Friday, August 18, 2017

Carlisle, PA, Industrial Leading Goodman's $2B US Pipeline

by Steve Lubetkin

Goodman Group has preleased more than one million square feet of logistics space to syncreon at its Goodman Logistics Center in Carlisle, PA.

Goodman has secured a seven-year lease with syncreon, a third party logistics company, on one of two industrial facilities at the Goodman Logistics Center Carlisle. The logistics campus provides direct access to Interstate 81, one of the major transportation networks servicing the Greater Northeast. Syncreon is scheduled to take occupancy of the building in early 2018.

“Goodman Logistics Center Carlisle offers a strategic location and provides access to over 40 percent of the US population, making it highly sought after by customers servicing the New York City, Washington, DC, Baltimore, Philadelphia and Pittsburgh markets,” says Anthony Rozic, CEO of Goodman North America.

“The prelease of this modern logistics center to syncreon is an example of Goodman delivering its Northeast real estate strategy, providing high quality logistics facilities, close to consumers,” says Michael Fahy, syncreon’s head of global accounts for technology. “This facility is a critical part of syncreon’s growth plan in North America. We are very pleased with the speed, level of service and the quality of the build. It’s important that we were able to customize key facility features to optimize our process flow. This facility will be a world-class operation for us and for our technology customers.”

The second logistics facility is currently available for lease and provides an additional 938,236 square feet of available space.

The Goodman Logistics Center Carlisle is one of a number of projects in Goodman’s $2 billion identified US investment pipeline, which will provide 14.9 million square feet of Class A logistics space in the key logistics and industrial markets of Inland Empire, Greater Los Angeles, Northern New Jersey and Central Pennsylvania.

Over the last 12 months, Goodman has completed two million square feet of class A development product in these key logistics markets, with a further 4.3 million square feet currently under construction. This is consistent with Goodman’s ongoing commitment to servicing the needs of its global customer base through the development of modern, well-located properties for long-term ownership.

Monday, August 14, 2017

Monthly Economic Outlook – August 2017 (Video)

Office Leasing Strategies Part I & II (Video)

Part 1
Part 2

Great Valley Commerce Center sells for $73M

Rittenhouse Capital Advisors has successfully arranged the financing for the acquisition of the 356,000 square-foot class-A office building known as the Great Valley Commerce Center. Located in Malvern, PA, the property is fully leased to credit tenants. The property was acquired for $73 million, and Rittenhouse Capital placed the first mortgage financing with a national bank in the amount of $54.25 million, or 74 percent leverage. The loan was structured as a CMBS execution and carries a 10-year term with the interest rate fixed at 4.48 percent. It amortizes over thirty years.

Friday, August 11, 2017

Retail has been under more pressure than any other product type (Video)

from CNBC.

Impact of Abolishing 1031 Exchange - Tell Your Congressman - NAA (Video)

PARQ @ The Square Sells for $39.3M

Capano Residential Properties acquired the 231-unit PARQ @ The Square apartments at 1303 Delaware Ave. in Wilmington, DE from Merion Realty Partners for $39.25 million, or about $170,000 per unit.

The 15-story, 214,411-square-foot multifamily building was built in 1962 and is in the Upper New Castle County submarket.

Thursday, August 10, 2017

5-acre parcel sold at Exton Square Mall

By Brian McCullough, Daily Local News

The owner of the Exton Square Mall announced Wednesday it has agreed to sell five acres of the property to a developer of multi-family dwellings.

PREIT – Pennsylvania Real Estate Investment Trust – announced the agreement as part of its second quarter report.

The sale of the Exton property is one of three the Philadelphia-based mall operator announced that is expected to bring the company about $75 million. The company did not break out the price it is receiving in each sale.

The announced transactions are:
• 801 Market Office condominium in Philadelphia – a purchase and sale agreement has been executed with a significant non-refundable deposit. Closing is anticipated during the third quarter.

• Logan Valley Mall in Altoona – a purchase and sale agreement has been executed with a significant non-refundable deposit and closing anticipated during the third quarter.

• Exton Square – a 4.9 acre land parcel is under agreement of sale with a multi-family developer. Closing is expected to occur once entitlements are obtained by the buyer, PREIT said in a statement Wednesday.

PREIT spokeswoman Heather Crowell did not respond to inquiries about the exact location of the Exton property. A person familiar with the project said the acreage is part of the former Kmart parcel that is located between Route 100 and the mall.

Part of that parcel is being used for a Whole Foods grocery store. After months of inactivity, it appears work is taking place inside the fenced-off property.

Neither PREIT nor Whole Foods responded to a request for an update on the much anticipated upscale grocery store.

“This is another example of our ability to execute in a challenging environment,” said Joseph F. Coradino, CEO of PREIT, of the three transactions. “This is a critical step in the further transformation of PREIT into a top-tier mall company. As the retail industry evolves, there are many opportunities to improve the shopping environment, and raising capital through the sale of non-core properties provides the perfect vehicle for creating value for our shareholders.”

PREIT on Wednesday reported second quarter results. The company said its net operating income increased by 1.6 percent for wholly owned property.

Same store net operating income was reduced by $1.6 million as a result of bankruptcies and $300,000 as a result of co-tenancy claims.

Sales per square foot reached $468, a 2.2 percent increase over the prior year.

Non-anchor leased space for malls was 91.9 percent, 190 basis points over quarter end physical occupancy.

“It is clear that in this constantly evolving and sometimes challenging retail environment, our portfolio of high quality properties located in compelling markets is improving in spite of the headwinds,” Coradino said in the report.

SICOM Leases 92,000 SF at The Pinnacle Lansdale

SICOM, a technology provider to the restaurant industry, has signed an eight-year office lease for 92,104 square feet in The Pinnacle building at 1684 S. Broad St. in Lansdale, PA.

The three-story, 344,280-square-foot office building was constructed in 1999 in the West Montgomery County submarket. SICOM's lease includes a part of the first and third floors in the building, the remainder of which is vacant and available for lease from 43,470 square feet up to 252,176 contiguous square feet in the building.

Greenfield Partners Secures $90.5M Loan on Fort Washington Office Bldg

Greenfield Partners LLC has secured a $90.5 million loan on its Fort Washington Technology Center building located at 1100-1140 Virginia Dr. in Fort Washington, PA.

Square Mile Capital Management LLC originated the loan. The funds will satisfy existing debt as well as future property upgrades and leasing costs.

The 751,143-square-foot office building was constructed in 1964 and was last renovated in 2007. Building amenities include on-site management, fitness center and basketball court.

Tuesday, August 8, 2017

Vanguard sells building in Wayne

by Natalie Kostelni Reporter
Philadelphia Business Journal

Vanguard Group has sold an office building it occupies at 455 Devon Park Drive in Wayne, Pa., for around $15 million.
The mutual fund company bought the 130,000-square-foot building in 1999 and is one of the few properties it owns outside of its main Malvern, Pa., campus where it is headquartered. E. Kahn Development Corp. bought the property. Jim Galbally of JLL arranged the transaction.

Even though Vanguard sold the property, it will remain in the space.

“As part of the agreement, we’ll continue to lease the building while we take some time to assess the right future location for the crew that currently work there,” said Arianna Stefanoni Sherlock, Vanguard spokeswoman.

It’s not totally unusual for Vanguard to occupy space off of its main campus. In 2008, it occupied 151 S. Warner Road, a 90,000-square-foot office building. At the time, the company needed some extra space while a new building called Three Quarry Ridge was being constructed. Vanguard vacated the Warner Road space in 2014.

Now Vanguard is in the early stages of planning new buildings in Malvern to accommodate its continued growth. The company has said it would initially construct one structure that would be between 180,000 and 240,000 square feet.

Full story:

CBRE CEO talks organic growth overseas in the wake of Brexit (Video)

from CNBC.

Cabot Properties Acquires Five Buildings in Lehigh County

High Street Realty Company LLC sold a five-building industrial portfolio in Allentown and Fogelsville, PA for $21.3 million, or about $79 per square foot, to Cabot Properties, Inc.

Totaling 271,045 square feet of industrial space, the portfolio includes 964, 966 and 999 Postal Rd in Allentown and 7331 and 7350 William Ave. in Fogelsville. Collectively, the properties are 92 percent occupied at the time of sale to multiple tenants including W.B. Mason and Air Products & Chemicals, Inc.

Monday, August 7, 2017

Plans to Rethink America’s Malls (Video)

Self-Storage Cap Rates, Financing & Investment Strategies (Video)

Philadelphia's Industrial Vacancy Increases to 5.9%

The Philadelphia Industrial market ended the second quarter 2017 with a vacancy rate of 5.9%.

The vacancy rate was up over the previous quarter, with net absorption totaling positive 1,782,519 square feet in the second quarter. That compares to positive 9,931,174 square feet in the first quarter 2017. Vacant sublease space increased in the quarter, ending the quarter at 1,193,014 square feet.

The Flex building market recorded net absorption of positive 428,315 square feet while the Warehouse building market recorded net absorption of positive 1,354,204 square feet in the second quarter 2017.

Tenants moving into large blocks of space in 2017 include: Uline moving into 1,070,000 square feet at Liberty Business Center III - Bldg 1, Mattel moving into 1,002,000 square feet at 575 Old Forge Rd, and PepsiCo moving into 502,754 square feet at 545 Oak Hill Rd.

Rental rates ended the second quarter at $4.84, a decrease over the previous quarter.

A total of 14 buildings delivered to the market in the quarter totaling 5,075,807 square feet, with 15,226,755 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. National Industrial vacancy rate, which decreased to 5.1% from the previous quarter, with net absorption positive 71.76 million square feet in the second quarter. Average rental rates increased to $6.22, and 537 industrial buildings delivered this quarter totaling more than 64.4 million square feet, with almost 272.4 million square feet still under construction.

Three Most Active Multifamily Submarkets in Philadelphia

Philadelphia apartment construction continues to be top-heavy in the city’s urban core, but a neighboring submarket’s development burst speaks to the continually emerging competition in Philly’s premier first-ring suburbs.

Center City Outpaces Nearest Suburbs in New Multifamily Development at 3-to-1

CoStar Market Analytics data through the second quarter, 2017 shows that Center City and bordering Art Museum / Northern Liberties submarkets had well over 2,500 units under construction - with Center City hosting more than 2,000 of the new units.

These two submarkets have remained atop the development rankings for most of the last three years, and roughly 30 new apartment communities - totaling more than 3,000 units - have delivered between the two from 2014 through June 2017. The overall average asking rent per square foot on these delivered units is over $2.60, while studios in this group are pushing toward $3.50 per square foot.

Job Rich Suburbs Attracting Renters and Developers Alike

While Center City has long been a stalwart demand base for landlords, and Art Museum/Northern Liberties has emerged over the last decade given the gentrification and development in NoLibs and Fishtown, development has picked up steadily of late in Philadelphia’s job-rich, centrally located suburbs.

Main Line, with heavy residential rental nodes in Ardmore, Bala Cynwyd and Wayne neighborhoods, started getting new stock in 2014 after nearly a decade without major deliveries. Strong leasing and renewal performance has kept developers eager, and as of the second quarter, Main Line had the second most units under construction in the entire metro area. Another 1,300 units are proposed for the submarket, with anticipated delivery dates between 2018-2020.

Housing Prices Make Renting an Attractive Option for Many Area Families

A mid-point destination for renters between the city and employment nodes like Conshohocken, King of Prussia, and Plymouth Meeting, the Main Line is known for its opulent subdivisions and outstanding school systems. It’s also known for high-six and low-seven figure single-family home price tags, and even with many of the new two- and three-bedroom households costing between $2,300-$3,500 per month, those prices are well below what a full PITI payment would be for the majority of the area’s homes. Not surprisingly, studio units are next to non-existent in newer builds found in Main Line.

Radnor Property Group Sells 3737 Chestnut Apts

Korman Residential Properties and The Carlyle Group have acquired the 3737 Chestnut apartment building at 3737 Chestnut St. in Philadelphia, PA for $118 million, or about $428,000 per unit, from Radnor Property Group.

Radnor delivered the 25-story, 216,912-square-foot property in August 2015 at a cost of $92.5 million. Today the 276-unit multifamily asset is fully leased.