York Pennsylvania Retail Building Sells for $3.2M

"Lancaster County Bible Church purchased 951 North Hills Road in York, PA for $3.2 million, or approximately $143 per square foot, from Sutliff Chevrolet.

The 22,336-square-foot retail building is currently an auto dealership. However, the new owner plans to convert the property into a church. Lancaster County Bible Church, based in Manheim, PA, provides worship services."

Philadelphia Industrial Park Building Sells for $2.95M

"Volvo Construction Equipment North America, Inc., sold the industrial buildings located at 10430 Drummond Road in Philadelphia to Weldenfield of VA for $2.95 million, or about $60 per square foot.

The building located on 3.8 acres in the Philadelphia Industrial Park offers 49,556 square feet of warehouse space. The property, an investment purchase by a private investor, was vacant at the time of sale."

Stein Realty Co. Purchases Warehouse in Telford

"Stein Realty Co. acquired an industrial building at 375 E. Church Avenue in Telford, PA, from Oldcastle Glass Inc. for $2,525,000, or about $34 per square foot.

The property is a one-story 73,690-square-foot warehouse building on 6.37 acres of land. It was constructed in 1980."

Tuesday, October 12, 2010

West Chester U, M&T and more....

"West Chester University broke ground on a $28.6 million recreation center that will total 72,575 square feet and include a fitness center four times the size of the current fitness facility. Aside from regular fitness equipment, the facility will have a three-story climbing wall, spinning rooms, meditation areas, social lounges and a “hydration” station with a refreshment area that includes a juice bar, where a glass and “green wall” will create indoor and outdoor terraces. Construction is expected to be completed by August 2012

M&T Marketing leased 4,168 square feet on the 37th floor at 1818 Market St. in Philadelphia. Newmark Knight Frank Smith Mack represented the landlord while PernaFrederick Real Estate represented the tenant …

Metcalfe Architecture & Design won an AIA Pennsylvania award for its design of a 450-foot walkway in the treetops at Morris Arboretum. The jury who designated the project for the award said the 450-foot tree canopy walk transports visitors from walking on the ground to walking in the treetops five stories above the forest floor …

Beech Interplex Inc. broke ground on a new student housing project that will house international students, visiting scholars and researchers at Temple University. The building will be called Beech International Apartments at Temple University and will contain 100-apartment units and feature a cafĂ©, conference space and other retail shops … KanCo Metals, Inc., a scrap metal recycler, leased 30,000 square feet at 4710 Bath St., Philadelphia. The company buys and sells nonferrous metals such as copper, brass, aluminum and insulated wire and will be consolidating its operations from the Frankford Arsenal."

Thursday, October 7, 2010

Broadview fills KOP building

"Broadview Networks signed a big lease for space at Valley Forge Park Place, filling up one of the buildings at the redeveloped complex off Route 422 in King of Prussia. The building had sat empty for a couple of years and Broadview’s 10-year lease stabilizes it.

The company, based in Rye, N.Y., took 57,200 square feet at the two-building, 155,000-square-foot office center at 1016-1018 W. 9th Ave. Broadview will be shrinking when it relocates from 2100 Renaissance Blvd. in Gulph Mills, where it is subletting 100,000 square feet. Keystone Property Group, which owns the buildings, renovated the properties that once housed Nova Care Inc. Lincoln Property represented Broadview Networks in the transaction. Other tenants in the complex include Reed Elsevier, Goddard Systems Inc., and Oracle USA Inc. ...

Joseph Levine & Son Inc., a well-known Jewish funeral home in the Olney section of Philadelphia, has sold its North Broad Street building. The structure at 7112 N. Broad totals 17,000 square feet and includes two chapels. It sits on two acres and can accommodate 50 vehicles. The Levines sold the property for an undisclosed price to Batchelor Brothers Funeral Services, which is making its first foray into the Philadelphia area. Batchelor Brothers is based in Rochester, Pa. The Levine family said it was difficult to sell the building but its business plan called for it and it continues to expand in the suburbs. In spite of the sale, Levine said in a statement that it and Batchelor will continue to operate out of the facility ...

FNK Enterprises sold a one-story, 24,000-square-foot industrial building at 1670 Winchester Road in the Bridgewater Industrial Park in Bensalem for $1.05 million. Pendant Systems Ltd. bought the property and will be relocated from a nearby 12,000-square-foot building off Blanche Road. Pendant Systems manufactures pendant lighting ... Duraclean Cleaning Specialist leased 2,603 square feet of warehouse space at 12 S. Bacton Hill Road in Malvern, relocating from smaller quarters.

Versa Fit leased 5,800 square feet on the sixth floor of 1529 Walnut St. in Center City, marking the first time the company has had a Philadelphia training facility. The personal training facility is based in Voorhees, N.J., and is expanding into the region."

The Biggest Mistake Made By Tenants

"The biggest mistake made by tenants looking for commercial office space is not engaging the services of a tenant representative; thinking it will cost them money. It doesn’t. A good tenant representative, is invaluable in making sure you find the right alternative, negotiate the best possible deal and avoid costly mistakes. They do this every day and only get paid when you get what you want. And you don’t even have to pay them. It costs you nothing. Most Landlords hire listing agents and the tenant rep will share in that fee. If there is no tenant rep, the listing agent keeps the entire fee and you are on your own. Tenant rep services will save you money by making sure you do it right with solid information and advice.

Many tenants don't understand what a good office tenant representative does. A tenant rep does more than just find office space. A good tenant rep will coordinate the entire office leasing process from helping you define your needs all the way to ensuring your space plan works for you. In between, an office tenant rep will not only find suitable alternatives, help you negotiate the deal, but also help with information, advice, space planning and lease review."

Manufacturing Company Moves Into Hanover Industrial Estate

"Mericle Commercial Real Estate Services sold 1058 Hanover St. in Wilkes Barre, PA, to Memco Realty Co LTD for $5.45 million, or just over $45 per square foot.

The 120,000-square-foot industrial building with quick access to I-81 and State Route 29 was constructed in 2003. The property on 9.6 acres has heavy power, 32-foot ceilings, 50 parking spaces. The building was 50% vacant at the time of sale but is now fully occupied by the buyer's manufacturing business."

Wednesday, October 6, 2010

Once site of big plans, parking lot sells for just $12 million

"An ordinary-looking parking lot at 1441 Chestnut St. that just two years ago seemed destined for hotel greatness - a Waldorf Astoria set amid a $420 million condo/retail/restaurant complex - went on the auction block Tuesday at the Union League.

"Going once. Going twice. Sold for $12 million!" exclaimed Douglas Johnson, of CB Auction Services. He hammered the winning bid made on behalf of Brook Lenfest, of Brooks Capital Group L.L.C. in Bala Cynwyd, a onetime Waldorf project partner.

Fourteen Forty-One Chestnut certainly has location going for it - it sits on prime Center City real estate directly behind the Ritz-Carlton and its condo tower. And the site, zoned for 848,000 square feet of building space, has great potential - that was never in dispute.

But what to build on this half-acre - and when - is being affected by the economic forces of the times. Auctions such as Tuesday's are increasingly being used throughout the United States to determine the market value of properties in major cities, such as Philadelphia, where there have been very few similar sales lately.

For example, Chicago Auction Services recently sold an Indianapolis Holiday Inn. It is set to auction a Holiday Inn at the St. Louis Airport later this month and a Dallas, Texas, spa site with many potential alternative uses next month

Lenfest, son of prominent businessman and philanthropist H.F. "Gerry" Lenfest, heads NetCarrier Inc. of Lansdale, a local-exchange carrier, and is president of Brooks Capital Group - a venture-capital firm specializing in early-stage investments. In April 2009, he bought out the 50-percent stake of his former Waldorf development partner, Timothy J. Mahoney III.

Mahoney, president and chief executive officer of Mariner Commercial Properties Inc., of Ardmore, said today's soft hotel and condo markets, as well as tight financing, prompted him to give up on his dream of building the 58-story Waldorf at the site, even though he had spent years and millions of dollars assembling the land.

When the project was first announced in October 2008, it was billed by Mahoney as a hybrid between the Four Seasons and the Residences at Two Liberty that would open in summer 2012. Planned for the posh tower were upscale stores, a signature restaurant, seven floors of valet parking, a spa, and 136 luxury condos starting at $1 million, all to be situated above the five-star hotel.

Mariner Chestnut Partners L.P., an affiliate of Mahoney's development company, was the listed seller at Tuesday's auction.

Lenfest already owned 85.5 percent of the Mariner Chestnut partnership; two others owned the other 14.5 percent. The auction liquidated that partnership, leaving Lenfest as sole owner and developer.

The price the land fetched Tuesday was about the same as he paid for it a decade ago, Mahoney said - then it was $11.2 million for the purchase and $800,000 paid to the City of Philadelphia to make a legacy-development agreement "go away."

"Needless to say," Mahoney said, "after 10 years of development expenses and six years of litigation, we spent many millions more than that [$12 million] figure."

Asked after the auction what the land should have brought, he said, "I thought it should have gone for above $15 million, but that tells you where the market is today. It's a very tough market.

"That property can't be just a surface parking lot," Mahoney said. "You have to put something on it, but that's difficult, if not impossible in this type of market. There's just no financing."

The Waldorf Astoria is one of at least nine major Center City hotel projects shelved or canceled because of frozen lending markets. The dearth of new hotel development has become a cause of concern for city tourism and convention officials, who say the expanded Convention Center, scheduled to open in early March, will need new hotels to support it.

When reached Tuesday afternoon, Lenfest was mum about his plans for 1441 Chestnut St. He wouldn't say whether it would eventually house a hotel, only that it was too early to tell.

Paul Galanis, managing director of Auction Services, said Tuesday's sale set a new benchmark. "There hasn't been a property like this sold here in four years," he said.

Those wanting to bid Tuesday were required to bring a $250,000 certified or cashier's check. Lenfest was not at the auction; William Luterman, chief investment officer of Brooks Capital Group, attended on his behalf.

Luterman, "Bidder No. 1066," stood near the back as the auction got under way at 11:05 a.m.

The floor bid was $4 million. From there, the bidding went up by $500,000 increments, as hands went up in the audience of about 75 people, almost exclusively men in expensive suits.

"Five million dollars. . . . Do I hear $5.5 million?" Johnson asked at rapid-fire speed. "Come on, do I hear $6 million?"

By 11:12 a.m., Luterman's bid of $12 million was declared the winner. He walked out quietly after signing the documents proclaiming Brooks Capital the new owner of 1441 Chestnut.

Something else did the talking, Johnson said:

"The market came here and spoke today."

Tuesday, October 5, 2010

Fate of 1441 Chestnut decided tomorrow

"The auction for 1441 Chestnut St. is set for tomorrow and will likely reflect current sentiment in the commercial real estate market as well as even set a new pricing for these types of parcels.

The real estate investment market, with a dearth of deals, has investors scouring for insight on where things are trading. Three years ago was the last time prime undeveloped Center City lots sold with frequency. That was when the real estate market was peaking and sale prices reflected it. Here are some transactions from 2007:

• The Philadelphia Parking Authority sold to Castleway Properties a 36,267-square-foot parcel at 1907-1915 Walnut St. for $36.7 million, or $1,011 per square foot;

• The 62,173-square-foot parcel the Bell Atlantic Properties sold for the proposed American Commerce Center at 18th and Arch streets for $30.5 million, or $490 a square foot; and

• Insurance Co. of North America sold a 22,145-square-foot lot at 100-118 N. 19th St. to Philadelphia Management Inc. for $8.4 million, or $379 a square foot.

The land at 1441 Chestnut is 22,400 square feet — about a half acre — and has received zoning approval to accommodate an 848,000-square-foot tower. It has an existing surface parking lot producing an annual net operating income of $650,000. It’s a block from City Hall in the heart of the Central Business District so it’s likely to garner some decent interest.

Mariner Commercial Properties bought the property nearly 10 years ago for roughly $11 million. Mariner Commercial, which was operated by Tim Mahoney, and Brook Lenfest’s Brooks Capital Group were in a partnership to build a Waldorf Astoria on the site. The market for the hotel, which would have also had a portion of its units as condominiums, turned and the project was killed.

The parcel also got tangled up in litigation over its ownership.

This is an absolute auction, meaning the parcel will be sold regardless of price. Interested parties who plan to make bids on the land were required to submit a $250,000 cashier’s check. I’ll let you know tomorrow who and how many show up at the auction and who makes the winning bid and for how much. Hopefully they will let us in on what they plan to do with it."

O'Neill v. Citizens lawsuit allowed

"Developer J. Brian O'Neill's lawsuit against his onetime primary lender, Citizens Bank, will proceed to trial despite the bank's opposition - and with considerably fewer claims.

Philadelphia Common Pleas Court Judge Albert W. Sheppard Jr. rejected the bank's motion that he throw out the entire suit, in which O'Neill seeks $297 million. Sheppard did, however, dismiss six of the 11 claims, including that Citizens defamed and disparaged O'Neill as their relationship of eight years and more than $180 million in financing went bad.

That deterioration, according to a lawsuit that has been especially caustic in tone, coincided with the start of the recent recession, when lenders in general grew skittish over just about any financing opportunity.

Sheppard let stand O'Neill's claim that the bank misrepresented to him that it would lead financing for the vertical-construction phase, when the buildings actually go up, of his $700 million Uptown Worthington retail/office/residential development in Malvern, when it had already decided it would not.

Based on the belief that the bank would be participating in that stage of the project, the lawsuit contends, O'Neill entered into a $61 million loan agreement with Citizens and began the site work necessary for the project to go vertical. The project stalled when Citizens decided against any additional Uptown Worthington financing, effectively frightening off other potential lenders, the suit says.

Uptown Worthington, proposed as 1.6 million square feet of housing, shops, entertainment venues, a hotel, and high-value office space on 106 acres at Routes 202 and 29, remains largely unfinished, populated by just Wegmans and Target stores.

Among the claims Sheppard did not throw out in his ruling, issued late Thursday, is that Citizens' conduct damaged business deals O'Neill had with two funding sources and three confirmed or prospective tenants for Uptown Worthington. The hoped-for tenants included VWR, a pharmaceutical-equipment company that pulled out of a deal to relocate its headquarters from the West Chester area.

The bank maintains there is nothing in writing to show that it ever committed to the vertical-construction financing. Citizens' officers have testified that early indications that it might were overruled by parent company Royal Bank of Scotland Group P.L.C.

O'Neill's attorney, Steven M. Coren of Kaufman, Coren & Ress P.C., said Monday that he and his client "welcome the opportunity to move forward and to present evidence in support" of the remaining claims.

Citizens has contended that O'Neill's lawsuit, filed in January and originally seeking $8 billion in damages, is retaliation by the King of Prussia developer for its securing $64 million in judgments against O'Neill relating to Uptown Worthington and the Horizon Corporate Center, a 101-acre office/retail/restaurant complex in Bensalem.

Robert C. Heim, a Dechert L.L.P. attorney for Citizens, lauded the judge's ruling, noting that he threw out a majority of the claims and "severely limited" those remaining "even when being required to apply the most liberal standard . . . a standard where the court has to accept the plaintiff's allegations as being true."

Sheppard also denied O'Neill's request for sanctions over allegations that Citizens altered and/or destroyed documents related to the case.

The trial is set to begin April 4."

Sunday, October 3, 2010

Chef Jose Garces will open his seventh new restaurant

"Chef Jose Garces will open a new restaurant — his seventh in Philadelphia — in the Cira Centre later this month.

JG Domestic, as the restaurant will be known, will fill the space once occupied by Daniel Stern’s Rae, which closed in December 2008. The Cira Centre, which is next to 30th Street Station, is at 2929 Arch St.

A mid-October opening is planned, though an exact date has not been set.

The 175-seat restaurant will focus on “artisanal” foods from around the country — products like Jasper Hill Vermont cheddar cheese, skirt steak from Strube Ranch in Texas and Washington state “lobster” mushrooms. By fall 2011, it will receive much of its produce from a 40-acre farm in Bucks County, Pa., recently acquired by Garces.

“I want JG Domestic to be a must for anyone who lives in the Philadelphia area, and for out-of-town visitors too,” said Garces. “It may be a little too lofty, but my plan is to have it become a true dining destination — the kind of place that people go out of their way to visit and enjoy.”

Garces has become a familiar face on the Food Network, on “The Next Iron Chef.” In Philadelphia, he’s made his mark in just five years.

Garces Restaurant Group owns Amada, Tinto, Distrito, Chifa, Village Whiskey and Garces Trading Co. In Chicago, it owns Mercat a la Planxa. In the future, there are plans for Guapos Tacos, a Mexican food truck, and Frohman’s Wursthaus, a “beers-and-bratwurst joint.”

Lafayette Building gets key OK for hotel conversion

"The Lafayette Building overlooking Independence Hall took another step to becoming a hotel.

Philadelphia’s zoning board of adjustment unanimously approved yesterday use of a restaurant and food service facility that will likely operate from the former office high rise. Hotel use was already permitted by its current zoning. The project also received a letter of support from the Old City Civic Association, an organization that reviews development projects in the historic neighborhood.

Kimpton Hotels put Lafayette Building under agreement with the intention of converting the property into a 270-room hotel. The 11-story, 195,000-square-foot historic building would be the only hotel with unobstructed views of Independence Hall, and sits among the features of Independence National Historical Park. Its direct competitor is the Omni, just a few doors down on Chestnut Street. The hotel would have a restaurant at the corner of 5th and Chestnut and roughly 10,000 to 12,000 square feet of meeting and ballroom space."

Arch Street high-rise has yet another name

"Meet Three Logan.

It’s a 53-story high-rise on Arch Street that went by the name Bell Atlantic Tower beginning when it was completed in 1991 for its tenant and developer, Bell Atlantic.

Then when Bell Atlantic changed its name in 2000 to Verizon Communications Inc., the local commercial real estate community clumsily tried to call the skyscraper Verizon Tower. It just didn’t feel right. Maybe in New York, “The Verizon Building” — where the company makes its headquarters — worked its way into the vernacular but not here.

In limbo, real estate folks started to call it by its address — 1717 Arch. That worked a little better. The city has plenty of buildings going by their addresses. Thomas Realty Properties decided in 2003 to rebrand 11 Penn Center as 1835 Market sans the “Street.”

It wasn’t the first of the Penn Centers to drop the Penn Center name to generate better recognition. Over the years, building owners have chipped away at the name.

The first one to fall was Three Penn Center in 1985. It was about the time 61-story One Liberty Place, which broke the city's unofficial height limit to tower above the Penn Center buildings, was in the works. Most of the Penn Centers that were developed prior to Liberty Place were 20 stories high, with the exception of Five Penn, which is 36 stories, and 10 Penn at 27 stories.

Wanting to get an edge up, Three Penn's landlord launched a multimillion dollar renovation and renamed it 1515 Market Street. A year later, Five Penn Center became 1601 Market and was touted in an advertisement at the time as "the most powerful address in Center City." It had also undergone major renovation work and, as part of a promotional gimmick, the landlord charged $16.01 a square foot in rent.

Around the same time, One Penn Center became Suburban Station at One Penn Center, holding onto its Penn Center lineage because of the rail station. Eventually, Six Penn Center became 1701 Market and Nine Penn Center became the Mellon Bank Center when Mellon Bank was secured as its anchor tenant. Not of the Penn Center bundle, but following suit around 1989, was the IVB, or Industrial Valley Bank, Building, which took 1700 Market as its new name.

The holdouts are Two Penn Center, Four Penn Center and Eight Penn Center.

When Brandywine Realty Trust (NYSE:BDN) bought Bell Atlantic, oops, I mean Three Logan, in August, the company decided it was an ideal time to go ahead and change the building’s name. The Radnor real estate investment trust owns the nearby One and Two Logan Square office buildings. With so much activity along the Benjamin Franklin Parkway and around Logan Square, such as the Barnes, library expansion and possible redevelopment of the family court building, that part of the city has seen its cachet rise.

“It’s really created a tremendously dynamic section of Center City,” said Jerry Sweeney, president and CEO of Brandywine. “We wanted to create a new identity for the project which ties into One and Two Logan and identifies it where it is in the city and from a naming standpoint.”

Sweeney refers to the building by its new name in conference calls and discussions with tenants and brokers. A new marketing brochure will carry the Three Logan moniker but don’t look for a neon sign on the building announcing its new name, Sweeney said."

Read more: Arch Street high-rise has yet another name - Philadelphia Business Journal