Wednesday, October 31, 2012
Tuesday, October 30, 2012
KMM Inks 196,000-SF Sublease in Piscataway
KMM Telecommunications, Inc. signed a long-term sublease deal for 195,555 square feet ofindustrial space at 21 Constitution Ave. in Piscataway, NJ. KMM, headquartered in Fairfield, NJ, is a provider of supply chain services to the communications industry.
Developed to Verizon's specs in 2004, the 288,115-square-foot industrial building is located in a 20-acre corporate park environment. The building features a fenced lot, 19,000 square feet of built-out office space, 32-foot clear heights in the warehouse, and cross-dock loading with ample trailer parking. It is located off I-287 and less than 10 miles to the New Jersey Turnpike.
With this new sublease, approximately 92,600 square feet of space remains available at the class A distribution property.
www.omegare.com
Developed to Verizon's specs in 2004, the 288,115-square-foot industrial building is located in a 20-acre corporate park environment. The building features a fenced lot, 19,000 square feet of built-out office space, 32-foot clear heights in the warehouse, and cross-dock loading with ample trailer parking. It is located off I-287 and less than 10 miles to the New Jersey Turnpike.
With this new sublease, approximately 92,600 square feet of space remains available at the class A distribution property.
www.omegare.com
Vornado Trimming Portfolio In Northern VA and Philadelphia
Vornado Realty Trust has struck a pair of deals to sell four office buildings to a pair of buyers for a total of $186 million.
The REIT agreed to sell three office buildings in northern Virginia's Fairfax County for $126 million. The three-building Reston Executive Center on Sunset Hills Road totals 495,762 square feet.
Vornado also entered into an agreement to sell an office building that is part of the Gallery at Market East in downtown Philadelphia for approximately $60 million.
The pair of buyers were not disclosed.
The two transactions will result in total net proceeds of approximately $89 million after repaying an existing loan and closing costs and a gain of approximately $70 million. Both deals are expected to be completed in the fourth quarter of 2012.
www.omegare.com
The REIT agreed to sell three office buildings in northern Virginia's Fairfax County for $126 million. The three-building Reston Executive Center on Sunset Hills Road totals 495,762 square feet.
Vornado also entered into an agreement to sell an office building that is part of the Gallery at Market East in downtown Philadelphia for approximately $60 million.
The pair of buyers were not disclosed.
The two transactions will result in total net proceeds of approximately $89 million after repaying an existing loan and closing costs and a gain of approximately $70 million. Both deals are expected to be completed in the fourth quarter of 2012.
www.omegare.com
Saturday, October 27, 2012
Philadelphia's Retail Vacancy Rises to 6.4%
The Philadelphia retail market experienced a slight decline in market conditions in the third quarter 2012.
The vacancy rate went from 6.2% in the previous quarter to 6.4% in the current quarter. Net absorption was negative 1,123,195 square feet, and vacant sublease space increased by 34,932 square feet. In second quarter 2012, net absorption was positive 127,373 square feet.
Tenants moving into large blocks of space in 2012 include: Wegmans moving into 140,000 square feet at The Village at Valley Forge - Phase I; Speed Raceway moving into 106,000 square feet at Village Mall; and Burlington Coat Factory moving into 70,500 square feet at Garden State Pavilion-Bldg 3.
Quoted rental rates increased from second quarter 2012 levels, ending at $14.02 per square foot per year.
A total of five retail buildings with 40,346 square feet of retail space were delivered to the market in the quarter, with 661,533 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Retail vacancy rate, which stayed at 6.9% from the previous quarter, with net absorption positive 9.22 million square feet in the third quarter. Average rental rates decreased to $14.49, and 410 retail buildings delivered in the quarter.
www.omegare.com
The vacancy rate went from 6.2% in the previous quarter to 6.4% in the current quarter. Net absorption was negative 1,123,195 square feet, and vacant sublease space increased by 34,932 square feet. In second quarter 2012, net absorption was positive 127,373 square feet.
Tenants moving into large blocks of space in 2012 include: Wegmans moving into 140,000 square feet at The Village at Valley Forge - Phase I; Speed Raceway moving into 106,000 square feet at Village Mall; and Burlington Coat Factory moving into 70,500 square feet at Garden State Pavilion-Bldg 3.
Quoted rental rates increased from second quarter 2012 levels, ending at $14.02 per square foot per year.
A total of five retail buildings with 40,346 square feet of retail space were delivered to the market in the quarter, with 661,533 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Retail vacancy rate, which stayed at 6.9% from the previous quarter, with net absorption positive 9.22 million square feet in the third quarter. Average rental rates decreased to $14.49, and 410 retail buildings delivered in the quarter.
www.omegare.com
Friday, October 26, 2012
Shire to Build at Atwater
by Natalie Kostelni
Shire plc has decided to have a new campus constructed at the Atwater Corporate Center off Route 29 in Malvern, Pa.
The company, which had been considering the move for several months, said it has signed a letter of intent to have a 600,000-square-foot complex built at the site that is owned by Trammell Crow Co. The space will serve as Shire’s U.S. headquarters for its special pharmaceutical and corporate functions.
The decision to relocate to Atwater brings to a conclusion a process that started in 2011 when the company said it was launching an evaluation of its space options. The company said it would consider relocating its North American headquarters out of the Chesterbrook Corporate Center in Wayne, Pa., and possibly moving to New Jersey or Delaware. Shire occupies 425,000 square feet at Chesterbrook and the company’s move will leave a gaping hole there.
Shire’s move to Atwater still has some hurdles to cross. The company said in a statement that it needs to select a developer, execute final agreements, which are expected to be done by December, line up land-use approvals, and get an OK from Shire’s board. The company said it is expected to begin moving from Chesterbrook toward the end of 2015.
Full story: http://tinyurl.com/8eh4bwv
Brandywine Realty Trust reports on its deals so far
by Natalie Kostelni
Brandywine Realty Trust it has signed almost 2.4 million square feet of leases so far this year, which is a strong showing compared with the same period last year when it reported sealing up more than 944,000 square feet in new and renewed leases. The Radnor, Pa., real estate investment trust reported these local deals:
In the Pennsylvania suburbs, it signed a total of 228,168 square feet of transactions:
• Essent US Holdings, Inc. renewed and expanded for a total of 26,874 square feet and is relocating to Two Radnor Corporate Center in Radnor.
• CableNet Services Unlimited renewed on 16,500 square feet at 620 Allendale Road in King of Prussia.
• Green Apple Management Co. signed a 15,759-square-foot expansion at 201 King of Prussia Road in Radnor.
• Metropolitan Life Insurance Co. renewed on 14,596 square feet at 610 Plymouth Meeting Executive in Plymouth Meeting.
Full story: http://tinyurl.com/94a3nkg
Kimco seeking to unload three downtown sites
by Natalie Kostelni
After having acquired several properties in Center City several years ago, Kimco Realty Corp. is looking to sell its Philadelphia holdings that don’t fit into a retail focus.
The New Hyde Park, N.Y., company has put its interests in 1831 Chestnut St. and 1401 and 1805 Walnut St. up for sale. The three buildings are in prime Center City locations and in various stages of residential development.
The company was on a bit of a buying spree in 2007 when it bought several buildings in Center City, particularly in the Rittenhouse Square neighborhood, with the intent of building up a residential presence.
Kimco officials couldn’t be reached for comment to discuss its change of direction.
The real estate investment trust focuses on neighborhood and community shopping centers. It initiated what it calls an “asset recycling initiative” to sell properties it deemed as nonstrategic and nonretail, according to company filings. At the same time, it has boosted the number of shopping centers it owns, spending $984.8 million to buy 47 properties.
The three buildings offer an opportunity for an investor to either boost its residential holdings in Center City or enter the market with a ready-made footprint.
Full story: http://tinyurl.com/9logdjf
Ricoh renews lease in Malvern, establishes its U.S. HQ
by Natalie Kostelni
Ricoh Americas Corp. has renewed its lease at 70 Valley Stream Parkway here and officially made the site its corporate headquarters for its Americas operations.
Ricoh Americas is the North and South American sales/marketing unit of Ricoh.
The company signed a long-term lease on 107,000 square feet in the building. Even though the company has been in the building for more than a decade — originally as Ikon Office Solutions — it conducted a search to explore what other options were available. They considered spots along the Route 202 Corridor but ultimately decided to stay put in a deal that keeps the company in the building at least through 2020. The landlord is Clarion Partners of New York.
Full story: http://tinyurl.com/cc4foc6
Thursday, October 25, 2012
Continental Terminals Leases 159,000 SF in Elizabeth
Continental Terminals, Inc., an imports company, has leased the entire 158,735-square-foot distribution building at 535 Dowd Ave. in Elizabeth, NJ. The tenant will take occupancy at the end of this year.
The property, built in 1972 and renovated in 2003, is located on 7.9 acres in Union County. It features 20-foot ceilings, heavy power, 10 interior loading docks and both wet and dry sprinkler systems. The property is ideally located in an Urban Enterprise Zone, in close proximity to NJ Ports, the Turnpike and airports.
www.omegare.com
The property, built in 1972 and renovated in 2003, is located on 7.9 acres in Union County. It features 20-foot ceilings, heavy power, 10 interior loading docks and both wet and dry sprinkler systems. The property is ideally located in an Urban Enterprise Zone, in close proximity to NJ Ports, the Turnpike and airports.
www.omegare.com
Two Penn Center Changes Hands in Sale Valued at $66M
Crown Properties, Inc. sold an 88% interest in the 502,531-square-foot office building to a joint venture comprised of Optibase, Inc. (20%) and Philadelphia investor Alex Schwartz (68%) for an aggregate $59,576,000, or approximately $135 per square foot. The transaction price was based on a $66 million valuation of Two Penn Center.
The 20-story, class A office building at 1500 John F. Kennedy Blvd. in Philadelphia, PA is a corporate office environment at the center of Center City. Double-paned, tinted glass windows provide panoramic views of JFK and City Hall Plazas and the Penn Center esplanade. The building has been awarded an Energy Star label for four years for its operating efficiency.
Reported earlier on 10/15/2012: http://omegacre.blogspot.com/2012/10/downtown-office-building-finally-sells.html
www.omegare.com
The 20-story, class A office building at 1500 John F. Kennedy Blvd. in Philadelphia, PA is a corporate office environment at the center of Center City. Double-paned, tinted glass windows provide panoramic views of JFK and City Hall Plazas and the Penn Center esplanade. The building has been awarded an Energy Star label for four years for its operating efficiency.
Reported earlier on 10/15/2012: http://omegacre.blogspot.com/2012/10/downtown-office-building-finally-sells.html
www.omegare.com
Tuesday, October 23, 2012
Ensemble Breaks Ground on Navy's Yard's First Hotel
Ensemble Hotel Partners, LLC, has broken ground on a new $34 million, five-story Courtyard by Marriott hotel in Philiadelphia, the first hotel to be constructed at The Navy Yard.
The new development is expected to be home to more than 120 companies and 10,000 employees by the end of 2012.
The 172-room Courtyard by Marriott expected to open next year is designed by Erdy McHenry Architects of Philadelphia. INTECH Construction, also of Philadelphia, is the design-build contractor of the 99,000-square-foot hotel on 2.4 acres.
"This new hotel is a great addition to the growing and dynamic business campus being built at The Navy Yard,” said Philadelphia Mayor Michael A. Nutter. "With almost 10,000 employees working at The Navy Yard, this new development will serve the demand of the companies and people located there and will provide a boost for our local economy."
The hotel project was announced last year by Liberty Property/Synterra L.P., a joint-venture between Liberty Property Trust and Synterra Partners, and the Philadelphia Industrial Development Corporation (PIDC). Ensemble Hotel Partners, LLC was selected to develop the hotel, which is one of nine projects currently under development at The Navy Yard Corporate Center.
www.omegare.com
The new development is expected to be home to more than 120 companies and 10,000 employees by the end of 2012.
The 172-room Courtyard by Marriott expected to open next year is designed by Erdy McHenry Architects of Philadelphia. INTECH Construction, also of Philadelphia, is the design-build contractor of the 99,000-square-foot hotel on 2.4 acres.
"This new hotel is a great addition to the growing and dynamic business campus being built at The Navy Yard,” said Philadelphia Mayor Michael A. Nutter. "With almost 10,000 employees working at The Navy Yard, this new development will serve the demand of the companies and people located there and will provide a boost for our local economy."
The hotel project was announced last year by Liberty Property/Synterra L.P., a joint-venture between Liberty Property Trust and Synterra Partners, and the Philadelphia Industrial Development Corporation (PIDC). Ensemble Hotel Partners, LLC was selected to develop the hotel, which is one of nine projects currently under development at The Navy Yard Corporate Center.
www.omegare.com
Important Questions to Ask before You Lease Office Space
Choosing to lease office space for lease is a big decision. The entire process can be quite confusing and it is easy to get a less-than-perfect office space deal if you don’t know what questions to ask and what certain terms mean to your bottom line.
What does $XX.XX/SF mean when stated in a lease or advertisement for office space? The cost stated usually refers to the yearly lease cost per square foot. An example would be 1,000SF of office space quoted at $10.00/SF would mean a rate of $10,000 per year or $833.33 per month. Although, in some markets it is based ont eh monthly cost. Make sure you know!
What does Rentable Square Feet mean to me? The term rentable square feet refers to the total square feet of office space used to calculate the rental rate. It may include an apportionment for the lobby, halls, and other common areas in the building that are available to you to use along with all the other building tenants.
What does Useable Square Feet mean? This is the total square footage inside the walls of the specific office space you are considering leasing; the acutula square footage you get to use. It refers to that area that is for the sole use of the tenant and does not include any sort of common area. Basically, this is the amount of office space, expressed in square feet, that you will be leasing as private office space in which you can conduct your business.
I was presented a lease that has the term “CAM charges” in it. What does this mean? The acronym CAM stands for Common Area Maintenance and CAM charges refer to the cost of services and charges to maintain common areas, including any parking areas owned by the building owner. This can include landscape services, common area lighting, parking lot maintenance, cleaning service for common areas, or even snowplowing if that is needed. The actual expenses are shared by all tenants and are quoted as CAM charges. This is calculated as $XX.XX/SF with the SF being equal to the rentable square footage of the leased area. These charges are usually paid monthly based on the estimated yearly cost. At year end, the actual CAM charges are calculated and any refund or additional payment is settled with the tenants.
What is NNN when appearing in a lease rate? The term “NNN” refers to any additional actual expense items incurred by the building that are split between all tenants. This may include insurance, property taxes, or CAM if CAM is not included separately. It may be called “Additional Rent” rather than NNN. Be sure to ask exactly what is included in the NNN because it can differ from landlord to landlord. It probably will not include any utility costs except that used by the common areas.
How utility costs are calculated and are they included in the rent? In some smaller office spaces, the cost of utilities may not be calculated separately but in larger spaces, the tenant often has to establish their own separately metered utilities. In some cases, the landlord has all unities metered and the tenant is billed for a share of the total utilities based on the size of their office space. Be sure to inquire about how utilities are billed and exactly what you are responsible for paying.
What does Gross Rent mean? The term Gross Rent means the landlord is paying all expenses outlined as NNN expenses and the tenant only pays the Gross Rental amount stated in the lease. The utilities may or may not be included in Gross Rent, so be sure to ask.
Can I get a short lease to try out the office space? Most landlords offering leases on commercial office space will not consider less than a one year lease. Some require two or three year leases as a minimum. In general, the longer the lease, the more valuable it is to the landlord and the easier it will be to negotiate what you want. Don’t plan on less than a one year lease.
I love the office space I found but there are a few things in the layout that need to be changed. How does this work? The layout of an office space varies from building to building and seldom do you find the perfect lay out. The landlord is likely to be reluctant to spend money on a tenant requested change. It is traditional that new paint, carpet cleaning, and general area maintenance be performed by the landlord. In some cases tenant improvements can be negotiated at the landlord’s expense, often on the longer term leases. In other cases the tenant may negotiate the right to alter the layout at the tenant’s expenses.
Your best bet is to use ther services of an Office Space Tenant Representative who will help you through the maze at NO Cost to you, making sure you avoid costly mistakes.
Sale of 430 acres might be close for Dow
Dow Chemical has an agreement of sale for roughly 430 acres of land in the Maple Beach area along the Delaware River, company officials said.
Bristol Township officials, hoping for commercial development along the river, expressed concern that the sale could remove land that could be developed by placing it in a wetlands bank and banning development.
But Ecosystem Investment Partners, which signed the agreement of sale with Dow, said commercial development will be proposed for the site.
“We are currently in the process of completing our conceptual land use plan for the property, but I can confirm that it will include a very balanced mix of traditional commercial development, open space conservation and public recreational use,” said Nicholas Dilks, managing partner of Ecosystem Investment Partners.
The firm is meeting with local community leaders and putting together its plans, which will “be easier to define in the coming months,” Dilks said.
The hundreds of acres near the Burlington-Bristol Bridge are made up of former industrial land, wooded wetlands, large bodies of water and former residential areas that were abandoned or bought out years ago.
Full story: http://tinyurl.com/9jt3eqh
www.omegare.com
Monday, October 22, 2012
Regional bank moving its headquarters
National Penn Bancshares said Tuesday it will move its headquarters from Boyertown to Allentown, Pa., and rebrand all of its subsidiaries as National Penn.
National Penn said it will open a new Reading, Pa., area business center and maintain its commitment to Boyertown.
Bank President and CEO Scott V. Fainor said the relocation will improve employee collaboration, enhance customer service and maintain the bank’s focus on growing the National Penn franchise.
CFO Michael J. Hughes said National Penn will receive a “competitive” rent because the developer of the project is receiving tax breaks.
The KNBT and Nittany Bank divisions will be renamed “National Penn” by spring 2013. The bank is already known as National Penn in the Philadelphia region, where it is the 10th largest financial institution by deposits.
Full story: http://tinyurl.com/8mhqd6p
Sunday, October 21, 2012
Philadelphia's Industrial Vacancy Rises to 9.0%
The Philadelphia Industrial market ended the third quarter 2012 with a vacancy rate of 9.0%.
The vacancy rate was up over the previous quarter, with net absorption totaling positive 146,777 square feet in the third quarter. That compares to positive 2,609,140 square feet in the second quarter 2012. Vacant sublease space decreased in the quarter, ending the quarter at 2,695,326 square feet.
Tenants moving into large blocks of space in 2012 include: Westport Axle moving into 516,800 square feet at 650 Boulder Dr, Ulta Inc moving into 361,900 square feet at I-81 Distribution Center - Bldg 1, and and M & M Logistics moving into 360,637 square feet at Center Point Business Center.
Rental rates ended the third quarter at $4.45, a decrease over the previous quarter.
A total of three buildings delivered to the market in the quarter totaling 2,189,000 square feet, with 5,585,944 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Industrial vacancy rate, which decreased to 9.1% from the previous quarter, with net absorption positive 24.73 million square feet in the third quarter. Average rental rates ended at $5.14, and 137 buildings delivered in the quarter.
www.omegare.com
Full report: http://www.omegare.com/Costar-3Q2012-Market-Report-Industrial.pdf
The vacancy rate was up over the previous quarter, with net absorption totaling positive 146,777 square feet in the third quarter. That compares to positive 2,609,140 square feet in the second quarter 2012. Vacant sublease space decreased in the quarter, ending the quarter at 2,695,326 square feet.
Tenants moving into large blocks of space in 2012 include: Westport Axle moving into 516,800 square feet at 650 Boulder Dr, Ulta Inc moving into 361,900 square feet at I-81 Distribution Center - Bldg 1, and and M & M Logistics moving into 360,637 square feet at Center Point Business Center.
Rental rates ended the third quarter at $4.45, a decrease over the previous quarter.
A total of three buildings delivered to the market in the quarter totaling 2,189,000 square feet, with 5,585,944 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Industrial vacancy rate, which decreased to 9.1% from the previous quarter, with net absorption positive 24.73 million square feet in the third quarter. Average rental rates ended at $5.14, and 137 buildings delivered in the quarter.
www.omegare.com
Full report: http://www.omegare.com/Costar-3Q2012-Market-Report-Industrial.pdf
Thursday, October 18, 2012
Cosentino Leases 32,000 SF in Oaks
Cosentino North America, a natural stone marketing and distribution company, signed a five-year lease for 32,000 square feet in the flex building at 121 Green Tree Road in Oaks, PA.
The single-story building totals 57,600 square feet on 5.5 acres. Greentree Office Investors owns the property, which was developed in 2006 by BPG Management Services.
www.omegare.com
The single-story building totals 57,600 square feet on 5.5 acres. Greentree Office Investors owns the property, which was developed in 2006 by BPG Management Services.
www.omegare.com
Tuesday, October 16, 2012
Vastgood, Prudential JV Acquires 7 Shopping Centers for $104M
"Vastgood Properties LLC, in a joint venture with an affiliate fund managed by Prudential Real Estate Investors, has acquired seven grocery-anchored shopping centers located across southern Pennsylvania for approximately $104 million, or about $173 per square foot, from affiliates of Cedar Realty Trust Partnership, LP and Homburg Holdings (US), Inc.
The retail portfolio represents an aggregate of nearly 600,000 square feet of retail space in central and eastern Pennsylvania. Six of the properties are anchored by Giant Food Stores LLC, with the seventh anchored by a Nell's Supermarket. The properties reflect a more than 95-percent occupancy at time of sale, with the supermarkets representing roughly 80 percent of total GLA with average remaining lease terms of more than 10 years.
The portfolio includes:
Aston Center - 60,000 SF at 239 Concord Rd. in Aston, PA
Ayr Town Center - 55,600 SF at 360 S. 2nd St. in McConnellsburg, PA
Parkway Plaza - 120,000 SF at 235 - 295 Cumberland Poky in Mechanicsburg, PA
Pennsburg Commons - 66,000 SF at 310 E. Penn Dr. in Enola, PA
Scott Town Center - 180,000 SF at 2101 Green tree Rd. in Pittsburgh, PA
Spring Meadow Shopping Center - 70,000 SF at 2104 Van Reed Rd. in Wyomissing, PA
Stonehenge Square - 89,000 SF at 950 Walnut Bottom Rd. in Carlisle, PA.
Vastgood, through wholly-owned affiliates, will provide management services to the joint venture. The private real estate company is owned by Leo Ullman, founder and former chairman and CEO of Cedar Shopping Centers (now Cedar Realty Trust). PREI is a global real estate investment and management business headquartered in Madison, NJ. Its portfolio of managed investments totals approximately $50 billion in gross real estate assets on behalf of 490 clients worldwide."
www.omegare.com
The retail portfolio represents an aggregate of nearly 600,000 square feet of retail space in central and eastern Pennsylvania. Six of the properties are anchored by Giant Food Stores LLC, with the seventh anchored by a Nell's Supermarket. The properties reflect a more than 95-percent occupancy at time of sale, with the supermarkets representing roughly 80 percent of total GLA with average remaining lease terms of more than 10 years.
The portfolio includes:
Vastgood, through wholly-owned affiliates, will provide management services to the joint venture. The private real estate company is owned by Leo Ullman, founder and former chairman and CEO of Cedar Shopping Centers (now Cedar Realty Trust). PREI is a global real estate investment and management business headquartered in Madison, NJ. Its portfolio of managed investments totals approximately $50 billion in gross real estate assets on behalf of 490 clients worldwide."
Monday, October 15, 2012
Downtown office building finally sells
by Natalie Kostelni
Two Penn Center, a 20-story, 505,000-square-foot office building at 1500 John F. Kennedy Blvd., has finally sold after being on the market since early 2011.
A joint venture entity involving Alex Schwartz bought the building for roughly $66 million. The property is 82 percent occupied and rents run around $23 a square foot.
Crown Properties Inc. was the seller. The New York company has owned Two Penn since 1997 when it paid $33.5 million for it.
Schwartz, a downtown real estate investor, owns several other Center City office buildings including Land Title and Eight Penn Center and has interest in others. He has plans to make several interior improvements to the building such as upgrading the common areas, bathrooms, lobby and building systems .
Two Penn was initially put on the market in February 2011 and, in somewhat of a milestone, was the first office building to be put up for sale since 2007 when the recession sparked a retrenchment in commercial real estate. Since then other downtown office towers have been put up for sale only to be taken off the market and refinanced. Currently 2000 Market St. is for sale.
Friday, October 12, 2012
Activity at Chesco Center as Building gets Leased Up
by Natalie Kostelni
Shire Pharmaceutical and Sophia’s Heritage Collection signed onto leases at the Three Tun Business Center. The moves complete the leasing at the 32,500-square-foot office/flex building, and have the landlord looking to construct more buildings.
Three Tun at Route 30 and Route 352 in Malvern, Pa., is owned by RedGo Development Co.
Shire and Sophia’s Heritage leased 6,000 square feet each. The aggregate value of the two lease agreements exceeds $1.75 million.
The lease-up of the building and demand is prompting RedGo to move ahead with constructing two new buildings. It has started work on 40 Three Tun Road, a 21,000-square-foot flex building that is pre-leased to Animal Critical Care and Specialty Group Inc. It signed a 15-year deal. The building will be completed in the first quarter of next year.
Full Story: http://tinyurl.com/8st2z5r
Kaiserman’s Bourse lines up five leases
by Natalie Kostelni
Five leases totaling 16,355 square feet were lined up at the Bourse, a 10-story, 286,000-square-foot building at 111 S. Independence Mall East that has suffered some recent vacancies.
The landlord is Kaiserman Co.
Humanistic Robotics Inc., a technology company the develops robotic systems, took 2,790 square feet.
The Language Co., which helps teach people for whom English is their second language, leased 4,800 square feet.
DiLenardo Siano & Caserta Ltd., an advertising firm, leased 5,722 square feet.
Oxman Goodstadt & Kuritz, a law firm, took 1,298 square feet. PA-NJ-DE Minority Supplier Development Council leased 1,745 square feet.
Full story: http://tinyurl.com/9j77lg6
Philly's Real estate tax abatement policy in play
by Natalie Kostelni
Developers fear a proposal to alter the 10-year real estate tax abatement has the potential to derail strides made in the Philadelphia residential market during the last decade and dampen future construction activity.
These developers contend the abatement has been one of the most successful economic development policies the city has instituted and any changes to it now, especially as the housing market begins to show signs of recovering, is misguided.
A bill introduced by Philadelphia Councilman W. Wilson Goode Jr. would dramatically change the 10-year tax abatement. Goode is proposing reducing it to five years, and other changes include cutting the amount of the abatement over the course of those five years. A 100 percent abatement would be taken in the first year and then reduced by 20 percent each of the remaining four years. The changes would apply to the construction of new residential developments beginning with any abatement sought on or after Jan. 1, 2014. Goode’s proposal would not affect the 10-year abatement on the conversion of existing buildings into apartments, for example.
Several developers interviewed for this story believe that without the abatement, the city would not have experienced the revitalization currently under way as well as the population growth that effectively stemmed a decades long slide in the number of people living in Philadelphia. They also agree any changes to the policy would have deleterious effects on future development.
“We would absolutely not be doing the level of development that we are doing today,” said Jonathan Stavin, executive vice president at PMC Property Group.
The abatement, which was adopted in 2000, gives developers constructing new residential and commercial projects a 10-year break on real estate taxes. Once the abatement burns off, the taxes begin to be assessed at a property’s full value.
Take 2121 Market St. as an example of how the taxes eventually go up along with the amount of revenue the city can take in. PMC Property paid $71,000 in taxes in 2011, the last year it qualified for the abatement. In 2012, the tax bill on 2121 Market was $517,000 and next year will be $536,000.
Since the abatement was put in place PMC Property Group has spent $750 million completing 20 projects that created more than 5,000 market-rate apartment units. The Philadelphia company has 1,000 rental units in three developments under way.
A developer “absolutely needs” the full 10 years to get the benefit and offset the upfront costs associated with new construction, Stavin said. Any reduction would make a project unfeasible and would discourage development in the city. Developers such as PMC Property would tend to focus their work in other markets that offer better incentives.
“I think, in general, people who think of doing this have very short memories of what the city was like before 1997,” said Carl Dranoff of Dranoff Properties, which constructed Symphony House as well as 777 S. Broad and has been involved in other residential projects.
Full story: http://tinyurl.com/8vrwv9b
Wednesday, October 10, 2012
Pathmark Portfolio Exchanges Hands for $48.7M
Winstanley Enterprises Inc. sold three fully leased retail buildings to The Inland Real Estate Group for $48,765,000. The three facilities, located in Upper Darby, PA, Wilmington, DE and Seaford, NY, totaled in 142,663 square feet. The price per square foot totals approximately $342.
The portfolio of the three grocery stores are fully leased by Pathmark, with about 18 years remaining on the lease terms.
www.omegare.com
The portfolio of the three grocery stores are fully leased by Pathmark, with about 18 years remaining on the lease terms.
www.omegare.com
Tuesday, October 9, 2012
Merck to move HQ from Whitehouse Station to Summit, N.J.
Merck & Co. said Tuesday that its cost-cutting efforts will now include closing its global headquarters building in Whitehouse Station, N.J., and moving most of those functions and people about 30 miles east to Summit, N.J.
The move would mean a longer commute for some of the employees who live in Pennsylvania, with many of them in Bucks County.
Merck is among the large pharmaceutical companies wrestling with pressure from insurers, public and private, to reduce the costs of drugs, generic competition and less revenue from medicine that produced big profits when it had market exclusivity because of patent protection. A company spokesman said Tuesday this move does not mean any more immediate changes for the Merck manufacturing facility in West Point, Montgomery County.
"This announcement is not a restructuring in terms of job cuts," Merck spokesman Ron Rogers said. "We do have an ongoing effort to consolidate our global real estate footprint." The moving probably won't start until 2014 and will be completed in mid-2015, the company said in a statement. About 2,000 employees and contractors currently situated at the Whitehouse Station will move to the facilities in Summit or to other nearby facilities such as those in Branchburg, N.J. and Cokesbury, N.J. Merck's headquarters has been in Whitehouse Station since 1992, after being in Rahway, N.J. Merck got the Summit facility when it bought Schering-Plough in 2009.
"The relocation of our headquarters will help us achieve our future vision, reduce the size of our operating footprint, and increase agility as we adapt to our changing business environment," said Kenneth C. Frazier, a Philly native and Penn State graduate who is chairman and chief executive officer of Merck. www.omegare.com
Merck is among the large pharmaceutical companies wrestling with pressure from insurers, public and private, to reduce the costs of drugs, generic competition and less revenue from medicine that produced big profits when it had market exclusivity because of patent protection. A company spokesman said Tuesday this move does not mean any more immediate changes for the Merck manufacturing facility in West Point, Montgomery County.
"This announcement is not a restructuring in terms of job cuts," Merck spokesman Ron Rogers said. "We do have an ongoing effort to consolidate our global real estate footprint." The moving probably won't start until 2014 and will be completed in mid-2015, the company said in a statement. About 2,000 employees and contractors currently situated at the Whitehouse Station will move to the facilities in Summit or to other nearby facilities such as those in Branchburg, N.J. and Cokesbury, N.J. Merck's headquarters has been in Whitehouse Station since 1992, after being in Rahway, N.J. Merck got the Summit facility when it bought Schering-Plough in 2009.
"The relocation of our headquarters will help us achieve our future vision, reduce the size of our operating footprint, and increase agility as we adapt to our changing business environment," said Kenneth C. Frazier, a Philly native and Penn State graduate who is chairman and chief executive officer of Merck. www.omegare.com
Philadelphia's Office Vacancy Increases to 11.5%
The Philadelphia Office market ended the third quarter 2012 with a vacancy rate of 11.5%.
Net absorption for the overall Philadelphia office market was negative 1,046,919 square feet in the third quarter 2012. That compares to positive 150,752 square feet in the second quarter 2012. Vacant sublease space decreased in the quarter, ending the quarter at 1,137,302 square feet.
Tenants moving into large blocks of space in 2012 include: Young Conaway Stargatt & Taylor, LLP. moving into 218,335 square feet at The Courthouse; Marshall, Dennehey, Warner, Coleman & Goggin moving into 131,325 square feet at 2000 Market St; and Philadelphia Media Network Inc moving into 125,000 square feet at 801 Market St.
Rental rates ended the third quarter at $20.96, a decrease over the previous quarter.
A total of two buildings delivered to the market in the quarter totaling 17,500 square feet, with 1,809,842 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Office vacancy rate, which stayed at12.1% from the previous quarter, with net absorption positive 15.09 million square feet in the third quarter.
Full report: http://www.omegare.com/Costar-3Q2012-Market-Report-Office.pdf
www.omegare.com
Net absorption for the overall Philadelphia office market was negative 1,046,919 square feet in the third quarter 2012. That compares to positive 150,752 square feet in the second quarter 2012. Vacant sublease space decreased in the quarter, ending the quarter at 1,137,302 square feet.
Tenants moving into large blocks of space in 2012 include: Young Conaway Stargatt & Taylor, LLP. moving into 218,335 square feet at The Courthouse; Marshall, Dennehey, Warner, Coleman & Goggin moving into 131,325 square feet at 2000 Market St; and Philadelphia Media Network Inc moving into 125,000 square feet at 801 Market St.
Rental rates ended the third quarter at $20.96, a decrease over the previous quarter.
A total of two buildings delivered to the market in the quarter totaling 17,500 square feet, with 1,809,842 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Office vacancy rate, which stayed at12.1% from the previous quarter, with net absorption positive 15.09 million square feet in the third quarter.
Full report: http://www.omegare.com/Costar-3Q2012-Market-Report-Office.pdf
www.omegare.com
Monday, October 8, 2012
Teva: Facility in Northeast Philly still on hold
"The big news for Teva Pharmaceuticals this week was.......still no shovels in the ground in North Philly.
Ok, yes, the world's biggest seller of generic pharmaceuticals had other issues to deal with and we'll get there in a minute.
But first things first.
In late September of 2011, Teva officials and Philly area politicians gathered on the site of the former Budd Co. plant in Northeast Philadelphia to celebrate a new facility for the company. Teva is based in Israel, but its Americas headquarters is in North Wales, Montgomery County.
But there was less happiness within the upper ranks of Teva in the months that followed the groundbreaking and by Jan. 1, 2012 Jeremy Levin was named as the replacement for CEO Shlomo Yanai. Since taking over in May, Levin has been sorting out what he likes and doesn't like about the company.
It is unclear what he thinks of the idea of a new building.
"We will not have any information to share on the proposed distribution center until December at the earliest," spokeswoman Denise Bradley said via email on Wednesday.
Levin has said he plans to spell out his grand vision for the company at an investor day in December.
Meanwhile, this week, the FDA asked Teva to withdraw Budeprion XL, its version of the antidepressant Wellbutrin XL, because it didn't work. The pill, in the 300 milligram size, was made by Impax and distributed by Teva.
The Associated Press's Matthew Perrone wrote this week that this appears to be the first FDA-requested withdrawl driven by consumer complaints and might undermine general confidence in generic drugs
“The lesson is that everyone — from pharmacists to physicians to the FDA — needs to take these reports seriously,” Dr. Tod Cooperman of ConsumerLab, a privately-held company that independently tests drugs and nutrition products, said according to AP. Cooperman said that the vast majority generic drugs work appropriately but added, “consumers will be the first to know when there is a problem.”
Teva's Bradley said, "Upon receiving the communication from the U.S. Food and Drug Administration, Teva ceased shipment of Impax's 300 mg Budeprion XL. This update to the FDA’s guidance affects the bioequivalence rating of the product and does not reflect any safety issue. Teva's first priority is to our patients and providing them with quality medicines."
Because they can be 50 to 70 percent cheaper than brand-name, patent-protected drugs, the generic versions now make up 80 percent of all the prescriptions written in the U.S. and the generic drug manufacturers' trade group noted that only 27 percent of the nation's drug bill goes to generics.
“There are approximately 10,000 FDA-approved interchangeable generics in the U.S.," Generic Pharmaceutical Association President and CEO Ralph G. Neas said in a statement. "The recall by a single manufacturer of one strength of a generic drug should in no way cast doubt on the impeccable reputation of the generic industry or the FDA in our joint commitment to patient safety.”
www.omegare.com
Demolition for Ortlieb’s Brewery
"Today the Ortlieb Brewery buildings in Northern Liberties are skeletal remains of their former selves. Windows are long gone with weeds growing on their sills, and trees poke up above the roofline. But not for long.
On Thursday night a reader tipped us off that the Ortlieb Brew House and Stock House will be demolished by developer Bart Blatstein, whose company has owned them since 2000.
In their post last night Hidden City Daily, shared this rationale from Blatstein:
“I would have kept the buildings if I would have felt it was a marketable commodity, but the condition of the buildings is such that it’s just not worth it.”
To be sure the Ortlieb buildings have seen far better days, but Bart Blatstein is to blame for their current condition. He has owned the buildings for more than a decade, and despite a glimmer of redevelopment hope back in 2007, no serious plans materialized. And even after demolition, Blatstein said he’s not sure about the future for the site.
Demolition permits were recently obtained over the counter from the Department of Licenses and Inspections. L&I spokeswoman Maura Kennedy told me that although there are some outstanding property maintenance code violations, this demolition is not being motivated by pressure coming from L&I.
To me this feels like a callous shrug from Blatstein, who essentially neglected the buildings to death. It’s far easier for a developer to work with a clean slate, and Blatstein must believe that he can command fatter rents for shiny new construction.
As of October 24 demolition can begin. So before it’s reduced to the slag heap of memory, head over to American and Poplar to say farewell to Ortlieb’s – the last of its kind in Northern Liberties, where industrial survivors are no longer desired for their grit and authenticity but for the value of the land."
Pictures/Full article: http://planphilly.com/eyesonthestreet/2012/10/05/demolition-for-ortliebs-brewery
Friday, October 5, 2012
2000 Market for sale, might bring $120M
by Natalie Kostelni
A Center City office tower that was one of the first local victims of the recession and downturn in commercial real estate is up for sale. One estimate has it trading for $120 million.
The last time 2000 Market St. sold was on New Year’s Eve 2009, while the economy was struggling and lenders continued to be tightfisted. Just a month earlier that November, RREEF, who had owned the 29-story, 665,000-square-foot office tower, voluntarily gave the building back to its lender, Prudential Life Insurance, in a deed in lieu of foreclosure.
CB Richard Ellis Investors, the pension advisory arm of CBRE Inc., stepped in. It bought the building for about $50 million, or $80 a square foot, a steep discount to the $77 million RREEF had paid for the building in 2003. It had a $49 million mortgage with Prudential.
Between the time RREEF bought the property — when the commercial real estate market was climbing to a peak — and the time it relinquished ownership, 2000 Market had lost nearly $30 million in value.
The deal highlighted a type of transaction that has played out with commercial real estate properties throughout the suburbs and Center City over the last few years and continues to do so as the market adjusts to conditions plaguing commercial real estate. Owners have routinely given up on buildings to lenders as property values dropped, or they tried to renegotiate loans as a way to retain a property.
Since buying the building, CB Richard Ellis Investors put $25 million into it; redoing the lobby, creating a large conference center in what had been a cafeteria and renovating common spaces.
It also stabilized the building with tenants. Arkema Inc. vacated more than 130,000 square feet but Marshall Dennehey, a law firm, relocated to the building from 1845 Walnut St., moving into Arkema’s space. Law firm Fox Rothschild also renewed its lease as well as the U.S. headquarters for the Board of Pension of the Presbyterian Church Pension Fund, which manages $8 billion in assets. With all of that leasing activity, 2000 Market went from 80 percent occupied at the time of sale to 96 percent occupied. The average lease term runs 11 years. CBRE is responsible for leasing the building.
Full story: http://tinyurl.com/9by9kwj
Chesterbrook braces for potential tenant defections
By Natalie Kostelni
Full story: http://tinyurl.com/93yqwty
www.omegare.com
After suffering some serious blows during the recession, Chesterbrook Corporate Center is poised to be tested again as two major tenants reconsider their office space options.
The office park has a history of ups and downs and the protracted downturn in the economy caused some vacancies to crop up. AstraZeneca terminated its lease on 25,000 square feet, Liberty Mutual Insurance Co. ended its 25,000-square-foot lease early, GFK Healthcare relocated out of 50,000 square feet, Navteq pulled out of 40,000 square feet and Centocor moved out of 120,000 square feet.
“They were major hits,” said an office broker with CBRE Inc. who handles the leasing of the park’s 15 Class A buildings totaling 1.5 million square feet. “The defections from the last recession were due to M&A activity and early terminations. Downsizing and office closures were devastating to the park.”
The series of early terminations and downsizing dragged the occupancy rate down to 70 percent after it had been enjoying a rate of around 90 percent. Chesterbrook has steadily made up some of the ground it lost. AmerisourceBergen Corp. expanded by 20,000 square feet and is now housed in a total of 190,000 square feet. After conducting a search of office space between Malvern and King of Prussia, Auxilium Pharmaceuticals decided to relocate its world headquarters into a single building totaling 74,000 square feet at 640 Lee Road in Chesterbrook. The company was in two buildings at 40 and 50 Valley Stream Parkway in Malvern.
Full story: http://tinyurl.com/93yqwty
www.omegare.com
Arborcrest redevelopment under way, master plan in the works
by Natalie Kostelni
A Maryland real estate investment trust has come up with a master plan for the former Unisys Corp.campus that entails eventually constructing an additional 800,000 square feet of office buildings.
This comes after Corporate Office Properties Trust (COPT) of Columbia, Md., has poured $69 million over the last two years in redeveloping existing buildings on the 137-acre property at Union Meeting Road and Penllyn Blue Bell Pike in the Blue Bell section of Whitpain.
In order to rebrand the property from its prior use as the headquarters for Unisys, COPT has renamed the campus Arborcrest as well as giving the five existing, older buildings new names: Lakeside I, Hillcrest I, II and III, and Woodlands I.
So far, COPT has finished the redevelopment of Lakeside I, a 219,000-square-foot building that Unisys now anchors. It is well into renovations of Hillcrest I, a 114,000-square-foot building that is 50 percent leased up and is now under way with the total overhaul of Hillcrest II, a 184,000-square-foot building. Hillcrest I and II had originally been a single, large building but has now been split into two. Part of the redevelopment of Hillcrest II will be an amenity center that will have meeting and conference rooms, a fitness area, locker rooms, and cafe.
“It’s another fairly significant investment we’ve made,” said Wayne Lingafelter, president of COPT’s development and construction division.
So far, it has leased up 490,000 square feet, or 65 percent, of 730,000 square feet in a total of four buildings. Jones Lang LaSalle has the listing.
Full story: http://tinyurl.com/8vv5t3q
Thursday, October 4, 2012
Kenco Purchases New Hatfield HQ
Kenco Hydraulics acquired the industrial building at 2280 Amber Dr. in Hatfield, PA from a private investor for $1.55 million, or about $39 per square foot.
The single-story, 40,120-square-foot industrial building is comprised of 13,000 square feet of office space and 27,120 square feet of warehouse space on 2.2 acres. The property is located in the West Montgomery County Industrial submarket.
Kenco previously was running its business out of two buildings a short distance from this property, but decided to consolidate its operations under one roof, while allowing for future expansion.
www.omegare.com
The single-story, 40,120-square-foot industrial building is comprised of 13,000 square feet of office space and 27,120 square feet of warehouse space on 2.2 acres. The property is located in the West Montgomery County Industrial submarket.
Kenco previously was running its business out of two buildings a short distance from this property, but decided to consolidate its operations under one roof, while allowing for future expansion.
www.omegare.com
COPT Pulling Out of Philly; Will Take $46 Million Hit
Saying the properties it owns in the greater Philadelphia region no longer meet its strategic investment criteria, Corporate Office Properties Trust approved a plan by management to shorten the holding period for the office properties and developable land it owns in the area.
The Columbia, MD-based REIT said it has determined that the carrying amounts of the properties will not likely be recovered from the cash flows from the operations and sales of the properties over the likely remaining holding period.
Accordingly, during the three months ending Sept. 30, 2012, COPT will recognize a total non-cash impairment loss of $46 million -- the amount that the carrying values of the properties exceed their respective estimated fair values.
These losses reflect the REIT's expectation that it will spend $25 million to complete its redevelopment and disposition of the properties over the next four years.
COPT's Greater Philadelphia Holdings include:
· 785 Jolly Road in Blue Bell, 219,065-SF office building, 100% occupied, $2,884,072 annualized rental revenue
· 801 Lakeview Drive in Blue Bell, 218,653-SF office building, 99.4% occupied, $5,341,961
· 751 Arbor Way (Hillcrest I) in Blue Bell, PA, 113,291 SF of office space upon redevelopment, 39% occupied, -
· Arborcrest land in Blue Bell, 8 acres, 722,000 developable SF.
www.omegare.com
The Columbia, MD-based REIT said it has determined that the carrying amounts of the properties will not likely be recovered from the cash flows from the operations and sales of the properties over the likely remaining holding period.
Accordingly, during the three months ending Sept. 30, 2012, COPT will recognize a total non-cash impairment loss of $46 million -- the amount that the carrying values of the properties exceed their respective estimated fair values.
These losses reflect the REIT's expectation that it will spend $25 million to complete its redevelopment and disposition of the properties over the next four years.
COPT's Greater Philadelphia Holdings include:
· 785 Jolly Road in Blue Bell, 219,065-SF office building, 100% occupied, $2,884,072 annualized rental revenue
· 801 Lakeview Drive in Blue Bell, 218,653-SF office building, 99.4% occupied, $5,341,961
· 751 Arbor Way (Hillcrest I) in Blue Bell, PA, 113,291 SF of office space upon redevelopment, 39% occupied, -
· Arborcrest land in Blue Bell, 8 acres, 722,000 developable SF.
www.omegare.com
The Waterfront in Allentown Sells for $4.9M
The Waterfront, 26 acres of redevelopment land located at 1 W. Allen St. in Allentown, PA sold for $4.9 million, or about $188,000 per acre.
The land consists of 7 lots on the western bank of the Lehigh River. Currently zoned I-3, the land has industrial buildings which are set to be demolished. Future plans for the riverside development include office, residential, retail, restaurant and hotel properties.
Dunn Twiggar Company LLC, Michael Dunn Company, Ltd. and Jaindl Properties purchased the land from LSS Realty Corporation.
www.omegare.com
The land consists of 7 lots on the western bank of the Lehigh River. Currently zoned I-3, the land has industrial buildings which are set to be demolished. Future plans for the riverside development include office, residential, retail, restaurant and hotel properties.
Dunn Twiggar Company LLC, Michael Dunn Company, Ltd. and Jaindl Properties purchased the land from LSS Realty Corporation.
www.omegare.com
Wednesday, October 3, 2012
2012 U.S. Presidential Election Guide on Commercial Real Estate Issues
This side-by-side comparison of the presidential candidates includes some of the issues most pertinent to the commercial real estate industry. The information collection process was solely through legislative staff research and analysis of the candidates and/or political parties.
Website: https://docs.google.com/file/d/0B3KNtS98ntHPQ3VzaUtncXMxMzg/edit?pli=1
www.omegare.com
Website: https://docs.google.com/file/d/0B3KNtS98ntHPQ3VzaUtncXMxMzg/edit?pli=1
www.omegare.com
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