Tuesday, July 16, 2019

Ever Changing Retail Commercial Uses (Video)

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Monthly Economic Outlook — July 2019 (Video)

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Counter Capital Buys Mixed-Use Property for $19.1 Million

Counter Capital Management, a joint venture between Christian Dalzell's Dalzell Capital Partners and Mukang Cho's Morning Calm Management, purchased a mixed-use property in Philadelphia's Rittenhouse Square neighborhood from local full service investment firm Pearl Properties for $19.1 million.

The Class B property at 1501 Locust St. includes 29 multifamily units and ground floor retail. Built in 1947, the 10-story property was converted into a luxury mulitfamily property in 2010.

Barclays Capital provided a $14.1 million loan in the off-market transaction, and the deal marks Counter Capital's first acquisition since its launch in March.

"[1501 Locust Street] is so different from anything else we own; it’s a different caliber. So, this was a very exciting closing," Dalzell said in a statement. "We’re now starting to envision the expansion of what we’re doing here in Philly into multiple markets. We have the capacity and the expertise level."
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New Jersey Office Asking Rent Sets New Record Again


The New Jersey office market is showing continued improvement and in the second quarter set a new record high for asking rents, according to a report released today.

The statewide average asking rent reached an all-time high for the second time in the past three quarters. The New Jersey office market recorded its fifth consecutive quarter of positive net absorption, driving the state’s average asking rent to a historical peak of $27.22-per-square-foot, which marked the first time the average has ever exceeded $27-per-square-foot.

Multiple submarkets throughout the state are experiencing higher than 5% year-over-year growth in rents including Woodbridge/Metropark, Edison South, Parsippany Region, Hudson Waterfront, Wayne/Paterson and Somerset/Interstate 78 East.
Of the state’s 21 submarkets, 15 are posting higher rents year-over-year and compared to the previous quarter. In addition, 13 of the 21 submarkets are experiencing occupancy levels that are higher than the state average.

“Continued demand for high-quality office space is supporting both successful repositioning of existing assets within prime locales and this cycle’s first speculative ground-up office development. These factors are putting upward pressure on overall market rents. The steady success of the New Jersey commercial real estate market is encouraging investors to move forward with new development plans throughout the state, in both urban and suburban areas.”

Among the major commercial real estate projects underway in the Garden State include Toll Brothers’ 1000 Maxwell Lane in Hoboken; 350,000 square feet of office space planned in Morristown by SJP Properties and Scotto Properties and the Silverman Group’s plans for more than 100,000 square feet of office space above existing retail properties in Morristown.
“The U.S. economy reached the longest expansion in U.S. history and at the same time, we’re seeing some remarkable trends and growth in the office sector. However, the Grow New Jersey tax credit program expired with no replacement and remained under scrutiny, which may pose some challenges to attracting and retaining businesses. The minimum wage increase could also impact hiring and potentially decelerate overall growth.”

The largest new leases signed in the suburbs by life sciences companies include the IQVIA sublease for 115,000 square feet in the Somerset/I-78 East submarket and Genmab U.S. Inc. for 90,000 square feet in the Princeton submarket. Other sectors during the that drove activity during the second quarter included law firms, professional services firms and healthcare companies, while government tenants were particularly active in Newark.
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Monday, July 15, 2019

Medecision Inks Sublease Deal at CrossPoint at Valley Forge

Medecision, a leader in software solutions for the healthcare industry, subleased 24,726 square feet at Prime US REIT's Class A office building at CrossPoint at Valley Forge in Wayne, Pennsylvania.

The 272,360-square-foot, four-story building at 550 E. Swedesford Road was built in 1974 and renovated in 2014. The 4-Star property spans 25.3 acres less than four miles from King of Prussia.
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Coworking Trends (Video)

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Friday, July 12, 2019

Teva buys three buildings in West Chester for its R&D campus

By John George and Natalie Kostelni  –  Philadelphia Business Journal

Teva Pharmaceuticals USA bought three buildings in West Chester this week that — together with three other adjacent buildings it already owns — will allow the pharmaceutical manufacturer to “firmly establish” a North America research and development campus in Chester County.

About 650 employees will be based at Teva in West Chester by the end of 2019, including teams involved in product and device research and development, regulatory affairs, medical affairs and a variety of support functions.

A Teva spokeswoman said the company is not planning to make new hires, but will be consolidating positions at other Teva locations in the region at the West Chester campus.

Teva declined to disclose the purchase price for the three buildings it purchased, all of which the company previously leased. According to county property records, the purchase price paid to Liberty Property Trust (NYSE: LPT), the seller, was $30 million.
Fully story: https://tinyurl.com/y4esz45g
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ShopOne Centers REIT Looks for Market-Leading Grocers (Video)

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King of Prussia Apartment Projects Are Leading the Philadelphia Metro Area in Lease-Up Pace


Almost 2,000 new, luxury apartment units have delivered in King of Prussia, Pennsylvania, just in the past two and a half years. While this rapid growth in high-end apartment options would cause apartment fundamentals to buckle in plenty of Philadelphia suburbs, tenant demand has been sufficient to match the new supply in King of Prussia, where new apartment deliveries are leasing up at the fastest rates of any projects throughout the Philadelphia metro area.

Three developments with more than 250 units delivered in King of Prussia last summer, including Hanover King of Prussia, Park Square and AVE King of Prussia. One year later, all three of these properties are more than 70% leased.

While large apartment properties that delivered in the Philadelphia metro area during the past two years have averaged 15 move-ins per month over the course of lease-up, within King of Prussia, it has been 30% faster, averaging just over 19 units per month.

Most of King of Prussia’s recent multifamily projects have delivered within the Village at Valley Forge masterplan development. The mixed-use and pedestrian friendly layout of Village at Valley Forge allows local residents to walk to the grocery store, as well as to local bars and restaurants.

These selling points are likely helping boost interest in King of Prussia’s new apartment stock, as there are very few pedestrian friendly enclaves in Philadelphia’s far western suburbs, which are dominated by major highways and sprawling office parks and shopping malls.

Thursday, July 11, 2019

Endurance/CenterSquare announce the signing of a 242,960 SF lease at 594 Distribution Center in Hazleton, PA

Affiliates of Endurance Real Estate Group, LLC (“Endurance”) and CenterSquare Investment Management (“CenterSquare”) are pleased to announce the signing of a 242,960 SF lease with Progressive Converting, Inc. (“Pro-Con”) at 594 Can Do Expressway located in Hazleton, PA (the “Property”).  The Property was recently purchased from Quad Graphics and rebranded as 594 Distribution Center (“594 DC”). The lease with Pro-Con increases the Property’s occupancy to 100%.

“Shortly after acquisition, ownership embarked on a capital improvement program which included the installation of a new roof, new LED lighting throughout the warehouse area, upgraded levelers and dock packages, select interior demolition and various office, paving and landscaping improvements. Pro-Con recognized the quality of the Property and we are thrilled we can accommodate their expansion within the park as this will be their third location within the Humboldt Industrial Park, which currently boasts a vacancy rate of less than 2%”.

594 DC is located just one mile from Exit 143 of I-81 and is part of the Humboldt Industrial Park. This location offers excellent transportation links to Interstate Highways and is within 250 miles of most major markets in the Northeast and Mid-Atlantic regions. As part of the Eastern & Central Pennsylvania Industrial Market, the Northeast Pennsylvania Industrial Market is an established center for national retail distribution and consumer goods companies in the Eastern United States.
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MarketFair Mall NJ Welcomes New Restaurant Tenant

by John Jordan Globest.com
Tommy’s Tavern + Tap, a family-owned restaurant specializing in coal-fired pizza and a wide variety of quality bar favorites, has leased space at the MarketFair Mall here and is slated to open in late 2019.

The new Tommy’s Tavern + Tap will be located next to Barnes & Noble and across from Corner Bakery and will total 8,740 square feet.
The new MarketFair Mall location will be the fourth for Tommy’s Tavern + Tap along the East Coast. Each location offers an upscale, yet comfortable atmosphere with rustic, modern and industrialized design elements. Tommy’s Tavern + Tap books live bands, regularly hosts parties for its patrons, and caters events to help customers celebrate the special moments in their lives. The restaurant has three East Coast locations in Freehold and Sea Bright, NJ and Staten Island, NY.

“Tommy’s Tavern + Tap will bring something new and desirable to our community,” says Richard Kenwood, general manager, MarketFair Mall. “The combination of the restaurant’s three specialty kitchens—coal-fired pizza, tavern, and sushi—will provide diners with a wide assortment of taste-tantalizing treats, and its comfortable atmosphere will entice visitors to stop by with their families during a shopping trip or to reconnect with friends to enjoy live music. There’s a huge demand for craft beers and fresh food today, and Tommy’s Tavern + Tap offers both.”
MarketFair Mall is a 246,000-square-foot lifestyle shopping center anchored by Barnes & Noble and the AMC MarketFair 10 movie theatre. The lifestyle shopping center offers more than 40 retail, service, restaurant, and entertainment venues, including Anthropologie, Free People, Pottery Barn, West Elm, Seasons 52 and Starbucks. Leased and managed by Madison Marquette, MarketFair is located off Highway 1 in Princeton, just one mile from Princeton University.
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Wednesday, July 10, 2019

Ricoh USA cuts office space by more than half, relocates HQ

Natalie Kostelni Reporter Philadelphia Business Journal
Ricoh USA Inc. has slashed the amount of office space it occupies by more than half and is relocating its headquarters to Exton from its long-term home in Malvern.

The company leased 45,971 square feet at 300 Eagleview Blvd. in Exton and is relocating out of 107,000 square feet at 70 Valley Stream Parkway in Malvern. It has been in the Valley Stream building for more than 20 years.

“No job loss is directly associated with this move,” the company said in a statement. The relocation and reduction in space are part of the company’s desire to modernize its office space and incorporate new, evolving work styles in its space, it said. 

In 2012, Ricoh USA renewed its lease at 70 Valley Stream in a deal that kept it in the space until 2020. At the time, it had been in the building for more than a decade. The company was originally known as Ikon Office Solutions.
Full story: https://tinyurl.com/y4kuodak
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Vici Propeties CEO talks sports betting and real estate (Video)

Vici Propeties CEO talks sports betting and real estate with Jim Cramer from CNBC.

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Corporate Downsizings Are Causing Available Office Space to Accumulate in Philly’s Northern Suburbs


The share of Horsham/Willow Grove’s office stock listed as available for lease rose to 15% last quarter, the highest level recorded there since CoStar began tracking the figure in 2005.

Toll Brothers was the largest single contributor to the recent rise in availabilities. In early 2019 the home builder announced it would vacate its 203,000-square-foot headquarters at 250 Gibraltar Road in Horsham by the end of the year and move to a smaller, 167,000-square-foot office at 1100 Virginia Dr., in the nearby Fort Washington/Spring House submarket.

Toll Brothers’ announcement followed 120,000 square feet coming available at 425 Privet Road in Horsham during late 2018. This property long housed a U.S. office of Israel-based Teva Pharmaceuticals, which enacted a major restructuring that included 14,000 layoffs globally last year.

Horsham/Willow Grove has long been the tightest office submarket in the northern suburbs, and it still is. But the accumulation of record space availabilities at a time when Philadelphia’s economy remains healthy and unemployment is at multi-decade lows sends a clear signal that tenant preferences are shifting away from the submarket. Long-term challenges could lie ahead for local landlords as tenants loyal to the northern suburbs gain increased bargaining power in lease negotiations.
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Hamilton Lane Inks Deal at Seven Tower Bridge

Hamilton Lane, the Bala Cynwyd-based alternative asset manager focused on private markets, preleased 127,500 square feet at Oliver Tyrone Pulver's Seven Tower Bridge.

The 260,000-square-foot office building at 171 Washington St. is slated to deliver in 2020.
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Monday, July 8, 2019

Envestnet Signs Office Lease in Berwyn PA

Financial services company Envestnet signed a 15,897-square-foot lease at a Class A office building in Berwyn, Pennsylvania.

The 173,036-square-foot building at 1000 Chesterbrook Blvd. was built in 1999. The 4-Star property spans 13.6 acres less than two miles from the Berwyn train station.
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Economist Talks Economic Outlook (Video)

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Philadelphia's Center City Office Rent Growth Outperforms Most East Coast Central Business Districts


by Adrian Ponsen Costar.com
The Central Business Districts of global gateway markets such as New York, Washington, D.C., and Boston, have long been perceived as the powerhouses for office rent growth in the Northeastern U.S. But that dynamic appears to be changing.

Since 2016, rents in the CBDs of the most-expensive East Coast markets have been flat-lining. With average office rents now between $55 to $75 per square foot, affordability constraints are coming into play for CBD tenants in New York, Washington, D.C., and Boston. Meanwhile, these three locations have seen a combined 48 million square feet of new office projects either complete, or break ground in the past five years. For owners of existing office properties, this rapid expansion in high-end office inventory means more properties to compete with and less bargaining power during lease negotiations.

The situation is very different in Center City Philadelphia, where the list of technology and finance tenants looking to expand may be limited, but sky-high construction costs are keeping new office development to a minimum. Averaging $33 per square foot, Center City’s rents are vastly more affordable than those in other nearby East Coast CBDs, and rent growth, which made a strong showing from 2013 to 2015, has only accelerated in recent years.

Investors who have piled into Midtown Manhattan and District of Columbia properties at 3% to 4% capitalization rates in recent years may not like it, but this divergence may well continue over the long-term, given the prohibitively high cost of doing business in the Northeast’s global gateway markets.
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Industrial Wave Surges With Tallest 3 Story East Coast Distribution Center

by Diana Bell Costar.com
A surge in online shopping and limited modern warehouses equipped for e-commerce is pushing a cutting-edge development wave into New York City’s industrial market, already one of the largest in the United States.

Developers in Brooklyn, Queens and the Bronx are rushing to upgrade the city’s aging industrial building stock that's hamstrung by typically low ceilings and poor capacity to support heavy load weights. E-commerce companies also tend to demand space with enough room to accommodate warehouse robotics and multiple truck ports, which is rare in New York.

Goldman Sachs Asset Management and DH Property Holdings have started construction for their joint-venture development of 640 Columbia St., a three-story logistics facility in Brooklyn’s Red Hook neighborhood that the team says will allow for the fastest last-mile fulfillment possible in the nation's largest city.

Spanning 336,500 square feet and designed by architecture firm Ware Malcomb, the project is touted to be the tallest distribution center on the East Coast. Located on the Red Hook waterfront, 640 Columbia is within an hour’s drive of 13.5 million consumers and specifically designed to capitalize on demand for efficient warehouse space by e-commerce tenants, according to the joint venture.

It is expected to be open in the fourth quarter of 2020, said Joe Sumberg, managing director of Goldman Sachs’ Private Real Estate division.

“We are more bullish now about last-mile industrial in the New York City area than we were when we originally acquired the property,” Sumberg said. According to a recent industrial report by CoStar market analytics, the team signed a 99-year ground lease for the lots comprising the site valued at $280 million.

Red Hook evolved from a Dutch settlement into one of busiest ports in the country by the mid-1800s, according to the Waterfront Museum. About a hundred years later, the largely industrial neighborhood was considered one of the city’s most dangerous areas, where mobster Al Capone learned his trade. But in the past decade, it has transformed into a hip enclave marked by cafes, trendy bars, specialty stores, Citi shared bicycles and a massive new Ikea store.

In recent years, Red Hook’s proximity to Manhattan has led to mounting investment interest, with developers Thor Equities and Aecom undertaking some of the largest residential projects in southwest Brooklyn, CoStar analysts wrote in a report on the area.

Plans for the Red Hook site being developed by Goldman Sachs and DH feature 28 loading docks split evenly between the first and second floors. Those floors can accommodate 130-foot-long delivery trucks. On the first floor is a 162-space parking deck and direct freight elevator access to the third floor. On the first and second floors, ceiling heights are penciled in to reach 28 feet. The third floor is being designed with 18-foot ceilings.

“The first and second floors will likely be most attractive to last-mile distribution focused on reaching the end consumer within minutes. For the third floor, in addition to bulk distribution, the space could be desirable to tenants focused on high-touch product preparations, food commissary, pick and pack, maker space, or more creative tenants looking for showroom space in conjunction with or independent from the lower floors,” Sumberg said.

Race for Modern Distribution Space

As New York’s 9 million residents increasingly adopt new digital-shopping channels, retailers’ need to be close-in for speedy delivery has become more crucial. Commercial real estate investors are pouncing on the opportunity. Across the five boroughs, there are 10 industrial warehouse projects in the works, according to CoStar data. Nearly a handful of those rise multiple levels.

There is “insatiable demand for modern, ‘last-mile’ distribution space located in highly populated urban areas,” said HFF’s Rob Hinckley.

Brooklyn is home to another major warehouse development targeting e-commerce and third-party logistics tenants for last-mile distribution.

Wildflower is at work on Brooklyn Logistics Center, a two-building, 214,000-square-foot facility. The property, about 5 miles from John F. Kennedy International Airport, carries 32-foot ceiling heights. It’s being constructed on speculation, or without any tenants lined up. The project’s October delivery date is expected to make it the first modern warehouse coming on line in the city, according to commercial real estate services firm Cushman & Wakefield, which has the exclusive listing.

“The market is starved for quality product, especially in Brooklyn, which offers quick access to Manhattan. Only 9 percent of the industrial market in Brooklyn is Class A, a very low figure. With the way retail has been changing, the industrial market can’t keep up with demand for product supply to high-density residential populations,” said Rico Murtha, a director of leasing at Cushman & Wakefield. The average age of industrial stock in the boroughs is 70 years old, according to the firm’s data.
JULY 05, 2019|DIANA BELLEMAILPRINT
Industrial Wave Surges With Tallest East Coast Distribution Center
Goldman Sachs Venture Aims for Fastest Last-Mile Fulfillment
Construction is underway at a three-story industrial facility at 640 Columbia St. in Brooklyn, New York. Illustration: DH Property Holdings
Construction is underway at a three-story industrial facility at 640 Columbia St. in Brooklyn, New York. Illustration: DH Property Holdings
A surge in online shopping and limited modern warehouses equipped for e-commerce is pushing a cutting-edge development wave into New York City’s industrial market, already one of the largest in the United States.

Developers in Brooklyn, Queens and the Bronx are rushing to upgrade the city’s aging industrial building stock that's hamstrung by typically low ceilings and poor capacity to support heavy load weights. E-commerce companies also tend to demand space with enough room to accommodate warehouse robotics and multiple truck ports, which is rare in New York.

Goldman Sachs Asset Management and DH Property Holdings have started construction for their joint-venture development of 640 Columbia St., a three-story logistics facility in Brooklyn’s Red Hook neighborhood that the team says will allow for the fastest last-mile fulfillment possible in the nation's largest city.

Spanning 336,500 square feet and designed by architecture firm Ware Malcomb, the project is touted to be the tallest distribution center on the East Coast. Located on the Red Hook waterfront, 640 Columbia is within an hour’s drive of 13.5 million consumers and specifically designed to capitalize on demand for efficient warehouse space by e-commerce tenants, according to the joint venture.

It is expected to be open in the fourth quarter of 2020, said Joe Sumberg, managing director of Goldman Sachs’ Private Real Estate division.

“We are more bullish now about last-mile industrial in the New York City area than we were when we originally acquired the property,” Sumberg said. According to a recent industrial report by CoStar market analytics, the team signed a 99-year ground lease for the lots comprising the site valued at $280 million.

Red Hook evolved from a Dutch settlement into one of busiest ports in the country by the mid-1800s, according to the Waterfront Museum. About a hundred years later, the largely industrial neighborhood was considered one of the city’s most dangerous areas, where mobster Al Capone learned his trade. But in the past decade, it has transformed into a hip enclave marked by cafes, trendy bars, specialty stores, Citi shared bicycles and a massive new Ikea store.

In recent years, Red Hook’s proximity to Manhattan has led to mounting investment interest, with developers Thor Equities and Aecom undertaking some of the largest residential projects in southwest Brooklyn, CoStar analysts wrote in a report on the area.

Plans for the Red Hook site being developed by Goldman Sachs and DH feature 28 loading docks split evenly between the first and second floors. Those floors can accommodate 130-foot-long delivery trucks. On the first floor is a 162-space parking deck and direct freight elevator access to the third floor. On the first and second floors, ceiling heights are penciled in to reach 28 feet. The third floor is being designed with 18-foot ceilings.

“The first and second floors will likely be most attractive to last-mile distribution focused on reaching the end consumer within minutes. For the third floor, in addition to bulk distribution, the space could be desirable to tenants focused on high-touch product preparations, food commissary, pick and pack, maker space, or more creative tenants looking for showroom space in conjunction with or independent from the lower floors,” Sumberg said.


The floor plan for 640 Columbia St. is being designed by architecture firm Ware Malcomb. Illustration: DH Property Holdings
Race for Modern Distribution Space

As New York’s 9 million residents increasingly adopt new digital-shopping channels, retailers’ need to be close-in for speedy delivery has become more crucial. Commercial real estate investors are pouncing on the opportunity. Across the five boroughs, there are 10 industrial warehouse projects in the works, according to CoStar data. Nearly a handful of those rise multiple levels.

There is “insatiable demand for modern, ‘last-mile’ distribution space located in highly populated urban areas,” said HFF’s Rob Hinckley.

Brooklyn is home to another major warehouse development targeting e-commerce and third-party logistics tenants for last-mile distribution.

Wildflower is at work on Brooklyn Logistics Center, a two-building, 214,000-square-foot facility. The property, about 5 miles from John F. Kennedy International Airport, carries 32-foot ceiling heights. It’s being constructed on speculation, or without any tenants lined up. The project’s October delivery date is expected to make it the first modern warehouse coming on line in the city, according to commercial real estate services firm Cushman & Wakefield, which has the exclusive listing.

“The market is starved for quality product, especially in Brooklyn, which offers quick access to Manhattan. Only 9 percent of the industrial market in Brooklyn is Class A, a very low figure. With the way retail has been changing, the industrial market can’t keep up with demand for product supply to high-density residential populations,” said Rico Murtha, a director of leasing at Cushman & Wakefield. The average age of industrial stock in the boroughs is 70 years old, according to the firm’s data.


Wildflower's Brooklyn Logistics Center project features mirror-image buildings. Illustration: Wildflower
“Multistory developments are swinging for the fences, looking for e-commerce/tech-type companies to take large 100,000-square-foot-plus blocks of space. What is so unique about this site is that it is in line with the traditional industrial market product, but it is brand-new. It is a traditional type of warehouse with off-street parking and loading that doesn’t exist in the outer boroughs. The scale of 200,000 square feet is also not available and makes it stand out, but even more so because the buildings are designed to be flexible and can be divided into spaces as small as 40,000 square feet,” said Cushman & Wakefield Managing Director Frank Liggio, who is working with Rico on leasing.

Meanwhile in Queens, a 300,000-square-foot, three-level logistics warehouse is rising from a three-acre plot also near JFK airport. Joint-venture partners Triangle Equities, L&B Realty Partners and Township Capital are building the project, dubbed Terminal Logistics Center, at 130-24 S. Conduit Ave., and expect it to be ready for tenants in 2020.
“We’ve wanted to invest in this type of venture for some time because of what we saw happening in New York City," said Josh Weingarten, director of capital markets at Triangle. "For years, New York City industrial in the boroughs has been rezoned to residential. The remaining industrial product is very old; it doesn’t have the features a modern logistics occupier wants," he said.

Possible tenants for the property include third-party logistics firms, business-to-business freight forwarders that move cargo through JFK to manufacturers, and businesses that support JFK, according to Weingarten.

"There is an incredible lack of supply of warehouse/fulfillment space while every year more retail is happening through e-commerce. So it’s this perfect storm," he said.

Also in Queens, New York-based landlord RXR Realty is stepping up its e-commerce pursuits with Grand Logistics Center, a 770,000-square-foot industrial site that will stand three to four stories as one of the largest warehouses under construction in the city.

RXR is working with national warehouse developer LBA Logistics on the project, which seeks to appeal to retailers’ need for supply-chain speed – it will encompass 84 doors, 32 truck stalls, staging areas, office space and secure parking lots. Trucks will be able to load directly from the first, second and third floors.

And in the Bronx, commercial real estate investment into new industrial product has been snowballing since 2018, as big names such as financier Square Mile Capital, Innovo and Prologis pursue development of modern, multistory industrial properties that brokers expect to achieve high-water marks for rent in the area. Most recently, Square Mile Capital made another industrial purchase, teaming with Himmel + Meringoff Properties to purchase a low-rise Bronx industrial property at 1601 Bronxdale Ave. for $89 million.

The partners will modernize the space as part of a new acquisition program targeting mixed-use and industrial properties. The partnership “intends to take advantage of increased local market demand for distribution facilities,” Square Mile Capital Chief Executive Craig Solomon said in a statement.
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Easton Coach Co. Inks Deal in Cherry Hill, New Jersey

by Johanna Jordan Costar.com
Transit services company Easton Coach Co. leased 47,670 square feet at Hillside Plastics' industrial building in Cherry Hill, New Jersey.

The 85,797-square-foot, single-story structure at 1941 Old Cuthbert Road comprises nine loading docks and levelators, one drive-in bay, 29- by 80-foot column spacing and a 27-foot clear ceiling height. Built in 1969 and renovated in 2000, the property spans 10 acres less than 11 miles from downtown Philadelphia.
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Liberty Property Trust Doubles its Money on Center City Medical Office Tower

by John Jordan Globest.com
Liberty Property Trust has sold a medical office building in Center City it developed six years ago, for just under $100 million, more than double what it cost to build the property.

The Wayne, PA-based firm sold 800 Walnut St., a 12-story 153,242-square-foot medical office building for $99.25 million to the University of Pennsylvania Health System. Liberty Property Trust developed the medical office tower in 2013 for $48.5 million.
The University of Pennsylvania Health System’s Penn Medicine Washington Square occupies the entire building. Penn Medicine Washington Square is home to more than 100 health care providers from a wide range of services, including cardiology, otorhinolaryngology (ear, nose and throat), primary care, surgery, urology, women’s health and more.

The “green” building features energy efficient heating and cooling, optimized day lighting, extensive recycling and storm water retention through a “green roof” terrace.
The University of Pennsylvania Health System could not be reached for comment at press time.

Liberty Property Trust reports it used a portion of the sales proceeds at closing to repay $35.9 million of mortgage debt encumbering the property and, consequently, will realize a loss on early extinguishment of debt of $7.6 million, or $0.05 per diluted share, in the second quarter of 2019. The debt extinguishment charge was not included in the company’s previously announced earnings guidance for 2019. The secured loan carried an interest rate of 4.84% and was scheduled to mature in 2033.

Earlier this year, Liberty Property Trust added to its Central New Jersey portfolio with the sale-leaseback acquisition of 75 Ethel Road in Edison, NJ for $12.2 million. The 101,454 square foot building features a 22-foot clear height and is strategically located along I-287 near Exit 10 of the New Jersey Turnpike.
Liberty also purchased 115 Moonachie Avenue, a “last-mile” property, in the Meadowlands for $39.6 million. The 168,800-square-foot multi-tenant building is 100% leased and features 28-foot clear height. It is immediately adjacent to three buildings Liberty previously acquired in two separate transactions in the Meadowlands.

Liberty Property Trust has been engaged in a strategy of exiting the commercial office sector and concentrating on the development, acquisition, ownership and management of superior logistics, warehouse, manufacturing, and R&D facilities in key markets in the United States and the United Kingdom. Liberty’s 108-million-square-foot operating portfolio services 1,200 tenants.
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Thursday, July 4, 2019

King of Prussia apartment complex sells for $108M

By Natalie Kostelni  – Reporter, Philadelphia Business Journal

UDR Inc. has acquired Park Square, a 313-unit apartment complex that opened last year in King of Prussia, for $108.5 million, or for $346,600 a unit.

While not reaching the per square foot prices that some Center City properties are getting, the sale price for Park Square is an encouraging sign for those worried the suburbs — particularly King of Prussia — were getting overbuilt with apartments. That may yet still be the case, but strong sales prices indicate that the units being built are getting filled, rents are being paid and properties are stabilizing.

There are 9,314 apartment units in various stages of construction or planning throughout the Philadelphia suburbs, according to a first quarter Berkadia report. Of those, two projects — the Smith at 580 S. Goddard Blvd. and Skye 750 at 750 Moore Road — are in King of Prussia. Between them, they have 568 units that are in the lease-up phase. Other projects planned for King of Prussia include Hanover Village (390 units) and two projects on Renaissance Boulevard (nearly 600 units), according to the report.

King of Prussia isn't alone seeing an abundance of new apartments. Malvern, Exton, Collegeville, Cherry Hill, N.J., and Marlton, N.J., are among the suburban communities where developers have either started or are planning new multifamily construction. In Kennett Square, High Real Estate Group recently broke ground on a $30 million apartment development called the Flats at Kennett. The 175-unit project is being built on 14.4 acres at 603 Millers Hill Rd. It will consist of three buildings totaling 230,000 square feet.

"We saw a specific gap in demand where there was no new apartment supply built in Kennett Square in recent years. We saw an opportunity and growing demand for an upscale project," said Brad Mowbray of High Associates Ltd. "We believe this will cater to growing demand in the millennial market and those downsizing."
Full story: https://tinyurl.com/yxhh9uoo
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Tuesday, July 2, 2019

Relative Properties Scoop Up Riverwalk at Millennium

Long Wharf Capital and Sully Co. have sold the Riverwalk at Millennium multifamily development here to Bryn Mawr, PA-based Relative Properties.

The joint venture partners acquired the 375-unit transit-oriented development in 2015 for approximately $81 million, according to multiple published reports. The property previously traded a decade earlier when an affiliate of JP Morgan purchased the property for $87.5 million, according to a report in the Philadelphia Business Journal.
Long Wharf Capital is based in Boston and Scully Co. is headquartered in Jenkintown, PA.

Relative Properties’ purchase of the property purchased the property with Long Wharf and Scully Co. in 2015 and arranged both the joint venture partnership between the two and acquisition financing in that deal.
In the latest trade,  Relative Properties to placed the fixed-rate acquisition loan through Freddie Mac. A Freddie Mac Multifamily Approved Lender for Conventional Loans. No financial terms of the transaction were disclosed.

Originally constructed in 2005, 189 units were rebuilt in 2010 after a construction fire at an adjacent property burned down two of the property’s four buildings.
Riverwalk at Millennium is situated on 7.89 acres at 309 Washington St. in Conshohocken, a suburb northwest of Philadelphia that borders the Schuylkill River.

The Schuylkill River Trail, which is used for running and biking along the river between Valley Forge and Center City, is directly behind the property. The four-story buildings sit above single-story parking garages and house a diverse blend of one- and two-bedroom units with contemporary floor plans averaging 923 square feet. Units also feature ceilings at least nine feet high, plank flooring, full-sized washer/dryers and six-foot windows. Community amenities include controlled access, a modern clubhouse with fireplace, a resort-style pool with sundeck and grill area and a contemporary fitness center with an on-demand fitness studio.
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Tight Labor Market Favors Apartment Rent Growth, but Limits Office Tenant Expansions

Chart: CoStar Market Analytics
Philadelphia's Unemployment Rate Falls to 30-Year Low
After another month of job growth, Philadelphia's economy has reached an important milestone. The metro area’s unemployment rate fell to 3.1% in May, the lowest level of unemployment recorded in Philadelphia since the Bureau of Labor Statistics (BLS) began publishing the figure in 1990.

For local commercial real estate markets, current record-low unemployment represents both a blessing and a potential risk.

On the positive side, it reflects how Philadelphia’s economy is clearly stronger than it was 10, 20, or even 30 years ago. The healthcare sector has powered this transformation, growing its employee count by 25% – or over 100,000 local jobs – since the end of the last recession 10 years ago.

With available workers in short supply, competition for new recruits is forcing companies to raise wages across industries and not just for the highest paid positions.

At least five local health systems have announced plans to raise their minimum wage since late 2018. The BLS also reported that average hourly wages across all sectors grew by 3.6% last year. Pay increases like these have supported rent growth over 3% among Philadelphia’s workforce housing rentals.

But the lower Philadelphia’s unemployment rate goes, the harder it will become for local companies to find the employees they need, making it more difficult for businesses to grow and less likely that they will expand their real estate footprints.

At 1.2% year-over-year, Philadelphia’s pace of job growth has already slowed to about two-thirds of the pace recorded in 2014 to 2015, when available workers were easier for companies to find. In line with that trend, the pace at which local office tenants are expanding their square footage has also slowed in the past three to four years.

Philadelphia’s tight labor market will likely persist into next year. Under this scenario, wage gains should continue to support accelerated rent growth in workforce housing rentals while slowing job gains keep a lid on office tenant expansions.

Office tenants may not be growing aggressively, but they will likely continue to put increased emphasis on leasing high-end space to help recruit and retain employees, as it is becoming increasingly costly to lose them.
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Monday, July 1, 2019

KBS to Unload 11 US Office Buildings Into New Singapore REIT

KBS Realty Advisors has priced the initial public offering of a new Singapore real estate investment trust, Prime US REIT, that will acquire 11 U.S. office buildings from KBS' U.S. nontraded REIT, KBS Real Estate Investment Trust III.

Priced at 88 cents per unit, Prime US REIT is set to raise more than $612 million. It’s poised to become the largest REIT controlled by a U.S. company to trade on the Singapore stock exchange and the third since April.

KBS Realty Advisors plans to purchase an equity interest of about $200 million. The transaction is scheduled to close this month.

Prime US REIT has agreed to pay $1.2 billion for the 11 office properties in nine states. The portfolio totals 3.41 million square feet:


  • 101 S. Hanley Road, St. Louis
  • 171 17th St. NW, Atlanta
  • 222 S. Main St., Salt Lake City
  • CrossPoint at Valley Forge, Wayne, Pennsylvania
  • One Washingtonian Center, Gaithersburg, Maryland
  • Promenade I and Promenade II at Eilan, San Antonio
  • Reston Square, Reston, Virginia
  • Tower I at Emeryville, Emeryville, California
  • Tower on Lake Carolyn, Irving, Texas
  • Village Center Station I, Greenwood Village, Colorado
  • Village Center Station II, Greenwood Village, Colorado

In a filing with the U.S. Securities and Exchange Commission, KBS III said, "The company believes that the Singapore transaction presents an excellent opportunity to monetize the 11 stabilized properties that comprise the portfolio at attractive pricing."

Additionally, it said it would avoid significant third-party closing costs by selling the portfolio to a single buyer compared to potentially selling the assets in multiple sales transactions to various buyers.

KBS III expects to distribute a substantial portion of the net proceeds to its stockholders and to pay down debt.

The sale will leave KBS III with a portfolio of about 17 office properties.

Going forward, KBS Realty Advisors said that potential asset acquisition opportunities would go first to Prime US REIT if they meet the following criteria: a Class A office building with a purchase price of at least $125 million and occupancy of at least 90% for the first two years based on contractual in-place leases.

Prime US REIT will be the third U.S. property REIT to launch in Singapore. Last month, Eagle Hospitality REIT Management completed the IPO of Eagle Hospitality Trust, an offering that raised about $566 million. The REIT used the proceeds from the offering to complete the $1.11 billion acquisition of the portfolio.

In April, ARA US Hospitality Trust priced the IPO of its 38 Hyatt select-service U.S. hotels, raising about $498 million.
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Real estate sector leads S&P 500 (Video)

Real estate sector leads S&P 500 from CNBC.

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Big story in real estate is all about yield (Video)

Marcus & Millichap CEO: Big story in real estate is all about yield from CNBC.

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Top 10 Issues Affecting Real Estate Part 1 (Video)

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Global Medical REIT Sees “Tremendous Growth” Ahead for Health Care Industry (Video)

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Medical Office and Campus Design Trends (Video)

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Friday, June 28, 2019

BET Investments Sells 95% Leased Marchwood Apartments in Exton, PA to Morgan Properties

Local investment firm Morgan Properties acquired the 504-unit Marchwood Apartments in Exton, Pennsylvania, from BET Investments for $82 million, or about $163,000 per unit.

The garden-style community at 105 Coach Lane comprises a mix of one-, two- and three-bedroom units ranging from 810 to 1,300 square feet in 40, two-story buildings. Built in 1973, the 95% occupied property spans 43.6 acres less than 30 miles from Philadelphia International Airport.

Morgan Properties President Jonathan Morgan said in a statement, "We are bullish on the suburban Philadelphia market. We look for Class B properties with a value-add component and saw this as a nice opportunity to further expand our suburban Philadelphia assets."

He also mentioned that they had a pre-existing relationship with the seller, making for a smooth transaction.

In March, Morgan Properties acquired a 10-property multifamily portfolio from Lonestar known as the Home Properties Portfolio for $890.5 million. Seven of the communities were located in Pennsylvania while the other three were in Northern Virginia. The firm owns and operates more than 167 multifamily apartment communities and over 51,000 units across the Mid-Atlantic, Nashville and Northeastern United States, according to its website.
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The Galman Group Buys Studio Green, Park Place Complexes for $40.96 Million

Local investment firm The Galman Group purchased the 338-unit Studio Green and the 276-unit Park Place multifamily complexes in Newark, Delaware, from Houston-based Campus Living Villages for $40.96 million, or about $67,000 per unit.

The Studio Green student housing community at 91 Thorn Lane will be converted to apartment units named Thorn Flats. Built in 1965, the property comprises a mix of studio to four-bedroom units ranging from 484 to 1,507 square feet in 59, three-story buildings.

The garden-style Park Place complex at 650 Lehigh Road features a mix of one- and two-bedroom units ranging from 601 to 1,033 square feet in 23, three-story buildings. The Class B property spans 5.2 acres and was built in 1965.
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Thursday, June 27, 2019

Innovative Hospitality Management Buys Hotel Near Hersheypark

Local investment firm Innovative Hospitality Management purchased the 110-room Hampton Inn & Suites in Hershey, Pennsylvania, from New York-based The Blackstone Group.

The three-story hotel at 749 E. Chocolate Ave. was built in 1999. The Class B property spans 2.2 acres less than a mile from Hersheypark.

Ketan Patel and Kevin Hanley with HREC Investment Advisors represented the seller, which originally purchased the property as part of a portfolio in December 2013, CoStar data shows.

Greg Porter at HREC Capital Markets Group led purchase financing. The non-recourse acquisition loan was sized to 72.6% of the purchase price plus budgeted PIP cost and 71.5% of the property’s post-PIP value and has a 10-year fixed rate of 4.35% and 30-year amortization.
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W.P. Carey Shows Appetite for Industrial Properties with Latest Deals

New York real estate investment trust W.P. Carey announced it paid $53 million for a variety of industrial buildings around the country in a sign that industrial properties are prime investment targets.

Sales of industrial buildings remain strong, though a bit off from a record selling last half of 2018, which was driven by big investors merging and acquiring one another. The report noted that “strong price appreciation has mirrored rent growth.”

Two of the properties W.P. Carey recently bought house operations for a company that basically provides the products that turn warehouses into distribution centers. It paid $10 million for a building in Westerville, Ohio, and another in North Wales, Pennsylvania, that are leased to Integrated Warehouse Solutions. The Forth Worth-based company is a roll up of three companies -- Bluff Manufacturing, Nordock and Wesco Industrial Products.

All of the deals involve the owners selling the properties and leasing them back. They include triple-net leases in which the tenant pays for more of the property’s operating expenses. The deal with IWS came with a 20-year lease.

W.P. Carey’s largest latest deal, $24 million, included eight production buildings in the United States and in Mexico from “a leading global manufacturer of electrical wire harnesses, control boxes and other value-added components for a diverse customer base.”

The buildings make up a “significant portion” of the undisclosed company’s North American manufacturing operations. W.P. Carey also has 20-year leases on those buildings.

Its third deal cost the REIT $19 million to acquire a 301,000-square-foot building in Statesville, North Carolina, leased to Front Sport Group, a company that owns athletic apparel brands Badger Sport and Alleson Athletic.

Earlier this year, W.P. Carey bought a fully leased food production plant in an undisclosed location for $44.7 million. It also paid $38 million for a distribution center leased to Memphis-based Orgill, a wholesale supplier to independent hardware stores, at 4925 Tablers Station Road in Inwood, West Virginia.
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Here's Where US Apartments Are Heading

by Lou Hirsh Costar
Apartment developers are experimenting with new and niche styles, amenities and features to keep project pipelines flowing and new buildings filled with renters, almost a decade into a national economic expansion that propelled the U.S. multifamily market to new heights.

Some developers are doubling down on luxury amenities in large floor plans, while others are emulating the so-called sharing economy with "micro" units built around shared living spaces. Some seek to create quiet getaways, and some meld their projects into larger mixed-use entertainment districts, increasingly tied to professional sports venues, or put them closer to public transit.

Based on input from CoStar analysts nationwide, and in no particular order, here are five apartment projects showing how developers are aiming to serve diverse customer priorities, while dealing with rising costs and other factors challenging their ability to get affordable new housing built.

Dwell at 2nd Street, Philadelphia (Developer: Klein Company)

Developer Klein Co. is betting on the prefab movement to help control costs at its newest project, a 320-unit complex (shown above) in Philadelphia’s emerging Olde Kensington neighborhood. Most of its apartments will be built from modular units prefabricated off-site, according to the developer.

Business consulting firm McKinsey & Co. reports that modular construction in the United States has accelerated project completion timeliness by 20 to 50%, while reducing construction costs by 20% or more. The practice is still relatively uncommon in the apartment industry but could soon show up more often in some markets.

"Philadelphia has some of the highest construction costs of any major U.S. market, and the modular approach is being used to expedite construction time and lower development costs," said Adrian Ponsen, a Philadelphia-based director of analytics for CoStar Group. "You’ll see more projects like these as developers look for innovative ways to maintain their returns in the face of rising construction costs over the long term."

Little has been announced about amenities at the site, which is scheduled to be completed in early 2020.

CitySpaces 500 Kirkham, Oakland, California (Developer: Panoramic Interests)

Higher-density, transit-friendly projects have steadily gained traction in major cities. CitySpaces takes the trend further. Tiny units help to create this massive 1,032-unit "micro-pad" apartment community on three acres in Oakland, California, by Panoramic Interests. The developer’s website notes that its trademarked MicroPad concept is a 160-square-foot, self-contained dwelling with a private bathroom and kitchenette.

The project, which is currently in entitlement phases, is designed to include three buildings made of steel modular units constructed off-site and assembled in place. Plans call for 59 parking spaces to be devoted to car-share services like Zipcar, and the development is adjacent to West Oakland BART station.

Units are stacked to create buildings up to 12 stories tall.

City Club Apartments, Minneapolis (Developer: City Club Apartments LLC)

City Club Apartments in Minneapolis provide an opportunity for residents to stay on the property and grow their accommodations as their financial or life situations change over time, offering a mini-pad for single residents and larger units for growing families.

Set for completion next month, the project is expected to bring the micro-unit concept to a downtown setting, targeting recent college graduates and other young renters. The site comprises 307 units, with about half of those measuring 407 square feet or less. The smallest units are around 360 square feet.

Notably, the complex is designed to have 100 units with one and two bedrooms to accommodate tenants who might eventually want to move beyond the base-sized unit to more roomy accommodations, said Michael Roessle, director of market analytics CoStar Group in Minneapolis.

The project is designed to have 24-hour amenities including a fitness center, conference and business center, and concierge services, outdoor pool, indoor and outdoor theaters and on-site restaurant.

There will be no parking, as many young renters in the urban core don’t own a car and prefer biking and ride-sharing to get to work at several large nearby employers.

Ten Thousand, Los Angeles (Developer: Crescent Heights)

From robot butlers to dog spas, the ultimate in luxury amenities are showcased at this Los Angeles apartment high-rise, which could influence other nearby developers to compete more lavishly for the same high-spending customers.

Opened in 2017 and a potential tone-setter for future surrounding projects, this 40-story tower has drawn national media attention as an example of ultra-high luxury, in a city that has no shortage of conspicuously posh housing arrangements. Located on the border of L.A.’s Century City and the city of Beverly Hills, it has two-bedroom units going for between $10,000 and $30,000 per month, with some penthouses going for double that higher-end figure.

Other developers with similar clientele could be looking to keep up with high-touch services that have included on-site space for botox treatments. The developer’s website points to features including a dog spa, a cold-storage package delivery facility for perishable items and a robot butler named Charley that delivers mini-bar items to residents.

Twelve Cowboys Way, Frisco, Texas (Developer: Columbus Realty Partners)

Renters can live, work and play all on the same property in this Texas development, with "play" in this instance referencing the growing trend of professional sports teams entering the commercial development arena to interact with fans well beyond game times.

Among the latest examples of teams getting into the field of apartment and mixed-use development near their facilities, this 17-story luxury tower is scheduled to open in 2020 next to the suburban headquarters of the National Football League’s Dallas Cowboys.

The project is spearheaded by a group that includes the Cowboys’ Hall-of-Fame former quarterback Roger Staubach, former Cowboys player Robert Shaw and current Cowboys owner Jerry Jones. With rents expected to begin at $2,700 per month, it’s been billed as the first luxury development catering to those Cowboys football diehards, with amenities including exclusive access to certain team facilities.
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DePaul Healthcare Sells Senior Living Properties in New Jersey, Philadelphia

A New Jersey chain of senior assisted living facilities has sold three of its properties, one in the Garden State and two in Philadelphia, according to the broker on the deal.

DePaul Healthcare of Sewell, New Jersey, sold the portfolio to Paramount Health Resources, based in McMurray, Pennsylvania, for an undisclosed sum, according to CoStar data.

The three facilities inlcuded in the sale are:


  • Absecon Pavilion, which has 162 beds at 1020 Pitney Road in Absecon, New Jersey;
  • Angela Jane Pavilion, a 49-bed home at 8410 Roosevelt Blvd. in Philadelphia;
  • River’s Edge Nursing and Rehabilitation Center, which has 120 beds at 9501 State Road in Philadelphia.

The DePaul family, built and owned the communities for decades. At the time of the sale, the three facilities were operating at break-even, but Paramount plans to implement better marketing and services while "simultaneously creating staffing efficiencies, all of which will increase earnings," according to IPA.

Paramount – which owns and operates senior living facilities in New York, New Jersey, Pennsylvania and Maryland – completed the financing and closed the deal with the assistance of Lazmor Capital and Ziegler Investment Banking.

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Metrix-Penwood JV Begins Construction on New Distribution Facility in Lawrenceville

by John Jordan Globest.com
A joint venture of Princeton, NJ Metrix Real Estate Services, LLC and Penwood Real Estate Investment Management, LLC of West Hartford, CT has acquired a 31-acre site here and started construction on a more than 340,000-square-foot distribution facility here.

The joint venture between Metrix Real Estate Services, whose principal is Michael Nachamkin, and an institutional fund managed by Penwood Real Estate Investment Management recently closed on the purchase of 10 Princess Road in Lawrenceville.
Brokers-Simone Realty represented the seller, Capital Health Systems and Transwestern of New Jersey handled negotiations for the purchaser. No financial terms of the transaction were disclosed.

The partnership has since commenced construction on the speculative 10 Princess Logistics development, a 340,400-square-foot distribution facility with 40’ clear ceiling heights, cross loading, trailer storage and abundant parking.  The project is scheduled to be completed in the spring of 2020.
“Our development team is very excited about the opportunity to build a state- of- the- art warehouse in Central New Jersey with a great institutional partner,” says Nachamkin, principal of Metrix.

He adds, “We anticipate strong interest in the project from a variety of potential tenants who are planning their expansion or opening up a new location. 10 Princess Logistics Center is located at the Princeton Pike/ I-295 interchange and services Southern, Central and Northern New Jersey as well as the Philadelphia region.”
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Wednesday, June 26, 2019

Medical Office Building Cap Rates (Video)

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Endurance announces the signing of two leases totaling close to 300,000 SF at 2000 Bishops Gate

An affiliate of Endurance Real Estate Group, LLC (“Endurance”) and Thackeray Partners (“Thackeray”) is pleased to announce the signing of two leases with Maintenance Supply Headquarters (“MSH”) and Lean Supply Solutions (“LSS”) which brings the building to 100% occupancy.

“These two lease transactions raise the project’s occupancy to 100%. Achieving stabilization after completing our re-development of the building is a testament to tenant demand for functional, in-fill product in the Southern New Jersey market. We are excited Maintenance Supply chose to relocate their local operations to our facility and happy Lean Supply selected this location to support their expansion onto the East Coast.”

The 292,466 SF building was built in 1997 and renovated in 2018. It is equipped with an ESFR sprinkler system, LED lighting, 32’ clear height, 60’ concrete dock apron, 35 dock doors and 2 drive-in doors, and a 3-phase, 3,200 amp power system
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Friday, June 21, 2019

Rethinking Student Housing (Video)

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E-Commerce Demand Pushes US Warehouse Construction to Record Levels

by John Jordan Globest.com
Top-10 Markets for Speculative Warehouse Space Under Construction, Q1 2019. Source: CBRE Econometric Advisors, CBRE Research, Q1 2019
At the end of the first quarter of this year, warehouse construction in the United States reached an unprecedented 255 million square feet, driven in large part by e-commerce demand.

The top 10 warehouse markets were ranked with the Inland Empire, CA leading the way with 23.4 million square feet in the ground and a 3.2% vacancy rate and 9.4% annual rent growth, followed by Atlanta at 16.1 million square feet under construction, a 6.4% vacancy rate and 7.9% annual rent growth and Dallas /Fort Worth, TX at number three at 15.2 million square feet being built, a 5.9% vacancy rate and 3.1%% annual growth.
The New York/NJ and Pennsylvania markets have very active warehouse markets with a combined more than 19 million square feet under construction.

The PA/78/81 Corridor came in at number four in the US with 12.1 million square feet in the ground, a 6.7% vacancy rate and 4.9% annual rent growth.
Ranked at number seven, New York/New Jersey market has 7 million square feet under construction, a 3.4% vacancy rate and 4.8% annual rent growth.

Coming in at number five in the US was Houston at 10 million square feet under construction, a 5.8% vacancy rate and 4.1% annual rent growth.

The City of Chicago came in at number six with 7.7 million square feet being built at the moment, with a 6.0% vacancy rate and 2.9% annual rent growth.
Rounding at the top 10 were: Seattle at 6.1 million square feet in the ground, a 4.2% vacancy rate and 6.1% annual rent growth; Los Angeles with 5.6 million square feet in the ground, a 1.4% vacancy rate and 8.5% rent growth and Las Vegas, which has 5.5 million square feet being built, a 2.4% vacancy rate and 10.2% annual rent growth.

The US average vacancy rate is 4.4%.

Of the 255 million square feet of warehouse space under construction, 70.2% of it is on spec. Since 2015, however, warehouse demand has outpaced new warehouse completions by 169 million square feet and rents have increased by 19.2%.

Five of the top-10 markets for speculative development have market conditions that justify adding more big-box warehouses: vacancy rates below or slightly above the national average (4.4%) and aggregate net asking rent growth of 7.8% annually.

The remaining five markets were well above the national vacancy average and their aggregate rent growth averaged 4.6% due to more available supply.

With demand not likely to diminish, speculative big-box developments in those five markets are expected to lease up shortly after completion. E-commerce, food & beverage, wholesaler and third-party logistics users, which have dominated pre-leasing activity, are the best candidates to occupy these new modern warehouse facilities, they add.

Commenting on the New York/New Jersey industrial markets, “In Northern New Jersey, e-commerce continues to create a huge demand for new distribution space. As online grocery sales continue to grow and given the state’s prime location to major consumer markets and local ports, we anticipate the warehouse vacancy rate to remain low, while rents steadily increase.”
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Thursday, June 20, 2019

Tower Health, Drexel U. College of Medicine Break Ground on New Regional Campus

by John Jordan Globest.com
Construction has begun on a new four-year regional campus for the Drexel University College of Medicine at Tower Health here.

Drexel University College of Medicine at Tower Health, located on Parcel 9 of The Knitting Mills redevelopment, will feature state-of-the-art technology, as well as traditional classrooms, learning communities and lecture halls. The facility, located less than a mile from Reading Hospital, will include traditional and nontraditional instructional venues where students will advance their medical skills and education via simulated patient rooms, anatomy laboratories and simulation labs to promote interdisciplinary education with residents, physicians and nurses.
When fully operational, the campus will have capacity to educate and train 200 medical students. The new campus building will total 150,000 square feet, according to a report in Lehigh Valley Business.

Tower Health and Drexel University held a groundbreaking ceremony on June 17 for the new project. No development cost for the project was disclosed.
Clint Matthews, Tower Health President and CEO, said of the new campus initiative, “Tower Health is focused on taking care of all the communities we serve. Our collaboration with Drexel University further enhances our ongoing commitment to our academic mission by educating the physicians of tomorrow while also having a positive economic impact in Berks County.”

At the new building, students will have access to a fitness center with indoor and outdoor recreation space, Information Commons (Library), lounge areas, a game room and café.

Drexel University states that its medical students will benefit from the addition of a new regional campus in an area that is experiencing economic growth, while studying medicine at the largest hospital between Philadelphia and Pittsburgh. “Our relationship with Tower Health and this four-year regional campus creates an excellent destination for our medical students to build the emerging skills required by today’s physicians to meet the ever-growing needs within health care,” said Drexel University president John Fry.
Tower Health and Drexel University first announced plans to develop a regional campus near Reading Hospital in April 2018. Parcel 9 of The Knitting Mills was selected as the future home of Drexel University College of Medicine at Tower Health in October 2018. A 20-year academic agreement was signed between the two organizations in February 2019, and on May 29, 2019, 20, third-year medical students began their core clinical rotations at Reading Hospital.

With more than 12,000 team members, Tower Health consists of Reading Hospital in West Reading; Brandywine Hospital in Coatesville; Chestnut Hill Hospital in Philadelphia; Jennersville Hospital in West Grove; Phoenixville Hospital in Phoenixville and Pottstown Hospital in Pottstown. It also includes Reading Hospital Rehabilitation at Wyomissing; Reading Hospital School of Health Sciences in West Reading; home healthcare services provided by Tower Health at Home; and a network of 22 urgent care facilities across the Tower Health service area. Tower Health offers a connected network of 2,000 physicians, specialists and providers across 125 locations.
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Wednesday, June 19, 2019

Private REITs vs Public REITs (Video)

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WeWork to Open Fifth Location in Philadelphia

Shared office space provider WeWork has signed a 50,514-square-foot lease  Class A office building in Philadelphia.

The eight-story building at 1100 Ludlow St. in Philadelphia’s East Market development totals 227,313 square feet. Built in 1920, the landlords recently tapped Morris Adjmi and BLT Architects to transform and improve the facade of the facility.

The modernized exterior features Adjmi’s signature grid design, and the "post-industrial style" emulated in the facade and interior is helping to create the dynamic urban neighborhood that will connect Midtown Village with the business district along Market Street. 1100 Ludlow is located in the heart of Philadelphia’s City Center with proximity to City Hall, Chinatown and public transportation.

WeWork’s lease includes the entire top two floors of the 4-Star building, which is the company's fifth location in the city. The coworking company is also located at 1000-1010 N Hancock St., 1430 Walnut St., 1601 Market St. and 1900 Market St. 
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CyrusOne CEO Sees 5G Generating Data Center Construction Demand for Next Decade (Video)

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Student Housing Performance Update with RealPage (Video)

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Tuesday, June 18, 2019

Monthly Economic Outlook — June 2019 (Video)

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Ventas to Move Forward with $800M in New University-Based Research & Innovation Developments

by John Jordan Globest.com
Locally-based Ventas Inc. announced on Monday four new university-based research and innovation developments in partnership with Wexford Science & Technology, LLC of Baltimore valued at approximately $800 million.

The four Ventas-Wexford projects are located in Pittsburgh, Philadelphia and St. Louis and are part of Ventas’ near-term $1.5 billion R&I pipeline of expected new projects previously announced by Ventas.
The four projects include the development of a $280-million research, academic medicine and innovation hub anchored by University of Pittsburgh to house ground-breaking immunotherapy research in collaboration with the University of Pittsburgh Medical Center and co-located with UPMC’s Shadyside Hospital. The project totals 350,000 square feet and will house the Immune Transplant and Therapy Center.

The development is expected open in two phases, with the first and second phase expected to be completed in 2021. The full project is 70% pre-leased.

Ventas also reports two new projects in the City of Philadelphia. The first is a a new development that expands the Philadelphia uCity Square Knowledge Community associated with the University of Pennsylvania. Also in uCity Square, Vexel will develop a state of the art College of Nursing and Health Professionals for Drexel University. These two projects will total $400 million and 650,000 square feet.

Ventas expects the College of Nursing and Health Professions, Drexel University, to open in 2022. The firm anticipates that the Knowledge Community at uCity Square will open in early 2022. Ventas owns four buildings in the uCity sub-market that are nearly 100% leased.

The final project announced by Ventas calls for the expansion of the vibrant Cortex Innovation Community associated with Washington University in St. Louis. The $115-million, 320,000-square-foot development is located in the Cortex Innovation Community. The new development adds to Ventas’s Cortex R&I portfolio of four owned buildings totaling more than 700,000 square feet, which are nearly 100% occupied.
The projects are 40% pre-leased and are expected to generate more than a 7% cash yield, and over an 8% GAAP yield, upon stabilization.

Combined with a $77-million project announced in late February with Arizona State University, Ventas has now announced a total of $900 million in new projects that add approximately 1.5 million square feet to its portfolio.

“Ventas and Wexford are proud to partner with leading research universities, health systems, academic medical centers, life science companies and entrepreneurs in the creation of Knowledge Communities and innovation hubs. We are committed to collaborating with and supporting these world-class research institutions, pioneers in biomedical research, academic medicine leaders and innovators as they develop life-changing therapies, conduct groundbreaking scientific research, and train clinicians to improve the lives of millions of patients as the population rapidly ages,” says Debra A. Cafaro, Ventas chairman and CEO.

Ventas currently has relationships with more than 15 leading research universities in its R&I portfolio. Pro forma for announced developments, Ventas’s R&I portfolio will total nearly eight million square feet and is expected to generate approximately $230 million in annual net operating income upon stabilization of announced new developments.
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Monday, June 17, 2019

Cold storage warehouses spike in real estate value (Video)

Cold storage warehouses spike in real estate value from CNBC.

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Ventas CEO Points to Signs of “Powerful Upside” in Senior Living (Video)

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Chestnut Funds, Anchor Health Properties Sell Rittenhouse Square Facility

Chestnut Funds and Anchor Health Properties sold a Class B medical office building in the Rittenhouse Square submarket of Philadelphia to a private investor for an undisclosed price.

The 50,000-square-foot facility at 1740 South St. is adjacent to the Penn Medicine Rittenhouse campus, which comprises a 96-bed hospital, licensed through the Hospital of the University of Pennsylvania. Built in 1986 and renovated in 2010, the facility is 97% leased to a diverse mix of private physician groups.

"Philadelphia is home to one of the nation’s largest concentrations of healthcare and higher education institutions, including the adjacent UPenn Health System, the oldest health system in the country; and 9th top-ranked in 2018. Yet, relative to other U.S. cities, health systems own more of their outpatient real estate, leaving fewer ownership opportunities for medical office investors. This creates very strong demand for quality healthcare assets in and around Philadelphia when those opportunities sporadically arise," Appel said in a statement.
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Friday, June 14, 2019

June 2019 Economic Outlook - Commercial Real Estate (Video)

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Dranoff Breaks Ground on $253M Tower Project in Downtown Philadelphia

by John Jordan Globest.com
Dranoff Properties broke ground earlier this week on its latest project, a 47-story condominium tower located at Broad and Spruce streets, across from the Kimmel Center for the Performing Arts.

The $253-million Arthaus condo tower will feature 108 units, more than 36,000 square feet of amenities, including a rooftop greenhouse, and more than 4,200 square feet of ground floor retail.
Designed by Philadelphia-native Eugene Kohn of Kohn Pedersen Fox Associates, is scheduled for initial occupancy in the fall of 2021.

“Arthaus is a no-compromise, single-purpose tower that punctuates the Philadelphia skyline with luxurious living and unmatched amenities,” said Carl Dranoff, CEO, Dranoff Properties. “We are bringing Philadelphia something it has never seen before—a greenhouse with extraordinary outdoor amenities—we’re giving our residents their own park in the sky.”
Dranoff Properties groundbreaking event on Tuesday featured a host of dignitaries, including: Ed Rendell, former Governor of Pennsylvania; Philadelphia Mayor Jim Kenney; Eugene Kohn, founder and chairman of Kohn Pedersen Fox Associates; Councilman Mark Squilla and others.

“Carl Dranoff has a track record of reshaping and rejuvenating neighborhoods and cities,” said Philadelphia Mayor Jim Kenney. “For decades he has pioneered areas like Old City, Fitler Square and the Avenue of the Arts and transformed them into highly desirable residential destinations. A prominent skyscraper like Arthaus furthers his deep commitment to Philadelphia and solidifies our position as a world-class city.”

The building’s design was inspired by the Bauhaus movement—a period of architecture that stressed form and function over excess and decoration, the developer notes. The Arthaus tower will offer high ceilings, floor-to-ceiling windows, wide-plank oak flooring and oversized balconies with panoramic views from each corner unit, Dranoff Properties states.
Building amenities will include a 75-foot indoor lap pool and state-of-the-art fitness center overlooking the Kimmel Center, a library, board room, club room, a dining salon, café with demonstration kitchen and kids’ playroom. In addition, Arthaus will offer a 24-hour concierge, valet services and a chauffeur-driven town car.
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Dermody Adds Logistics Property in Central New Jersey

by John Jordan Globest.com
Dermody Properties has acquired 150 Milford Road, a more than 600,000-square-foot logistics building, here.

The Reno, NV-based private equity real estate investment, development and management company plans to undertake building upgrades that will make a total of 615,000 square feet ready for occupancy in 2020. No financial details of the transaction were disclosed.
The building, located on 51.49 acres, was originally built in 1998 with a warehouse expansion added in 2003. The building features 28 trailer parking positions, 413 car parking stalls, 41 dock doors, two drive-in doors and a 36-foot clear height in the warehouse addition, making it well-suited for e-commerce operations, Dermody states.

“This new acquisition fits well with Dermody Properties’ strategy to procure logistics real estate in key markets across the nation,” says Douglas A. Kiersey, Jr., president of Dermody Properties. “The asset provides an opportunity for our customers to grow their logistics network in one of the tightest submarkets in the country.”
The building is less than a mile away from the New Jersey Turnpike and Route 33 and is located within 45 miles of Newark Liberty International Airport, Port Newark and Port Elizabeth.

Eugene Preston, East Region partner for Dermody Properties, adds, “The building represents one of the largest blocks of available space in the Central New Jersey industrial market.”

Dermody has been active in the Pennsylvania/New Jersey industrial market of late. The deal for the East Windsor, NJ property comes less than a month after the firm broke ground on two buildings at a 557,820-square-foot complex located 80 miles from the Port of New York and New Jersey in Wind Gap, PA.
The firm’s LogistiCenter at Lehigh Valley East will be located at 450 East Moorestown Road in the Northampton County submarket. Construction of the first building is scheduled to be complete in the fourth quarter of 2019. The second building will be completed in early 2020.

Last month, Dermody Properties also announced that it recently broke ground on a 251,800-square-foot distribution center in the North Las Vegas submarket of southern Nevada. It will be located at 6565 Nascar St. on a 14-acre parcel and will be called LogistiCenter at Speedway. Dermody estimates that construction will be completed by first quarter of 2020.
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FCP Re-Enters Philadelphia With $118M Acquisition

by By Erika Morphy Globest.com
FCP has re-entered the Philadelphia market with the $117.9 million acquisition of a luxury high-rise apartment. The 286-unit property is called Edgewater and is located at 2323 Race St. in the Center City submarket. The sellers were institutional investors advised by J.P. Morgan Asset Management.

The purchase price includes excess land that can be developed, a stand-alone parking garage (in addition to parking beneath the building) and a revenue producing billboard along I-676.
The acquisition of Edgewater is FCP’s fourth Center City Philadelphia investment and its first deal in the city in a long time. Other investments, such as the adaptive re-use projects, The Arch and ICON 1616, both in the downtown market, have been exited.

The sale is indicative of the firm’s very active multifamily acquisition activity over the past 12 months with 4,766 units acquired throughout the US.
“Strong job growth, extraordinary walkability and the continued evolution of Center City into a complete live/work/play downtown make Philadelphia an attractive market,” said FCP Associate, Drew Schwartz in a prepared statement.

Schwartz said that FCP was able to close the transaction with all cash and didn’t obtain a loan.
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Hackensack Meridian Health to Build $714M Medical Pavilion

by John Jordan Globest.com
Officials with the Hackensack Meridian Health Hackensack University Medical Center unveiled plans on Thursday to build a new 530,000-square-foot state-of-the-art medical pavilion along Second Street here.

Construction on the $714-million project is expected to begin in 2022. The new pavilion that will total 438,000 square feet of usable space will feature nine floors of cutting-edge technology and a design to provide patients and families with world-class acute care, while enhancing comfort and privacy, Hackensack Meridian states.
“This large-scale, innovative project will truly transform the Hackensack University Medical Center campus, preparing us to effectively meet the growing needs of our patients and the communities we serve,” says Robert C. Garrett, FACHE, CEO of Hackensack Meridian Health. “As Bergen County’s first hospital and the largest provider of inpatient and outpatient services in the state, Hackensack University Medical Center has always been setting the standard for excellence in health care. This is a major investment to elevate our best-in-class health care services and modernize our facilities to ensure we are providing patients the world-class, cutting-edge care they deserve.”

Hackensack University Medical Center is the primary teaching site for the Hackensack Meridian School of Medicine at Seton Hall University.  Hackensack University Medical Center’s renovation, expansion and modernization plans will ensure its campus will be able to accommodate the growing needs of the region and continue operating at the highest standards. The new pavilion, which spans Second Street, will become the largest building on campus.
Hackensack University Medical Center is prioritizing the enhancement of the patient experience and states that it will privatize and modernize all of its patient rooms over the next 10 years. The new pavilion is the first step in that process and will feature 24 new operating rooms, new and improved Intensive Care Unit beds, as well as three floors of private patient rooms. In addition, the building will include: a new Second Street entrance/visitor lobby, a visitor center, a new central sterile processing department, 24 operating rooms including an intraoperative MRI, 50 ICU beds, shell space for an additional 25 ICUs, 100 medical-surgical beds and a 50 bed Orthopedic Institute.

Gordon N. Litwin, Esq., chair, Hackensack Meridian Health Board of Trustees, says, “This new pavilion will provide an enhanced patient experience, while preserving the privacy, respect and dignity our patients and families deserve. Our patients are at the heart of the work we do, and we will continue to pursue groundbreaking initiatives that advance the network’s world-class, patient- and family-centered care well into the future.”

RSC Architects of Hackensack is the lead architect and is partnered with EYP Architects of Houston. Stantec Consulting is providing project management services/owner’s representative services for the overall project. The W.M. Blanchard and Turner Construction Company have created a joint venture to provide construction management services for the project.
Hackensack University Medical Center is the largest employer in Bergen County with more than 8,000 employees. It will continue to maintain 781 beds even after the new pavilion project is completed.

Hackensack Meridian Health comprises 17 hospitals from Bergen to Ocean counties, which includes three academic medical centers—Hackensack University Medical Center in Hackensack, Jersey Shore University Medical Center in Neptune, JFK Medical Center in Edison; two children’s hospitals:  Joseph M. Sanzari Children’s Hospital in Hackensack, K. Hovnanian Children’s Hospital in Neptune; nine community hospitals: Ocean Medical Center in Brick, Riverview Medical Center in Red Bank, Mountainside Medical Center in Montclair, Palisades Medical Center in North Bergen, Raritan Bay Medical Center in Perth Amboy, Southern Ocean Medical Center in Manahawkin, Bayshore Medical Center in Holmdel, Raritan Bay Medical Center in Old Bridge, and Pascack Valley Medical Center in Westwood; a behavioral health hospital – Carrier Clinic in Belle Mead; and two rehabilitation hospitals – JFK Johnson Rehabilitation Institute in Edison and Shore Rehabilitation Institute in Brick.

The network has more than 500 patient care locations throughout New Jersey, which include ambulatory care centers, surgery centers, home health services, long-term care and assisted living communities, ambulance services, lifesaving air medical transportation, fitness and wellness centers, rehabilitation centers, urgent care centers and physician practice locations.
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Thursday, June 13, 2019

Alliance Partners Secures Financing for SoNo Project

Alliance Partners secured permanent financing for the leasehold interest in the SoNo building, a 186,000-square-foot, mixed-use property in Philadelphia.

The redeveloped project at 456 N. 5th St. is fully leased to three tenants including Yards Brewing Company, 70,000 square feet; City of Philadelphia's Archives Department, 68,000 square feet; and Target, 48,000 square feet.

"We are pleased to work with our client, Alliance Partners, on the refinancing of their SoNo development. The combination of an exceptional redevelopment, high-quality tenancy and strong sponsorship allowed for easy execution of this financing assignment."


Since inception in 2009, Alliance, the East Coast operating platform of The Shidler Group, has acquired, developed and redeveloped more than $1 billion of commercial properties with acquisition prices ranging from $5 million to $125 million, according to its website.
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Rutgers Begins Construction on Adult Autism Services' Facility in New Brunswick

by John Jordan Globeest.com
Rutgers University has announced the start of construction on its new Rutgers Center for Adult Autism Services building here.

A groundbreaking ceremony was held for the $9.5-million project on Monday. The university notes that the building, when completed next year, will be the first of its kind at a higher education institution in the United States. The new building will allow the center to more than double its capacity from 12 to 30 participants. The center, located on the Douglass Campus of Rutgers University-New Brunswick, is being financed by philanthropic funds.
“This center will have a lasting impact on the lives of adults with autism in New Jersey and across the country,” Rutgers President Robert L. Barchi said at the groundbreaking event.

The Rutgers Center for Adult Autism Services was founded in 2016 and serves adults with autism by providing meaningful, paid employment and integration into the Rutgers community. The new facility will include vocational and life skills teaching areas, high-tech meeting rooms and amenities intended to provide a welcoming environment for program participants and other members of the surrounding community, including Rutgers students, faculty and staff, the university states.
Mel Karmazin, the former CEO of Sirius XM Radio, was a key leader in fundraising for the project along with his daughter Dina Karmazin Elkins, executive director of the Mel Karmazin Foundation. Dina Karmazin’s son, Hunter, was diagnosed with autism at age two, and the Karmazin Foundation has been active in autism causes.

“What would be a better place to house a center that would create jobs for adults on the spectrum than a college campus?” Mel Karmazin said at the groundbreaking.

Christopher Manente, executive director of the center, says, “The RCAAS exists to stand for those adults on the spectrum who are not always able to stand up for themselves, and whenever possible it also exists to amplify the voices of those who can.”
He adds, “Today, I call on all of you to stand with us in opposition to the lack of awareness and the general indifference that the rest of the world continues to show in response to the crisis impacting adults with autism and their families. Today, I ask that all of you help us change the world.

Autism and autism spectrum disorder are among the fastest-growing developmental disabilities in the United States. Rutgers-New Brunswick’s Graduate School of Applied and Professional Psychology created the center to address the well-documented shortage of quality services that help adults with autism lead meaningful and productive lives, and to conduct research that can inform the development of other programs for adults with autism.

Rutgers-New Brunswick is a leader in autism research facilities. RUCDR Infinite Biologics, containing the world’s largest collection of autism biomaterials, and the Douglass Developmental Disabilities Center, which includes an on-campus K-12 day school for children with autism from across New Jersey, are among many research and educational programs for autism at the university.
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Wednesday, June 12, 2019

EPA Inks Deal at Four Penn Center Office Tower Philadelphia

Environmental Protection Agency leased 172,658 square feet at Treeview Real Estate Advisors' Four Penn Center office tower in Philadelphia.

The 4-Star, 522,050-square-foot building at 1600 John F Kennedy Blvd. spans three quarters of an acre across from Suburban Station. The 20-story structure was built in 1964 and renovated in 2001.

The EPA's 15-year lease encompasses six full floors at the Class A tower.
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Local Investment Firm Sells Park Square for $108.5 Million

Local investment firm CornerstoneTracy sold the 314-unit Park Square apartment complex in King of Prussia, Pennsylvania, to Highlands Ranch, Colorado-based UDR for $108.5 million, or about $346,000 per unit.

The Class A, mid-rise complex at 751 Vandenburg Blvd. comprises a mix of studio, one-, two- and three-bedroom floorplans ranging from 553 to 1,470 square feet in four, four-story buildings. Built by the seller in 2018, the 4-Star property spans 18.6 acres less than four miles from the Norristown Transportation Center.

The property was approximately 70% leased at the time of sale.
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Mixed-Use Strategies (Video)

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Brandywine Completes Community Park in Schuylkill Yards Development

by John Jordan Globest.com
Brandywine Realty Trust has completed Drexel Square, a new 1.3-acre community park, that will be part of its $3.5-billion master-planned Schuylkill Yards development in University City here.

The $14.3-million park, situated directly across from 30th Street Station at the corner of 30th and Market streets, is the first of several public green spaces that will eventually total 6.5-acres of the 14-acre Schuylkill Yards neighborhood. These greenspaces will connect 6.9 million square feet of workplace and lifestyle environments being master developed by Brandywine Realty Trust.
A host of city officials, including Philadelphia Mayor Jim Kenney, and other dignitaries were on hand for the grand opening of Drexel Square on Monday.

“We are thrilled to introduce a new park for the entire community to enjoy,” says Jerry Sweeney, president & CEO of Brandywine Realty Trust. “Schuylkill Yards is designed to create a neighborhood centered around human interaction and unique environments. Our investment in Drexel Square was the first project within the master-planned neighborhood because we understand the social, environmental, health and economic benefits that green spaces offer to communities. Drexel Square lays the foundation for what’s to come at Schuylkill Yards.”
Designed by West 8 and SHoP Architects, the park serves as the continuation of William Penn’s vision of Philadelphia’s “Public Room”—a place for people to gather, rest, and be renewed by the natural world, Brandywine states. Conceived as an intimate, natural space within the urban environment, Drexel Square provides a clear transition from the city to a lush enclave, with 23 Meta Sequoia (Dawn Redwood) trees standing more than 25 feet tall lining the perimeter. The trees are complimented by an array of shrubs and perennials in more than 9,000 square-feet of raised planted beds.

The elliptical green lawn, measuring more than 12,000 square feet, features an abstract graphic overlay evoking visions of the globe, while also serving as a pathway for visitors. The custom granite benches, outdoor furniture and built-in lighting features will create an inviting environment for all to enjoy.

“When we selected Brandywine as the master developer for Schuylkill Yards, we knew we found a partner who shared our values of quality and integrity for the built environment and public realm,” says John Fry, president of Drexel University. “The investment made in this park will serve the University City neighborhood and all those who enjoy it— from our local residents, students, employees, visitors and more— for generations to come.”
Drexel Square park sits directly in front of the Bulletin Building, which Brandywine will begin construction on this month in partnership with Philadelphia-based architecture firm, Kiernan Timberlake. Together, with Drexel Square, the $43.3-million re-imagination of the Bulletin Building will serve as the centerpiece of Schuylkill Yards. Brandywine and Timberlake will reshape the building into a high-performing work environment. The renovated building will feature more than 200,000 square feet of office space and 50,000 square feet of lab space, and is fully leased to life science company, Spark Therapeutics.

Following the opening of the reimagined Bulletin Building in early 2020, two ground-up developments are planned at 3001 and 3025 JFK Blvd. featuring office, retail and residential components. Drexel Square, The Bulletin Building, and the two “East” and “West” JFK towers are considered phase one of the multi- phase, master-planned interconnected neighborhood that will eventually host 14 acres of experiences unfolding within 6.9 million square feet of office, lab, residential, retail, hotel, and green space.

“This project isn’t just centered around one building,” said Philadelphia Mayor Kenney. “The Schuylkill Yards project is about the transformation of an entire neighborhood, and it’s impressive to see the growth of this neighborhood happening right before our eyes. This investment is a testament to the momentum Philadelphia has as a world-class city, and showcases the drive we have as Philadelphians to help this city thrive.”
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