Wednesday, October 27, 2021
Tuesday, October 26, 2021
Monday, October 25, 2021
Multibillion-Dollar Philadelphia Redevelopment Project Gets Dubbed ‘Bellwether District’
By Linda Moss CoStar News
The multibillion-dollar redevelopment of a former oil refinery site in Philadelphia, a project touted as what will be one of the largest and most strategically located U.S. logistics hubs, now has a moniker that reflects the times.
Developer HRP, formerly known as Hilco Redevelopment Partners, on Monday announced the 1,300-acre South Philadelphia property it acquired for $225.5 million in June 2020 will now be called the Bellwether District. The company, based in Chicago, purchased the site of the former Philadelphia Energy Solutions refinery at 3144 W. Passyunk Ave. in a bankruptcy auction.
"This is a poster child of environmental and social justice, let's call it that," Justin Dunn, HRP senior vice president of development, told CoStar News. "The amount of remediation, the amount of development that is going to go into this site — that was 150 years a refinery — and now turning that into an economic and environmental sustainable engine for this region I think is really, really powerful. And we're future-proofing this as much as possible, everything from the energy to the environmental, to the types of buildings, the types of life-science products. ... And those jobs are sustainable for generations to come."
HRP described the refinery as a symbol of the Industrial Revolution for more than a century in Philadelphia — and a factory that polluted its site. Now it has become the latest U.S. brownfield set to be transformed into a new kind of industrial use, mainly distribution, in an environmentally friendly fashion. HRP, the real estate development unit of Hilco Global, is spending hundreds of millions of dollars to decommission, demolish and clean up the property for actual construction, which is expected to start the end of 2022 or early 2023, according to Dunn.
HRP is removing 35,000 tons of asbestos, 850,000 barrels of hydrocarbons, 100 buildings, and 950 miles of pipe from the refinery.
The redevelopment of the Bellwether District is expected to take up to 15 years, "resulting in one of the largest and most strategically significant multi-modal logistics hubs in the country that leverages the site's unparalleled infrastructure and location," according to HRP. The parcel is within an eight-hour drive of one-third of the nation's population, the developer said.
The property encompasses 2% of the land mass of Philadelphia, will create an estimated 19,000 permanent jobs and aspires to be home to global leaders in e-commerce, logistics and life sciences. Roughly 10 million square feet of the project will be devoted to Class A industrial uses, according to Dunn, and 4 million to 5 million square feet is slated for life sciences firms.
Its full tenant roster will include e-commerce, warehouse and distribution companies, as well as light manufacturing, rail and marine operations at the site, in addition to life science, which will take up over 250 acres of the site.
Innovator Role
The Bellwether District name, with its tag line of “Next Starts Here,” was the end result of extensive research, according to HRP, "and reflects Philadelphia’s role as an innovator and achiever of many firsts for the country from the first library, hospital, and medical school to the birthplace of a new nation."
"A bellwether is really a meter or an indicator of trends," Melissa Schrock, HRP senior vice president of mixed-use development, said. "And we see the redevelopment of a very large piece of property as an indicator of what's to come in the future for Philadelphia, so that's why we selected this name."
There's already been inquiries from potentials tenants, according to Dunn.
"There's been a lot of interest in this site based on its location itself and its proximity to New York, the city, Philadelphia, New Jersey and that region," he said.
As part of the project four new city streets are being created, with two of them paying homage to historic Black Philadelphians: James Forten, a Philadelphia businessman and abolitionist, and Frances Harper, one of the first Black women to be published in the United States.
The new Bellwether District name will be featured on buses and various billboards on Interstate 95, Penrose Avenue, the Schuylkill Expressway and other major commuting routes.
Friday, October 22, 2021
Thursday, October 21, 2021
Wednesday, October 20, 2021
Investor Buys Amazon Facility Near Scranton
By Rachel Whaley CoStar Research
Preylock Holdings has purchased a recently built distribution center fully leased by Amazon in Jessup, Pennsylvania, a borough located about 7 miles from Scranton.
The Los Angeles-based investor acquired the 1.03 million-square-foot facility from a joint venture between Trammell Crow Co. and Diamond Realty Investments Inc., which developed the distribution center. Preylock paid $127.7 million for the facility, according to a Pennsylvania Department of Revenue realty transfer tax statement of value.
Located at 45 Valley View Drive, the joint venture broke ground on the speculative distribution center in November 2018 and wrapped-up construction on it in August 2020. The facility features a 40-foot clear height, 190-foot-deep truck courts with opposing trailer storage, ESFR fire protection, 311 trailer parking spots, 277 car parking spots and 159 dock positions.
The joint venture announced in March 2021 that it leased the entire facility to "a major ecommerce tenant," which was later reported to be Seattle-based retail giant Amazon. The distribution center serves as one of Amazon's XL facilities, where the company packs and ships large items such as mattresses, grills and exercise equipment, according to local media reports.
Tuesday, October 19, 2021
Monday, October 18, 2021
ASB and Endurance Joint Venture Acquire 1.5-Million-Square-Foot Industrial Complex in Central Pennsylvania for $90.96 Million
ASB Real Estate Investments (ASB) today announced the acquisition of a 1,525,000-square-foot industrial facility, York Business Center, located in York, PA for $90.96 million in a joint venture with Endurance Real Estate Group. ASB made the investment on behalf of its Allegiance Real Estate Fund, a $7.4 billion core vehicle.
The three-building warehouse facility is situated on 119 acres near the intersection of I-83 and Route 30 and located in the core of the Central Pennsylvania industrial market. This prime location provides easy access to exceptional highway infrastructure that places approximately 40% of the US population, six of the top 10 U.S. MSAs and 51% of the Canadian population within a one-day truck drive. In addition, companies are attracted to the Central Pennsylvania region for its ample blue-collar labor pool—236,000 working-aged people are within a 30-minute drive of York.
The property is 94.2% leased primarily to Harley-Davidson for just-in-time manufacturing and pre-assembly which supports the nearby Harley-Davidson York manufacturing plant, LSC Communications, a multinational commercial printing company, and WellSpan, a non-profit healthcare delivery company.
The two primary buildings in the complex—787,600 square feet and 686,000 square feet—feature up to 32-foot clear ceiling heights, ample column spacing and a combined dock ratio of one per 7,000 square feet. The overall site provides parking for 1,600 cars and 400 trailer spaces. The asset also includes 53,670 square feet of office space, that WellSpan utilizes as a mission critical operations center.
Brodie Ruland, ASB Managing Director and Co-Head of Acquisitions, said: “The York Business Center investment expands ASB’s industrial portfolio into a strategically important regional distribution and manufacturing corridor. We are continuing to grow and diversify our industrial portfolio across the country meeting the significantly increasing tenant demand for well-located assets that facilitate rapid delivery of parts, products, and consumer goods in and around the nation’s major population centers.”
ASB’s industrial nationwide portfolio, comprising nearly 10 million square feet of space, is 99% leased. The company has invested $1 billion in 17 industrial assets since 2018.
The investment is ASB’s fourth with Endurance Real Estate Group, a diversified real estate developer and management company in the Mid-Atlantic States. The joint venture bought the asset from Equity Industrial Partners.
UDR Acquires Apartment Complex in King of Prussia Suburbs Outside Philly
By Cara Smith-Tenta CoStar News
UDR Inc., one of the nation’s largest real estate investment trusts, has acquired an apartment complex in King of Prussia, Pennsylvania, outside Philadelphia.
The Denver-based REIT spent $115 million, or $370,968 per unit, on The Smith at Valley Forge, a 310-unit apartment complex at 580 S. Goddard Blvd. next door to the King of Prussia Town Center, according to CoStar research and UDR’s public filings.
Woodfield Development, a South Carolina-based development firm, sold the property and the property was 92.8% occupied at the time of sale, according to UDR’s filings.
In UDR's second-quarter earnings release, the company said it was under contract to close on an apartment complex in King of Prussia for $115 million.
UDR paid nearly twice the average price per unit that most buyers pay for Philadelphia apartments. The average multifamily property in the city trades for $192,000 per unit.
UDR is also developing The George Apartments, a 200-unit project at 140 Valley Green Lane on the other side of Goddard Boulevard, which should be complete in the third quarter of 2022, according to the company.
The outlook for Philadelphia’s suburban landlords is positive at the moment. Thanks to record completions of new apartment projects in 2020 and the pandemic’s shock to construction lending, the number of properties under construction in the city’s suburbs has been cut almost in half since late 2019.
That could translate to less demand — and therefore the ability to charge higher rents — for landlords in the suburbs in the coming years.
Friday, October 15, 2021
Thursday, October 14, 2021
Wednesday, October 13, 2021
Tilted 10 To Take Over Former J.C. Penney Space in Willow Grove Park
By Mannie Rivera CoStar Research
Paying homage to Willow Grove Park's roots as an amusement park, indoor family entertainment center Tilted 10 and Tilt Studio will be opening a new location in the former J.C. Penney space at the Montgomery County, Pennsylvania, mall in 2022.
The entertainment center, operated by Texas-based Nickels and Dimes Inc., will span two floors and occupy the entire 104,000-square-foot J.C. Penney space. Tilted 10's first location in the Philadelphia region is set to feature over 200 games and attractions, including a bowling alley, multi-level laser tag arena, black light mini golf course, bumper cars, virtual reality games, a pinball arcade, a prize redemption center and a restaurant.
The addition of Tilted 10 is part of a strategy by the mall's landlord, Pennsylvania Real Estate Investment Trust, to expand offerings at Willow Grove Park to meet the changing needs of today's consumer.
"PREIT continues to lead the charge in proactively transforming our properties to create sought-after community centerpieces that serve a multitude of purposes," Joseph F. Coradino, CEO of PREIT, said in a statement. "Tilt is a trusted partner across our portfolio, and we’re excited to bring this unique entertainment experience to the Philadelphia region."
Willow Grove Park was originally an amusement park that opened in the late 1890s. The park operated until the mid 1970s and was later converted into the Willow Grove Park Mall in 1982.
Friday, October 8, 2021
Tuesday, October 5, 2021
Northeast Philadelphia industrial building trades for $33.5M
Natalie Kostelni Reporter Philadelphia Business Journal
A 454,456-square-foot industrial building in Northeast Philadelphia has sold for $33.54 million after attracting a dozen offers.
A joint venture between two New York firms, Ajax Advisors and Brickman Associates, bought the property from Ivy Realty. The building at 11200 Roosevelt Blvd. sits on 25 acres and was fully occupied at the time of the sale to such tenants as Philadelphia Delivery Systems, IK Marketplace, Philadelphia Academy Charter School and Dependable Distribution Services.
Ivy Realty of Greenwich, Connecticut, bought the building in the fall of 2018 for $17.75 million.
Though some of its characteristics can be unattractive to investors — it was built in 1960, is adjacent to a shopping center, and a charter school is a tenant as is a cocoa bean distributor — it still garnered 12 offers.
Full story: https://tinyurl.com/2y6v44ea
Monday, October 4, 2021
GSK moving out of Philadelphia Navy Yard to smaller space at FMC Tower
Natalie Kostelni Reporter Philadelphia Business Journal
GlaxoSmithKline is relocating corporate operations now based at the Philadelphia Navy Yard into FMC Tower at Cira Centre South in University City, joining the University of Pennsylvania, Spark Therapeutics in the building and bringing it closer to one of the city's burgeoning life sciences hubs.
The global pharmaceutical company will be leasing 46,000 square feet at the skyscraper and shrink from 207,779 square feet it occupies at a four-story building at Five Crescent Drive at the Navy Yard. Prior to the pandemic, GSK had 660 employees working each day from the Navy Yard and it expects up to 330 employees to work from FMC Tower.
GSK (NYSE: GSK) will occupy floors 16 and 17 at FMC Tower that Brandywine Realty Trust has occupied for the last four years as its headquarters. Brandywine will relocate into space that had been occupied by Dechert, a law firm, in Cira Centre. Brandywine, which built and owns FMC Tower and Cira Centre, declined comment.
In 2011, GSK signed a 15-year lease on the Navy Yard building, which was designed for it, and completed its move there in early 2013. It was a big deal for the company when it decided to move to the South Philadelphia site and considered pioneering to relocate from offices it had been in for decades in Center City.
Along with its move to the Navy Yard, GSK redefined how office space was used and eschewed many of the traditional ways companies had used space. Gone were dedicated desks and cubicles and a hierarchy that designated expansive offices for executives that were located around the perimeter and often with the best views. Spaces at its Navy Yard building were designed to be open with some break out rooms for meetings and private conversations, and furniture was mobile and benching commonplace.
Many companies, viewing GSK as on the vanguard, mimicked the style of open office and space for employees on a per-square-foot basis shrunk and kept getting smaller. While there was growing backlash against open offices and smaller work spaces, the pandemic threw many of those design elements into question.
GSK expects to complete its move to FMC Tower early next year and, once it vacates the Navy Yard, will seek to sublease the space. Its lease runs until September 2028.
Five Crescent Drive was sold in 2018 for $130.5 million, or $628 a square foot, to an affiliate of Korea Investment Management Co. Ltd.
Full story: https://tinyurl.com/36x23wke
Friday, October 1, 2021
Dermody Properties Breaks Ground on 154-Acre Logistics Park in South Jersey
By Amber Valentine CoStar Research
Dermody Properties has broke ground on a 154-acre logistics park in South Jersey, a region where industrial space remains in high demand.
The three-building, 1.2 million square-foot logistics park, called LogistiCenter at Woolwich, is located at the intersection of Route 322 and Locke Avenue in Woolwich Township in Gloucester County. Dermody plans to make significant improvements to the intersection in conjunction with the development of the park.
LogistiCenter at Woolwich includes a 262,200-square-foot facility at 2062 U.S. Route 322, a 552,585-square-foot facility at 2120 U.S. Route 322 and a 336,700-square-foot building at 2057 U.S. Route 322. Each building is set to feature a 36- to 40-foot clear height, build-to-suit office space, ESFR fire protection systems, 50 to 110 dock-high doors, drive-in doors and ample trailer and car parking.
The logistics park is less than 2 miles from Interstate 295 and less than 3 miles from Interstate 95. Because of its proximity to Philadelphia and Wilmington, the park's direct highway will give tenants the ability to reach 33% of the U.S. population in a single day's drive and 3 million people within a 40-minute drive, Dermody said in a press release announcing the start of construction.
Demand for industrial space had been skyrocketing, driven by e-commerce, in New Jersey even before the pandemic last year. Stay-at-home orders and store closures at the onset of the coronavirus pandemic gave online buying another boost, and the need for logistics space exploded. But there is scant vacant space available to build such projects in North Jersey, so distribution and warehouses are being constructed farther south in the Garden State.
Gloucester County's industrial vacancy rate is 2.1%. Annual net absorption, which measures the difference between the sum of space tenants physically occupied and the sum of space tenants vacated over the past 12 months, sits at 2.5 million square feet.
"The region continues to attract top-tier companies looking for Class A warehouse space that has become too rare to find or too expensive in Central and Northern New Jersey," Rob Borny, partner at Dermody Properties, said in the press release. "We believe that Southern New Jersey will continue to flourish and we’re extremely grateful that our past success in the region has afforded us the opportunity to grow along with it."
