Thursday, May 31, 2012

Packaging Corp of America Bldg Changes Hands for $17.3M

"Endurance Real Estate Group LLC sold the 394,577-square-foot Packaging Corporation of America industrial building at 171 - 173 Tuckerton Rd. in Reading, PA to STAG Industrial Management LLC for $17.3 million, or about $44 per square foot.

The distribution facility was constructed in 1956, and renovated in 1999. The building sits on more than 32 acres of land, contains 65 loading docks with levelators, and has access to four rail lines. Packaging Corporation of America occupies approximately 200,000 square feet with more than 14 years remaining on its lease."

Syms Selling All Owned Stores

"Discount clothing retailer Syms Corp. and its wholly owned subsidiary, Filene's Basement LLC, filed a plan of reorganization calling for Syms to continuing owning its real estate while it disposes of the properties.
The retailer filed for Chapter 11 reorganization last fall and liquidated the two chains earlier this year. It has either cancelled or is in the process of disposing of its leased store locations. Now, it plans to do the same for retail properties it owns
Syms cited a litany of woes that combined to undermine the two retail operations, including increased competition from large department stores offering the same brands at similar discounts; a proliferation of private label discount chains; decreased buying opportunities as manufacturers reduced overruns through improved supply chain management; together with what she described as the worst economic downturn in her lifetime.

Documents file with the Bankruptcy Court explain that "because Syms is solvent, under the Plan, Syms anticipates paying all its creditors in full… Syms will retain its real estate assets and own, manage, lease and dispose of them over time, in a non-distressed commercially reasonable manner, in order to maximize the value of these assets."

Filene's, on the other hand, is insolvent and Syms has agreed that Filene's creditors will share pro rata in a portion of the proceeds of Syms' assets."

Syms anticipates selling its parcels either "as is," i.e., vacant in certain cases, or after they have been leased to one or more commercial tenants and related improvements have been made. Syms anticipates that the disposition process could take up to four years.
Syms currently owns 17 stores totaling 1.53 million square feet
Fairfield, CT, 43,000
Ft. Lauderdale, FL, 55,000
Miami, FL, 53,000
West Palm Beach, FL, 112,000
Marietta, GA, 77,000
Norcross, GA, 69,000
Addison, IL, 68,000
Southfield, MI, 60,000
Cherry Hill, NJ, 150,000
Paramus, NJ, 77,000
Secaucus, NJ, 340,000
Elmsford, NY, 59,000
New York, NY, 57,000
Westbury, NY, 92,000
Williamsville, NY, 102,000
Berwyn, PA, 69,000
Houston, TX, 42,000

Wednesday, May 30, 2012

Exeter buys 290,000 building in Elizabethtown, PA

1499 Zeager Rd., a 290,000-square-foot industrial building in Elizabethtown, PA, was bought by Exeter Property Group.
Prior to the sale, the former single-user facility had been converted to multi-tenant use.
Exeter Property Group was represented in-house.
The 55-acre property is located within Conewago Industrial Park, just off Route 283 with proximity to interstates 78, 81 and 83 and the Pennsylvania Turnpike in South Central Pennsylvania.
Among other users, 1499 Zeager Rd. is approximately 50 percent occupied by companies in the pet pharmaceutical industry - Butler Schein Animal Health and MWI Veterinary Supply. Approximately 100,000 square feet remains available for lease at the location.

Tuesday, May 29, 2012

Philadelphia's Retail Vacancy Stays at 6.2%

"The Philadelphia retail market did not experience much change in market conditions in the first quarter 2012.

The vacancy rate remained at 6.2% from the previous quarter. Net absorption was positive 770,096 square feet, and vacant sublease space increased by 15,188 square feet.

The largest lease signings occurring in 2012 included: the 66,485-square-foot-lease signed by Impact Thrift at 101 E. Street Rd; the 57,680-square-foot-deal signed by Kohl's at Fairlane Village Mall; and the 31,436-square-foot-lease signed by Ross Dress for Less at 5084-5098 Jonestown Rd.

Quoted rental rates were unchanged from fourth quarter 2011 levels, ending at $13.93 per square foot per year.

A total of 18 retail buildings with 556,997 square feet of retail space were delivered to the market in the quarter, with 446,897 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. national retail vacancy rate, which stayed at 6.9% from the previous quarter, with net absorption positive 9.53 million square feet in the first quarter."

Friday, May 25, 2012

VIDEO: Retail Optimism on the Upswing

KTR Scoops Up 1.8M SF of I-81 Industrial

"An affiliate of New York City-based KTR Capital Partners has bought a pair of class A bulk warehouses totaling 1.8 million square feet along the I-81 industrial corridor here.  Hillwood, nor KTR disclosed the purchase price; published reports say KTR paid a total of $93.3 million for the assets at 950 Centerville Rd. and 1700 Ritner Hwy. A KTR spokeswoman declines to comment on those reports.
Completed in 2008, 950 Centerville is a 1.2-million-square-foot cross-dock facility, part of the Key Logistics Park and currently 50% leased. 1700 Ritner is a 602,500-square-foot front-load facility that was developed in 2006; it’s leased long-term to a single tenant.
 The deal “highlights the attraction of institutional capital to the top-tier central Pennsylvania industrial submarket and illustrates the strong demand for state-of-the-art, class A bulk distribution facilities in this region,” Hines says in a release.
At KTR, PJ Charlton, SVP of Investments, says in a release that the acquisition was an opportunity to buy "functional new product in a highly sought after market on an off-market basis." He adds that the I-81 corridor is a strategic location for logistics-driven users looking to serve the East Coast, "and because of that, central Pennsylvania has become a top tier market for institutional investors."
Charlton notes that the market has performed "favorably" over the past 24 months with over six million square feet of positive absorption and a vacancy rate of less than 9%. "Presently, there are very few large class A availabilities remaining in central Pennsylvania, which positions us well to capitalize on the demand for high quality distribution space at 950 Centerville Rd.," he adds. KTR’s portfolio in the region has now reached 8.5 million square feet, and the company is seeking out acquisition and development opportunities in Pennsylvania, New Jersey and Maryland, Charlton says."

Hankin makes old Johnson & Johnson space an incubator

by John George

"When Johnson & Johnson did not renew its lease for its freestanding building in Chester County, the property owner had a choice to make.

“We could have waited for another 40,000-square-foot lab user,” said Stacy A. Martin, director of commercial sales and leasing of the Hankin Group. Or offer it up in pieces.

Given the consolidation that has swept through the pharmaceutical industry, the first option did not seem like a practical approach.

“We were looking for a way to be flexible and creative with the space,” Martin said.

The Hankin Group decided to carve up the building into smaller offices and lab space to create The Innovation Center at Eagleview, an incubator for startups in the life sciences industry that can take advantage of the preserved lab space formerly used by Johnson & Johnson researchers.

Martin said as a member of the Chester County Economic Development Council she was aware of the county’s interest in creating space for entrepreneurs trying to launch companies, particularly in the biopharmaceutical sector.

Gary Smith, executive director of the Chester County Economic Development Council, said the creation of the Innovation Center at Eagleview supports the county’s philosophy of growing its own businesses rather than trying to attract some from outside the area.

“That happens,” Smith said, referring to established businesses moving into Chester County, “but starting companies is a primary objective of what we do.”

The incubator model, he said, provides entrepreneurs with a place to start their companies and interact with peers, while minimizing operating costs.

“With a lot of commercial leases [property owners] want a three- to five-year commitment,” Smith said. “The Innovation Center will be more flexible” with lease terms.

About 25,000 square feet in the building is being devoted to the Innovation Center, the planning for which began last fall.

The Hankin Group leased the other 15,000 square feet to Cray Valley, a trial maker of resins and additives that needed lab space for product development.

Martin said the Innovation Center has already secured its first tenant, TransSig. Founded by former Cephalon research scientist Douglas Pippin, who serves as the company’s CEO, TransSig is a biopharmaceutical company focused on the development of novel small molecule signal transduction modulators. The company got its start in the Pennsylvania Biotechnology Center of Bucks County.

The site is closer to Pippin’s Chester County home, he said, and provides him with greater ability to expand.

“There’s a lot more hood space,” Pippin said. “The laboratories are all fully equipped.”

Hankin’s plan is to have about 10 tenants, occupying 500 to 1,500 square feet of space under short-term leases.

The building is in the new Ideas x Innovation Network (i2n) created in March through a partnership by the Chester County and Delaware County Keystone Innovation Zones.

The i2n serves more than 55 companies in the two counties and was created to consolidate and strengthen the package of resources, services and networking opportunities available to emerging technology companies — primarily in the life sciences, information and energy sectors — in the Keystone Innovation Zones.
Full story:

Former Genaera home to become new tech center

by John George

"A building that once housed a now-defunct biotechnology company is getting a new life as a center for early-stage life sciences firms and other technology-related businesses.
ProTecs has invested $2.3 million to buy and renovate the former home of Genaera Corp. (originally founded in 1988 as Magainin Pharmaceuticals) to turn it into the Montgomery County Technology Center.
“The trend is Big Pharma is vacating their research-and-development space,” said Christopher R. DiPaolo, president of ProTecs, which moved its headquarters from Conshohocken to the tech center here last summer. ProTecs, which acquired the property through a lease-to-own deal, was expected to close on its acquisition of the building this week.

DiPaolo said larger pharmaceutical companies are turning to partnerships with smaller biotech firms to replenish their pipeline of new drug candidates.

“The biggest hurdle the startups have is finding a place to do their research,” he said.

Locally, companies can pay as much as $300 a square foot for lab space — which for a business that needs a modest 1,000 square feet translates into $300,000 a year.

DiPaolo, whose design and construction management firm’s clients have included companies such as Orthovita and Fujirebio in Malvern and BioCoat in Horsham, said that for the past few years he has searched for a building that could house companies that are past the incubator stage, but not big enough for their own building.

The Plymouth Meeting space became available after Genaera, a publicly traded company that unsuccessfully tried to develop therapeutic products from substances found in frogs and sharks, went out of business in 2009. The building was on the market for more than a year before DiPaolo signed his deal with Alexandria Real Estate Equities Inc.

DiPaolo sees the center as home to all types of tech businesses, not just life sciences companies in need of lab space.

“We don’t want to discriminate,” he said. “We’ll talk to anybody who is interested in coming in and taking space.”

Occupying 5,000 square feet for its own offices, ProTecs has leased 75 percent of the remaining space to three companies.

Already moved in is a unit of Cryotech, a division of General Atomics International Services Corp. of San Diego, which develops de-icing technology used on airplane wings.

“This was a good fit for us” said Glenn Wallace, a technologist at Cryotech. “We are a small operation [with three employees]. They had a pretty well-developed lab here. We can stay focused on our work in the lab and [ProTecs] takes care of everything else with the building.”

Vascular Strategies, which is developing therapies to reverse atherosclerosis (hardening of the arteries), has also signed on for space after having outgrown its home at the Lankenau Institute for Medical Research (LIMR) in Wynnewood.

Oxycare, a new company that provides services involving oxygen therapy delivered in hyperbaric chambers, is finalizing a lease for space at the site.

The remaining 5,000 square feet could be taken by anywhere from one to three companies depending on the needs of the business, DiPaolo said.

The center features communal space — conference rooms, a break room, a reception area — shared by all tenants. DiPaolo said the center won’t be like a traditional incubator, where startups are provided with shared support services in areas such as marketing or accounting, but outside consulting firms will be brought in to discuss services they can provide to tenants.

“There’s really nothing like this in Montgomery County,” he said.

Karen Hanson, executive director of Elkins Park-based BioStrategy Partner — a virtual incubator organization that serves early-stage life sciences companies — said the center will fill a need.

“The availability of lab space is a huge issue,” Hanson said. “This space is great for somebody in an incubator to graduate to when they don’t need their own business but do need their own space.”

DiPaolo is planning to collaborate with other suburban tech centers and incubators, such as LIMR, the Pennsylvania Biotechnology Center of Bucks County in Doylestown, the Bridge Business Center in Bristol and The Innovation Center at Eagleview, a new life sciences incubator in Chester County developed by the Hankin Group.

The centers are in Keystone Innovation Zones, which give tenants access to up to $100,000 in state tax credits. BioStrategy Partners is helping lead the effort to network all the facilities.

“It will be great to have them work together because the different facilities are geared toward different types and stages of companies,” Hanson said.

With the Plymouth Meeting space almost fully leased, DiPaolo is looking for additional vacated properties where he can duplicate the model.

“Here, instead of somebody buying the building and taking everything out to create more office space, we’ve done something that creates more value for the economy,” he said. “Lab space is more valuable than office space.”
Full story:

Thursday, May 24, 2012

Frontage Labs Signs 60,000-SF Lease at Eagleview Corp Ctr

Frontage Laboratories, Inc. will move into 60,000 square feet of space at 700 Pennsylvania Dr. in Exton, PA following a new lease the tenant signed with building owner, The Hankin Group.

The subject property is an 80,000 square foot, single-story office building located in Eagleview Corporate Center. It was constructed in 1998, sits on 7.96 acres of land zoned R2, and has plenty of parking. The office park is located conveniently near Route 100 and The Pennsylvania Turnpike.

Kutztown’s Village Square Under New Ownership

The Village Square shopping center located at 45 Constitution Blvd. in Kutztown, PA was sold for $4,025,000, or about $102 per square foot.
The 39,612-square-foot retail center is located in the Berks County submarket of Philadelphia. It was 88 percent occupied at the time of sale, with tenant such as Dollar Tree, CVS and PLCB Wine & Spirits.

New Iron Hill Brewery eatery coming to Voorhees

by Peter Van Allen
Iron Hill Brewery & Restaurant will open a location in Voorhees, N.J., it said Tuesday.
It plans to open the brew pub in Voorhees Town Center this winter. It will be Iron Hill’s second South Jersey location, after Maple Shade.
Separately, Voorhees Town Center owner PREIT confirmed Tuesday that Firecreek Restaurant & Bar has closed, but said Iron Hill will not be moving into that site.
In addition to Maple Shade, Iron Hill has Pennsylvania locations in Media, West Chester, North Wales, Phoenixville, Lancaster and Philadelphia’s Chestnut Hill section. In Delaware, it is in Newark and Wilmington.

Wednesday, May 23, 2012

Real Estate Realities (Video)

Space for rent to artists, entrepreneurs from CultureWorks

by Natalie Kostelni
"CultureWorks Greater Philadelphia has leased 5,000 square feet of office space at the Philadelphia Building in Center City.

The space is similar though not exactly the same as what 3rd Ward is establishing in the Old Kensington neighborhood in Philadelphia. The gist is providing a space where creative entrepreneurs and artists can do their work without the hassle of worrying about organizational details or rudimentary things such as copy paper and coffee for the kitchenette.

3rd Ward is a popular arts collective based in Brooklyn, N.Y., that has ventured down into Philadelphia and leased 27,000 square feet in a complex of three old buildings at 1227 N. 4th St. It bills its space as a “creative workshop for freelancers.” You can become a member of the collective and gain the ability to use the space. Old Kensington has become somewhat of an enclave for artists as developers have been buying old factory buildings and converting them into studio space for creative workers.

CultureWorks is similar.
Its space at the Philadelphia Building is designed to build “a vibrant, collaborative workspace that will boost creative efficiency and sustainability.” It will have traditional office space and its users, for a monthly membership fee, will have access to a range of support resources such as organizational financial planning and legal counseling as well as access to amenities such as WiFi, conference rooms, a kitchen and even a business address. The target audience include artists, small organizations, freelancers and entrepreneurs.

The co-working space opens in October and CultureWorks is seeking so-called founding members as “co-investors” in the space on three levels of membership that range from $45 a month to $350 a month. It was designed with the “generous assistance” of Metcalfe Architecture & Design and pro bono legal support from Cozen O’Connor."

Friday, May 18, 2012

Billionaire: How I Never Lose on Wall Street

Phila. archdiocese building to become apartments

by Natalie Kostelni
"Nolen Properties and PMC Property Group have teamed up to buy an old office building in Society Hill with plans to convert it into 66 apartments.

Referred to as Walnut Place, the property sits at 312-22 Walnut St. It was sold by the Archdiocese of Philadelphia, which bought it in 1996 for $1.25 million. The church had in 2000 considered using the 6-story, 68,460-square-foot building to house a Catholic Heritage Center and even had architectural plans drawn up for that use but decided against moving forward with the center as it deals with the financial and other fallout of a clergy sex-abuse trial.

“Since there isn’t a need for the property now we decided to sell it,” said Donna Farrell, spokeswoman for the archdiocese.

"The archdiocese has put a range of properties up for sale as part of a reorganization that initially included consolidating and shuttering 45 elementary schools and closing four high schools.

“We have to look at all aspects of the archdiocese now and in the months ahead and make honest assessments about what is needed and what’s not,” Farrell said.

The building sits next to Old St. Joseph’s Church, which was the first Catholic Church in Philadelphia. It sits on a little more than a half acre and has parking for 34 vehicles. It was constructed in 1926 as an office and warehouse building and is listed on Philadelphia’s Register of Historic Places.

The building has sat vacant for the last 15 years.

The church had put the property up for sale at about the same time the recession started, and it had originally been listed for $7.8 million. “Twelve offers were made [in the earlier bidding] and we picked the top guy, who was going to put a hotel there. It’s hard to do a hotel there. This time, it sold for roughly $5.5 million and the conversion project will cost an estimated $13 million.

PMC Property and Nolen put the building under contract a year ago. Officials from Nolen of King of Prussia and PMC Property of Philadelphia declined to comment. They did work with Society Hill Civic Association to reach a compromise over some issues that the organization had concerns about. One issue was curbing traffic on a narrow, historic street called Willings Alley that runs along the back of the building that is used as the main entrance for Old St. Joseph’s, said Lorna Katz Lawson of the organization’s zoning and historic preservation committee.

“We wanted to reduce traffic and protect the street,” Katz Lawson said.

Other issues included how the roof decks would be used. However, the biggest worry was the conversion itself. Most neighbors also preferred to have the building converted to condominiums rather than apartments but realize that banks aren’t financing condo projects like they were and now prefer making loans on multifamily rental projects.

“People move in and out and turnover is higher with rental and there’s a lot of wear and tear and disruption on the building and street,” Katz Lawson said.
Full story:

Thursday, May 17, 2012

Prologis CEO Hamid Moghadam (Video)

Toxicology Holdings Corp Leases 46,000 SF in Horsham

Toxicology Holdings Corporation, a substance abuse testing company, leased 45,525 square feet in the flex industrial facility at 200 Precision Rd. in Horsham, PA.
The 126,644-square-foot flex building was delivered in 1976, part of the Horsham Ridge Industrial Park in the East Montgomery County Industrial submarket.

Monday, May 14, 2012

Visionworks to Open New Store on Cottman Avenue in Northeast Philadelphia

Visionworks has finalized a 10-year, 3,506 square foot lease at the Citibank Plaza Shopping Center, located at 2118 Cottman Avenue in Northeast Philadelphia.

This will be Visionworks’ second store in Northeast Philadelphia who will be leasing a portion of the former Mattress Giant space, and scheduled to open late summer 2012.

PhilaRx Pharmacy lease space at 1415 City Ave

1415 City Avenue, a free-standing 2,600 square foot building was leased to PhilaRx Pharmacy 5, Inc., a local retail pharmacy Owner who operates 4 additional locations within the City of Philadelphia. This will be PhilaRx Pharmacy’s first suburban location.

Located on City Avenue (Route 1), just off the intersection with Haverford Avenue, this well-positioned building has off-street parking for 19 cars, convenient access and features strong demographics.

Friday, May 11, 2012

A Commercial Real Estate Comeback?

Science Center leases up latest building, looks to expand

by Natalie Kostelni
"The Science Center has repeatedly proven it can fill speculative office and lab space, and the latest building it opened four years ago during the depths of the recession has been no different.

The $80 million, 10-story, 155,000-square-foot building at 3711 Market St. in University City is 86 percent occupied and set to be nearly fully occupied over the next couple of months. One of its existing tenants is planning to expand and would bring the occupancy rate to 96 percent.

Some of 3711’s tenants include Integral Molecular, which leases 10,000 square feet and is a graduate of the Science Center’s incubator. Another is Avid Radiopharmaceuticals, which started out with 16,000 square feet and expanded to 24,500 square feet, and Energy Plus, which has 33,000 square feet.

During the recession, educational and medical sectors continued to thrive, said Stephen S. Tang, president and CEO of the Science Center, and that helped to attract tenants to 3711 Market. “Proximity does matter and that is one of the things we’re trying to build upon,” Tang said.

With its office and lab space needs met for the time being, the Science Center is now considering incorporating a residential building into its 17-acre campus as one way of creating a more vibrant, around-the-clock community. It’s also an attempt to shed its reputation of being in a “concrete canyon” along Market Street.
"I don’t think in the history of the Science Center there has been a plan for pure residential,” Tang said. “We think there is very high demand for upscale apartments here.”

A multifamily project would be a new direction for the Science Center, which has stuck to a mission of providing a place for fledgling companies to incubate and grow since it was spawned 49 years ago.
While it’s still early in the process, the Science Center has issued a request for proposals for the construction of a residential building that could have as many as 300 apartments as well as retail space. The project could sit on what is currently a surface parking lot. A future phase would have what Tang called a “spiritual center” for the campus. Aside from incorporating potentially more housing, Tang envisions the building having more common space and uses for tenants and residents.
“The Science Center’s assets become less about the buildings, but the people in the buildings,” he said. “Now you’re talking about this becoming a community.”
The Philadelphia Redevelopment Authority, which had been at loggerheads with the Science Center on the timing of the redevelopment of some parcels along Market Street, supports the plans. This is a continuation of more than 40 years in partnership, said Paul Chrystie, spokesman for the redevelopment authority.
Tang has given Ed Covington, director of the redevelopment authority, an overview of his vision for the Science Center. Based on that, Covington is optimistic about Tang’s plans and how it will continue to contribute to the ongoing revitalization in the area surrounding the other universities in the neighborhood, Chrystie said.
“The redevelopment authority shares Steve Tang’s vision for a more functionally diverse Science Center and is optimistic that Steve’s plans will support an even more vibrant University City,” Chrystie said.
While the Science Center is exploring adding a residential dimension to its campus, it will continue to expand its incubator space. Its next building at 3737 Market is fully approved for between 250,000 and 300,000 square feet of lab and office space. Under a best-case scenario, the Science Center would break ground this year but only when an anchor tenant is secured. The Science Center is in discussions with a tenant but declined to divulge more details about it.

Further into the future, the Science Center would also build at 38th and Market. Early plans call for a two-building development that could be as big as 800,000 square feet of research and development, and light manufacturing space. One idea is to attract the headquarters of a life sciences company.
“We would love to do something big there,” Tang said.
Full story:

Finnegan’s Wake tries again to expand

"If at first you don’t succeed, tweak the plan and try again.

It seems that’s what Mike Driscoll, a Democratic committeeman and owner of Finnegan’s Wake, has done to snag a block of Bodine Street in Northern Liberties.

City Councilman Mark Squilla introduced a bill Thursday that calls for making Bodine Street from Spring Garden to Green private property — a measure that was met with community opposition and languished in Council last year when it was introduced by then-Councilman Frank DiCicco.

Driscoll had planned on creating a three-story open bar and balconies on Bodine Street, but local residents were concerned about noise and giving up a public street.

Matt Ruben, president of the Northern Liberties Neighbors Association, who was against the bill last year, said Squilla’s bill would create a public easement. But he said parts of the plan still need to be worked out. Ruben said people would be able to bike through Bodine, there would be ground level tables, and the three-story bar area would be moved to Spring Garden street.
Squilla said he introduced the bill Thursday so that if the community and Driscoll reach an agreement, the bill could be approved before Council’s two-month summer break.
There will be a zoning committee hearing on the plan May 21 at the Northern Liberities community center."

Thursday, May 10, 2012

Embassy Bank Leases 16,500 SF in Bethlehem

Embassy Bank for the Lehigh Valley, the primary subsidiary of Embassy Bancorp, Inc., signed a lease renewal and modification agreement for 16,479 square feet in the office building at 100 Gateway Drive in Bethlehem, PA.

The three-story building totals 27,700 square feet in the Gateway office park. Arcadia Properties developed the building in 2002 with Bonsall Shafferman Architects. Embassy's lease includes 7,827 square feet on the first floor used entirely for its retail branch, and about 8,652 square feet of corporate office space on the second floor.

Greater Hazleton CAN DO Sells Bldg 2 in Can Do Corp Ctr

Hazleton School District purchased Bldg 2 in the Can Do Corporate Center at 40 Azalea Dr. in Drums, PA from Greater Hazleton CAN DO, Inc. for $4.4 million, or about $85 per square foot. The 51,560-square-foot office building was constructed in 2004 in the I-81 Corridor submarket of Philadelphia, in Luzerne County.

Good Quality Commercial Property Still in High Demand (Video)

Wednesday, May 9, 2012

Prologis CEO on Trading the Industrial Recovery

Benjamin Foods Acquires Hatboro Industrial

Vornado Realty Trust sold the 127,028-square-foot industrial building at 1001 S. York Rd. in Hatboro, PA to Benjamin Foods for $8.75 million, or about $69 per square foot.
The distribution facility sits on more than 17 acres. Benjamin Foods exercised its option to purchase the facility stated in the original lease agreement signed in the first quarter of 2010.

Hershey Heritage Village Trades for $46.1M

Martin Zelman Enterprises sold the 518-unit Hershey Heritage Village to The Solomon Organization LLC for $46.7 million, or about $89,000 per unit.

Located at 1330 Wabank Rd. in Lancaster, PA, the 41 two-story buildings sit on more than 63 acres and total about 660,000 square feet. The complex contains basketball courts, clubhouse, tennis courts, and a hot tub.

Tuesday, May 8, 2012

Proposed Lower Providence hotel, restaurant and credit union reviewed by board

A proposal for the construction of a new hotel, credit union and restaurant was reviewed Thursday by the township board of supervisors.

Audubon Land Development Corp. of Lower Providence has proposed building a 135-room, five-story Fairfield Marriott hotel, a Citadel Credit Union building with drive-through and a restaurant, as yet unnamed, with drive-through on a 20-acre parcel off Trooper Road and Forge Avenue. The developer now has proposed 245 parking spaces after the Lower Providence Planning Commission recommended additional parking, said Brad Macy, the vice president for land development at Audubon Land Development Corp. The original plan had 148 parking spaces.

Attorney Bernadette Kearney, representing ALD, said the developer recognized that a traffic study was required.

"It is a little difficult getting in and out of the ice cream place," said Supervisor's Chairman Richard Brown. "I think a hotel is a wonderful idea. We think it is a needed facility. We have to address the planning commission's concerns."

Supervisor Jason Sorgini said there was a need for the traffic study. Supervisor Colleen Eckman asked how many stories were in the existing Homewood Suites.

Macy said that all the necessary studies would be completed before the plan is finalized. He said that requests for sidewalks and bike trails would be included in the plans.

"Traffic is a major concern over there," said Supervisor Don Thomas.  Brown said the supervisors would like to see a comprehensive plan for the undeveloped land.

Ken O'Brien, the senior project manager of McMahon Associates, said that turning restrictions should be provided on Forge Avenue because of the heavy traffic volume on Trooper Road and the stop sign on Forge Avenue.

A conditional use hearing will be required for the restaurant approval, according to Kevin Chavous, a Montgomery County Planning Commission design planner. A traffic impact study of seven adjacent intersections and the 20-acre project will have to accompany the preliminary site plan submission. The plan includes a collector road extension of about 400 feet from the rear of the Wawa and Bertucci's along with a "wrap-around" road to go behind an existing warehouse building. A Jefferson Avenue extension from the industrial park would be connected to the new driveways.

No members of the public commented on the sketch plan for Audubon Square V. No official action on the proposal will be taken until a traffic study and preliminary sketch plans are submitted to the Lower Providence Planning Commission and the board.

Philadelphia's Industrial Vacancy Decreases to 9.1%

The Philadelphia Industrial market ended the first quarter 2012 with a vacancy rate of 9.1%.

The vacancy rate was down over the previous quarter, with net absorption totaling positive 830,829 square feet in the first quarter. Vacant sublease space increased in the quarter, ending the quarter at 2,792,977 square feet.

Tenants moving into large blocks of space in 2012 include: Crossroad Beverages Group LLC moving into 324,132 square feet at 1055 Crossroads Blvd, R.C. Moore Inc. moving into 289,242 square feet at Pittston Distribution Center #1, and AmeriCold moving into 239,000 square feet at 3800 Hempland Rd.

Rental rates ended the first quarter at $4.49, an increase over the previous quarter.

A total of two buildings delivered to the market in the quarter totaling 169,562 square feet, with 4,662,661 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. national industrial vacancy rate, which decreased to 9.3% from the previous quarter, with net absorption positive 30.71 million square feet in the first quarter.
Full report:

Friday, May 4, 2012

Commercial Real Estate Turnaround? (Video)

CertainTeed, Saint-Gobain are out looking for offices

by Natalie Kostelni
"CertainTeed Corp. and its parent company, Saint-Gobain, a French conglomerate that maintains its North American headquarters off Swedesford Road here, are exploring options to relocate out of its tired, old buildings into new space.
The combined companies, which make building materials and supplies, are seeking between 200,000 and 250,000 square feet to consolidate and expand.
This isn’t the first time they have searched for office space, making some brokers and other observers who track the market skeptical as to whether the companies are serious this time around.
The last time they looked was a year ago when CertainTeed and Saint-Gobain decided to stay put in four buildings they own totaling 175,000 square feet at 750 E. Swedesford Road.

The companies concede they routinely evaluate what opportunities might be available and this time is no different. “What we’ve been doing is periodically go out looking at our options,” said Carmen Ferrigno, spokesman for Saint-Gobain. “It’s what we do given where the market is and the ebb and flow of things.”

Real estate observers believe a decision to relocate is more likely this time given market conditions.
“This is the last legs of a tenant market before things turn the other way and they are smart to chase it now rather than wait until they are forced into a build-to-suit at higher rates.”

Some office submarkets are starting to see increased activity and a shortage of supply, particularly Class A space — a sign the market is on the cusp of shifting from a tenant having the upper hand to one in which the landlord is on top.
“It’s a good time for them to be out while rental rates are low because the market is starting to tighten up and rental rates will begin to rise over the next year. There are a limited number of options of existing inventory in that size range.”
What does help is the competition is limited since few other really big tenants are scouring the market for space.
A CertainTeed/Saint-Gobain deal would have implications for the office market. “If they take existing space, it’s a big chunk of absorption and would cure ills the market has,” he said.
“If they do a build-to-suit, they leave behind empty space, and they aren’t helping.”
A condition of any deal that is struck would be to sell the buildings to whichever landlord is able to snag CertainTeed and Saint-Gobain as tenants, according to people familiar with the situation. How much those properties are worth is difficult to say because they are at least 40 years old. They have their original exteriors, the interiors aren’t conducive to contemporary layouts and are functionally obsolete by contemporary standards. To buy the buildings would be more of a land play since the highly visible location is at the crossroads of major highways.
A range of options are available to CertainTeed and Saint-Gobain. Existing space not far from their current location that could accommodate tenants of this size include: Ellis Preserve in Newtown Square: the former Aegon property in Frazer; and 530 and 580 E. Swedesford Road, two buildings totaling 258,000 square feet down the road from the existing offices that could become available in the next few years. Some build-to-suit sites include the Village at Valley Forge, which is across the street, as well as Atwater, Swedesford Square or Worthington, all of which are in Malvern. A decision is expected within the year."
Full story:

NY investor tries to resuscitate Cherry Hill offices

"A joint venture of Time Equities Inc. and Bergman Realty Group says it has paid $3.4 million for 51 Haddonfield Road, a 100,000-square-foot office building in Cherry Hill.

South Jersey offices have been particularly battered in the recession. The new owners promise "an extensive capital improvement campaign to upgrade areas of the property, including the parking lot and lobby," and even "a rotating art gallery of work by local and national artists."

Thursday, May 3, 2012

New hotel opening in Chester County

by Natalie Kostelni
"A new Marriott hotel developed by Oliver Tyrone Pulver Corp. will officially open tomorrow in Coatesville, Pa.

The project finally comes to fruition after the developer faced several obstacles for more than five years only to finally break ground in 2009. The $36 million Courtyard by Marriott (NYSE:MAR) has 125 rooms.

A ceremony is scheduled that will include developer Donald W. Pulver and several state and local officials. At the opening, more details are expected to emerge on another project, 30 West, an 80,000-square-foot office building that is part of the overall redevelopment project Pulver has envisioned in Coatesville."

RPM Renews 304,000-SF Industrial Lease

"RPM Warehousing & Transportation has renewed its lease for 304,000 square feet at Avidan Management's industrial building at 99 Hook Rd. in Bayonne, NJ.

Located on 20 acres, the 500,000-square-foot warehouse facility is located on State Route 169, just minutes from the New Jersey Turnpike, Holland Tunnel, Bayonne Bridge, Staten Island and Brooklyn. The property features reinforced concrete floors, heaters, 40-foot column spacing and 24-foot ceiling heights. There are a total of 50 exterior doors with dock levelers, three interior doors, 10 rail doors and ample parking.

"We're extremely pleased that RPM Warehouse has made the decision to remain at our Bayonne facility," stated Avi Avidan, managing member of Avidan Management. "As one of the most active and well-established warehousing and transportation companies operating in the port area, RPM is exactly the type of high-quality tenant that we value."

Avidan will be upgrading the property to include site work and the creation of two new access points directly on Route 440 and Lafante Way, in addition to the existing entrance on New Hook Road. Avidan Management is based in Elizabeth, NJ with strong roots in northern New Jersey and a portfolio that totals nearly 3 million square feet in nine facilities."

Wednesday, May 2, 2012

W Hotel planned for Chestnut Street

"An upscale W Hotel is scheduled to break ground next year on a half-acre site that was originally planned for a $420 million Waldorf-Astoria Hotel with luxury condominiums before the lending markets collapsed four years ago.

The new hotel would sit on what is now a surface parking lot at 1441 Chestnut St, just behind the Ritz-Carlton Hotel and its condo tower, according to a representative of Starwood Hotels and Resorts Worldwide Inc., which owns the W brand.

"It is going through,” Katherine Tory, a member of Starwood’s development team, said Tuesday. “Construction is set to begin in about a year.”

She said the hotel could open as early as April 2014. The number of rooms, floors, and other details were still being worked out.
The W brand is known for being edgy and attracting a younger, hip crowd with its lounges, spas, and entertainment venues. On the website, W Hotels are described as “where iconic design and contemporary luxury set the stage for exclusive and extraordinary experience.”
Confirmation of a new W Hotel comes two weeks after ground was broken at another surface parking lot, at 12th and Arch Streets, to make way for a 246-unit Hilton Home2Suites. Hospitality experts say it may be another sign that financing is starting to loosen for hotel projects to support the one-year old completion of the $786 million expansion of the Pennsylvania Convention Center that needs additional rooms to attract the biggest gatherings here.

The 1441 Chestnut St. location is the latest example of a site that has gone through a few iterations because of the economy and tight lending. The site has been vacant since the fire-ruined One Meridian Plaza was leveled in 1999. In October 2008, developer Timothy J. Mahoney III, chief executive officer of Mariner Commercial Properties Inc., of Ardmore, announced plans to convert the site into a 58-story Waldorf-Astoria operated by Hilton Hotels Corp. The project was to include upscale retail, a signature restaurant, seven floors of valet parking, and a spa, as well as 136 condos, starting at $1 million.

But the recession hit and lending dried up. By the spring of 2009, Mahoney said the project had been put on ice.

In October 2010, he sold his 50 percent stake to partner Brook J. Lenfest of Brooks Capital Group L.L.C., of Bala Cynwyd, for $12 million in an auction.

“We realized there were structural problems in the marketplace … including the credit markets, softening prices, and oversupply of competing inventory,” Mahoney, who had spent a decade assembling the land, said then of his decision to sell his stake.

Lenfest, who heads NetCarrier Inc. of Lansdale, a local-exchange carrier, did not return calls Tuesday seeking comment. Brooks Capital Group is described in its website as a venture-capital firm specializing in early-stage investments. Brook Lenfest’s father, H.F. “Gerry” Lenfest, is one of the new owners of Philadelphia Media Network, which owns The Inquirer, Daily News, and

As recent as April 18, featured a Philadelphia location in its “New and Upcoming Hotels” section and even went so far as to specify “opening in January 2015” at 1441 Chestnut St. But the listing was removed a few days later, on April 23. Starwood would not say why it was removed.

Peter Tyson of PKF Consulting USA said of the location: “Well-located with respect to the greatest concentration of Class A office space in Center City, and the restaurants and entertainment venues on the Avenue of the Arts and Walnut Street ... both appealing to the upper end of the commercial traveler segment.”

A W Hotel here would add to the slate of luxury boutique hotels that have entered the Center City market in the last three years, including the Kimpton brands Palomar and Hotel Monaco as well as a Le Meridien. The Latham Hotel at 135 S. 17th St. is undergoing a major renovation.

And Tuesday was the soft opening of a 136-unit Homewood Suites in University City owned by Campus Apartments.

A survey on Tuesday showed revenues were up for hotels nationally. In 2011, 80.5 percent of the properties that participated in the annual survey by PKF Hospitality Research L.L.C. reported an increase in total revenue over the previous year. Nearly three-quarters achieved growth in profits. “On average, hotels ... saw their profits increase by 12.7 percent in 2011,” said R. Mark Woodworth, president of PKF-HR.

Starwood Hotels & Resorts Worldwide Inc. is seeing healthy returns so far this year. For the first quarter of 2012, the company reported revenue of $1.72 billion, up 32.4 percent year-over-year. Revenue on the hotel management, franchise, and other income lines increased 13.6 percent to $201 million. Other properties managed by Starwood in Philadelphia include the Sheraton Society Hill and Le Meridien. The company has been looking to build a W Hotel here since 2006.

Mahoney, former owner of the Chestnut Street lot, said he was happy to hear it may now finally become a hotel. “I would love to see the project happen,” he said. “I think a W would be a great addition to the city, and I am excited to hear that Brook has something in the works.” He said the site was fully zoned to develop 800,000 square feet on 58 stories for the original five-star Waldorf.“Those approvals are still in place,” Mahoney said. “It’s ready for building permits at this point.”

Tuesday, May 1, 2012

FL Smidth, Inc. leases space in Whitehall, PA

FL Smidth, Inc. leased 15,575sf of warehouse space at Riverside Business Center (1139 Lehigh Avenue) in Whitehall, PA.

The tenant, FL Smidth, is an international leading supplier of equipment, services and expertise for the cement and minerals industries. FL Smidth occupies several other spaces at Riverside Business Center; the new space is intended for the manufacturing of materials used in making turbine blades, and signifies FLSmidth’s continued interest in leasing space at Riverside Business Center.

505-509 Fishing Creek Road sells for $6M

"The sale of 505-509 Fishing Creek Road, a 216,000 square foot light manufacturing and assembly complex in Lewisberry, PA was arranged. The 27.8-acre site in York County is situated at Exit 36 of I-83 three miles south of the Pennsylvania Turnpike. The 100% leased property was sold for $6,050,000.

The transaction required transfer to the purchaser of the leasehold improvements owned by locally based Flight Systems, Inc. as well as fee title to the underlying land owned by E. I. DuPont de Nemours. In addition to the current tenancy and in place cash flow, this site has significant potential for redevelopment in the future to a more intensive use due to the tremendous visibility from its one quarter mile of frontage on I-83 and its position adjoining the I-83 southbound exit ramp.”