Wednesday, November 20, 2024
Spending on industrial property in Pennsylvania capital sets new record
By Brenda Nguyen CoStar Analytics
A Pennsylvania industrial real estate market experienced unprecedented growth in 2024, with year-to-date sales volume hitting $740.6 million.
This amount for the Harrisburg area is already more than double last year's total of $328.1 million, setting a new record for the market. Recent performance builds upon a decade of steady growth, transforming the region into a major Northeast distribution hub.
Over the past decade, industrial sales averaged over $330 million annually, notably outpacing office, retail and multifamily properties by significant margins.
The upward trajectory of industrial growth reflects Harrisburg's geographic advantages. Located at the intersection of major highways, including interstates 81 and 83, the region offers superior access to Northeast population centers while maintaining operating costs lower than primary markets.
The area's extensive transportation infrastructure, including Norfolk Southern's intermodal facility and major ports, also draws in national and international capital.
In August, EQT Exeter acquired Building 1 at Core5 in Middletown for $170.5 million. The single-tenant, 1.2 million-square-foot distribution facility built in 2023 was occupied by Amazon at the time of sale. The company's lease expires in October 2034.
And last month, EQT Exeter acquired a portfolio consisting of three buildings at Carlisle Distribution Center for $210 million. The two single-tenant buildings, constructed in 2006 and 2009, were fully occupied by decor retailer At Home and supply chain specialist Geodis. Meanwhile, the multitenant building was 55.5% leased at the time of the sale. This portfolio sale is Harrisburg’s largest industrial acquisition in history.
Recent sales volumes indicate a shift in market perception, with institutional investors increasingly viewing Harrisburg as a prime industrial market rather than a secondary location. The region's success in attracting major distribution facilities has created a network effect, drawing additional industrial users and investors to the market.
With year-to-date volume already exceeding the combined total of office, retail and multifamily sales, industrial has become the defining feature of Harrisburg's commercial real estate market.
National law firm fuels Philadelphia growth with office expansion
By Katie Burke CoStar News
National law firm Polsinelli is making good on its ambitious growth plans in the Philadelphia area with a deal to roughly double its office space to accommodate its expansion.
Within a few months of making its regional debut, the Kansas City, Missouri-based firm signed a deal to take over two floors at the Three Logan Square tower, Polsinelli confirmed. The expansion means it can grow its 60-person regional workforce to about 120 employees.
The long-term deal with Brandywine Realty Trust totals about 40,800 square feet across the 11th and 12th floors of the building at 1717 Arch St. Polsinelli earlier this summer made its debut in the Philadelphia area, where it has been working from about 21,650 square feet on a higher level within the more than 1 million-square-foot tower.
The firm's growth in the area meant it soon outgrew the space, and Polsinelli began looking for alternatives both within the Brandywine-owned building as well as elsewhere across the Philadelphia-based landlord's portfolio.
The law firm expects to shift to the expanded space by mid-2025 once finish-out work wraps up.
The legal industry collectively signed on for about 17 million square feet nationally in 2023, according to a recent Cushman & Wakefield report, an assertive rebound from the early years of the pandemic when law firms were pulling back on deals or hesitant to take on new space.
The burst of new leases has also pushed the legal sector to the forefront of the national office market as other industries remain wary about making long-term commitments to office space.
Legal boost
Law firms' emphasis on space in high-end buildings has helped prop up leasing activity across the United States, as many have prioritized office decisions in the nicest and newest properties.
Some major law firms have increasingly used office space as a tool to attract and retain talent, often moving into newer, higher-quality space in a boost to landlords of top-tier buildings. While some law firms have opted to reduce their real estate portfolios and hop to smaller spaces in newer properties, other firms have signed some of the country's largest deals in the past couple of years.
Law firms across the country "are expected to continue to be in the market for office space given their proclivity for in-office work and apprentice-based business model," according to the Cushman & Wakefield report.
Law firms accounted for roughly 9% of all office leasing activity last year in the country's largest legal markets, including Boston, Philadelphia, Chicago and Atlanta, according to Cushman & Wakefield. That's almost double the share that law firms accounted for in 2022.
For Brandywine, more than 60% of the new leases it signed in the third quarter account for what CEO Jerry Sweeney attributes to the "flight to quality" trend.
The landlord's Three Logan Square tower is already home to a party of law firms that have expanded to the downtown tower in recent years. National law firms Post & Schell, Barnes & Thornburg and Flaster Greenberg have all recently relocated to or expanded within the building, according to CoStar data.
Once it moves into its newly expanded space, Polsinelli will be one of the tower's largest tenants.
Tuesday, November 12, 2024
After Montgomery County debut, more Dill Dinkers indoor pickleball sites planned in region
By John George – Senior Reporter, Philadelphia Business Journal
The region's first Dill Dinkers pickleball complex officially opened its doors in Lansdale on Friday, and its operator said more clubs are on the horizon.
Andrew Wakefield, who with his father serves as regional developer of Dill Dinkers sites in Bucks, Chester and Montgomery counties, said he is hopeful their second location in Hatboro will open later this year, followed by additional outposts.
"We hope to add another three places next year," Wakefield said. "We've been out scouting sites, and we have some promising ones."
He declined to disclose exactly where they are looking for competitive reasons. Wakefield said the plan is to own and operate two of those planned pickleball centers and bring in a franchisee for the third.
The Wakefields added Bucks County to their territory earlier this year after originally obtaining the rights to Chester and Montgomery counties from Maryland-based Dill Dinkers.
Husband and wife Jim and Mia Cassady signed a deal to be Dill Dinkers regional developers for Delaware County and northern Delaware this summer.
The debut of the Wakefield's first Dill Dinkers site, which spans 37,000 square feet at Velocity Station at 1180 Church Road, comes several months later than initially expected. They had hoped to open the complex over the summer but ran into construction delays.
"Our customers have been pretty understanding," Wakefield said. "Construction delays happen in everything from pickleball centers to skyscrapers."
The Lansdale Dill Dinkers, created at what was once a Merck training facility, includes 11 indoor courts, a pro shop, event space that can accommodate up to 80 guests and ball machines for practicing.
The next Dill Dinkers will span 48,000 square feet at Hatboro's Station Park, a mixed-used commercial building at 330 Warminster Road. It will feature 18 courts.
Velocity Venture Partners of Bala Cynwyd is the landlord for both properties.
Full story: https://tinyurl.com/4r7dnysk
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