Wednesday, May 24, 2017

Developers seize on Philadelphia where inventory is tight

Natalie Kostelni Reporter Philadelphia Business Journal
While there’s an increasing weariness that the multifamily rental market in Philadelphia is becoming overbuilt, developers such as David Perlman are finding a lack of inventory has made their bets on new for-sale projects less of a risk.

Perlman is moving forward with a new 43-unit residential development at 600 N. 5th St. in Northern Liberties and he’s confident the townhouses will sell. “We just completed 25 units across the street,” he said. “That took us two years to sell and that’s about a fair pace.”

Real estate agents have been bemoaning about the lack of inventory throughout the city and suburbs. In Philadelphia, the first quarter proved to be unusually strong despite what is typically viewed as a slow time of year because of the weather.

“Home sales volume in the first quarter was also both exceptionally and unusually strong,” according to a report by Drexel Unviersity’s Lindy Institute for Urban Innovation. The report later said that the activity was “exceptional because it was the strongest first quarter since 2007 and unusual because home sales activity typically declines from the fourth to the first quarter, due to the holidays and winter weathe … A likely driver of this seasonally uncharacteristic price appreciation is the very low level of current inventories.” Nationally, inventory has become an issue as well. Single-family housing starts rose to 835,000 in April, which is half a previous peak of 1.72 million in 2005.

“We’ve hit a point where there is so little inventory real estate agents are throwing out ridiculous numbers and getting them,” said Ori Feibush of OCF Realty, which builds houses in several Philadelphia neighborhoods including Point Breeze, Graduate Hospital and Old City. “You have two-and-a-half months of inventory, which is an incredibly unhealthy supply. I foresee that will continue.”

There are several factors influencing the lack of supply. A nearly 10-year focus on the multifamily rental market, what can be a lengthy approval process and an increased desire to live in Philadelphia have contributed to limiting how much new housing has hit the market. There are also signs that millennials, who have all but shunned buying a house over renting, are starting to come into the market to buy.

Full story: http://tinyurl.com/mackdyh
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3601 Market Street Apts Hits the Market

Southern Land Company, a residential developer, has put to market for sale its 363-unit apartment building at 3601 Market St. in Philadelphia, PA to prospective buyers.

The property is being listed without an asking price.

The 28-story, 443,000-square-foot multifamily property was built in August 2015 on nine-tenths of an acre in the University City MF submarket of Philadelphia County.

The LEED Silver-certified tower features 26,000 square feet of ground-floor retail space home to Jimmy Johns and Dunking Donuts beneath a mix of studios, efficiencies, one- and two-bedroom apartments and penthouses, seven elevators, concierge, business center, game room, fitness center, swimming pool, 200-stall parking garage and on-site management. The asset was 32 percent vacant at the time of sale, and asking rents range between $1,800 and $4,700 per month for apartments averaging between 427 and 1,543 square feet each.

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Frank Theatres Cinebowl & Grille Preleases 68,000-SF at Granite Run

Frank Theatres Cinebowl & Grille has signed a lease deal to anchor the in-development Promenade at Granite Run shopping center expansion at 1067 W. Baltimore Pike in Media, PA.

The theater experience will open a new 68,115-square-foot location, its fourth in the state. The retailer, with locations along the southeast, provides a host of attractions ranging from movies, bowling, arcade games, and a bar and grill.

The Promenade at Granite Run lifestyle center originally delivered on 56 acres in 1974 and is currently undergoing an expansion which broke ground earlier this year and will total 886,585 square feet when it delivers to the Delaware County submarket of Philadelphia in the first quarter of 2018.

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Tuesday, May 23, 2017

PREIT Puts Two More Malls Up for Sale

Philadelphia-based PREIT (NYSE: PEI) announced plans to sell two more of its regional malls after receiving unsolicited inquiries from potential buyers.

PREIT said it will pursue the sale of its 900,000-square-foot Logan Valley Mall in Altoona, PA, and the 600,000-square-foot Valley View Mall in LaCrosse, WI.

The REIT did not reveal the identities of the potential buyers or an expected sales timeline, but said any proceeds from the dispositions would be used to fund its redevelopment pipeline.

"PREIT has a demonstrated record of transforming and revitalizing the traditional mall model to capitalize on new opportunities and evolving trends in the market," said Joseph F. Coradino, CEO of PREIT. "To date, we have successfully sold 16 lower-productivity malls as part of our non-core property disposition program. With these additional dispositions, we are taking further action to strengthen our portfolio amid a challenging retail climate."

PREIT recently announced that midwest department store Herberger's would be relocating and expanding at Valley View Mall to fill Macy's former location. Owned by The Bon-Ton Stores Inc., Herberger's will move from its current 42,000-square-foot to the 100,000-square-foot space formerly occupied by Macy's. The move is expected in October 2017.

However, Logan Valley is PREIT's worst-performing property and Valley View ranks as its eighth-worst among the REIT's 22 remaining malls on a sales-per-square-foot basis, according to PRET's most recent quarterly financial disclosure. PREIT said selling the malls is expected to boost its portfolio’s sales by $10 per square foot.

Since initiating a major disposition strategy to prune low-sales properties and focus on its best-performing centers beginning in 2013, PREIT has netted about $730 million from selling 16 of its properties.

PREIT has also focused on revamping its tenant mix, adding more dining, exercise and entertainment options to appeal to changing shopper patterns.

"The historic view of the mall, heavily reliant on apparel and traditional retail, has expired and a new model is rising," said CEO Coradino. "Dining, entertainment and experiential concepts represent the mall of the future."

In recent leasing activity, PREIT leased 28,000 square feet to Dave & Buster's in its Capital City Mall in Harrisburg, PA. At Plymouth Meeting Mall near Philadelphia, PREIT signed a new tenant called 5 Wits, which offers live-action entertainment experience that immerses guests in realistic situations that includes hands-on challenges and requires teamwork," according to a description. The 14,000-square-foot space will be across from the mall's Legoland Discovery Center. PREIT also recently signed indoor cycling firm Cyclebar at its Plymouth Meeting center, offering what it describes as "high-energy workouts in a concert-like atmosphere."

"As the retail format lines continue to blur, we are capitalizing on owning quality properties in the best locations in their markets, capturing a wide variety of tenant interest," Coradino added. "At the same time, we are systematically reducing exposure to select department stores, driving increased net operating income and enhancing the consumer experience, thereby creating long term shareholder value and driving NAV."

Coradino said the REIT will also continue to engage in discussions with third parties as its looks to optimize its mall portfolio and increase shareholder value.
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Private Equity Firms Sell Fort Washington Hilton Garden Inn

by Steve Lubetkin, Globest.com
Ethika Investments, a real estate private equity firm says one of its investment funds has sold its interest in the Hilton Garden Inn Philadelphia/Ft. Washington hotel for $22.5 million. The buyer was not disclosed.

Acquired by Ethika in 2013 with fund sponsor Laurus Corp., the investors say they spent $2.5 million targeted renovation to public spaces and guest rooms, selection of a new management company, focused efforts to raise RevPAR, and strategic marketing bringing up guest satisfaction – winning Trip Advisor’s Certificate of Excellence 2013, 2014, 2015 and Aimbridge Hospitality’s Presidential Award for RevPAR Growth 2013, 2014, 2015. Laurus says the property achieved a 20.1 percent gross IRR and 1.9x gross equity multiple in under four years.

“This successful disposition underscores our strategy of investing in ideally located value-add assets in dynamic and flourishing markets around the US,” says Austin Khan, chief investment officer of Ethika Investments. “Through a diligent application of the value-add strategy by our affiliate, Laurus Corp., this hotel moved from an opportunistic investment to stabilization and sale to a core investor.”

Ethika and Laurus acquired the 146-key property in 2013 for a reported $16.4 million, according to Real Capital Analytics, a proprietary research database.

“The successful sale of this hotel, the second disposition for Laurus-sponsored assets within the past two weeks, continues to highlight our consistent ability to source, execute and monetize on opportunistic and value added real estate investments,” says Andres Szita, Laurus chairman.  “As always, we carefully evaluate each project and define a custom strategy for each property, aiming at delivering the best possible risk-adjusted outcomes.”
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Weakening demand in commercial real estate? (Video)

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Monday, May 22, 2017

Pharmaceutical Research Company Renews 28,000-SF Lease in DE

Incyte, a pharmaceutical research company, has renewed its lease for 28,460 square feet at the 2200 Concord Pike building at 2200 Concord Pike in Wilmington, DE.

Incyte occupies space on the ninth and 10th floors in the building it has called home since 2014. Founded in 2002, Incyte now employs more than 900 people across the U.S. and Europe.

Friday, May 19, 2017

Keystone, Argosy Sell Devon Square Offices

Westover Companies purchased the office buildings at 724 and 744 W. Lancaster Ave. in Wayne, PA from Keystone Property Group and Argosy Real Estate for $33.5 million, or about $245 per square foot.

The two buildings total 136,493 square feet on two floors and were built in 1984 and renovated in 2005. Devon Square was designed by Architectural Concepts PC and developed by Keystone Property Group.

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Wednesday, May 17, 2017

CBRE Global Investors Acquire King Of Prussia Town Center

JBG Rosenfeld Retail Properties sold the open-air shopping center at 131 Town Center Rd. in King of Prussia, PA to a fund led by CBRE Global Investors. 

The newly-constructed, 263,423-square-foot retail center was 87 percent leased at the time of sale and features a walkable urban design combining a mix of necessity and experiential retailers in a town-center setup. The property is shadow-anchored by a Wegmans grocery store and is located in the King of Prussia / Wayne submarket of Montgomery County. 

"King of Prussia Town Center is a one-stop shopping and dining destination located on the border of Pennsylvania’s wealthiest counties, serving some of the nation’s most affluent and well-educated populations," said Kim Hourihan, portfolio manager with CBRE Global Investors on the submarket's average household income of more than $130,000. "The combination of attractive demographics and exceptional accessibility makes the property the ideal location for retailers and restaurants alike. As e-commerce has disrupted traditional retailers, necessity retail and destination restaurants drive daily traffic, enhance the shopping experience and offer protection against e-commerce risks affecting other retailers." 

The property is part of a 122-acre, master-planned, mixed-use development. The center was JBG's only development in suburban Philadelphia, and its sale marks the firm's effective exit from the region. 

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Thursday, May 11, 2017

Tips for Commercial Property Owners - EY's Global Real Estate Market Outlook (Video)

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Sam Zell: I wouldn't let those virtual office guys near my business (Video)

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DaVita Signs 16,000-SF Lease in Malvern

Healthcare provider DaVita, Inc. has leased 15,991 square feet of office space at 2476 Swedesford Rd. in Malvern, PA.

The 276,736-square foot office building was constructed in 1968 within the Great Valley Commerce Center located in the Exton/Whitelands submarket of Chester County.

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Ace Hardware Signs Two Bldg Industrial Lease Totaling 1.1M SF

Ace Hardware has signed a 1.1 million-square-foot industrial lease at 139 Fredericksburg Rd. in Fredericksburg, PA.

The lease deal encompasses a full-building deal at an existing distribution facility totaling 874,126 square feet and a 225,875-square-foot proposed expansion building that is expected to break ground this summer with an anticipated delivery date in early 2018.

USAA Real Estate Company owns the 90-acre lot, located near I-78 and I-81, within the Lebanon Valley Distribution Center. Reportedly, Ace Hardware will not take occupancy of the existing space until the expansion building is completed.

The existing building delivered in May 2016 in the Lebanon County Industrial submarket of Philadelphia and features abundant surface and trailer parking, ESFR sprinkler, 123 loading docks and two drive-ins in a cross-dock design, 36-foot clear heights and 48x56-foot column spacing.
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Supply, Affordability Issues Pressuring Apt. Rent Growth in Downtown Philadelphia

The stark contrast in recent apartment rent growth between the city and suburbs is notable. A majority of the new supply has been built in and around Philly’s CBD, and rents have been flat or even retreating the last few quarters in the downtown Center City and Art Museum/Northern Liberties submarkets. Even buzzworthy apartment-renting hot spots such as University City have seen slow to no rent growth, and new units are still coming.

Meanwhile, the major suburban apartment submarkets such as Conshohocken, Cherry Hill/Haddonfield and Main Line have seen the party continue with rent gains averaging closer to 4% or 5% year over year.

A lot of this is attributable to new supply pressure, but affordability is also a factor. There are only so many renters who can or will pony up for a $2,000-per month, one-bedroom unit in Center City. Similar amenities in nearby buildings that have access to public transportation and a rent bill that’s several hundred dollars less per month can be pretty compelling.

Sky Isn’t Falling on Center City Apt. Leasing Managers Just Yet

While the slowdown in rent growth is obvious, apartment assets in downtown Philly still have a lot going for them-and the biggest selling point is the city itself. I can’t tell you if an infiniti pool in Newtown Square is better than an infiniti pool in Rittenhouse Square, but I know which one is a few steps away from premier shopping, restaurants and more nightlife than just about every suburb in Philadelphia combined can offer.

This isn’t a value judgement on one or the other, by the way. Just an observation that you can’t replicate the city as an amenity, even in the most walkable town-center environment. Oh, and having the Comcast Technology Center and it’s thousands of well-paid employees commuting to your neck of the wood in less than a year is also pretty good consolation.

Compelling Multifamily Stories Emerging Outside Pennsylvania Portion of This Metro

There are two fascinating reclamation projects happening within the boundaries of the Philadelphia metro area, both are in nearby Delaware.

The city of Camden’s revival has received national attention because of all the tax incentives the state has offered to corporations to locate there. But the city needs population growth and the reclamation of the Camden waterfront could go a long way in that pursuit. Crime is down, tech startups are seeing a potential home base for their businesses and employees, and Camden could benefit from the urban pioneering spirit that many younger Philadelphians have.

Further south, Wilmington is undergoing a similar rebirth. Crime destroyed the city’s reputation and still plagues parts of it. For the longest time, there were very few viable rental housing options for employees at JP Morgan Chase, Bank of America, DowDuPont and others.

Much of Wilmington’s comeback story is being written by the Buccini/Pollin Group, which has made a goal of facilitating the addition of 5,000 new residents to Wilmington by 2020, where the company is based. Their principals are from the city and they have a genuine desire to see not just their projects succeed but their city as well.
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Friday, May 5, 2017

Lehigh Valley Health Network Signs Leases at Three City Center

Lehigh Valley Health Network has signed leases totaling 82,000 square feet at the Three City Center building at 515 W. Hamilton St. in Allentown, PA.

The 210,000-square-foot office building is just two years young. The construction on the building was completed in May of 2015. Lehigh Valley Health Network will occupy space on the second, third and fourth floors of the building, taking 54,634 square feet in September 2017 and expanding into an additional 27,317 square feet in June 2018.
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Thursday, May 4, 2017

Kimco Realty CEO: Retail getting painted with broad brush (Video)

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High Street Raises $350 Million for Core-Plus Industrial Fund

High Street Realty Co. held final close on its High Street Real Estate Fund V reaching total equity commitments of $353 million.

Utilizing leverage of 50%, Fund V will seek to acquire $700 million of assets in its target markets.

San Francisco-based High Street Realty formed the fund to continue acquiring smaller warehouse distribution assets in the eastern two-thirds of the US, with a specific focus on Class A and B infill properties fulfilling regional and “last mile” logistics requirements.

Fund V will target primary distribution markets, including Chicago, Northern New Jersey, Central Pennsylvania, Atlanta, Florida and Texas.

The fund attracted capital from existing investors and several new top-tier, institutional investor relationships. Investors include insurance companies, public and corporate pension funds, foundations and other institutional investors from Europe.

To date, Fund V has acquired 19 assets that, in aggregate, represent approximately 34% of its total commitments.

Its most recent purchase occurred in March when it acquired three industrial properties in Morrow, GA, as part of the Southlake Distribution Centers from UBS Realty Investors LLC for $31.45 million, approximately $39 per square foot. Great-West Life & Annuity Insurance Co. provided $16.25 million in purchase financing.
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Tuesday, May 2, 2017

DuPont Building Set for Major Overhual

The purchase of the DuPont Building and Hotel DuPont in Wilmington, DE has finalized, with the city’s most active developer - The Buccini/Pollin Group (BPG) - announcing its purchase from chemical company Chemours last week.

The DuPont spinoff has reportedly signed a 17-year leaseback of approximately 260,000 square feet at the property, which it acquired as part of its detachment from DuPont back in 2015.
While the price tag always matters, perhaps a more important number is $175 million - the projected price tag for BPG’s conversion of the outdated mixed-use asset into a defining centerpiece for the downtown’s ongoing transformation.

"The purchase of the DuPont Building and its assets couldn’t make any more sense to us right now," said Chris Buccini, co-president of The Buccini/Pollin Group. "There is no better way to coalesce our long-running vision for a vibrant downtown where people come together to live, work and play, than to take on the DuPont Building and re-envision it as a modern version of what it has always been, a lifestyle center for the City of Wilmington."

The Wilmington-based developer has been driving an effort there for the better part of two decades, and the DuPont Building deal aligns closely with the joint effort between BPG and the City of Wilmington to add 5,000 new residents to the area between 2015 and 2020. The renovation plans include gutting the existing office space and apportioning some of it for 180 apartment units. While the unit mix and asking rents haven’t been finalized, BPG has said that it expects rents to come in around $2/SF. This is in the range of the higher-end Residences brand that BPG has developed around the city.

The first phase of renovations is expected to take up to 18 months, and Chemours will reportedly take over temporary space in the Nemours Building next door until its open floor plan space located on floors four through 13 is available.

The remaining space, which could fit up to four tenants according to BPG, will be up for grabs in a submarket defined by elevated vacancy in that sector. According to recent data from CoStar Market Analytics, almost 15 percent of the 4 & 5-Star spaces in the Wilmington CBD submarket were unoccupied at the time of this trade. Less than 1 million square feet of office space has delivered here since 2000, and only one building over 100,000 square feet (the 160,000-square-foot AAA Building on River Place, fully leased) was over 90 percent occupied as of Q2-17.

In addition to the office component, the property will see overhauls of its hotel, retail and lobby spaces. Playing to the live-work-play concept dominating most major cities these days, the 40,000-square-foot retail plans involve 10,000 square feet dedicated to a planned food hall. The idea is to make both the office and apartments part of an 18-hour urban hot spot.
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OMEGA CRE donates $5,100 o/b/o PennFleet to the B-Strong Foundation

Do Well by Doing Good  - OMEGA Commercial Real Estate, Inc.

The Story: 
 Joe O’Donnell of OMEGA Commercial Real Estate, Inc. and Jim Kolea of PennFleet began looking for a building for PennFleet many years ago. PennFleet had a unique requirement of certain size industrial building but with extra land for parking commercial vehicles. As Jim and Joe got to work together, Jim told Joe about a charity that was started by one of his employees and close to his heart as a cause.  That charity was the B-Strong Foundation. Joe agreed to donate a portion of his commission should Jim ever find a building to purchase. After many years of searching they finally located 591 Meetinghouse Road, Marcus Hook, PA. PennFleet settled on the property and recently relocated. Today PennFleet continues to thrive and hit new sales highs in their larger and more modern facility helps them to accomplish.


Jim Kolea, Tracy Ehleben & Joe O’Donnell

About:
B-Strong Foundation is a 501(c)(3) non-profit organization, who provides meals, gifts and financial help to families whose children are diagnosed with cancer. Our families reside in the Delaware Valley area and we encourage them to Be Strong, Be Brave and BEAT cancer. http://www.b-strongfoundation.org

OMEGA Commercial Real Estate, Inc. is a full service real estate company specializing in corporate tenant/buyer representation, landlord/seller representation, project leasing and investment sales for Montgomery, Chester Counties and surrounding Philadelphia areas. @OmegaRE or www.OmegaRE.com

PennFleet  provides quality service and repairs for commercial vehicles.  PennFleet’s services include, collision repair and refinishing, mechanical services, media/sponge blasting & the sale of parts. @pennfleet or http://pennfleet.com

How Trump's tax reform could save commercial real estate (Video)

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Monday, May 1, 2017

Chester County’s commercial real estate sizzles

By Brian McCullough, Daily Local News
While the residential real estate market has rebounded from the last recession at a slow, uneven pace, Chester County’s commercial and industrial real estate markets have been going strong for a while, according to those in the business.

Leaders in the industry met at the Chester Valley Golf Club on Thursday to recognize those responsible for the top transactions of the last year and to hear from a Texas economist who gave an upbeat assessment of the national market.

“I would say it’s at least five years that we’ve been back from the recession,” said Adam Cathers, new president of the Chester County Commercial Industrial Investment Council, or CII Council, which put on Thursday’s event. “There’s a lot of both redevelopment within the boroughs and new corporate facilities. It’s been a nice mix of re-use and new.”

The CII Council was started as an informal networking group in the late 1980s and officially incorporated in 1994.

It now has 200 members – commercial and industrial developers, title companies, bankers, attorneys, real estate agents and others involved in commercial development.

“We do business everyday face to face,” said MaryFrances McGarrity of the CII Council. “We refer one another ... it’s a strong group that really enjoys doing business in Chester County.

The following recognitions were given by the group on Thursday:

• Best Collaboration of CII Members: Charlene Tucker of Interland Real Estate and Phil Earley and JoAnn West of Lieberman Earley & Co., and Bruce West of Manito Abstract Co., who worked together to bring about the sale of 782 Springdale Drive in Exton, a 42,000-square-foot Class A office building on 3.9 acres, for $3.5 million.

• Most Significant Land Sale - Adam Knox of Geis Realty Group for the sale of 1295 Ward Avenue in West Chester, an 8.3-acre parcel with a total value of $1.9 million.

• Most Significant Portfolio Sale - Jim Dugan of Neward Grubb Knight Frank for 412, 435, 436, 440 and 457 Creamery Way in Exton. The portfolio contained a total of 267,055 square feet of flex space and true office with a total value of $31.6 million. Taylor Young received special mention for representing the seller, Hayden Properties, on the transaction.

• Most Significant Flex Sale - Jim Lees of Swope Lees Commercial Real Estate for the sale of 901 S. Bolmar Street in West Chester, total of 89,920 square feet with a value of $8.7 million.

• Most Significant Flex Lease - Jack Purcell of the Hankin Group for leasing 260 Sierra Drive in Exton with a total of 41,557 square feet and a lease value of $14.1 million. Ed Hollin of Riley Riper Hollin & Colagreco represented the landlord.

• Most Significant Industrial Lease - Eric Stretch of First Liberty Partners for 231 W. Stewart Huston Drive in Coatesville, a 35,000-square-foot property with a total lease value of $1.3 million.

• Most Significant Industrial Sale - Eric Stretch of First Liberty Partners for the sale of 3172 Lower Valley Road in Parkesburg, which is the new location for Victory Brewing, a total of 212,000 square feet and a total value of $10.8 million.

• Most Significant Retail Lease - Nicole Lyddane and Chuck Swope of Swope Lees Commercial Real Estate for leasing Univest a total of 5,515 square feet high visibility space at 200 North High Street in West Chester. The lease had a $2.1 million value. Duie Latta of the Clarion law firm also worked on the transaction.

• Most Significant Office Lease - Cat Bianco of Workspace Property Trust for leasing 1400 Liberty Ridge in Wayne, a total of 104,818 square feet and a lease value of $14.3 million. Jim Dugan was given an honorable mention for his lease for 52 East Swedesford Road. The 21,008-square-foot building had a total lease value of $6 million.

• Most Significant Office Sale - Kevin Flynn of The Flynn Co. for 748,835 and 855 Springdale Drive, which had an aggregate of 118,000 square feet and a total value of $16 million. Taylor Young, who worked on the transaction, received an honorable mention.

The event’s keynote speaker, Mark Dotzour, an independent economist who served for 18 years as chief economist of the Real Estate Center at Texas A&M University in College Station, said the American commercial real estate market remains the envy of the world and produces better returns than the stock and bond markets as well as hedge funds. Don’t believe doom and gloom media reports, he advised.

“Our economy is the strongest on earth – period,” he said. “Everybody wants to invest here.”

Institutional and foreign investors will continue to snap up American real estate due to those higher returns, said Dotzour, who acknowledged that as an economist he could be wrong “about 50 percent of the time ... I’m due for a big miss.”

“It will end when commercial real estate has a viable alternative” Dotzour said of the market’s attractiveness to large investors.
Full story: http://www.dailylocal.com/business/20170422/chester-countys-commercial-real-estate-sizzles

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Philadelphia's Office Vacancy Decreases to 8.7%

The Philadelphia Office market ended the first quarter 2017 with a vacancy rate of 8.7%.

The vacancy rate was down over the previous quarter, with net absorption totaling positive 173,096 square feet in the first quarter. That compares to positive 1,080,044 square feet in the fourth quarter 2016. Vacant sublease space increased in the quarter, ending the quarter at 1,112,547 square feet.

The Class-A office market recorded net absorption of negative 588,125 square feet in the first quarter 2017, while net absorption for Philadelphia's central business district was negative 4,710 square feet.

Tenants moving into large blocks of space in 2017 include: Ashfield Healthcare moving into 82,000 square feet at 1100 Virginia Dr; WeWork moving into 55,238 square feet at 1900 Market Street; and Holy Redeemer Health System moving into 36,000 square feet at 201 Veterans Way.

Rental rates ended the first quarter at $22.68, an increase over the previous quarter.

A total of six buildings delivered to the market in the quarter totaling 214,556 square feet, with 4,398,979 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 at 9.7%, relatively unchanged from the previous quarter, with net absorption positive 10.78 million square feet in the first quarter. Average rental rates increased to $24.44, and 339 office buildings delivered this quarter totaling more than 21.29 million square feet, with 154.4 million square feet still under construction.
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Thursday, April 27, 2017

Capital One Leases 330,000 SF in Wilmington Consolidation

Financial services corporation Capital One has signed a new 10-year lease for 174,000 square feet in the office building at 800 Delaware Ave. in Wilmington, DE and renewed its current space at the adjacent 802 Delaware Ave. through 2027.

The company, which recently acquired Wilmington, DE-based financial services companies HSBC and INGDirect, will consolidate offices from several area buildings as its new space is renovated and built out.

800 Delaware is a 10-story, 277,899-square-foot, 4-Star office building in the Wilmington CBD submarket while the adjacent 802 Delaware building totals 240,780 square feet of 4-Star office space over 14 floors. DelleDonne & Associates developed the 800 building in 1994 and renovated it in 2007. Other tenants there include Blue Cross Blue Shield of Delaware and Heckler & Frabizzio.
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Tuesday, April 25, 2017

O'Neill Property Group has GSK campus in Upper Merion under agreement

by Natalie Kostelnie, Staff writer Philadelphia Business Journal

O’Neill Properties Group has put GlaxoSmithKline’s “West Campus” in Upper Merion, Pa., under agreement, according to sources. And, if a deal is completed, it will for the first time in three decades free up the property to be marketed to multiple tenants.

The property at 709 Swedeland Road consists of 43 buildings totaling about 2.2 million square feet of office, lab and warehouse space. In 2014, GSK announced it planned to sell its West Campus and lease back a portion of the site that consisted of its sterile clinical manufacturing pilot plant.

Frances DeFranco, a GSK spokeswoman, declined to comment on whether the sprawling campus was under agreement. A representative from O’Neill Properties also declined comment.

Undertaking the repositioning of 2 million square feet of space would be a daunting task for any developer. There is demand for lab space in the region, which has an abundance of pharmaceutical and biopharmaceutical companies. Such specialized space is expensive to build and fit out. In light of that, its ready-made, move-in condition might be appealing to prospective tenants.

There is also demand for office space. Large blocks of well-located office space in the suburbs is becoming scarcer and may present O’Neill Properties or any buyer with an opportunity to renovate the space and create an amenity-rich environment that would appeal to tenants.

O’Neill has completed office and multifamily projects throughout the region but is familiar with the area where the GSK property is located. The real estate company developed projects in Conshohocken, Pa., and maintains its headquarters off Renaissance Boulevard, just a stones throw away from the GSK campus.
Full story: https://www.bizjournals.com/philadelphia/news/2017/04/21/developer-has-gsk-campus-in-upper-merion-under.html

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Is this a good time to sell my CRE property? (Video)

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Monday, April 24, 2017

Amazon Adding Three More NJ Fulfillment Centers

by Steve Lubetkin, Globest.com
CRANBURY, EDISON, AND LOGAN TOWNSHIP, NJ—Amazon.com will open three additional fulfillment centers in New Jersey, at sites in Cranbury Township, Edison and Logan Township that the online retailer says will create more than 2,500 new, full-time jobs.

Since Amazon launched operations in New Jersey in 2012, the company has grown its fulfillment workforce in the state to 13,000-plus full-time employees across seven existing facilities in Avenel, Carteret, Florence, Logan Township and Robbinsville.

“Our ability to expand in New Jersey is the result of two things: incredible customers and an outstanding workforce,” says Akash Chauhan, Amazon’s vice president of North American Operations. “We are excited to continue growing by creating an additional 2,500 full-time roles at new fulfillment centers across the state.”

Amazon employees at the more than 900,000-square-foot fulfillment center in Cranbury Township and the one-million-square-foot fulfillment center in Logan Township will pick, pack and ship larger customer items such as music equipment, sports gear, and patio furniture. The 900,000-square-foot fulfillment center in Edison will handle smaller customer items such as books, toys and kitchenware.

“We applaud Amazon for investing in several expansions throughout New Jersey and for creating greater opportunities for our high-quality workforce,” says New Jersey Governor Chris Christie.
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Friedman Group Acquires, Renovating Phoenixville Apartment Complex

by Steve Lubetkin, Globest.com
Breckenridge Plaza, a 92-unit garden apartment community with 48 two-bedroom apartments, 40 one-bedroom apartments and 4 studio apartments located on Nutt Road in Phoenixville, PA, has been acquired by an affiliate of Friedman Realty Group for $8.7 million.

Friedman specializes in revitalizing apartment communities, shopping centers and office buildings.

Major renovations underway on the property will help reposition the property with a new name—Phoenix View Apartments—and Friedman also plans to capitalize on the economic revitalization initiative that has attracted large developers for multifamily, class-A properties in and around Phoenixville.

“The property had all the hallmarks of the type of property we like,” Brian K. Friedman, president of FRG. The property had been overlooked for years by the previous owner.  Rents fell well below the market and vacancies rose to 42 percent. Yet it had terrific bones with a garden setting and brick exterior, providing us with an opportunity to significantly enhance the property’s curb appeal. With 40 years of expertise restoring class-B apartment communities, we will turn Phoenix View Apartments into one of the most sought after multifamily addresses in Phoenixville.”

Exterior improvements include new building entryways and common area designs, gable roof siding replacement, apartment deck and balcony replacements, decorative window shutters plus updated lighting, landscaping and signage.

“The repositioning of the exterior amenities, including the former in-ground pool, is just another fresh start for Phoenix View Apartments,” says Friedman.  The apartments will also benefit from new energy efficient windows and sliding glass doors.

Apartment interiors will receive new plank hardwood flooring throughout the living and dining areas with new carpeting in bedrooms, new kitchens with updated cabinetry, stainless steel appliances (including built-in dishwashers and microwaves), quartz countertops and subway tile backsplashes.  Additionally, the kitchen layouts will be re-designed from their current footprint to provide for a more open and modern look.  Bathrooms will be gutted and everything will be replaced, such as new floor and wall tile with upgraded vanities, light fixtures and plumbing fixtures.  All apartments will also include individual stackable washers and dryers within the unit.

The property’s prior ownership had not invested any capital for major or minor renovations and upgrades, except for adding newer roofs and parking lots, all of which were required by the Borough of Phoenixville to address previous multiple code violations.  Inside the units, everything from the HVAC systems to kitchen cabinets and appliances to the bathrooms were original and in poor condition.  With a deteriorated look, inside and out, the property’s marketability stagnated and suffered, with vacancies rising to 42 percent at the time FRG purchased the property.

“This is a complete gut job,” says David B. Friedman, CPM, owner and vice president of FRG.  “It’s going to be an enormous effort to renovate and restore this property, but this is what we do.  We convert under-managed garden style apartments into modern, contemporary communities with state-of-the-art amenities that can compete with new construction.”

Built around 1970, the property consists of five two-and-a-half-story brick on block buildings with pitched roofs constructed on a three-acre parcel.  The property sits atop of a hill at the busy intersection of Nutt Road and Bridge Street and is within one-half mile from downtown Phoenixville and the township’s Borough Hall.

“The growth of Phoenixville has been tremendous,” says David B. Friedman. “A number of high-profile multifamily projects are coming out of the ground led by developers who have been attracted to Phoenixville’s economic revitalization. The growth shows no signs of waning; renters are exhibiting strong interest in suburban settings with access to downtown shopping and dining destinations.  We believe Phoenix View Apartments fills an important niche in the sub-market by providing beautifully renovated apartments at competitive, affordable rents.”

Phoenix View Apartments is close to major highways such as Route 422, I-76 and provides convenient commuter access to Pennsylvania routes.  Within 10 miles is the King of Prussia Mall, one of the largest retail shopping centers in the country, as well as major regional employers such as The Vanguard Group, GlaxoSmithKline, Pfizer, Dow Chemical Company, and Lockheed Martin.
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Friday, April 21, 2017

Retail ice age: Why 5K stores expected to close this year (Video)

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Blackstone REIT Rapidly Adding to Initial Portfolio with 6 Million-SF Industrial Buy

Blackstone’s non-traded REIT, Blackstone Real Estate Income Trust, this week added another portfolio to its growing property stockpile.

The REIT's latest acquisition is a six million-square-foot portfolio of predominantly infill industrial assets it purchased from affiliates of High Street Realty Co. $402 million.

The portfolio is 97% leased to over 90 tenants and consists of 38 industrial properties totaling 5.97 million square feet. The properties are located in six submarkets with the following concentration based on square footage: Atlanta (38%), Chicago (23%), Houston (17%), Harrisburg (10%), Dallas (10%) and Orlando (2%), according to Blackstone. The purchase price breaks down to about $67.30/square foot.

Blackstone did not provide a specific list of properties.

The REIT said that, over the last two years, market rents in those submarkets have increased by 5% annually while vacancy has declined by approximately 100 basis points to 5.2%. The REIT also said that infill industrial supply in these markets is expected to be constrained at 0.6% of stock throughout 2017 given limited land availability near these population centers.

The REIT added the properties have posted weighted average releasing spreads of 12% over the last two years, which Blackstone described as a measurement of the change in rent per square foot between new and expiring leases at a property. The portfolio posted average effective annual base rent of $4.31/square foot as of March 31.

The acquisition was funded through a combination of cash on hand, a $5 million draw on the REIT’s line of credit, and a short-term $292 million loan from various lenders lead by Bank of America. The REIT expects to convert the loan shortly after closing long-term financing.

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Wednesday, April 19, 2017

FASB Leases Standard to Offer Clearer View of Corporate Liability (Video)

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Health Network Labs Leases 15,000 SF in Bethlehem

Health Network Laboratories has signed a 15,400-square-foot office lease in the Fuller Co office building located at 2040 Avenue C in Bethlehem, PA.

The tenant will relocate to the first floor of the updated annex building in the Lehigh Valley Industrial Park I. The 164,451-square-foot office building has been recently updated with a main entrance, natural light, flexible layouts and additional parking.

Health Network intends on using the space as additional administrative office space. The company has locations across Pennsylvania and New Jersey.
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HT Lyons Renews 122,000-SF Lease in Allentown

H T Lyons, a contracting, engineering and maintenance company, has renewed its industrial lease for the 122,400-square-foot building at 7165 Ambassador Dr. in Allentown, PA.

The single-story warehouse was built in 2002 on 10 acres in the Lehigh Valley Industrial submarket.
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Monday, April 17, 2017

MRA Group Acquires 133 Acre Rohm & Haas (Dow) Campus in PA

MRA Group announced that it acquired the former Rohm & Haas Research & Development campus located at 727 Norristown Road, in Spring House, Lower Gwynedd Township, Montgomery County, PA.  Rebranded as the Spring House Technology Park, there currently exists 591,000 square feet in eleven buildings. The bucolic campus, which totals 133 acres situated at a full interchange with the Rt. 309 expressway, is less than three minutes north of the Ft. Washington exit of the Pennsylvania Turnpike.  Mike Wojewodka, Senior Vice President of MRA Group, states "we are transforming Spring House Technology Park into the premier, multi-use technology enhanced campus in the region. Plans include, in addition to first class office and laboratory facilities, a campus environment with a university-affiliated regional center of excellence for innovation and advanced production, a laboratory incubation and commercialization center, a boutique hotel with full amenities, co-working space with on-demand offices and shared office/conference facilities, on-site child daycare, a health/fitness center, and a retail village containing approximately 40,000 square feet of restaurants and other amenities. Our focus is in attracting companies that can best utilize the robust existing laboratory infrastructure at one of the best locations in the Philadelphia region."

According to Hank Merrill, Vice President of Facility Engineering at MRA Group, "the in-place laboratory infrastructure is invaluable for laboratory users and technology companies. The cost to replicate what we already have in place would be immense, and certainly will be a significant benefit to any forward-thinking company that prefers to direct capital to other needs besides building improvements.  Our utility infrastructure alone will translate to measurable operating savings over what space users will typically find available on the market today."

Heather DeFreytas, MRA Group Vice President for Project Design and Management, plans to embrace and enhance unique architectural features of the campus, along with including an outdoor amphitheater and meeting spaces, nature trails for use by tenants and the community, and the conversion of an existing barn into a coffee shop and restaurant.  Heather observed, "the opportunities presented on this campus are complex. Design and construction for each building will reflect a balance between technology, innovation, sustainability and the neighboring environment.  Though some of the buildings appear tired now, they in fact possess features that are very much desired by space users today.  It will not take much to bring them up to MRA standards."

Larry Stuardi, CEO of MRA Group, states that "the development of Spring House Technology Park is a collaborative endeavor with Lower Gwynedd Township.  There is a shared vision for the redevelopment of the campus, and though there are details to be worked out, we generally are on the same page when it comes to the overall development of the site.  We are all aware that we have the opportunity to do something special and unique, and we are collaborating so as to get it right."
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Monthly Economic Outlook – April 2017 (Video)

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Two Logistics Firms Lease 450K SF At Middlesex Center

by Steve Lubetkin, Globest.com
CDS Logistics and Best Logistics have leased 450,000 square feet of space at 301 Middlesex Center Boulevard, a class-A industrial building located within the three-building Middlesex Center in South Brunswick, NJ.

This brings the newly constructed, speculative facility to full occupancy. CDS leased 250,000 square feet and Best Logistics leased 200,000 square feet.

“Exit 8A is one of New Jersey’s hottest submarkets for industrial property, and this class-A facility provides an ideal location for premier third-party logistics providers like CDS and Best Logistics. To facilitate lease-up in a more timely manner, we utilized the latest technologies, including virtual reality tours, to draw greater interest from local and national prospective tenants.  We ultimately decided to divide the building into a multi-tenant facility, and IDI Gazeley was able to pursue the subdivisions without a hitch. These leases also mean that all three buildings at Middlesex Center are now fully occupied, providing further evidence of the continued strength of New Jersey’s industrial market.”

Situated just off of the New Jersey Turnpike in South Brunswick, 301 Middlesex is less than 30 miles away from the ports of New York / New Jersey and Newark International Airport. The property includes 36-foot ceiling heights, ESFR sprinkler systems and cross-docked loading. Among tenants at Middlesex Center is Williams-Sonoma.

“CDS and Best Logistics are among the most prestigious logistics providers in the region, and we’re very excited to welcome them to our property.”
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Big plans for an 11-acre parcel on the Schuylkill River in Bala Cynwyd

Natalie Kostelni Reporter Philadelphia Business Journal
For the last 17 years, Sean McCloskey has been patiently plotting a more than $50 million mixed-use development on an 11-acre site along the banks of the Schuylkill River where the former Pencoyd Iron Works Inc. plant operated. Finally, he is now the closest he has ever been to getting his project out of the ground.

McCloskey’s Penn Real Estate Group anticipates breaking ground later this year on the first phase of Pencoyd Landing, which will include a public square, two hotels, a restaurant as well as an already renovated building that once served as Pencoyd’s headquarters but is now occupied by the real estate company McCloskey runs with business partner Donna Glavin. The first part of the project to be constructed is a 123-room Marriott Residence Inn. The other hotel will follow at some point and be about the same size but more upscale. McCloskey said he has lined up an operator for it but declined to disclose who it is.

Between 1999 and now, Penn Real Estate has been assembling parcels, conducting environmental remediation, installing infrastructure such as stormwater management systems and retaining walls as part of its effort to bring Pencoyd Landing to fruition. “Our objective is to encourage people to visit the river not only from Philadelphia but from around the world,” McCloskey said. “We are re-imagining and repurposing this part of the waterfront for the first time since 1852.”

That’s when Pencoyd Iron Works began production along the Schuylkill River and one of its last remaining operations, the fabrication of rebar, fully ceased operations last month. That meant Penn Real Estate could finally move forward with its plans.

Two hotels next to each other on the Lower Merion side of the Schuylkill River may seem a little preposterous until McCloskey makes his case. For one, he believes there’s demand for additional rooms in that area and at that particular spot, where Righters Ferry Road dead ends into the river, will provide an experience visitors can’t get elsewhere.
Full story: https://www.bizjournals.com/philadelphia/news/2017/04/14/big-plans-for-an-11-acre-parcel-on-the-schuylkill.html
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Redevelopment Authority makes pick for Chinatown's 8th and Vine development site

by Natalie Kostelni Reporter Philadelphia Business Journal

The Philadelphia Redevelopment Authority has selected a team that involves Pennrose Properties and EZ Park to buy and develop a highly visible site at 8th and Vine streets into a mixed-use project that pitted developers and their respective visions for the property against each other.

“We’re definitely deeply honored to be selected,” said Richard K. Barnhart, chairman and CEO of Pennrose Properties, which will lead the development that includes the construction of the Philadelphia Bar Association's Equal Justice Center.

The site sits in an area of Philadelphia referred to as Chintatown North, which has expanded the boundaries of Chinatown beyond Vine Street. It’s an area that was once overlooked by developers, even those from Chinatown, but has gained more attention from investors in recent years and will continue Chinatown's expansion northward.

The redevelopment authority put out a request for proposals for the site last fall and both bids were backed by experienced developers. Despite that, it was a contentious process.

The process ended up putting a proposal that involved the Philadelphia Chinatown Development Corp. and its partner, Parkway Corp., against a plan that involved the Philadelphia Bar Foundation and the long-time operator of what is now a surface lot. Some observers predicted Parkway was a shoo-in because it has done a handful of PRA-controlled sites in Chinatown already and was experienced with the government agency.

The Philadelphia Bar Foundation, the philanthropic arm of the Philadelphia Bar Association, was hoping its plan would prevail and it did. With Pennrose and EZ Park as partners, the Bar Association proposal laid out the building of a $40 million mixed-use project that would house more than 20 legal nonprofits.

The proposed 160,000-square-foot building — which the bar association is calling the Equal Justice Center — is envisioned to be eight to 14 stories when completed. The plan also calls for 55 affordable housing units for senior citizens, another building containing market rate rentals, a small hotel (rumored to be a Comfort Inn), retail space and 181-space parking lot.
Full story: https://www.bizjournals.com/philadelphia/news/2017/04/11/8th-vine-chinatown-phila-bar-equal-justice-center.html
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Wednesday, April 12, 2017

Crown Properties Pays $19M For Cherry Hill Office Park

Crown Properties, Inc., a New York-based property investment firm, has acquired the 215,465-square-foot Woodland Falls Corporate Center in Cherry Hill, NJ from Brandywine Realty Trust for $19 million, or about $88 per square foot.

The center includes three Class A office buildings located at 200, 210 and 220 Lake Drive East constructed between 1986 and 1989. Brandywine reported an average occupancy at 93%.
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Metro Development Sells Bakers Centre for $52.4 Million

Bakers Centre, a grocery anchored shopping center on 27.4 acres in the East Falls/Hunting Park area of Philadelphia traded for $52.4M.

The 236,719-square-foot center is anchored by ShopRite, Ross Dress for Less and Planet Fitness.
The property developed in 2013 is located in the Northwest Philadelphia submarket at 2800 Fox St. An undisclosed buyer group purchased the property
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Tuesday, April 11, 2017

REIT Fundamentals Keeping Market on “Solid Keel” (Video)

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Retail real estate strength defies headlines of store closures (Video)

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Middle Market CRE Digest – The Northeast

by Steve Lubetkin Globest.com

The Haub School of Business’s real estate finance program at St. Joseph’s University has conducted its first Real Estate and Construction Survey of Philadelphia and the Delaware Valley. The report, which is based on a survey of local professionals in various real estate fields, contains 2016 year-end results as well as expectations for the upcoming year. The survey’s 117 respondents included real estate agents to construction specialists, property owners, bankers, project managers and more, representing 134 professions in 10 areas of commercial real estate in Philadelphia and the Delaware Valley. Significant findings from the Real Estate and Construction Survey Report include: 80 % of respondents indicated that their business increased in 2016. Only three percent said business had decreased. 100% reported an increase in hiring in 2016. 59% said that they expect business to increase again in 2017. Respondents agreed that the top strategic opportunities in the Philadelphia real estate market are infrastructure, tax abatement and the millennial market.

PREIT held a grand opening of LEGOLAND® Discovery Center Philadelphia, an indoor family-friendly LEGO® play experience, at Plymouth Meeting Mall. The first-to-market attraction is also a first-to-portfolio tenant for PREIT, illustrating its strategy of revolutionizing the shopping experience for consumers. With a focus on family-friendly entertainment, LEGOLAND Discovery Center Philadelphia reinforces Plymouth Meeting Mall’s transformation into a lifestyle destination in the Greater Philadelphia region. Currently 17 percent of PREIT’s retail space is committed to dining and entertainment tenants, such as LEGOLAND Discovery Center.

The sale of a multi-building, 5.5 acre retail parcel located at 5202 Baltimore Pike, Delaware County, Springfield PA, traded in the aka “The Golden Mile” for $7.425 million. The property, situated on a signalized corner at Baltimore Pike and Oak Avenue, was sold to BET Investments by Burlington Stores, Inc. The site will be redeveloped for retail uses.

Metropolitan Capital Advisors and AMA Financial arranged both the debt and equity for the acquisition of Northbrook Corporate Center in Trevose, PA. MCA and AMA (based in Pennsylvania), both members of the Real Estate Capital Alliance, teamed up to facilitate the financing on behalf of a partnership sponsored by Red River Asset Management. Northbrook is a 107,700 square foot class A office building. The business plan is to renew and extend the major tenants, renovate common areas, and lease up the few remaining vacant suites. The acquisition loan was funded by a bridge lender that included a future funding component to execute the business plan. The equity partner is a NYC based private investment firm focused on “middle market assets”. Scott Lynn, Founding Principal of MCA, and Gregg Wallace, President of AMA, were responsible for arranging the financing.
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Monday, April 10, 2017

Acme replacing Fresh Grocer in West Philly

Natalie Kostelni Reporter Philadelphia Business Journal

Acme Markets has signed a lease on 34,500 square feet at 4001 Walnut St. in the University City neighborhood of Philadelphia and will open a grocery store in the space.

The lease was signed with the University of Pennsylvania. In addition to a sushi and noodle bar as well as a guacamole station, the new store will have a Starbucks and sell beer and wine. Acme plans to spend millions of dollars to renovate the space.

The new Acme will backfill space vacated by Fresh Grocer. It had been reported in December by the Daily Pennsylvian that the Fresh Grocer was trying to remain in the space and that Acme was at the ready to move forward with a store at that location. Fresh Grocer had operated from that site for 15 years.
Full story: http://tinyurl.com/m6ndblf
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Custom doughnut shop & burger joint coming to KOP Town Center

Kenneth Hilario Reporter Philadelphia Business Journal

Upper Merion residents and visitors can add customizable doughnuts and chargrilled burgers to the King of Prussia Town Center's growing list of food-and-beverage operators.

The King of Prussia Town Center, developed by Maryland-based JBG Cos., has continued to add more eateries to its roster over the past few months since the first restaurant opened in summer 2016.

Most recently, JBG Cos. signed on three food-and-beverage tenants like California-based MidiCi The Neapolitan Pizza Company.

Two more tenants have signed on to open up Philadelphia-area outposts: Duck Donuts and The Habit Burger Grill.

Duck Donuts is slated to open in July, and Habit Burger is slated to open in October. The Town Center is now 86 percent leased with these additions.

Duck Donuts, which originated in the Outer Banks and is named after Duck, N.C., is known for its made-to-order doughnuts that include 11 coating choices, seven topping choices and four drizzle choices.

Duck Donuts will open three more Pennsylvania locations this year alongside the 1,500-square-foot Town Center outpost, including one in Hershey that's slated to open in May.

The Town Center location is expected to create 25-40 new jobs in Montgomery County.

“King of Prussia is located only 1.5 hours from our corporate headquarters in Mechanicsburg and is home to many of our doughnut fans that vacation in the Shore points near our Avalon store,” said Russ DiGilio, founder and owner of Duck Donuts Franchising Company.
Full story: http://tinyurl.com/m6ndblf
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Retail real estate bargain hunting (Video)

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Blackstone real estate head on future of retail (Video)

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Southern NJ and Pennsylvania CRE Markets Remain Strong

by Steve Lubetkin, Globest.com
Despite political uncertainty at home and around the world, the Southern New Jersey market has started off 2017 on a cautiously optimistic footing.

“Even with an expected winter slowdown affecting office leasing activity, and added anxiety with the transfer of political power in Washington, the overall mood of the market seems to be positive. As we’ve seen the past couple of years, several business sectors increased their occupancy needs during the first quarter, and we continue to see increased capital spending, construction hiring, and expansions.”

In its latest quarterly analysis, there were approximately 317,886 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents a decrease of approximately 18 percent compared with the previous quarter, but is essentially unchanged from the first quarter last year. While leasing slowed a bit, the sales market doubled in volume during the first quarter, with some 767,988 square feet worth more than $133.5 million trading hands. New leasing activity accounted for approximately half of all deals – a significant increase over the fourth quarter. Overall, net absorption for the quarter was in the range of approximately 122,572 square feet.

Other office market highlights:


  • Overall vacancy in the market is now approximately 11.05 percent, which is a nominal increase from the previous quarter.
  • Average rents for class A and B product continue to show strong support in the range of $10.00-$14.50 per square foot (triple net) or $20.00-$24.50 per square foot gross for the deals completed during the quarter. This is essentially unchanged from the previous two quarters.
  • New Jersey’s unemployment rate moved down to 4.4 percent, putting it below the national rate of 4.7 percent.

 Highlights from the first quarter in Pennsylvania include:

  • Office demand in Center City is still exceptionally strong, as rental rates continue on an upswing and vacancy levels are compressing to all-time lows.
  • There is a significant amount of inventory of multi-family, including recently developed, under construction, and proposed, in both the City of Philadelphia and Philadelphia suburbs. Rental rates have either remained relatively stable or decreased slightly. Concessions are becoming commonplace at many apartment communities.
  • While much of the pricing for commercial real estate accounts for increasing interest rates, many purchasers are showing signs of hesitation and fears of potential decreases in market fundamentals.
  • The industrial market in the City of Philadelphia and its suburbs is fetching price points never experienced in the marketplace. The lack of available product coupled with significant demand is putting further upward pressure on overall pricing.

There was also a report on the Southern New Jersey retail market, noting an incongruous mix of consumers earning more and showing a willingness to spend, and a high number of retailers declaring bankruptcy. The report attributes this to a growing shift to online shopping and other changes in spending habits. Highlights from the retail section of the report include:


  • The Conference Board reports that consumer confidence is at its highest level since 2000.
  • Nine retailers filed bankruptcy in the first quarter, which is the same as the total for all of 2016.
  • Retail vacancy in Camden County stood at 6.4 percent, with average rents in the range of $12.92 per square foot (triple net).
  • Retail vacancy in Burlington County stood at 11.1 percent, with average rents in the range of $12.31 per square foot (triple net).
  • Retail vacancy in Gloucester County stood at 5 percent, with average rents in the range of $12.01 per square foot (triple net).

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Thursday, April 6, 2017

Philadelphia's Growth Can And Should Go Beyond Its Priciest Buildings

by Matthew Rothstein, Bisnow
Philadelphia’s growth as a commercial real estate market over the last decade has been invigorating for business and government leaders, but its concentration in Center City and University City has increased the gap between the haves and have-nots, highlighting for many the progress that still needs to be made.

One of the most frequent questions for developers regarding any major city has been the possibility of preventing Millennials from moving back to the suburbs when they start families. With the amount of multifamily being planned and built in Philadelphia, keeping demand high is essential to prevent a major downturn, but the single biggest factor in retaining that demographic is the quality of schools.

 Philadelphia’s public schools lag far behind its suburbs in terms of performance, but its negative reputation can be a self-fulfilling prophecy.

 “It’s important to talk about public schools in Philadelphia not as bad, but as trending upward,” PIDC’s Prema Gupta said. “There is so much energy and innovation, I feel incredibly bullish about the direction of school districts in Philadelphia.”

“If we want to improve our schools, Millennials who are moving out need to stay and be part of the solution,” Philadelphia Planning and Development director Anne Fadullon said.

 For businesses, one of the programs that they have supported most strenuously — the 10-year tax abatement on new construction — may be one they need to think differently about to keep those young families around.

“The appropriate balance between abatements and losses is necessary," City Councilwoman Maria Quiñones-Sanchez said. "As good as abatements have been for business, they’ve taken money from our schools."

But the focus on Millennials may itself be slightly misplaced, thanks to their visibility and influence on cultural and retail trends. There are other groups, especially in Philadelphia, that may have just as much of a demographic impact.

“We need to talk about immigrants,” Fadullon said. “The reason we’ve had a population growth in the last few years is because of immigrants, and we’re doing them a disservice by ignoring them.”

According to Fadullon, Hispanics are the only ethnic group that has seen an increase in homeownership in the last decade in Philadelphia, a trend indicative of their solidifying place in the community and one that needs to be supported and fostered.

Quiñones-Sanchez stressed the importance of programs allowing lower-income homeowners to keep and maintain their homes, both as a way to support nearby businesses and to stave off homelessness. Remaining in one’s homes is a major priority for the senior population as well — a demographic growing as quickly as any in the area.

“So many things seniors want — access to transit, walkable grocery stores and healthcare — are the same things that Millennials want,” Fadullon said.

With discussion largely focused on what Philadelphia can do to both attract investment and support its residents, Fadullon gave a crucial exhortation to business professionals to offset some of the damaging federal cuts on the horizon from the Trump administration.

“We’re going to have to be really creative, because if some policies from the federal government come down, it’s going to be on the people in this room to keep this city from taking a nosedive,” Fadullon said. “We cannot let the federal government just walk away, especially in regards to infrastructure. It’s great that they’re talking about infrastructure, but they’re also talking about gutting public transit, which makes no sense for our current climate.”

 One of the ways in which Philadelphia could use the private sector to overcome a lack of support from the federal government is the way in which it negotiates zoning, land-use and tax agreements. “Now that Philadelphia has something that people want, we’re going to start asking for things in return,” Fadullon said.

Full story: http://tinyurl.com/kprvumk
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Middle Market CRE Digest - Northeast

by Steve Lubetkin, Globest.com

Natixis provided a $102.795 million floating-rate, first-mortgage financing to Post Brothers for the redevelopment of a vacant, 21-story historic office building located at 260 South Broad Street in Philadelphia into a 268-unit luxury multi-family rental property, to be branded as The Atlantic. The property also includes an adjacent three-story parking garage building with 205 parking spaces as part of the proposed amenities. The property was designed by Rafael Viñoly, a world-renowned architect. The Atlantic is positioned to be Center City Philadelphia’s premier residential building. It will have an unrivaled amenity package with a business lounge with conference rooms for resident usage, a clubhouse, a fitness center including a yoga studio, a rooftop swimming pool, and a roof deck with dog park and grilling areas.

Two mixed-use properties in Center City, Philadelphia have sold: 120 N. 3rd Street in the Old City neighborhood and 1701 South Street in the Graduate Hospital neighborhood. 120 N. 3rd Street contains four high-end renovated loft-style apartment units and one unit in “shell” condition, along with a ground floor commercial unit.  It is well located among the boutiques and cafes of 3rd Street and is just a few blocks from historical tourist attractions like the Liberty Bell and the Betsy Ross House. 1701 South Street is a newly constructed building with 9 apartment units and a ground floor commercial unit leased to 7-Eleven, located on the southern edge of the Rittenhouse Square neighborhood.  The seller selected a buyer in less than 30 days after going to market.
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Wednesday, April 5, 2017

Turn5 plans expansion, will add 200 jobs

By Brian McCullough
A company that sells parts online for Jeep Wranglers, Ford Mustangs and F-150 pickup trucks plans to expand and add almost 200 jobs in eastern Chester County.

The news of Turn5’s expansion was announced by Gov. Tom Wolf last week as the state put in incentives to keep the company, now based in East Whiteland, in the area. The new headquarters at 600 Cedar Hollow Road will be about four miles from its current location on Lee Boulevard, brothers and company founders Steve and Andrew Voudouris said.

The company was last in the headlines in July when it refurbished the 2012 Jeep Wrangler of wounded Folcroft Police Officer Christopher Dorman. A Jeep enthusiast, Dorman was shot seven times while responding to a drug activity call and was recovering in the hospital when Turn5 detailed his Jeep.

Now, Turn5 says business is going so well it plans to create 183 new full-time jobs during the next three years, taking its total to more than 500.
The company also will double the size of its headquarters with the move to 90,000 square feet.

“To see a successful Pennsylvania-born company grow is a true testament to Pennsylvania’s business climate,” Wolf said in a statement. “This will provide jobs to Pennsylvania’s residents and further the company’s contribution to the economic well-being of the commonwealth.”

Turn5 plans to invest $7.9 million in the expansion project.

“Andrew and I started our business in southeastern Pennsylvania, in our parents’ garage in fact, and we’ve been proud to grow here over the last 15 years,” said CEO Steve Voudouris. “We look forward to bringing more jobs and more economic development to the region as we continue to serve the auto enthusiast market with our phenomenal team.”

“This has been our headquarters here for nine years, and we’ve had aggressive growth for all of those years, particularly in the last couple of years,” added Andrew Voudouris, executive marketing director.

Turn5’s new building is now an empty warehouse that the company plans to turn into “high-class office space,” Steve Voudouris said. “We plan to be here a long time. We’re excited to need all of this space”

Turn5 received a funding proposal from the Department of Community and Economic Development that includes a $200,000 Pennsylvania First Program grant, $45,000 in WednetPA funding for employee training, and $366,000 in Job Creation Tax Credits to be distributed upon the creation of the new jobs.

The project was coordinated by the Governor’s Action Team, a group of economic development professionals who report directly to the governor and work with businesses that are considering locating or expanding in Pennsylvania, in collaboration with the Chester County Economic Development Council.

“As an e-commerce-based company, Turn5 has embraced technology and innovation to expand its business and provide significant job creation in Malvern,” said MaryFrances McGarrity, senior vice president of business development at the development council. “The IT sector is expected to remain one of the largest employers in the county, which bodes well for Turn5. We are delighted that the company has made the decision to continue its growth trajectory in Chester County.”

Founded in 2003, Turn5, Inc. is an award-winning e-commerce business that provides aftermarket auto parts, content, and customer service through the two e-retail stores, www.AmericanMuscle.com and www.ExtremeTerrain.com.

The Voudourises credit the company’s success to its workforce.

“We know the products inside and out,” Steve Voudouris said. “(Customers) can feel that – that we have the same passion that they do. We really connect with our community.”

New employee hiring has commenced. The company is looking for people in the areas of software development, IT, marketing and Jeep/Mustang experts.

It will maintain space at 1 Lee Blvd, where it has contact and distribution centers, as well as a distribution center in Linefield. The company opened a West Coast distribution center last week in Las Vegas.
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Zamir Equities Acquires 184,000-SF Triad Bldg in KOP

Zamir Equities, a New York-based property investment firm, acquired the Triad Bldg at 2200 Renaissance Blvd. in King of Prussia, PA for $30.2 million, or about $164 per square foot, from Artemis Real Estate Partners and Kairos Real Estate Partners.

The four-story, 184,118-square-foot office building delivered in 1985 on 10.1 acres in Montgomery County, and was renovated in 2014. It features covered and surface parking, steel construction, 12-foot slab heights, atrium, on-site day care and fitness center, food service, building signage and a water feature.
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The Future of the Economy and Real Estate - Integra's Viewpoint 2017 (Video)

Part 1 Part 2 - Rising Interest Rates and REIT Performance Part 3 - Foreign Investment and the Future of Retail www.omegare.com

Top 10 cities for real estate growth getting a Trump bump? (Video)

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Sam Zell: President Trump's impact on real estate (Video)

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Tuesday, April 4, 2017

Apple Hospitality Trust CEO: Seeking Growth Opportunities (Video)

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Digital Realty Trust CEO: Underlying Strength (Video)

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Prologis CEO: Strength in REITs (Video)

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TCC Breaks Ground on 455,000-SF Distribution Center in Scranton

Trammell Crow Company began construction in March on its Humboldt East Trade Center, a 455,000-square-foot distribution center being built on spec at a 31-acre site at 105 Commerce Dr. in Hazleton, PA. 

Expected to deliver by year-end, the 5-Star industrial building will feature 60 loading docks and two drive-ins, rail spurs on Norfolk Southern, 36-foot clear heights, 50-foot column spacing, seven-inch floors, 2,400-amp heavy power, metal halide lighting, ESFR sprinklers and reinforced concrete construction. 

Located within the Humboldt Industrial Park, one of the area's largest parks with rail service, the property also falls within a Keystone Opportunity Zone (KOZ) which offers certain tax abatement incentives to qualified occupants. 

Originally marketed as a build-to-suit opportunity, the project is moving forward in a submarket teeming with demand. According to CoStar data, vacancies in the I-81 Corridor submarket of Luzerne County are hovering around all-time lows with next to no vacancy in distribution centers built in 2000 or later. Whether that demand can stand up to all the speculative building in the submarket remains to be seen; as of the end of the first quarter 2017, nearly 2 million square feet of warehouse and distribution space was under construction in the submarket. 

The rampant building in the area is the result of how important the I-81 Corridor has become in terms of a North American distribution hub. A future tenant would join the likes of OfficeMax, Auto Zone, Penske Logistics and Hershey Foods within the park and scores of multi-national corporations that have zeroed in on Scranton, Lehigh Valley and Harrisburg over the last several years. Quick access to interstate highways, rail yards and ports are some of the benefits to locating within the area, which allows for overnight shipping access to more than one-third of the U.S. population and parts of Canada. 

"Construction has not been as strong in Scranton as it has been in neighboring Lehigh Valley, but demand remains strong because of the ideal location and is unlikely to taper off in the near future," said Ben Atwood, an analyst with CoStar Market Analytics covering both Scranton and the Lehigh Valley. "Developers have over 90 pad sites built-out and are optimistic they'll be filled over the next few years." 

While an asking rate for the new building is being withheld at this time, institutional-grade distribution centers in the submarket are at or above $4 per square foot. The building is also available for sale, and while an asking price is also undetermined, recent comps in the area would suggest that $65-$70 per square foot is possible. Of note, the Northeast Distribution Center on Green Mountain Road, a 400,000-square-foot asset built in 2006, sold for $28.5 million ($71 pSF) in 2015 to the Abu Dhabi Investment Authority.
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Phillips & Cohen Subleases 34,000 SF at The Shipyard

Phillips & Cohen Associates, a law firm founded in 1997, has subleased 34,000 square feet of office space at The Shipyard office building at 1000-1072 Justison St. in Wilmington, DE.

The 94,691-square-foot office building was developed, owned and managed by Pettinaro.
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Target expands central Philly footprint with new store planned for NoLibs

by Jacob Adelman Staff Writer, Philadelphia Inquirer

Target Corp. is opening its biggest central Philadelphia store yet at the former Destination Maternity warehouse headquarters at Fifth and Spring Garden Streets, a heavily trafficked area for commuters to Center City and the growing neighborhoods that surround it.

The Minneapolis-based retailer said in a release Monday that it had signed a lease for an approximately 47,000-square-foot space at the building, with plans to open in July 2018.

The store will feature a grocery section, with fresh produce and grab-and-go items, as well as clothing, sporting goods, and beauty products, a pharmacy operated by CVS Health, and other offerings, Target said.

“We think guests in the Northern Liberties and Fishtown communities will enjoy the quick-trip shopping experience that only Target can provide,” senior vice president Mark Schindele said in the release.
The retailer will occupy the southern part of the structure, facing a parking lot with 100 designated spots, Matt Handel, leasing director for the building’s owner, Alliance HSP, said in an interview.

The building also will be home to Yards Brewing Co., which aims to complete its move into a 70,000-square-foot space by the end of this year, as well as the Philadelphia Department of Records and Archives, which is to occupy a 68,000-square-foot section of the property.

Alliance acquired the building, in a mostly industrial and commercial corner of Northern Liberties, in 2014 from Destination Maternity Corp., which has relocated to Moorestown. The Target deal leaves the property 100 percent leased, Bryn Mawr-based Alliance said in its own release.

“We pieced together a blend of tenants with different needs, allowing us to allocate the existing building’s strongest physical attributes accordingly,” Max Ryan, Alliance’s director of development, said in the release. “Target will have visibility from Spring Garden Street and [I-]676, as well as prominent surface parking directly in front of their premises.”

The Target store will be the retailer’s fifth in Philadelphia to deploy its "flexible format" approach involving smaller, urban-oriented alternatives to its big-box stores. Two such stores are currently operating in Center City, with an additional two under development in Fairmount and  Roxborough.

Target also has been looking to open a store at the planned Lincoln Square mixed-use complex in South Philadelphia at Broad Street and Washington Avenue, according to a legal filing concerning a nearby property.

The space at Fifth and Spring Garden will be Target’s largest in what is sometimes called Greater Center City, bounded by Tasker and Girard Avenues between the Schuylkill and the Delaware River.

The site is different from Target’s other central Philadelphia locations in that it lacks their population density and easy walkability.

Though some recent real estate activity points to more residential uses around the newly announced site, its selection seems based on its ability to draw from the heavy vehicular traffic along Spring Garden and Callowhill Street and other busy arteries nearby, said Steinberg, who was not involved in the deal.

"They like the existing fundamentals," he said. "The fact that density could improve here is just a bonus for them."
Full story: http://tinyurl.com/kwosrue
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Friday, March 31, 2017

Investing in Senior Housing Real Estate (Video)

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RETAIL NEWS SERIES: Flurry of Dept. Store Closures Forcing Mall Owners to Adapt, Reinvest or Die

In this two-part news report by Senior Editor Mark Heschmeyer, CoStar analyzed the stores being closed by the three major department store chains, Sears, Macy's and JC Penney.

Over the last three years, the three chains combined have closed 1,195 locations in 860 cities. Among the hardest hit cities were: Jacksonville, FL, and Louisville, KY, each with seven closures; Philadelphia and Pittsburgh each have seen six; and Chicago, West Palm Beach and El Paso, TX, have each had five.

Sears shows the most closures: 828, (with more than half those being Kmart stores). JCPenney has closed or announced plans to close 236 stores. Among those are 138 it identified for closure late last week. Macy’s has closed or plans to close 131, including 68 of 100 planned closures it announced two months ago.

Six malls have the unfortunate distinction of having all three of the above retailers as anchors that have either been closed or announced that they will be closing:
Vallco Shopping Mall, Cupertino, CA;
The Boulevard Mall, Las Vegas, NV;
The Mall at Cortana, Baton Rouge, LA;
Upper Valley Mall, Springfield, OH;
Gallery at Military Circle, Norfolk, VA; and
Gulf View Square, Port Richey, FL.

While none of the department stores disclosed the specific criteria they use to decide which stores to close and which to keep open, CoStar research has developed a proprietary Location Quality Score (LQS) to evaluate more than 1.5 million retail properties in the CoStar database.

Using multiple variables, including trade area incomes, retail density and market competition to approximate the productivity of a given retail property, the CoStar Location Quality Score can provide insight as to whether the store closure is warranted by a location in a poor trade area, or whether it is in a good trade area but just too close to another of the retailer's stores, in which case the location could support a different retail user.

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Wednesday, March 29, 2017

Real estate Stocks tough run (Video)


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Durst Organization Acquires Delaware River Waterfront Properties from Brandywine Realty Trust

The Durst Organization today made its first acquisition outside of New York, purchasing approximately five acres of waterfront property in Philadelphia from Brandywine Realty Trust (NYSE: BDN).

The privately held real estate firm purchased the land assemblage spanning Piers 12, 13-15, 19 and 24 north of Benjamin Franklin Bridge along the Delaware River known as the Philadelphia Piers at Penn’s Landing for a reported $21.4 million.

The properties include several existing tenants, including a Dave & Buster's entertainment center, Hibachi Japanese Steakhouse, Morgan’s Pier beer garden, a marina and a DLC Management parking facility.

In a release, New York City-based Durst said its acquisition reflects the company’s recognition of Philadelphia’s economic growth and future potential. Durst cited Philadelphia Mayor Jim Kenney's recent commitment to allocate $90 million toward a $225 million project to build an 11-acre park and canopy-deck over I-95 that will connect Center City with Penn's Landing as a move that opens the waterfront for future development.

Durst, which owns 4 Times Square and One World Trade Center in Manhattan among other trophy properties, said it has no immediate development plans for the site, which it plans to keep as a long-term hold.

Philadelphia is currently experiencing a development boom, with major projects under way in Center City and other areas within the metro, including the ongoing revitalization of Schuylkill Yards and the Philadelphia Navy Yard.

The Delaware River Waterfront Corp. has embarked on a series of master-planned revitalization projects along the central Delaware riverfront, setting the stage for the I-95 park and canopy project, which has received commitments for a reported total of $190 million of its $225 million cost.

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Friday, March 24, 2017

TJM Puts Atlantic Club Casino Hotel Under Contract

TJM Properties, the owner of the now-closed Atlantic Club Casino Hotel at 3401 Boardwalk in Atlantic City, NJ, has put the property under contract for an undisclosed price. The sale is expected to close at a later date.

The Atlantic Club Casino Hotel has been closed since January 2014. It was constructed in 1980 on 2.6 acres and underwent renovation in 2012.

The buyer, R&R Development Group LLC, plans to construct a 100,000-square-foot indoor, family-friendly entertainment facility to include a water park, hotel, restaurants and an arcade. The firm will invest more than $135 million and expects to have 300 hotel rooms delivered by this fall, while the water park construction is expected to take one or two years to complete.
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Thursday, March 23, 2017

Cedar Realty Trust Pays $29.3M for Christina Crossing

Cedar Realty Trust, Inc. acquired the Christina Crossing shopping center on Howard St. between S. Market St. and S. Walnut St. in Wilmington, DE for $29.3 million, or about $240 per square foot, to Cedar Realty Trust, Inc.

The retail center delivered in 2008 in Wilmington's CBD submarket and totals 122,002 square feet. Notable tenants include ShopRite and Rainbow.
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Wednesday, March 22, 2017

Post Brothers Secures Financing for The Atlantic Building

Post Brothers Commercial Real Estate has secured an almost $102.8 million first mortgage to complete its redevelopment of the historic, and vacant, Atlantic Building office property at 260 S. Broad St. in Philadelphia, PA.

Russell Schildkraut and Christine Zivkovic of The Ackman-Ziff Real Estate Group arranged the financing on behalf of the borrower, placing the floating-rate loan with Natixis Real Estate Finance Americas.

The 21-story office building was originally built in 1923 on almost half an acre in the Market Street West submarket of Philadelphia County.

The property is being redeveloped into a 268-unit multifamily rental property with an anticipated completion date of later this year. The new property will continue carrying the name The Atlantic, and will boast an unparalleled amenity package including a business lounge, clubhouse, fitness center with yoga studio, rooftop swimming pool and deck with dog park and grilling areas. It is conveniently located along the Avenue of the Arts section of South Broad Street, within walking distance of cultural, dining, and retail destinations as well as several entertainment venues including Kimmel Center for the Performing Arts, Merriam Theater, Academy of Music and the Wilma Theater.

"The Atlantic will be another premier residential building that will be similar to previously delivered first class Post Brothers buildings and will take full advantage of the vibrant and growing Center City market," commented Greg Murphy, head of Natixis.
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State of Commercial Real Estate Lending (Video)

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Chinese Cash Pours Into U.S. Real Estate (Video)

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Tuesday, March 21, 2017

Monthly Economic Outlook – March 2017 (Video)

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Carlisle Distribution Center Completes Construction

Ryan Commercial LLC has completed construction on Building 5 in the Carlisle Distribution Center at 45 Logistics Dr. in Carlisle, PA.


The 582,000-square-foot industrial warehouse is located on 40 acres in the Harrisburg Area West Industrial submarket of Cumberland County. It was under construction for almost a year, and features car and trailer parking, ESFR Sprinkler, 80 loading docks and two drive-ins, 36-foot clear heights and fluorescent lighting.

Built on spec after several years as a proposed building opportunity, the completed asset is now actively being marketed for sale and for lease, divisible down to 150,000 square feet.
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Monday, March 20, 2017

Is this the holy grail project that could jump-start revitalization of North Philly?

2142 West Sedgley Avenue, Philadelphia Listing 0.8mi: ow.ly/o2TC30a2plU

by Jacob Adelman, Staff Writer, Philadelphia Inquirer

Real estate magnate Ziel Feldman’s properties are in some of Manhattan’s poshest neighborhoods.
Now, he wants to build in one of Philadelphia’s most destitute.

Feldman’s HFZ Capital Group is part of a consortium of New York investors planning a complex of homes, offices, labs, and start-up work spaces in what is now an enclave of vacant warehouse properties and empty lots around Amtrak’s North Philadelphia station.

The $162 million first phase of North Philadelphia District LLC’s proposal calls for two new buildings on what is now the train station’s parking lot, and the renovation of a hulking dilapidated factory site nearby, said Michael Shenot, who is leading the project as a managing director with the real estate services firm JLL, in an interview Friday.

Work could begin before the end of the year if the investor group is granted its  request for a $20 million state redevelopment grant to cover parts of the project, said Shenot, who previously participated in developing the World Trade Center Transportation Hub. He is now working on an expansion of New York’s Penn Station involving a historic postal building to its west.

If the group’s plan is successful — no sure thing in an area that has shown few apparent signs of readiness for revitalization — its impact on this North Philadelphia neighborhood could be enormous, said Harris Steinberg, who directs Drexel University's Lindy Institute for Urban Innovation.

The site could capitalize on the train station’s citywide access via SEPTA’s Regional Rail system and its Amtrak link to New York, as well as its location barely a half-mile north of Temple University’s main campus and just a few blocks south of its Health Sciences Center complex, Steinberg said.

“This could be the holy grail that could jump-start revitalization in North Philadelphia,” he said. “Whether the market is there for this kind of development is another question.”


2142 West Sedgley Avenue, Philadelphia Listing 0.8 mi: ow.ly/o2TC30a2plU
Full story: http://tinyurl.com/l92vabr
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