Pair of Pennsylvania shopping centers sell in separate deals

By Linda Moss CoStar News

In the larger deal, a newly formed joint venture between Pittsburgh-based Echo Realty and San Francisco-based TPG acquired Water Tower Square, a 269,018-square-foot grocery-anchored shopping center in Montgomeryville, Pennsylvania.

The seller was the Goldenberg Group, which is based in Blue Bell, Pennsylvania. Terms of the transaction were not disclosed.

Water Tower Square, at 751 Horsham Road, sits near the Five Points intersection of U.S. Route 202 and Pennsylvania Routes 309 and 463. Anchored by The Home Depot and Sprouts Farmers Market, the center also includes Planet Fitness, Flagship Cinemas, Bob's Discount Furniture, World Market and Miller's Ale House.

"Water Tower Square offered investors the opportunity to acquire a best-in-class shopping center in a dominant Philadelphia [Metropolitan Statistical Area] retail corridor, anchored by a unicorn tenant in Home Depot."

In a separate transaction, Tacoma, Washington-based R.K. Getty acquired Dickson City Commons, a 110,254-square-foot shopping center in Dickson City, Pennsylvania, from Upton, Massachusetts-based Meritus Realty Ventures. 

The shopping center sold for $23.75 million.

Dickson City Commons, at 1106 Commerce Blvd., is located in the Scranton and Wilkes-Barre metropolitan area near the intersection of Interstate 81 and Routes 6 and 11. The center is anchored by Marshalls and Michaels and includes tenants such as Skechers, Famous Footwear, Pet Supplies Plus and Fine Wine & Good Spirits.

"We continue to see strong investor demand for dominant retail centers in secondary and tertiary markets. Buyers are increasingly targeting best-in-class assets in smaller trade areas, recognizing the opportunity to acquire high-quality real estate at more attractive yields than comparable assets in primary infill markets."

 Dickson City Commons recently underwent nearly $1 million in improvements, including an $800,000 parking lot resurfacing project, facade upgrades, roof repairs, lighting enhancements and landscaping improvements.

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Short supply of modern medical office space pushes Philadelphia rents higher

 By Brenda Nguyen CoStar Analytics

Philadelphia's medical office market posted stronger rent increases in mid-2026, even as leasing activity remained below long-term averages.

Asking rents for medical office space increased 2.5% year over year to an average of $27.72 per square foot, outperforming the traditional office market and reversing six consecutive quarters of decelerating rent growth.

The increase in asking rents reflects supply constraints more than accelerating demand. Healthcare providers continue to lease space for outpatient facilities, specialty practices, and ambulatory care centers, but the availability of that specialized space remains relatively limited at 10.1%.

More notably, the supply of newer medical office space is exceptionally tight. Of Philadelphia’s 4.3 million square feet of available medical office space, less than 350,000 square feet is available in buildings constructed since 2015.

When in-demand medical buildings are scarce, landlords can maintain pricing power on rent even during periods of moderate leasing activity. Providers seeking space that supports modern outpatient care and specialized medical services often have few options, allowing these in-demand properties to command above-average rents. A relatively small number of higher-priced leases can lift the headline asking rents.

Additionally, the prominence of smaller office deals, which also command higher rents, also influences market rates. For instance, in June 2026, Salterra Wellness signed a five-year lease for a 2,084-square-foot space in Newtown at a starting rate of $29.94 per square foot.

Limited development has reinforced these pricing dynamics. Only 295,000 square feet of medical office space was under construction in mid-2026, and nearly all that space was already pre-leased or intended for owner-occupants. With little new modern space expected to reach the market, existing landlords face little competitive pressure.

As a result, rent growth is being driven less by a broad expansion in demand and more by a shortage of newer, in-demand medical office buildings. Until there is a meaningful acceleration of construction activity, supply constraints are likely to remain a primary driver of rent growth across Philadelphia's medical office market.

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KenCrest leases floor in Brandywine-owned suburban office tower Plymouth Meeting

 By Holly Polivka CoStar Research

KenCrest, a human services provider supporting individuals with intellectual and developmental disabilities, leased 26,058 square feet of office space at 401 Plymouth Road and plans to relocate to the suburban office building owned by Brandywine Realty Trust in December.

The firm, which is currently located nearby at 960 Harvest Drive in Blue Bell, will occupy the entire fifth floor in the six-story building located at the crossroads of Interstates 476 and 276. Other tenants include Liberty Mutual, KeyBank, and McNees Wallace & Nurick.

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ID Logistics subleases large industrial facility to expand into central Pennsylvania

 By Noah Lacy CoStar Research

ID Logistics, an international contract logistics provider based in Tampa, Florida, subleased the entire 1,085,280-square-foot Building A in the First Logistics Center @ 283, located at 2771 N. Market St. in Elizabethtown, Pennsylvania, from online fashion retailer Boohoo Group, which closed its U.S. distribution center as part of a strategy to reduce costs and reposition its business for sustainable, profitable growth.

The deal single-handedly filled one of the largest blocks of industrial sublease space in eastern Pennsylvania.

France-based ID Logistics operates more than 360 sites across 17 countries and manages approximately 8 million square meters of warehousing space globally. The firm has been on an aggressive expansion in North America in 2026, recently expanding operations into South Carolina, North Carolina, Virginia and Kentucky and investing $83 million to acquire a 582,000-square-foot distribution facility in eastern Henrico County, Virginia.

ID Logistics entered the U.S. market through the 2019 acquisition of Tampa-based Jagged Peak, and has since made other major acquisitions, including Kane Logistics in 2022.

Boohoo Group, a U.K.-based online retailer that sells clothing, shoes, accessories and beauty products through its numerous brands that now operates as Debenhams Group, signed a long-term lease with First Industrial Realty Trust for the first building completed at First Logistics Center @ 283 with much fanfare in 2022. Completed that year, the distribution facility is located along Route 230 in Dauphin County, approximately eight miles southeast of Harrisburg International Airport and near FedEx and UPS parcel facilities.

Based on the successful development and lease-up of its first building, First Industrial commenced construction on an adjacent industrial facility measuring just under 700,000 square feet that was completed in the second quarter of 2023 at 2701 N Market St. and is leased to Kyocera and JAS Worldwide

Boohoo Group's U.S. facility was operational for approximately 15 months before it ceased operations in November 2024, switching fulfillment of its U.S. orders to its automated fulfillment center in the U.K. Debenhams Group reported the sublease will mitigate approximately $100 million in future lease and holding costs. The company incurred $124 million in costs at the site's operational requirements before closing.

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EPR Properties acquires Netflix House real estate in Pennsylvania

 By Linda Moss CoStar News

A landlord focused on experiential real estate has added the building that's home to a Netflix House, the digital streamer's entertainment-and-shopping venue outside Philadelphia, to its portfolio for $60 million.

EPR Properties, a real estate investment trust based in Kansas City, Missouri, has acquired the 120,000-square-foot building at 180 N. Gulph Road at the King of Prussia Mall, according to public documents. The sale closed in June. Canadian retail holding company Hudson's Bay Co. was the seller, according to CoStar data.

HBC, onetime owner of Saks Fifth Avenue, acquired Neiman Marcus Group in December 2024 for $2.7 billion. Subsequent to that purchase, HBC liquidated its Canadian operations and closed its stores in that nation. The merged Saks-Neiman Marcus company was first renamed Saks Global and is now called Exemplar Luxury Group.

Los Gatos, California-based Netflix leased and opened its first permanent entertainment location, Netflix House, at a former Lord & Taylor store in November last year. The site offers immersive attractions such as games and virtual-reality experiences, a store selling merchandise tied to Netflix shows and a large restaurant. A second location is open in Dallas, while a third is planned for Las Vegas.

Brick-and-mortar retailers have increasingly turned to in-person experiences that cannot be replicated online. EPR describes itself as a diverse REIT that specializes "in select enduring experiential properties in the real estate industry." That includes theaters, fitness, gaming, skiing, and "eat-and-play" locations.

In an investor presentation in July, EPR said it had "added Netflix as new partner through our acquisition of Netflix House Philadelphia; transforming popular digital intellectual property into physical, immersive experiences."

Ben Fox, EPR executive vice president, talked about the acquisition on that second-quarter earnings call.

"On the Netflix House investment, not only is Netflix an A-rated corporate credit, but as one of the leading streaming platforms, our partnership with them further validates the powerful role that physical experiences play in an increasingly digital world," he told Wall Street analysts.

The deal was earlier reported by the Philadelphia Business Journal. The large mall where Netflix House is located is owned by Simon Property Group.

The former Lord & Taylor building was on the block — for a second time — for roughly seven months, put up for sale a few months after Netflix House opened. 

"This first-of-its-kind concept is an experiential entertainment venue offering retail, dining and immersive experiences centered around Netflix’s [intellectual property] content," CBRE said in a marketing brochure. "Netflix House’s net lease has nine years of term remaining with 2.5% annual rent escalations and features a corporate guaranty from Netflix."

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Conshohocken office building has new owner

 Conshohocken | Business News , Local News| By Kevin Tierney

The 40,373-square-foot office building at 125 East Elm Street in Conshohocken has been sold for $11,100,000, according to Montgomery County property records. The office building, which was branded SORA East, was owned by an entity associated with Keystone Development + Investment. It was sold to an entity associated with Patriot Financial Partners, a private equity firm focused on investing in community banks, thrifts, and financial services-related companies in the United States, which is currently based in Radnor.

According to sources, Patriot plans to utilize the building as its headquarters and will lease a limited amount of space. Patriot did not respond to an email seeking more details on their move to Conshohocken.

The building is located at the corner of East Elm and Harry streets, and is adjacent to the not-yet-opened The Garden by Pieri Winery.

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