Friday, February 23, 2024

Empire State Realty Trust CEO on commercial real estate, NYC office trends and big name tenants (Video)

Over $1 Billion of Philadelphia Office Properties Traded in 2023 Amid Shaky Market Conditions


By Brenda Nguyen

Office sales activity persisted in Philadelphia last year despite disruptive office market fluctuations, revealing resourceful developers, investors and companies capitalizing on a shifting market.

Before 2020, office buildings reigned supreme, regularly commanding top dollar among commercial real estate property types from investors.

However, the lasting effects of the pandemic disrupted that trend. As employers and employees navigate the evolving future of in-person work amid lingering economic uncertainties, the office investment landscape remains in flux.

Subsequently, the level of office investment has declined with each passing year since 2019.

Interestingly, office investment—which was the least-favored asset for Philadelphia investors in 2021-2022—accounted for 25% of the total investments across retail, multifamily and industrial property types in 2023, up from 17% in 2021. Philadelphia office sales in 2023 even surpassed the volume of multifamily sales.

Several categories have buoyed the recent office sales volume, particularly projects primed for redevelopment and stabilized office buildings with a value-added component.

In a notable example from October 2023, a joint venture between FLD Group and A&H Acquisitions acquired the Bala Plaza portfolio in one of the top deals in the fourth quarter. The five-building, 1.14 million-square-foot office campus traded for $185 million, or approximately $163 per square foot. The new owners plan to redevelop the campus, incorporating 2.1 million square feet of retail, a 168-room hotel, 750,000 square feet of office space, and 750 residential units.

Medical office buildings and sale-leasebacks have also contributed to the heightened recent office sales activity.

The investment figures reflect a quietly opportunistic mindset among a small enclave of investors and developers despite lingering uncertainties from the pandemic.

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Wednesday, February 21, 2024

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Done Deals: Sansone pays $20M for Tac-Pal project site; Yellow Corp. sells Montco property out of bankruptcy

By Paul Schwedelson – Reporter, Philadelphia Business Journal

Here’s a roundup of recent real estate news and transactions in the Philadelphia area.

$20 million

Palmyra Urban Redevelopment Entity sold 60 acres off Route 73 just over the Tacony-Palmyra Bridge for $20 million to an entity affiliated with St. Louis-based Sansone Group, which is developing Phase 2 of the Tac-Pal Logistics Center at the New Jersey site.

The first phase of the project, developed in partnership with Dallas-based Crow Holdings Capital, was completed with a 702,450-square-foot industrial building. YesWay Logistics leased 252,000 square feet of that building, leaving about 450,000 square feet remaining. The second phase will see construction of a 704,182-square-foot industrial building, which is expected to be completed by the end of 2024.

$7.7 million

PECO paid $7.7 million for a 7-acre property with a vacant 13,700-square-foot office and truck servicing building at 480 S. Gravers Road in Plymouth Meeting. Proudfoot Investments was the seller.

$3.2 million

Transportation logistics company Realterm bought a 7.4-acre industrial truck terminal with 71 doors from Yellow Corp. for $3.2 million, according to Montgomery County property records. The property is at 750 County Line Road in Colmar.

Nashville, Tennessee-based Yellow sold the property out of bankruptcy. Yellow previously sold a 13.3-acre truck terminal in Bensalem to XPO Inc. for $36.2 million.

$2.5 million

Bala Cynwyd-based Velocity Venture Partners paid $2.5 million for a 47,800-square-foot industrial property at 1310 Stanbridge St. in Norristown. Velocity bought the property from Weber Real Estate Holdings. The building is fully leased by Norfab, which manufactures heat-resistant materials for firefighters.

The building is attached to a 127,000-square-foot industrial building at 1210 Stanbridge St. that Velocity bought for $4 million in 2019 when it was mostly vacant. Since then, Velocity has leased the entire building. VonC Brewing, HVAC supplier Cianci and Daimion, and Sweet Prosperity Bakery are among the tenants.

$1.475 million

An entity affiliated with Barnegat, New Jersey-based Walters Group bought an undeveloped 4.1-acre site at 1500 Pennbrook Parkway in Upper Gwynedd for $1.475 million. Walters Group plans to build 60 apartments across multiple buildings on the property.

38,000 square feet

Buccini/Pollin Group expanded coworking space in downtown Wilmington named The Mill by 38,000 square feet, bringing the space to a total of 104,700 square feet.

The coworking space is at Market West, formerly known as the Nemours building, at 221 W. 10th St. The expansion to the third floor of the building includes an additional 30 furnished offices, outdoor terraces, a podcasting suite and recreational activities like foosball and cornhole.

The 14-story, 800,000-square-foot Market West building is undergoing a $100 million renovation that will eventually feature 355 apartments while reducing the building’s office footprint from 450,000 square feet to 150,000 square feet.

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