Monday, September 16, 2019

JV Buys Former Hyundai Rotem Property for $16.8 Million

A joint venture between Wharton Industrial Partners and Walton Street Capital purchased a 283,500-square-foot industrial facility in Philadelphia from Rimas Properties for $16.75 million, or $59 per square foot.

The vacant building at 2400 South Weccacoe Ave. was previously occupied by Hyundai Rotem, a South Korean company that made train cars for SEPTA that vacated the property in 2018. Built in 1970, the property spans 13.5 acres near the Port of Philadelphia, Philadelphia International Airport, Interstates 95, 295 and 76 and just three miles from Philadelphia City Hall. 

The new ownership plans on making improvements to the property upwards of $10 million. Once completed in early 2020, the building will be rebranded as SoPhi Logistics Center.

"The buyer was attracted to the location of this facility being adjacent to the Packer Avenue Marine Terminal and its close proximity to Center City and University City."

Experts Predict Industrial #CRE Markets Will Weather Tariff Headwinds

by John Jordan
Real estate developers and investors at a recent two-day industrial real estate summit concluded that the market’s continued decade long-run of strong growth will continue with lower vacancy and higher rental rates in top markets despite some economic headwinds.

“The industrial sector has experienced significant growth over the past 10 years as ecommerce and supply chain realignment have reshaped the way businesses utilize industrial space and deliver goods to businesses and consumers. While there is concern regarding the long-term impact of tariffs and the potential for an economic downturn, we expect the industrial sector to weather any storm and maintain positive momentum.”
The top markets are land-constrained and port-centric. The top industrial markets expected to continue to perform well into 2020 will be: California’s Inland Empire, Dallas, New Jersey/New York City, Seattle, Chicago, and Miami, among others.

“Industrial remains one of the top investment classes, buoyed by corporate supply chain expansion and the ability to generate stable returns without the volatility seen in other market sectors. As we head toward 2020, we’re seeing investors focus on reducing risk and returning to core investments that can provide steady income growth.”
In addition to economic instability and tariffs on Chinese imports as potential headwinds that could limit investment growth, summit participants say other negative influences could be overbuilding and rental rate stagnation in some markets.

Chicago-based CenterPoint Properties, pointed to Seattle, Los Angeles, Miami, Oakland and New Jersey as markets that have seen record growth and markets that will offer long-term stability even if an economic downturn takes place.

“We are looking for rental growth that doesn’t have a lot of volatility. Markets with low vacancy rates, strong rental rates and proximity to ports should continue to fare well into 2020.”
Most U.S. industrial markets tracked are reporting single digit vacancy rates, despite the influx of new product. The strong demand and tight supply are also putting upward pressure on rents in many markets.

Rent growth is a key indicator driving investment decisions, said Jojo Yap, chief investment officer and co-founder of First Industrial Realty Trust of Chicago, which has 63 million square feet of industrial assets in its portfolio and another 5 million square feet under development.

“A driving force for making profitable investments and avoiding capital and value destruction is increasing net operating income. We are very focused on investing in submarkets where we can achieve above average rent growth. Last quarter we boasted the highest rent growth of all national industrial REITs at 13.4% cash on cash on new and renewal leasing. That was the highest in our 25-year history.”

The firm has shifted its portfolio in recent years to increase its holdings in coastal markets, given the potential for higher rental rates. “Twenty percent of our portfolio income is in Southern California—and growing—and overall the coastal, high barrier markets now represent more than 40% of our portfolio income."

“Rental rates are increasing at higher rates in coastal markets.  We have seen increases of 40% or more on some rollovers in the South Bay area of Los Angeles and north of 25% in Miami,” he added.

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Thursday, September 12, 2019

Hospitality Performance Update from Baird (Video)

T.J. Maxx Inks Deal at West Sadsbury Commons

National department store company T.J. Maxx leased 20,043 square feet at West Sadsbury Commons in Parkesburg, Pennsylvania.

The 84,026-square-foot building at 200-400 Commons Drive was completed in 2002. Spanning north of 136 acres, the power center is less than 20 miles from Lancaster.

Wednesday, September 11, 2019

Comcast Technology Center wins global ULI award

Natalie Kostelni Reporter Philadelphia Business Journal

Comcast Technology Center was a recipient of this year’s Urban Land Institute’s annual Global Awards for Excellence, which is considered one of the development industry’s most prestigious awards programs.

The building at 1800 Arch St. in Philadelphia was among 11 projects from across the globe to be recognized this year. The competition consisted of seven developments in the United States, three in Asia and one in Europe. A diverse international panel from different disciplines judged the nominations. Locally, Antonio Fiol-Silva, founding principal, SITIO Architecture and Urbanism, a Philadelphia firm, served as a judge.

 Each of the winners “demonstrates a comprehensive level of quality and a forward-looking approach to development and design,” according to ULI.

Comcast Technology Center also wont the local ULI Philadelphia Rouse Award. The building was developed by Liberty Property Trust (NYSE: LPT) and designed by Foster and Partners for Comcast Corp. (NASDAQ: CMCSA) The $1.5 billion mixed-use projects totals 1.2 million square feet and stands 60 stories. Comcast houses 4,000 employees in the tower. In addition to the office space, the building has a Four Seasons Hotel with 219 rooms and 15,000 square feet of meeting space as well as two restaurants: Vernick Fish and Jean-Georges.
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Sunday, September 8, 2019

Impact of CECL on Commercial Lending (Video)

CA Student Living to Open Doors to $550M in New Projects in Six States

by John Jordan
CA Student Living reports that it is about to open six new student housing developments in six states that are valued at more than $550 million.

The firm, the student housing investment and development division of Chicago-based CA Ventures, will open the student housing communities that total more than 3,000 beds in Florida, Indiana, Illinois, Iowa, Ohio and Pennsylvania.
“CA Student Living is doing what we’ve always done, delivering exceptional yet differentiated, pedestrian-oriented communities with thoughtfully designed amenities and modern accoutrements in university markets,” says JJ Smith, president of CA Student Living. “With investor interest at an all-time high, our team of seasoned professionals are sourcing some of the best campus-adjacent opportunities in the country.”

The six new properties are:

The Link University City (252 beds) – Drexel University; Philadelphia

Offering a walkable, near-transit location in University City—home to Drexel University, the University of Pennsylvania, the University of the Sciences and the Restaurant School at Walnut Hill College – The Link University City is a renovation of a historic three-story building, coupled with a new five-story addition, at 3600 Lancaster Ave. and directly adjacent to University City Square. Available residences range in size from one to three bedrooms, including six two-level townhomes along Lancaster. Amenities include a 24-hour, two-story fitness and wellness center; private study rooms; co-working and research lounges; cyber lounge with free printing and scanning; a lobby lounge with breakfast and coffee bar; sky lounge with pool table, darts and TVs and community kitchen.

CA Management Services, the firm’s property management arm, will manage leasing and operations for the 2019 portfolio.

Identity Miami (621 beds) – Florida International University; Miami

Located at 400 SW 107th Ave., Identity Miami is just three blocks from FIU’s main campus and around the corner from the university’s College of Public Health, College of Nursing & Health Sciences, College of Medicine and Department of Biostatistics. The 15-story building offers one- through four-bedroom floor plans, including upgraded penthouses. Amenities include a shuttle to campus, 24-hour fitness and wellness center, yoga room with Peloton bikes, lobby lounge with coffee bar, cyber lounge with free printing and scanning, private study rooms, communal study lounge, sky lounge with balcony, and clubroom with TVs, a pool table and demo kitchen. Outdoor amenities include a sun deck with resort-style pool and cabanas, as well the first-ever vintage Volkswagen Bus retrofitted as a DJ booth on the pool deck.

Rise on Chauncey (675 beds) – Purdue University; West Lafayette, IN
Situated steps from the Purdue University campus and popular shopping, dining and nightlife destinations along State Street and Chauncey Avenue, Rise on Chauncey is a 16-story high-rise at 100 S. Chauncey Ave. that offers studio through four-bedroom residences, including penthouse units with upgraded finishes. Spanning nearly 20,000 square feet across four floors, amenities include a 24-hour fitness center with yoga room and Fitness On Demand; research room with conference seating and study bar; cyber lounge with free printing and scanning; private study rooms; penthouse club lounge; and arcade room with pool table. Outdoor amenities include a rooftop pool and hot tub; adjacent sky terrace with an outdoor TV, hammocks, a fire pit and grills; and a gaming courtyard. The development’s lower-level retail space will house The Tap, a craft brewpub that originated in Bloomington.

The Link Evanston (411 beds) – Northwestern University; Evanston, IL

Located at 811 Emerson St. in the heart of downtown Evanston just one block from the Foster Purple Line stop and a short walk to the Davis Street/Evanston Metra stop, The Link Evanston features 411 beds in a mix of studio, one-, two- and three-bedroom floor plans. Amenities include a 24-hour fitness center with CrossFit equipment and Fitness On Demand, club/game room, meeting lounge and well-appointed workrooms. Outdoor amenities include a resort-style pool and entertainment deck with grilling stations, a fire pit and cabanas. The nine-story building also offers indoor bike storage and garage parking.

Latitude at River Landing (665 beds) – University of Iowa; Coralville, IA

Located in the fast-growing Iowa River Landing District of Coralville, Latitude at River Landing is a five-story community less than a mile from the University of Iowa campus. The development at 104 E. 7th St. features studio through four-bedroom apartments steps from nearby restaurants and retail, including a Trader Joe’s. On-site amenities include a dedicated resident shuttle, 24-hour fitness and wellness center, yoga room with Fitness On Demand, clubroom with TVs and a fireplace, rooftop and sky lounges with balconies, co-working and research room, cyber lounge with free printing and scanning, private study rooms and an arcade room with pool and air hockey tables. Outdoor amenities include a resort-style pool, hot tub and sun deck; adjacent courtyard with a Jumbotron, fire pit, hammocks and grilling stations; full-size basketball court and dog run.

Latitude at Kent (384 beds) – Kent State University; Kent, OH

Located at 1450 E. Summit St., across from the heart of the Kent State University campus, Latitude at Kent is a five-story community with a mix of studio, one-, two-, three- and four-bedroom residences. Amenities include a 24-hour fitness suite, yoga room with Peloton bike and Fitness On Demand, clubroom with coffee bar, study lounges with balconies, cyber lounge with free printing and scanning, private study rooms, and game room with TVs and a pool table. Outdoors, residents have access to a resort-style pool, hot tub and sun deck with adjacent grilling stations, as well as a separate courtyard with study deck, fit pit and bocce court.

Since 2008, CA Student Living has delivered more than $5 billion in near-campus housing across the US encompassing more than 40,000 beds. The firm has already begun construction on an additional nine communities, featuring nearly 4,000 beds, to be delivered in fall 2020. Together with another 24 communities in the predevelopment phase, which would deliver between 2021 and 2023, it represents a five-year tally of more than $3 billion in executable development.

Tuesday, September 3, 2019

Momentum Dynamics finds new HQ, goes on a hiring spree

Natalie Kostelni Reporter Philadelphia Business Journal
Momentum Dynamics Corp., a maker of wireless chargers for electric vehicles, has leased 89,430 square feet in Malvern for a new headquarters and, in growth mode, is looking to hire 60 new employees.

In addition to its headquarters, the building at 15-25 Great Valley Parkway will serve as the company’s research and development center.

“This is going to be an R&D playground for the best engineers in the world,” said Andrew Daga, Momentum’s CEO. “We have been able to find, attract and hold some of the best engineers. That’s pretty difficult but we’re very fortunate. It’s not just about salary, bonus and benefits but the work environment and freedom to try new things and make mistakes.”

Founded 10 years ago, Momentum Dynamics is in growth mode. While its new headquarters underscores that, it's moving out of 15,000 square feet in Malvern, it has also been raising money.
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Friday, August 30, 2019

SBA Financing for Real Estate (Video)

Commercial Project Transformation of the Year

By Ingrid Tunberg
In our pre-event coverage of’s ADAPT awards, we took a closer look at adaptive reuse projects across the country. The winner of the commercial project transformation of the year is Piazza Pod Park in Philadelphia. We will be honoring the project at our awards ceremony in Baltimore on September 16th.

Originally sited as a vacant parking lot in an industrial area devoid of steady foot traffic, the development of Pizza Pod Park has transformed the Northern Liberties neighborhood of Philadelphia into a widely-desirable, residential area.
Upon identifying the need for a community epicenter and recognizing the underutilized space of The Piazza, the Post Brothers acquired the property from Kushner Companies in 2018 and began construction that same year. The development project spans across nearly 125,000 square feet, featuring retail and commercial space, a public area and a 500-unit apartment community. Looking to bring life back to the area and promote community connections, the firm plans to cultivate a thriving social neighborhood scene with dining, fitness and entertainment options. Located at Germantown Avenue and Second Street, the formerly Schmidt’s Commons is being repositioned to revitalize The Piazza, shifting attractions and physically moving the community hub to hold events in the expansion of Piazza Pod Park.

Recognizing that the success of the development is dependent on the success of the communal space, the firm employed a dynamic programming strategy to intentionally appeal to everyone in the neighborhood; acquiring renown, established Philadelphia eateries, fresh, family-oriented attractions, as well as quaint, local businesses, all new to the neighborhood.

For the extension of the adjacent courtyard and retail offerings of The Piazza, Piazza Pod Park secured demographically-specific vendors to occupy 14 repurposed shipping containers in the aforementioned, unused parking lot to serve as the main focus of the project. The innovative retailer collective will feature pop-up shops from local vendors, offering fitness, wellness, food and beverage services, showcasing the property’s potential. Vendors of the park include: Essen Bakery, Lil Sum Sum, Tiki Tacos, New Liberty Distillery, Empanada Box, Fit Academy, Tildie’s Toy Box and more.

The park will also exhibit public art installations, seating for 300 people, 200 parking spaces and a two-level enclosed, climate-controlled dining pod and roof deck.
The Post Brothers development team overcame challenges in reimagining the area’s neglected residences as well. The development team has begun renovating the apartment complex with new finishes, planning to construct a new pool and fitness center within the property’s courtyard.

Rent in the area has already increased by 10% since the acquisition of The Piazza, due to hands-on management and rebranding campaigns. Upon renovations and retail repositioning, The Piazza alone is currently valued at $275 million, with numbers expecting to grow following the summer 2019 launch, while the park thrives as a centerpiece of the community.

Wednesday, August 28, 2019

Investors Line Up for New Opportunity Zone Hotel Projects

Investors are flocking to hotels, a property type in high demand across the United States and in the federal Opportunity Zone program that offers tax benefits.

Hotel sales in the program were up 51% last year over 2017, according to CoStar data. That’s in part because the federally designated areas enable investors to reap tax advantages from the real estate as well as investing in the hotel business.

Now investors are stepping up to buy new hotels nearing completion in Opportunity Zones. These include projects begun last year that were largely spurred by the program. Tax breaks are available on newly constructed properties as long as the money is invested before the property has been previously placed in service.

Overall hotel occupancy rates remain high as U.S. tourism surges, another draw for investors. New York and Chicago both reached records last year for numbers of visitors.

Virtua Partners of Scottsdale, Arizona, agreed last week to buy a 126-room Courtyard by Marriott under construction in downtown Winston-Salem, North Carolina, for an undisclosed price.

The Courtyard by Marriott deal is significant because it is among the first hospitality projects in the country to be built as an Opportunity Zone development, of which there is a growing number. CoStar data shows 120 hotel projects totaling more than 16,000 rooms now under construction or completed this year in the more than 8,000 designated Opportunity Zones across the country.

The Opportunities Zone program, enacted under the Tax Cuts and Jobs Act of 2017, is designed to stimulate the economies of overlooked, low-income communities through long-term investment from private capital. Investors can receive capital gains tax deferments or tax forgiveness for investments in real estate or companies within the zones.

"There is an incredible amount of upside for this project," Quinn Palomino, chief executive of Virtua, said in announcing the Courtyard by Marriott agreement. "Whether it be to the Winston-Salem community, the people who will be employed through construction and full-time hospitality jobs, or the investors who chose to finance this project."

Dedicated Fund

Virtua created a qualified opportunity fund as a one-off vehicle for investing in the Courtyard by Marriott. It raised $7.8 million in equity for the project.

The property’s internal rate of return is projected to be 18%, the official said.

Courtyard by Marriott is one of Virtua's favorite flags for Opportunity Zone investing. The company has three more such projects in its pipeline.

Virtua has about 100 Opportunity Zone projects overall, including hospitality, multifamily and single-family rental subdivisions.

Atlanta-based Hotel Equities will manage the Courtyard by Marriott when it opens in the first quarter of 2020.

Hotel Equities and Virtua joined forces last year to expand upon their current hospitality portfolio through new development and acquisition opportunities. Hotel Equities is providing development services for the Courtyard by Marriott through the construction process and plans to see it through completion.

Other firms are also developing hotels in Opportunity Zones.

In Atlanta, Peachtree Hotel Group, one of the nation's fastest-growing hotel investment and management firms, is targeting several Opportunity Zone developments. Projects range from an urban, dual-branded hotel in Atlanta to multiple ground-up hotels in the designated areas across the country.

Global alternative asset manager EJF Capital is developing a Marriott Moxy hotel in the Uptown neighborhood of Oakland, California.

"This is exactly the type of investment the Opportunity Zone program is intended to generate," said Neal Wilson, EJF's co-founder and chief operating officer, in a statement earlier this year. "This is the right time to invest in Oakland, a dynamic, expanding city that welcomes growth capital."

Luxury Condo Construction Ramps Up in Philadelphia's Center City

Luxury homebuilder Toll Brothers completed its acquisition of a four-story retail and office property at 704 Sansom St. on Jewelers' Row in Philadelphia earlier this month for just over $1.1 million.

The deal is a part of an assemblage of parcels along the 700 block of Sansom Street that will pave the way for Toll Brothers to break ground on its 85-unit Toll Washington Square. The condo development has already completed the Civic Design Review process, secured necessary zoning changes and could begin construction before the end of this year.

Progress on Toll Washington Square comes as groundbreakings for ultra-high-end condo projects are beginning to heat up around Center City. Since the beginning of the summer of 2019, three condo developments have broken ground, including Bock Development’s 2100 Hamilton, Dranoff Properties’ Arthaus and Southern Land Company’s The Laurel, which will build a mix of 189 apartments and 60 condo units on its upper floors.

Condo construction is back on the rise, as only one condo project with more than 25 units has delivered in Center City in the last 24 months. The 38-unit 500 Walnut completed during the summer of 2017, but its penthouse sold more than a year earlier, for $17.85 million, or just over $2,000 per square foot.

Developers remain more focused on apartment development, and condos still only represent about one-fifth of Center City’s total multifamily units currently under construction. However, with stock and bond prices near record highs, purchasing power is as strong as it’s ever been among Philadelphia’s wealthiest residents. Low mortgage rates and booming asset values are supporting demand for newly built Center City condos. Meanwhile, by choosing to build for-sale housing, developers are increasingly jumping at the chance to differentiate residential projects from a crowded field of recently completed high-end rental units.

New owner for Four Falls office complex

Natalie Kostelni Reporter Philadelphia Business Journal
Keystone Property Group has acquired Four Falls Corporate Center, a two-building office complex in West Conshohocken for an estimated $50 million.

Keystone purchased the complex, which includes 100 and 200 Four Falls Corporate Center, in a joint venture with Arden Group, which bought the building in 2014 for $44.3 million and continues to have an ownership stake in the property.

The buy fits in with Keystone’s portfolio. The real estate company has its headquarters in Conshohocken and is developing Sora West, a $325 million mixed-use development that will be the new headquarters for AmerisourceBergen. It also focuses on buying value-add real estate that needs either leasing or cosmetic work.

“It was a good opportunity and we like the location and area,” said Rich Gottlieb, president at Keystone, in an interview. “We felt that we could lease it and make it very successful.”

The company plans to invest “multi-million” dollars in the building to “transform it into a best-in-class trophy office building,” Keystone said in a statement. Gottlieb declined to divulge how much it expects to spend repositioning the complex or confirm the sale price, though sources familiar with the transaction indicated it was around $50 million.
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Tuesday, August 27, 2019

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Rubenstein Partners Adds 14 PA Office Buildings to Portfolio

by John Jordan
Rubenstein Partners, L.P. of Philadelphia has acquired 1.1 million square feet of office space within 14 buildings in the Chesterbrook Corporate Center here.

The Class A office space in the King of Prussia submarket includes: 1300 Morris Dr., 1325 Morris Dr., 1400 Morris Dr., 851 Duportail Rd., 955 Chesterbrook Blvd., 965 Chesterbrook Blvd., 725 Chesterbrook Blvd., 735 Chesterbrook Blvd., 600 Lee Rd., 601 Lee Rd., 620 Lee Rd., 640 Lee Rd., 690 Lee Rd., and 701 Lee Rd.
No financial terms of the transaction were disclosed. The Philadelphia Business Journal previously reported that Rubenstein and seller Pitcairn Properties had the Chesterbrook Corporate Center under contract for $148.5 million in May.

“Chesterbrook is an exceptional office campus that we’re pleased to add to our portfolio. Additionally, this acquisition further increases our presence in the Philly market, which is particularly important to us as an investment firm based in the region,” says Lou Merlini of Rubenstein Partners.
He adds that the firm’s planned capital improvement program at the property “will completely reimagine Chesterbrook, taking advantage of the beautiful park-like setting while providing an amenity package that we expect to be unparalleled in a Philadelphia suburban office portfolio. We are very excited for the opportunity to restore Chesterbrook to the pre-eminent office destination in the market.”

The 140-acre Chesterbrook Corporate Center, situated off Route 202, is currently more than 80% occupied.

Rubenstein boasts an already substantial presence in the Philadelphia market. Among its holdings include Makefield Crossing (formerly known as the Lower Makefield Corporate Center) in Bucks County and the Wanamaker Building in Center City.

Commercial Real Estate Due Diligence Explained (Video)

Friday, August 23, 2019

Planet Fitness to Open at Moorestown Mall in Spring 2020

by John Jordan
PREIT reports today it has signed Planet Fitness to a more than 23,000-square-foot lease at its Moorestown Mall here, continuing the health and fitness tenancy growth within the Philadelphia-based REIT’s portfolio.

The fitness facility is slated to open in the spring of next year. The deal marks the latest expansion of square footage dedicated to health and wellness tenancy at the PREIT’s properties.
“Gym-goers today are focused on the fitness journey—they’re not just going to the gym, but buying attire that suits their athletic style and seeking healthier eating alternatives,” says Joseph F. Coradino, CEO of PREIT. “We want to provide local consumers with more reasons to choose the mall as their go-to destination for activities that suit their lifestyle. With the addition of Planet Fitness, we’re continuing to add health and wellness tenants supporting the all-encompassing experience offered by our properties as consumer interests expand well beyond soft goods.”

Since 2008, fitness center leasing in malls has tripled on a square footage basis. PREIT says it has recognized the growing demand in this segment and has strengthened its portfolio to include a variety of health-oriented concepts, most recently incorporating Onelife Fitness at the Valley Mall, Peloton at the Cherry Hill Mall and Edge Fitness opening this fall at the Plymouth Meeting Mall.
Moorestown Mall recently enhanced its tenant mix to include new restaurants to complement a productive Harvest Seasonal Grill, YardHouse and Regal Cinema, rounding out a dining and entertainment component as well as a blend of new-to-market off price venues offering branded merchandise at a discount in the former Macy’s location, including HomeSense, Sierra and Five Below with Michaels Arts and Crafts joining the tenant roster in 2020.

At Moorestown Mall, results have been strong, PREIT reports. Rent generated in the former Macy’s store is 19 times the prior revenue. Traffic has improved by 5.7% through June 30, 2019 compared to the first six months of 2018.

Recent CRE Deals

By Natalie Kostelni  – Reporter, Philadelphia Business Journal


CluePoints Inc., a company that helps with clinical trial oversight, signed a five-year deal on 4,183 square feet at 1000 Continental Drive in King of Prussia.


CompanyVoice, a call center, renewed its lease on 34,559 square feet at 930 Harvest Drive in Blue Bell. The company had 43,000 square feet but reduced the amount of space it needed to be more efficient. The company first moved into 14,471 square feet at the Harvest Drive building in June 2012 and has expanded over the years.


Villanova Insurance Partners signed a seven-year lease on 5,300 square feet at King of Prussia Business Center at 1004-1019 W. 8th Ave. in King of Prussia.


Janney Montgomery Scott leased 6,700 square feet at Rosetree 2 at 1400 N. Providence Road in Media and relocated from Rosetree 1 in the same office complex.


Tiger Optics, a manufacturer of devices that detect gas, leased 18,000 square feet at 261-283 Gibralter Road in Horsham for its headquarters and will be relocating from about 10,000 square feet at 250 Titus Ave. in Warrington.

Wednesday, August 21, 2019

Endurance announces the sale of the King of Prussia Industrial Portfolio in King of Prussia, Pennsylvania

An affiliate of Endurance Real Estate Group, LLC (“Endurance”) and Thackeray Partners (“Thackeray”) is pleased to announce the disposition of the King of Prussia Industrial Portfolio, a five (5) building, 292,110 SF industrial/flex portfolio located in King of Prussia, Pennsylvania (“Property”)

The buildings were constructed in the 1960’s and 1970’s and feature Class B warehouse/distribution specifications including 22’ average clear ceiling heights, wet sprinkler systems and ample loading capacity with full dock packages. The portfolio is situated in the Montgomery County submarket of the Philadelphia MSA industrial market, offering users immediate proximity to I-276 and close proximity to I-76 and I-476. The portfolio was 95% leased at closing.

“Immediately after we acquired the 72% leased portfolio, we implemented our speculative capital improvement plan for the portfolio focusing on the large 60,000 SF vacancy at 780 Third Avenue. We started with the demolition of the second story office area at the building. We then focused our attention to the exterior of the building where improvements were made to the main entrance and parking areas of the building. Interior and exterior painting of the building was completed as well as various landscaping upgrades. Shortly after our renovation was complete, we secured a long term lease for the entire building with a national tenant to stabilize the portfolio”,

Radial Leases Dermody Properties' LogistiCenter at 33

Multinational e-commerce company Radial, Inc. leased Dermody Properties' LogistiCenter at 33 distribution building at Forks Industrial Park in Easton, Pennsylvania.

The lease mark's Radial's first on-the-ground fulfillment presence in the state of Pennsylvania, where the company plans to provide nearly 100 management and hourly positions initially, as well as 700 hourly positions later this year to meet customer demand during the holidays.

The 475,800-square-foot, single-story facility at 4200 Braden Blvd. East was completed by the landlord in 2016. The high-tier property spans 31.3 acres near several national companies including Amazon, UPS, FedEx, Porsche, Mondel─ôz International, BMW and Walgreens.

LogistiCenter at 33 comprises 36-foot clear ceiling heights, 226 car parking spaces and 85 trailer parking spaces.

Dermody Properties East Region Partner Eugene Preston said in a statement, "The location of this property is ideal for Radial’s e-commerce, fulfillment and transportation operations, providing proximity to major East Coast markets and population centers."

Headquartered in Reno, Nevada, Dermody Properties has invested in more than 83 million square feet of industrial space since its launch in 1960, according to its website.

Tuesday, August 20, 2019

Delaware Sets Pricing Milestone for Downtown Wilmington Office Market

The sale of a 283,000-square-foot office condo in Wilmington, Delaware, made few headlines when it closed last month, largely because the deed was transferred on the Monday after Fourth of July weekend. But a quick look back at the $84 million sale of Chemour's headquarters at the historic DuPont Building reveals that the deal was a milestone for Downtown Wilmington’s office market in many ways.

Thanks in part to Chemours’ 15-year lease in place, this was by far the highest price per square foot on a major office sale that has ever closed in Wilmington’s Central Business District, a submarket that has been riddled with tenant move-outs and sales of high-vacancy properties over the past few years.

The office condo was jointly purchased by Connecticut’s Arch Street Capital Advisors and Kuwait-based private equity firm Soor Capital. The pair also jointly purchased a portfolio of Malvern office properties from Liberty Property Trust in 2018.

The Buccini/Pollin Group, the most active local developer revitalizing the submarket’s office and residential properties of late, first acquired the entire 950,000-square-foot DuPont Building at 1007 N Market St. in 2017, for a lean $32 million, or about $34 per square foot.

At the time of the 2017 sale, the 1908-built property straddled a number of uses. The luxury Hotel du Pont occupied more than 200,000 square feet, which it still does today. Meanwhile, the seller, chemical company Chemours, announced plans to downsize its office within the property to 283,000 square feet that would be renovated by the incoming owner.

After a 20-month long renovation, Chemours’ new office opened in the fall of 2018 and last month, Buccini/Pollin group capitalized on the award-winning project, selling Chemours’ office as a separate condo within the property for nearly $297 per square foot.

Other investors including Austin, Texas-based Capital Commercial Investments, and Louisville, Kentucky-based Real Capital Solutions, have acquired high-vacancy office properties in Downtown Wilmington in recent years.

Although the DuPont Building is unique for its historical and architectural attributes, the willingness of an international private equity fund to pay almost $300 per square foot for Chemours’ headquarters sends an encouraging signal to other recent value-add buyers, in terms of the level of investor interest their Downtown Wilmington properties could garnish if they are successfully released to long-term tenants.

The sale gives Buccini/Pollin Group a large cash infusion to continue with its plan to renovate a large portion of the property’s remaining empty office space into 180 luxury multifamily units that would share some amenities and services with Hotel du Pont.

Buccini/Pollin Group also opened a new foodhall on the ground floor of the property last spring, and the property’s reinvigoration is a sign of hope in a submarket that has proven challenging for plenty of other local office owners in recent years.

Friday, August 16, 2019

How caution has impacted commercial real estate 2019 (Video)

Hankin to build $100M senior living facility in Eagleview

By Natalie Kostelni  – Reporter, Philadelphia Business Journal
Hankin Group is building a $100 million senior-living facility in Eagleview, which will be a first for the mixed-use community in Exton. 

Called Eagleview Landing, the project will be developed in two phases have a total of 284 units. The first phase, totaling $35 million, is underway and will consist of 62 personal care units and 45 memory care units. The second phase will have independent-living units.

Though a new type of housing for Eagleview, the addition of assisted living fits with the developer’s desire to follow the principles of New Urbanism at the 800-acre community that has been a work in progress for three decades and incorporates a mix of uses with open space in a walkable environment. When it comes to housing, Eagleview has single-family, multifamily, age-restricted and as well as low income units. Eagleview Landing will round out the community’s offerings by providing another type of housing that accommodates different stages of life and different lifestyles.

“We try to provide every kind of housing here,” said Robert Hankin, CEO at Hankin Group. "One of the concepts that had guided us through the years is the idea that the whole is greater than the parts. We have tried to follow the concepts of New Urbanism and, in doing so, we have learned how to add a mix of uses where ever possible. So, while we can’t always bring every use into each project, we strive to build communities that are as walkable as possible and combine as many uses as supportable.” 

Blue Harbor Senior Living, an Oregon operator of senior living facilities, will manage Eagleview Landing.
Full story:

Thursday, August 15, 2019

GIANT Food to Open Flagship Philly Store in Center City

by John Jordan
A host of city and state dignitaries were on hand yesterday when GIANT Food Stores announced plans to develop a new two-level flagship Philadelphia store in Center City.

The 65,000-square-foot store will be located in the first of two towers under development at 60 North 23rd St. by PMC Property Group of Philadelphia.The store is expected to open by the fall of 2020 and create more than 200 new jobs for the city.
GIANT Food Stores president Nicholas Bertram was joined by Pennsylvania Department of Community and Economic Development Secretary Dennis Davin, Philadelphia Mayor Jim Kenney and PMC Property Group president Ron Caplan formally at a groundbreaking ceremony at the site of the new Riverwalk development project.

“Like the city of Philadelphia, GIANT continues to grow and innovate – becoming part of this new incredible Riverwalk project helps cement our commitment to Philadelphia,” said Bertram of GIANT Food Stores. “We’ve always been dedicated to bringing quality groceries to the people of our home state of Pennsylvania, but this new Philadelphia store—as well as our new GIANT Heirloom Markets throughout the city—represent the future of GIANT: fresh solutions for the way families live now.”
Located in the Logan Square neighborhood within walking distance to Center City, the new GIANT will be housed in Riverwalk’s Tower 1. High open ceilings will welcome customers into the first-floor glass lobby. Natural light and city views will enhance the shopping experience while an outdoor terrace will give customers a picturesque place to enjoy a glass of wine or beer and food. A dedicated onsite parking garage will be available exclusively to GIANT customers, company officials stated.

“GIANT has become an integral part of the Philadelphia region, both as a business serving our communities and as a tremendous partner to our area’s nonprofits. Not only has GIANT done a great deal to improve the health and wellbeing of Philadelphians over the years, its recent growth has also brought hundreds of high-quality jobs to our neighborhoods. The announcement of GIANT’S new flagship store is an exciting development for the city,” said Philadelphia Mayor Jim Kenney.

More than 600 varieties of fresh produce with local product being spotlighted will be available at the new store. Inspired by GIANT Heirloom Market, the store will also feature community vendor partnerships with passionate Philadelphia-area food purveyors tempting and captivating shoppers. The store will boast the largest plant-based department in the company.
“The features planned for the new Riverwalk GIANT speak directly to the needs and desires of our city demographic. We’re thrilled to offer our future residents and customers such an incredible and innovative amenity,” noted Ron Caplan, president of PMC Property Group.

Plans for the Riverwalk store highlight Philadelphia’s central role in the company’s recent growth strategy and is in addition to a $70 million investment GIANT announced in April 2018 to grow its store network across the Commonwealth by constructing six new stores, remodeling two locations and opening four new fuel stations through the end of this year. GIANT will soon open a new store in East Stroudsburg and has plans to open two more GIANT Heirloom Markets in the Philadelphia neighborhoods of Northern Liberties and Queen’s Village.

GIANT has 158 stores in the state of Pennsylvania and employs nearly 29,000 associates in the state. The Carlisle, PA-based retailer has a total of 181 stores, 132 pharmacies, 102 fuel stations and more than 106 online pickup hubs in Pennsylvania, Maryland, Virginia and West Virginia. The firm employs more than 32,000 associates.

Newly Built Mixed-Use Philly Property Secures Nearly $28M Refi Deal

by John Jordan
The ownership of the recently built 1600 Callowhill St. mixed-use building here has secured $27.5 million in refinancing funding for the project.

The building owners are Ivy Realty of Montvale, NJ and DW Partners of New York City in procuring the refinancing loan from BBVA.
“This transaction was unique in that Ivy Realty in partnership with DW Partners delivered differentiated rental product in luxury loft units which leased quickly in the market and lenders who understood the growth in the sub market were eager to lend on the asset and Sponsorship."

Approximately 40% of the building’s units are leased to Sonder, a short-term rental start-up in nearly 30 cities that recently surpassed a valuation of more than $1 billion.
“The lease with Sonder for a portion of the units in the building further showcased the high-quality build and led to a competitive marketing process,” Alascio adds. “BBVA was able to put forth a custom financing package tailored to meet the needs and business plan of the sponsorship.”

1600 Callowhill Road is a brand-new multifamily building located between the City Center and Philadelphia’s Fairmount neighborhood. The property features a design that pays homage to the site’s historical past. Tenant amenities include a rooftop terrace, gym, lounge, parking, concierge, exposed brick and in-unit washers and dryers.

Wednesday, August 14, 2019

Plymouth Meeting Ripe for More Apartments, but Development Sites Limited

One of the most popular strategies among Philadelphia apartment developers in recent years has been to deliver large, highly amenitized rental communities near centers of suburban office employment. This approach has been particularly successful in Philadelphia’s western suburbs, which are notorious for rush-hour traffic congestion along I-76.

By completing projects less than a 10-minute drive from existing office parks, developers have been able to offer apartment renters relief from bumper-to-bumper traffic. This benefit has been a key ingredient for success for projects such as MLP Ventures’ Royal Worthington, which is adjacent to Vanguard’s giant Malvern campus, and for the more than 1,600 market rate apartment units that have delivered within King of Prussia’s Village at Valley Forge master planned development since 2017.

But CoStar’s recent analysis of the ratio of occupied office space to existing apartment units in various Philadelphia suburbs suggests that Plymouth Meeting may be undersupplied in terms of apartment options relative to the size of its office stock.

Within a two-mile radius of Plymouth Meeting Mall, for every existing apartment unit there is more than 3,300 square feet of occupied office space.

That is more than three times the amount of occupied office space per apartment unit of surrounding suburban retail centers such as the Bala Cynwyd Shopping Center, Exton Square Mall and Neshaminy Mall. The figure suggests a large number of Plymouth Meeting office workers would jump at the chance to rent a high-end apartment and shorten their commutes.

When Parc at Plymouth Meeting delivered in 2015, the project was the township’s first market-rate apartment development to complete since the 1970s. The property reported over 95% occupancy last month and has raised one-bedroom asking rents by about 17% since it began preleasing five years ago.

But no other projects have completed or broken ground in Plymouth Meeting since Parc at Plymouth Meeting’s completion, as the lack of properly zoned, open land has limited developers’ options. Of the four land parcels over one acre currently listed for sale on CoStar, all are being advertised as having light industrial designations in place.

This lack of new development in an otherwise viable apartment submarket means landlords of existing properties should benefit from minimal competition over the next several quarters. Investors committed to bringing more high-end apartments to market in Plymouth Meeting may have to consider redeveloping some of the area’s older, underperforming office buildings, although few are currently being offered for sale.

Tuesday, August 13, 2019

Monthly Economic Outlook — August 2019 (Video)

Industrial Real Estate via CCIM Economist KC Conway Part 1 & Part 2(Video)

Part 1 Part 2

Hampshire Companies Sells 33-Property Portfolio to Colony Industrial

by John Jordan
Hampshire Companies of Morristown, NJ has sold a portfolio of 33 industrial buildings and development sites in the Garden State to Dallas-based Colony Industrial, which announced last week that it has put its multi-billion-dollar industrial portfolio on the market for sale.

The deal that includes 30 industrial buildings totaling more than 1.3 million square feet. Colony Industrial acquired the portfolio, which is situated on nearly 83-acres of land, for an undisclosed sale price. Also included in the transaction were three development sites located in Carteret and West Caldwell, NJ totaling 46-acres.
Colony Industrial is the industrial platform of Los Angeles-based Colony Capital. No financial details of the transaction were disclosed.

The acquired assets by Colony Industrial are located within the Northern New Jersey industrial market and are currently 99% occupied by a diverse tenant roster. The portfolio provides a continuous cash flow with value enhancement through contractual lease escalations and rollover of existing tenants to continually increasing market rental rates.

“This portfolio offered Colony Industrial the very rare opportunity to acquire a critical mass of high-quality industrial assets and a future development pipeline in a joint venture structure with Hampshire Real Estate Companies, one of the most respected developers in New Jersey. This deal was a win-win for both parties and we are proud of the outstanding results our team was able to deliver.”

Among the properties in the portfolio are 41 Slater Drive, Elmwood Park, 700 Blair Road, Carteret and 231-232 Main Street, Little Falls, NJ.
Colony Capital announced on Aug. 9th as part of its second quarter financial report that it has engaged advisors to market the company’s multi-billion-dollar industrial portfolio for sale, which may include the related management platform.

“There has been significant appreciation in the value of our industrial portfolio driven by favorable operating fundamentals and strong investor demand for light industrial assets. As a result, a sale of the industrial portfolio may yield a price higher than the value that may be ascribed by the market to the industrial portfolio as part of the company’s overall valuation,” the company states.

Colony Capital is seeking to complete a sale by the end of 2019.

As of June 30, 2019, the consolidated light industrial portfolio consisted of 446 light industrial buildings totaling 55.7 million rentable square feet across 26 major U.S. markets and was 92% leased. The company’s equity interest in the consolidated light industrial portfolio was approximately 34% as of June 30, 2019 and March 31, 2019. Total third-party capital commitments in the light industrial portfolio were approximately $1.7 billion compared to cumulative balance sheet contributions of $749 million as of June 30, 2019. The light industrial portfolio is composed of and primarily invests in light industrial properties in infill locations in major U.S. metropolitan markets generally targeting multi-tenanted warehouses less than 250,000 square feet.

As of June 30, 2019, the consolidated bulk industrial portfolio consisted of six bulk industrial buildings totaling 4.2 million rentable square feet across five major U.S. markets and was 67% leased. The company’s equity interest in the consolidated bulk industrial portfolio was approximately 51%, or $72 million, with the other 49% owned by third-party capital, which is managed by the company’s industrial operating platform.

Back in March of this year, Colony Industrial acquired a class A building in Mahwah, NJ, with 271,176 square feet, and two class A light industrial buildings in Las Vegas totaling 423,786 square feet.

In February, Colony Industrial closed on the sale of a light industrial portfolio to Nuveen Real Estate, a division of TIAA, for $136 million. The warehouse portfolio totals 2.3 million square feet and is situated in four markets including 18 buildings in Atlanta, five buildings in Dallas, five buildings in Houston and six buildings in PA/NJ.

Monday, August 12, 2019

CubeSmart Sees 2019 as a Peak Year for Deliveries (Video)

Liberty Property Trust Designs Industrial Properties for Future Flexibility (Video)

Continental Cup Company to Establish Plant in Lehigh Valley

by John Jordan
Continental Cup Company, a fledgling manufacturer of high-end graphic paper cups, will establish its first manufacturing operation in the City of Bethlehem in Northampton County.

State officials say the project will create 71 new full-tine jobs over the next three years. “I’m proud to welcome Continental Cup Company to Pennsylvania,” says Gov. Tom Wolf. “Manufacturing is thriving in the Lehigh Valley and the addition of this new facility helps to keep this momentum going.”
CCC will lease a 40,000-square-foot building in Lehigh Valley Industrial Park. The company has pledged to invest at least $9.5 million into the project. CCC is a startup paper cup manufacturing company that will service the theater industry, quick service restaurants, convenience stores and food service distribution companies.

“We are extremely excited for our very first operation in Northampton County and proud of our contribution to the local economy providing family-sustaining jobs that will have a positive impact on Bethlehem and surrounding communities,” says Rick Timone, president of CCC. “The support from the Governor’s Action Team was a key component to making this project a reality.”
CCC received a funding proposal from the Department of Community and Economic Development for a $155,000 Pennsylvania First grant, $142,000 in Job Creation Tax Credits to be to be distributed upon creation of the new jobs, and up to $31,950 in grants for workforce training and development.

The company can also to apply for a low-interest $400,000 loan from the Pennsylvania Industrial Development Authority to assist with equipment costs. The project was coordinated by the Governor’s Action Team, an experienced group of economic development professionals who report directly to the governor and work with businesses that are considering locating or expanding in Pennsylvania, with additional coordination through the Lehigh Valley Economic Development Corporation.

Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corporation, says that Continental will join the nearly 700 manufacturers in the Lehigh Valley that account for $7.4 billion of the region’s $40 billion GDP.

Two Philly-Area Apartment Properties Change Hands

by John Jordan
The Royersford Gardens at 25 N. 5th St. in Royersford, PA in Montgomery County, and Maple Grove Apartments at 151 Maple Ave. in Dublin, PA traded in Bucks County.

The two apartment communities totaled 61 units.  “Both properties traded at sub 6.5% T-12 cap rates and north of $110,000 per unit, which shows the strength of the multi-family market at this time. With historically low interest rates, values are at all-time highs.”
No further financial details of both transactions were released,

Royersford Gardens consists of 29 units located in a quaint residential neighborhood. Most units have a private balcony or patio. It was sold as a value-add opportunity due to the fact that only 31% of the apartments had been renovated by the previous owner.
Maple Grove Apartments consists of 32 two-bedroom units. Prior to sale, the property had been owned and managed by the same owner since the early 1980s. It was also presented as a value-add opportunity, due to the rent growth potential after renovations.

“The Suburban Philadelphia sub-market is extremely robust. This is the second deal this year in Dublin, Bucks County, PA that sold at another record price per unit.”

An increasing number of buyers from outside of the Philadelphia market have been investing in properties in Philadelphia and the surrounding suburbs over the past few years.
The buyer in the Royersford Gardens transaction was a group out of North Jersey that is new to the multi-family industry.”

Thursday, August 8, 2019

How Do REITs Work (Video)

Keystone Signs Expansion Deals in Philly Area

Keystone Property Group reports it has signed lease expansion deals with four tenants at properties surrounding Philadelphia.

The largest transaction was with wireless site development firm Network Building & Consulting, LLC, which agreed to add 10,491 square feet to its space at Keystone’s VEVA, a 417 420,546 square-foot office campus in Blue Bell, PA. The firm now occupies a total of 25,037 square feet at the property. The firm has expanded on four separate occasions since moving into the complex in 2013 and is one of the largest tenants in the entire VEVA campus.

The second lease expansion for Keystsone was with Jefferson University Physicians, a Pennsylvania non-profit corporation, which will expand its current space at 225 City Ave. in Bala Cynwyd, PA by 6,790 square feet. Its new space totals 10,574 square feet—roughly three times its initial size.

Keystone also reports that Janney Montgomery Scott, a full-service financial services firm, relocated from Rosetree 1 to Rosetree 2 in Media, PA and expanded its footprint to 6,700 square-feet—an increase of approximately 20%—to provide for future growth and modernize its space.

The fourth lease expansion was with Affiliated Distributors, Inc., which added expansion space of about 2,500 square feet to its existing 28,000-square foot space at Valley Forge Office Center, in Wayne, PA in order to accommodate a recent acquisition.

“We are very proud to announce that four of our existing tenants are expanding within the mixed-use office destinations here in Pennsylvania,” says Rich Gottlieb, Keystone’s president and COO. “Our relationships with our tenants are our main priority, which is why we develop and design our properties specifically to foster creativity, collaboration and efficiency. Our goal is always to provide them with environments that will allow them to thrive and succeed, and we are extremely excited to continue their growth here in our buildings.”

Keystone, which in addition to its headquarters in Conshohocken, PA, also has offices in Miami, New York and New Jersey, begun construction in April of SORA West, a mixed-use, transit-oriented development in Conshohocken, PA that will house the new global corporate headquarters of AmerisourceBergen. The global healthcare solutions company is relocating to an 11-story, 429,122-square foot office tower that will serve as an anchor for the wider SORA West development there.

Number of Completed Center City Apartments to Slow Over Next 12 Months

For the past three years, over 2,000 apartment units have been built annually in Center City Philadelphia. This growing supply of apartments has made it more difficult for landlords of existing high-end buildings to raise rents, as they’ve had to compete with a slew of new, amenity-laden properties that often were offering discounts of one- or two-months free rent to get their first tenants in the door.

But competition from newly built properties is set to ease in the months ahead. Only 600 new apartment units are on track to be completed in Center City between June 2019 and June 2020, less than a third the rate of apartment completions from 2016 to 2018.

Center City apartment rent growth has already been accelerating since new apartment completions began to slow in 2019. As long as Philadelphia’s economy can remain healthy in the year ahead, further reductions in completed apartment projects through mid-2020 could give landlords increased leverage in lease negotiations.

This window of minimal new apartment completions will only be temporary, though. A tariff-induced spike in steel prices and rising interest rates in early 2018 could be the main reasons behind the upcoming lull in completed projects. But as steel prices and interest rates started to fall again in late 2018, and as the typical build time of high rise projects lasts about two years, completed projects are set to spike again 12 to 18 months from now, especially when projects like PMC’s 612-unit RiverWalk complex and RAL Cos.’ 477-unit 1300 Fairmount are completed.

These projects could begin preleasing as early as the summer of 2020. But until then, Center City apartment landlords will face less competition from new projects than what they’ve grown accustomed to in recent years.

Tuesday, August 6, 2019

Three NJ, PA Multifamily Properties Trade in 1031 Exchange Deal

by John Jordan
Three-property 1031 like-kind exchange transactions valued at $33 million for three multifamily properties in Highland Park, NJ, Pottstown, PA and Morrisville, PA.

The three-property portfolio transaction included the $5.3-million sale of Ausonia Apartments, a 26-unit multifamily property with two commercial units located at 501-505 Raritan Avenue in Highland Park, located in Middlesex County NJ. The second transaction involved the $8-million sale of of Arbor Grove Apartments, a 104-unit multifamily property located at 957 and 960 Hale St., 941 North Warren and 990 Washington St. in Pottstown (Montgomery County), PA. The third deal was the $20-million sale of Castle Club Apartments, a 158-unit multifamily property located at 254 West Trenton Avenue in Morrisville (Bucks County), PA.
The seller of Ausonia Apartments, and Arbor Grove Apartments, which previously purchased the properties in 1999 and 2002, respectively, purchased Castle Club Apartments.

The purchasers of the properties, 501 Raritan Ave LLC and Arbor Grove Realty LLC, and arranged the off-market sale of Castle Club Apartments in order to complete the exchange. The seller of Castle Club Apartments was RRG Castle Club Apartments LP and the purchaser was New Ausonia LLC and New Belmont LLC.
“The sellers of Ausonia and Arbor Grove made a strategic decision to market the properties with us on an exclusive basis, subject to an exchange. Concurrently with our marketing program, it was imperative to leverage our client relationships in order to identify an ideal exchange property. The purchasers of Arbor Grove and Ausonia also trusted our ability to complete the sales in a timely manner.”

Ausonia Apartments is a five-story mixed use building with 26 residential units, two ground floor retail units and four rooftop cell phone towers. Built in 1950, the property is located in the heart of downtown Highland Park, NJ, within walking distance to an abundance of commercial offerings and Rutgers University’s New Brunswick campus. At the time of closing, Ausonia Apartments was fully-occupied.

Arbor Grove Apartments is a two-story brick garden style apartment complex with pitched roofs containing 104 residential units and 12 garages. Built in 1953, the property is located just 20 minutes from King of Prussia and Exton, PA.
Castle Club Apartments is also a two-story brick garden style apartment complex. The property contains 158 residential units with a mix of one-, two- and three-bedroom units. It is located minutes away from Interstate-95 and the Pennsylvania Turnpike approximately 25 minutes from Princeton, NJ and Center City Philadelphia.

Monday, August 5, 2019

The Exponential Future of Commercial Real Estate (Video)

Philadelphia’s Market Street West Vacancies Near 10-Year Low with Video

Philadelphia’s largest office submarket, Market Street West, wrapped up the second quarter in good health.


As cited in the latest Market Street West video update, the submarket’s vacancy rate is holding steady around 8%, close to a 10-year low and even tighter than vacancy rates in other prime northeast submarkets, including Washington, D.C.’s, CBD, and the Plaza District in Midtown Manhattan.

Market Street West’s office absorption has been slightly negative year-to-date, but the complete lack of new office construction underway has helped keep the overall market tight and asking rents growing by over 6% year-over-year.

Global economic and markets mid-year outlook (Video)

Friday, August 2, 2019

The Fashion District Philadelphia Adds More Than Two Dozen Tenants

by  John Jordan
The Fashion District Philadelphia, which is scheduled to open here on Sept. 19, reports that Wonderspaces, a new-to-the region immersive art experience, will occupy 24,000 square feet of space at the more than 800,000-square-foot complex.

Los Angeles-based Wonderspaces, which partners with artists from around the world to present art shows, is scheduled to launch its Philadelphia location in December 2019 when it will open its first Philadelphia show, “Point of View.”
The Fashion District Philadelphia location follows successful Wonderspaces shows that attracted a total of 250,000 visitors in San Diego and Scottsdale, AZ.

“Our new home at The District marks our first permanent location in the center of a metropolitan area,” says Jason Shin, Wonderspaces’ co-founder and president. “We believe taking art to non-traditional places is a key part of inviting new audiences. And exploring how we can make art more accessible is core to our mission and values.”
Construction continues on The Fashion District Philadelphia, a joint venture partnership between PREIT and Macerich, which announced more than two dozen new lease deals at the property. Wonderspaces will join the entertainment attractions at The Fashion District Philadelphia that include third level anchors, Round 1, AMC Movie Theater, along with City Winery.

“The District was designed to combine a local Philly flair with a thoughtfully curated collection of first-to-market tenants and unique concepts,” says Joseph F. Coradino, CEO of PREIT. “This new-to-market experiential tenant, combined with our unique art installations, will deliver an engaging atmosphere for Fashion District visitors—transcending beyond a retail and dining center to offer a comprehensive destination that celebrates art and community in Philadelphia, ensuring that the district will be an engaging, fun, and accessible place for all.”

The addition of Wonderspaces builds on Fashion District’s existing $1 million in commissioned artwork in partnership with the Philadelphia Redevelopment Authority’s Percent for Art project. The artwork will be found in nine exhibit locations throughout The District, featuring work from local and international artists across disciplines. The diverse collection of artwork will range from large-scale 2-D and 3-D sculptures, graphic drawings and photography, to several contemporary murals.
Previously announced tenants include City Winery, a culinary and cultural wine experience offering fine dining, classes, concerts, and private events; a third-floor entertainment zone that includes AMC Theatres and Round 1; Market Eats, a grab-and-go market accessible to SEPTA’s Jefferson Station; and several in-demand retail brands including Nike, H&M, Samsonite, Sunglass Hut, Columbia, Levi’s, ULTA Beauty, and others – joining Burlington and Century 21 Department Store.

Newly signed fashion-related tenants include: Pandora, American Eagle/Aerie, Express Factory, Hollister, Journeys, Aeropostale, Justice, Will’s EyeWear, Bella Shoes, Eddie Bauer, American Shaman, Justice, Gamestop, Samsonite, Sunglass Hut, Spencer’s, T-Mobile, Guess Factory, Skechers and Zumiez

New food-related tenant signings were with: Big Gay Ice Cream, Rolling Cow, Auntie Anne’s, Beef Jerky Outlet, Dunkin Donuts and Philly Pretzel Factory. They join previously signed food tenants Chickie’s and Pete’s and Tiffany’s Bakery.

The District launches on September 19, 2019 – followed by a yearlong series of new additions later in 2019 and in 2020. The new-to-market openings continue in November 2019, when several entertainment tenants, including AMC Theatres and Round One, open their locations, followed in December by Wonderspaces.

Thursday, August 1, 2019

Boost Returns with a Self Directed IRA in Commercial Real Estate Part 1&2 (Video)

Part 1 Part 2

Liss Property Group Adds Two Philly Apartment Properties to Portfolio

by John Jordan
The Liss Property Group has acquired 66 multifamily units at two apartment properties in Northeast Philadelphia.

The Gladwyne, PA-based firm has purchased the Fox Chase Apartments, at 7922-36 Barnes St. and the Arendell Avenue Apartments, located at 4308 Arendell Ave. in Northeast Philadelphia.
No financial terms of the deal were disclosed.

The properties are both located close to I-95 and are within a 30-minute drive to Center City, Philadelphia. The Fox Chase Apartments are directly across the street from the Fox Chase Regional Rail, which stops at Temple University as well as in Center City and University City, while residents of the Arendell Avenue Apartments have access to SEPTA Bus Route 66 to the Frankford Transportation Center.
“Investor demand was extreme for these properties.  With both properties located in the Greater Northeast and offering below-market rents with renovation upside, investors from New York to Washington D.C. turned out, but ultimately it was sold to a local operator.”

“This was a natural purchase for the Liss Property Group to expand their foot print in the Northeast."

In early 2019, Rittenhouse brokered the Liss Property Group’s sale of the Keystone Lofts in the Tacony/Lower Mayfair neighborhood in Northeast Philadelphia to an international buyer at more than $140,000 per unit, a record price for Northeast Philadelphia.

Wednesday, July 31, 2019

Amazon to Open 1 Million SF Fulfillment Center Near Pittsburgh

by John Jordan, Inc. has announced plans to build a more than 1-million-square-foot fulfillment center that will create more than 800 new full-time jobs in the Pittsburgh suburb of Findlay Township, PA.

“Pennsylvania is a great state for business and Amazon is excited to continue its growth and investment with our newest fulfillment center in Allegheny County,” said Alicia Boler Davis, vice president of global customer fulfillment for Seattle-based Amazon. “For nearly a decade, the Keystone state has been key to Amazon’s ability to serve our incredible customers and provide great selection and super-fast shipping speeds across the Northeast and Midwest regions of the U.S.”
Since 2010, the company has invested more than $8.5 billion in the state through its local fulfillment center and cloud infrastructure, research facilities and compensation to thousands of employees. The firm currently employs 10,000 workers across the state. The new fulfillment center will be Amazons 15th facility in the State of Pennsylvania.

“It’s a great win any time a business comes in and pledges to create 800 new jobs,” said Pennsylvania Gov. Tom Wolf. “This is a significant investment for Pennsylvania and I applaud Amazon for selecting our commonwealth as the location for this facility.”
The new facility will be constructed by the Hillwood Group of Dallas and Chapman Properties of Leetsdale, PA. Amazon has committed to investing more than $30 million into the project, state officials note.

Amazon received a funding proposal from the Department of Community and Economic Development for $1.6 million in Job Creation Tax Credits to be distributed after the creation of new jobs. The project was coordinated by the Governor’s Action Team, with additional coordination through the Pittsburgh Regional Alliance and Allegheny County.

“Today’s announcement underscores that Amazon has never taken its eyes off Pittsburgh. A new, from-the-ground-up fulfillment center will increase the count of several local Amazon facilities—including a growing engineering center—that provide, or will provide, thousands of well-paying jobs in the region,” says Pittsburgh Regional Alliance president Mark A. Thomas.
Allegheny County Executive Rich Fitzgerald adds. “Amazon’s decision also reflects their continued confidence in this county’s, this region’s and this state’s economy. The county, Port Authority and Airport Authority are proud to continue working with so many partners to show that this region is a good place to do business.”

Last week, Amazon announced plans to open two new robotics fulfillment centers in Ohio that will create more than 2,500 full-time jobs once operational and will total a combined 1.4 million square feet.

Co-Working Sector Fueling Growth in Philadelphia Office Market

by John Jordan
Source: CBRE Research
Thanks to continued strong leasing activity by co-working operators, this business segment now represents more than 1 million square feet of office space here.

In the second quarter 2019 office market report for Philadelphia, reported that the co-working segment eclipsed the 1-million-square-foot mark in the second quarter. The brokerage firm also reports that another lease deal with a co-working firm involving multiple floors of a City Center office building is currently pending.
“The co-working phenomenon continues its positive momentum both in Philadelphia and markets across the United States. This disruptive industry has firmly established itself as an office solution for many corporations and we anticipate its growth trajectory to continue.”

Downtown Philadelphia was home to the most significant leasing activity of the second quarter in the Greater Philadelphia/Southern New Jersey region.
The EPA signed a 173,000-square-foot lease at Four Penn Center, a move from its current location at 1650 Arch St. in the second quarter. In addition to WeWork and Industrious’ new co-working deals at 1100 Ludlow St and Two Liberty Place, respectively, Children’s Hospital of Philadelphia signed on to take more than 50,000 square feet at the historic Wanamaker Building. Notable leases outside the CBD included Kreischer Miller’s renewal at 100 Witmer Rd. in Horsham and FXI’s new lease at 5 Radnor Corporate Center.

The vacancy rate for the Philadelphia CBD stood at 14.9% at the end of the second quarter. The region’s overall asking rent stood at $26.96-per-square-foot at the mid-point of 2019. Net absorption in the market was  a negative 232,222 square feet.

During the second quarter, market fundamentals across the metropolitan area improved slightly.  Occupancy gains in the CBD and Camden, NJ helped dampen the effects of Bank of America’s l exit from the Bracebridge buildings in Wilmington, which left more than 500,000 square feet of Class A space available.
Strong rent growth persisted in the CBD, where landlords asked 5.3% more for Class A space than they did this time last year. The premium for Class A space in Market West approached $7-per-square-foot per year compared to Class B space.

Reports also show that rents grew slightly in the suburbs and the outer submarkets, except for the Wilmington CBD where rates dipped in response to occupancy losses there. The overall vacancy rate in the CBD tightened by 30 basis points, reverting nearly back to where it stood at the end of 2018.

Vacancy across the suburban Pennsylvania markets generally grew, except for in the Main Line, where a flurry of leasing in Radnor caused vacancy to tighten by 410 basis points to 4.5%. The most noteworthy jump in vacancy occurred in Wilmington, where the previously mentioned Bank of America departure moved the rate to 26.6% at the end of the second quarter.

In the Philadelphia CBD there is currently approximately 1.3 million square feet of new office product under construction. With the recent delivery of the nearly 400,000-square-foot Triad 1828 Centre in Camden, NJ, the next major office product to open its doors will be Five City Center in Allentown, PA. The 300,000-square-foot mixed-use building is nearly 85% pre-leased to payroll services firm ADP.

Two major developments in the Philadelphia suburbs are currently under construction—AmeriHealth’s Caritas’ build-to-suit in Newtown Square and Amerisource Bergen’s build-to-suit in Conshohocken.

In terms of the region’s capital markets, Philadelphia rounded out the first half of 2019 with a relatively quiet quarter in the office investment sales sector. There were a few notable trades, including Buccini/Pollin Group’s purchase of Glenhardie Corporate Center in Wayne for roughly $120-per-square-foot and Apex Financial Advisors’ purchase of Lippincott Centre in Marlton.

Liberty Property Trust continued to divest from the office market, selling four more properties in Malvern. Despite these deals, sales volume for the second quarter in Philadelphia was the lowest since 2012. The report notes, however, that the four-quarter aggregate figure for the area indicates that office spaces, in recent quarters, remained above the 10-year average.

Tuesday, July 30, 2019

Phoenixville Apartment complex sells for $78M

By Natalie Kostelni  – Reporter, Philadelphia Business Journal
Pantzer Properties has paid $77.8 million for the Riverworks, a newly built 349-unit apartment complex in Phoenixville.

Toll Brothers Inc. (NYSE: TOL) developed the complex at 45 N. Main St. for around $66.5 million. Riverworks was one of the biggest apartment projects to get underway in Phoenixville in recent years and helped add to the vibrancy of the Chester County community that has experienced a resurgence. 

While there are a smattering of other multifamily developments in Phoenixville, the other project on the scale of Riverworks was Phoenix Village. DeMutis Group, in a joint venture with Fox Cos., developed that two-building complex at 131 Bridge St. with 275 apartments and 20,000 square feet of retail.

Riverworks consists of six buildings as well as an 11,000-square-foot clubhouse with a resort-style pool, climbing wall, kayak storage and other amenities. It was completed in 2016 and it was 96 percent occupied and 99 percent leased time of sale.
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Apartment Rent Growth in Philadelphia's Conshohocken Submarket Surpasses 4% As New Development Remains at Bay

The Conshohocken/Plymouth Meeting apartment submarket has been in a sweet spot for local landlords since 2016. The submarket’s modern office stock and location, squarely between Philadelphia and the metro area’s wealthy western suburbs, have attracted relocations and expansions by major employers including KeyBank, Cotiviti and the National Comprehensive Cancer Network.

While new companies are moving in, rental demand is increasing. But projects including Roseland’s 51 Washington St., and MLP Ventures’ 433 Washington St. have encountered delays, and no large apartment projects have delivered in the Conshohocken/Plymouth Meeting submarket in more than three years.

The influx of white-collar employers, combined with minimal growth in the local apartment stock has kept apartment rents climbing. Annualized rent growth averaged 3.7% over the past 36 months and year-over-year growth rose to 4.5% at the end of July 2019.

There is only one project currently under construction throughout the entire submarket: Korman Communities’ 275-unit AVE Blue Bell, which will include a luxury hotel-like set of amenities and a large share of extended stay units.

The project is targeting completion by the summer of 2020, putting it on track to deliver just a few months before AmeriSourceBergen expands into its new Conshohocken headquarters at SORA West.

Other projects could break ground in the months ahead. MLP Ventures is currently working with Whitemarsh Township officials to receive the necessary permitting and variances to break ground on a 270-unit project at 601 Washington St.

Late last year, Morgan Properties purchased Millennium Corporate Center, a 197,000-square-foot office portfolio. The firm may seek to convert part of the property into apartments after AmeriSourceBergen vacates 70,000 square feet in 2020, when its new headquarters completes just two blocks away.

However, these projects are both at least 16 months from completing since neither has broken ground. This means apartment demand is likely to continue running ahead of supply in Conshohocken well into 2020.

Brandywine to Build 100,000 SF Office Building in King of Prussia

by John Jordan
Brandywine Realty Trust reports it demolition activities began this month on its project to redevelop 650 Park Ave. here into a new 100,000-square-foot office building.

The project is expected to be delivered in the fourth quarter of 2020. The development follows the highly successful ground up development of 933 1st Ave. for single tenant, GeoBlue, and the $29.7-million redevelopment of 500 N. Gulph, now home to CSL Behring.
The Philadelphia-based firm did not release development costs for the new project.

Brandywine Realty Trust has hired Coscia Moos Architecture, a Philadelphia-based architectural design firm, for the redevelopment of 650 Park Ave., which will transform the property into a four-story, versatile workplace with open floor plates and customizable layouts that can be tailored for single, or multi-tenant users.
“King of Prussia is among the most successful regional economic hubs in the nation,” says Jerry Sweeney, president and CEO of Brandywine Realty Trust. “650 Park Avenue boasts a premier location in the heart of King of Prussia, and to attract leading businesses and talent, we elected to reinvent the property to deliver a highly desirable asset that will rival the quality and appeal found in urban workplaces.”

Brandywine notes that four new corporate headquarters opened last year in King of Prussia, totaling 265,000 square feet of office space, while 3,000 new multifamily units have been delivered in the market between 2016-2018.

Among the planned amenities at the property include a number of open-air amenity spaces and communal work environments designed to promote team productivity, and individual wellness and leisure. A fourth-floor terrace will serve as a flexible activity space, ideal for a variety of events from morning yoga classes, to lunch meetings, and evening gatherings.
The second and third floors of the property will feature private balconies, while amenity space on the east side of the building will be designed to accommodate group lunches, meetings, and gatherings with easy access to a 2.6-mile First Avenue Linear Park and trail, a new public recreational amenity that Brandywine will help deliver in collaboration with Upper Merion Township and King of Prussia District. 650 Park Ave. will also be WELL and Fitwel certified.

“Brandywine’s new office building will be a wonderful addition of King of Prussia, and the design beautifully complements the First Avenue Linear Park project, which is transforming underutilized, private lawns into a cohesive, active and beautiful public amenity,” says Eric Goldstein, executive director of King of Prussia District. “Brandywine’s investments continue to foster substantial economic growth and elevate KOP’s prominence in this Philadelphia submarket.”

On July 22, Brandywine Realty Trust reported second quarter results that included its net operating income, excluding termination revenues and other income items decreased (1.7%) on a GAAP basis and increased 1.6% on a cash basis for its 75 same store properties, which were 93.0% and 92.8% occupied on June 30, 2019 and 2018, respectively.

The firm leased approximately 651,000 square feet and commenced occupancy on 316,000 square feet during the second quarter of 2019. The second quarter occupancy activity included 96,000 square feet of renewals, 140,000 square feet of new leases and 80,000 square feet of tenant expansions. The firm also reported it had an additional 482,000 square feet of executed new leasing scheduled to commence subsequent to June 30, 2019.

At June 30, 2019, the firm’s core portfolio of 92 properties comprising 16.4 million square feet was 93.0% occupied that were currently 95.9% leased (reflecting new leases commencing after June 30, 2019). Brandywine Realty Trust’s core focus is in the Philadelphia (New Jersey), Austin and Washington, D.C. markets.

“We have made excellent progress on our 2019 business plan,” Brandywine’s Sweeney stated when announcing the firm’s second quarter financials. “Market conditions remain strong and we are now 99% executed on our 2019 speculative revenue target. In addition, we are increasing several of our key leasing plan metrics, including our mark-to-market rents on both a GAAP and cash basis.”

He added that in Philadelphia the firm achieved a significant milestone by receiving zoning approval for its entire Schuylkill Yards development site in University City.

“With the Schuylkill Yards zoning approval, we can now move forward on our mixed-use development totaling more than 5 million square feet featuring office, resident and life science components.,” Sweeney noted.

Westover Cos. Buys South Jersey MF Portfolio for $25M

by John Jordan
The Westover Companies of King of Prussia, PA has acquired a three-property multifamily portfolio in Camden, Cumberland and Burlington counties in South Jersey for $24.5 million.

The off-market transactions that involved a total of 326 units were reported by brokerage firm. The seller was Mercer Management. Northfield Bank arranged financing for the purchaser.
The three properties that traded included the 195-unit Regency House at 304 Erial Road in Sicklerville, Camden County; Upper Deerfield Estates (67 units) at 23 McCormick Boulevard in Bridgeton, Cumberland County and Polo Ridge Apartments (64 units) at 1210 North Route 130 in Burlington Township, Burlington County.

“The sale of the portfolio is a clear demonstration of the continued demand for value-add multifamily opportunities in today’s market. Both parties had incentive to act and the transaction proceeded smoothly to closing.”
Regency House is a four-story brick, mid-rise apartment building located approximately 10 miles from Philadelphia. Amenities include elevator service to each floor, spacious units each with a private porch, patio or balcony, and central heating and air conditioning.

Upper Deerfield Estates is a single-story active adult apartment community approximately 15 miles from both Wilmington, DE and Atlantic City. Amenities include central air conditioning, in-unit washer and dryer, and private entrances.

Polo Ridge Apartments is a two-story brick garden apartment complex located approximately 10 miles from Philadelphia. Amenities a patio or balcony, individually controlled heating and cooling units, and ample closet space.
“The location of the properties provided the purchaser with an opportunity to acquire a value-add portfolio that fits strategically within their business model in a multitude of ways. The purchaser intends to invest significant capital into the properties in order to enhance them. “

He says that Mercer Management’s focus has shifted to new developments at the Jersey Shore, including the recently completed Hotel LBI on Long Beach Island.

Harrisburg Rentals Trade for $50 Million

A local investment shop plunked down $50 million for an apartment portfolio in Harrisburg, the Pennsylvania capital city.

The transaction is the biggest multifamily deal in Harrisburg this year.

Park Run Management, of Pottstown, Pennsylvania, acquired the five-property, 825-unit portfolio in an off-market deal with Loketch Group of New York City. The price translates into a value of $60,000 a unit, but several of the properties include ground-floor retail space. The deal also includes four cell phone towers.

All five properties are mid-tier assets built between 1939 and 1956. They're all located close to one another on the east bank of the Susquehanna River. The new owners are looking to boost rents at the properties after a campaign of property renovations and upgrades.

The properties include: River Plaza, with 269 units and two commercial spaces at 2311 N. Front St.; Riverfront Park, with 216 units at 2600 Green St.; Bellevue Towers, with 118 units and six commercial spaces at 2400 Market St.; Magnolia Gardens, with 114 units at 210 Hale Ave.; and Magnolia Hills, with 108 units at 35 Thomas St.

Wednesday, July 24, 2019

Amazon to Convert Another Dead Mall Into a Fulfillment Center

Online retailer Amazon has spent the past two decades luring shoppers out of stores and onto the internet, leading a retail transformation that has left dead malls in its wake. Now the Seattle-based company is buying more of those empty shopping centers, converting them into warehouses for processing deliveries to consumer doorsteps.

The company plans to open two more Ohio warehouses, including one at the site of a closed mall in Akron, the third shopping center in the northeastern part of the Buckeye State the company has bought and converted into a fulfillment center. But it isn't limited to Ohio.

Around the country, this year there were identified 24 projects where developers have turned closed malls and shopping centers into logistics properties since 2016, with almost 8 million square feet of retail either converted to or replaced with 10.9 million square feet of new industrial space.

Among the advantages of converting malls to logistics facilities are their locations near population centers. That makes it easier to provide next-day or same-day delivery to customers, with easy access to highways and mass transit and water, sewer and parking systems already in place.

"This trend will continue to grow as the balance between brick-and-mortar retail and e-commerce shifts to necessitate more logistics space and less physical retail space. Trading Places: Retail Properties Converted to Industrial Use."

Three years ago, CoStar analysts predicted that owners would need to upgrade, repurpose or demolish 1 billion square feet of dead malls and other U.S. shopping space to reduce vacancies and return retail property to normal levels of productivity.

With online shopping increasing at roughly four times the rate of total retail sales and cutting deeper into spending at physical stores, owners are stepping up the sale or conversion of dead malls and distressed shopping centers, particularly in suburbs and rural areas most vulnerable to the effects of e-commerce and store closings.

And opportunistic buyers are scooping up sites that are ripe for turning into apartments, warehouses and other uses.

"We’re seeing a blurred line between industrial and retail, along with their increased need for integration." Plans for Amazon and other retailers for same-day delivery are driving up demand for distribution facilities closer to residential centers.

For its most recent plans, Amazon said it will build a 700,000-square-foot distribution hub at the northeast corner of Crossroads Parkway and South Compass Drive in Rossford, five miles southwest of Toledo, Andre Woodson, who manages Amazon public relations and communications in Ohio, said in an e-mail.

The company also intends to build a 700,000-square-foot fulfillment center at the site of the former Rolling Acres Mall at 2400 Romig Road, which was built in 1975 and had as many as 140 stores totaling 570,000 square feet before spiraling into decline in the 1990s and early 2000s. The mall's ruins, decimated by water damage, graffiti and vandalism, were documented in pictures and video made between 2012 to 2016 and posted on and other sites dedicated to abandoned malls.

Construction schedules for the Akron and Rossford projects, which are expected to bring a total of 2,500 jobs to the state, are still being determined, Woodson said.

No Bidders

Rolling Acres Mall was scheduled to be auctioned off in May 2009, but California-based investor Premier Ventures acquired the property in 2010 after no bids were received, according to CoStar data.

J.C. Penney, the mall’s last department store, closed in 2013 and Premier Ventures filed for Chapter 11 bankruptcy protection in 2014. After a series of sales failed, Summit County foreclosed on the mall and J.C. Penney gave its building to the city of Akron in 2016, and the mall and department store sites demolished between 2016 and 2018, according to Akron and Summit County documents.

As aging malls and brick-and-mortar retailers close, Amazon has been looking more and more to snap up the real estate of the retailers they helped to put out of business as shoppers shift their preferences to e-commerce and in-store pick up. Amazon has already redeveloped two former mall sites near Cleveland into fulfillment centers, opening a facility on the site of the former Randall Park Mall, a vintage-1976 shopping center in North Randall, Ohio, that closed in 2009.

The internet retailer is preparing to open another center at the site of the Euclid Square Mall in Euclid, which was built in 1977 and demolished in 2017 and 2018 after efforts to re-position it failed.

Ohio Gov. Mike DeWine said in a statement that the Akron and Rossford roll out shows that "Amazon continues to demonstrate confidence in the great workforce and e-commerce business climate we have in Ohio."

Amazon Vice President of Global Customer Fulfillment Alicia Boler Davis said in the statement that the company now has more than 8,500 employees in the Buckeye State, not including the 2,500 expected new hires in Akron and Rossford at facilities used to pack and ship books, electronics, toys and other small items to Amazon customers.

The converted malls and big-box retail stores favored by Amazon and other logistics developers are mostly in areas with lower median household incomes than the national average where industrial space is also in short supply, which makes the properties more valuable as industrial space than retail.