Friday, July 27, 2012

Beneficial Bank to re-dip into office space search

by Natalie Kostelni
Major office tenant Beneficial Bank may be on the move.
The bank is in the early stages of relaunching an evaluation of its options. This comes roughly two years after the bank went through an arduous exercise about whether to remain in Penn Mutual Towers or relocate out of the building at 510-530 Walnut St. in the Independence Square office submarket in Philadelphia.
A departure from Penn Mutual would be another blow for the property, which is in receivership.
Beneficial first launched that search in 2007 with a goal of finding new and larger office space between 125,000 and 135,000 square feet in order to consolidate some other offices under one roof.
At the time, its lease was scheduled to expire in the spring of 2011 and it had plenty of time to evaluate its options.
Though it toured space and considered various buildings, after the lengthy exercise of looking around, it ended up signing in 2010 an extension that pushed its lease to expire March 2014. It occupies about 90,000 square feet at Penn Mutual, where it first signed a lease in 2000 and moved to in 2001.
The short-term lease bought Beneficial time for the real estate and financial markets to continue to recover.
What it didn’t do is give it many more options depending on where it looks. If it decides to stay in the Independence Square submarket, Beneficial has a bevy of empty offices that could easily accommodate 100,000 square feet or more.
If it wants to upgrade to trophy space in the Central Business District along West Market Street, it will be limited.
If Beneficial left the submarket, it would also mean another hit for it. The entire Independence Square office submarket is struggling. After enjoying years of having one of the lowest vacancy rates in Philadelphia, it now has the second highest at 16.2 percent. Of its 4.5 million square feet, more than 750,000 square feet of direct space is empty.
The reason for the increase in vacancy is multifold. Wells Fargo is trying to lease nearly 100,000 square feet of office space at its operations center on Market Street. In this market, that’s almost like emptying out an entire building.

Philadelphia's Retail Vacancy Stays at 6.2%

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

The vacancy rate stayed at 6.2%, same as in the previous quarter. Net absorption was positive 106,941 square feet, and vacant sublease space increased by 25,143 square feet.

Tenants moving into large blocks of space in 2012 include: Wegmans moving into 140,000 square feet at The Village at Valley Forge; Speed Raceway moving into 106,000 square feet at Village Mall; and Burlington Coat Factory moving into 70,500 square feet at Garden State Pavilion.
Quoted rental rates decreased from first quarter 2012 levels, ending at $13.86 per square foot per year.

A total of four retail buildings with 81,065 square feet of retail space were delivered to the market in the quarter, with 408,909 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% over the previous quarter, with net absorption positive 2.85 million square feet in the second quarter.
Full report: http://omegare.com/Costar-2Q2012-Market-Report-Retail.pdf
www.omegare.com

Thursday, July 26, 2012

Liberty Property Trust Acquires 30.7 Acres in Lehigh Valley

"Liberty Property Trust purchased 30.69 acres of industrial land at 10 Emery St. in Bethlehem, PA. Primo No.1 Produce, Inc. sold the land, with utilities to site, for $4.2 million, or about $137,000 per acre.

Liberty Property Trust is planning to construct an 800,000-square-foot industrial building at the site, part of the Lehigh Valley Industrial Park VII. Construction is expected to start November 2012. The building will feature 32-foot clear heights, 75 loading docks and rail access. "
www.omegare.com

Brandywine Realty sells Phila.-area portfolio for $53M

by Natalie Kostelni
"Brandywine Realty Trust has unloaded its Exton, Pa., portfolio for $52.7 million, raking in a gain of $9.9 million on the sale.
Hayden Real Estate Investments of Conshohocken, Pa., reportedly bought the portfolio that consists of 10 single-story and one two-story office-flex properties totaling 466,719 square feet.

The properties were 81.6 percent leased at closing. The buildings were constructed between 1987 and 1999 and consist of: 412 Creamery Way, 429 Creamery Way, 436 Creamery Way, 440 Creamery Way, 456 Creamery Way, 457 Creamery Way, 467 Creamery Way, 468 Thomas Jones Way, 486 Thomas Jones Way, 111 Arrandale Blvd. and 481 John Young Way. Hayden already has a presence in the Exton office submarket."
www.omegare.com

Tuesday, July 24, 2012

Liberty Property's suburban office sell-off

by Joe DiStefano
"Liberty Property Trust, the Malvern-based landlord with 77 million square feet of offices, warehouses and other business property around the U.S., continued selling suburban office complexes in New Jersey and other mostly Eastern states, and buying warehouses in the Midwest and Southwest, as profits slipped in the quarter ended June 30.
Will suburban office demand ever recover? Here's where Liberty is selling, and where it's (less frequently) buying:

"Liberty sold 54 operating properties containing 2.7 million square feet, and 58 acres of land, for $208.6 million. The properties were 82.3% leased, and consisted primarily of single-story and mid-rise suburban office and high-finish flex product in Wisconsin, Maryland, Virginia, North Carolina and New Jersey...

"Liberty acquired 4 properties" at industrial and warehouse sites in Minnesota and Arizona "during the quarter for a purchase price of $29.3 million. The properties total 603,000 square feet of leasable space and are 58% leased." The company also invested $23.5 million in 2 Houston industrial properties and 1 Jacksonville, Fla. speculative office building, plus $6.6 million in 1 fully-leased Houston industrial property."
www.omegare.com

Monday, July 23, 2012

Molly Maguire's planning Chesco site

"Regional chain Molly Maguire's has its eye on Downingtown for its next installment.
Downingtown Borough Council on Wednesday unanimously approved a preliminary proposal to bring the Irish restaurant and pub to the borough.
According to the plan, the existing Minquas Fire House will be converted to a six-room hotel with about 6,700 square feet of banquet and pub space, along with an outdoor deck for dining.

Township Manager Stephen Sullins said that the restaurant will be an asset to the community, complementing the borough's current businesses, and a future employer for the local workforce.
Conor Cummins and Declan Mannion, Irish-born owners of the restaurant group which includes locations in Phoenixville and Lansdale, will have to wait until the construction for the new fire and ambulance departments are completed at 141 Wallace Ave., which is expected to happen in December.
"It's been a long time coming," said Council Vice-President Brenda Brinton. "I'm really excited that they'll be on our front doorstep."
Brinton said that the transferring of the fire company and finding an appropriate new tenant for the fire house was a "long time coming."
"(The council is) very excited to get another restaurant," said Council President Anthony "Chip" Gazzerro. "We're always excited to get another business, especially on a main street."
Mannion said that the true Irish pub that borough residents can expect to experience once constructed will welcome the entire family, and will not become the college bar that has almost become synonymous with pubs.
"I was born and raised in pubs, and (in Ireland) they're part of the community," he said."
www.omegare.com

Thursday, July 19, 2012

Philadelphia's Industrial Vacancy Decreases to 8.9%

The Philadelphia Industrial market ended the second quarter 2012 with a vacancy rate of 8.9%.


The vacancy rate was down over the previous quarter, with net absorption totaling positive 2,886,675 square feet in the second quarter. Vacant sublease space increased in the quarter, ending the quarter at 2,993,658 square feet.

Tenants moving into large blocks of space in 2012 include: Ulta Inc moving into 361,900 square feet at I-81 Distribution Center - Bldg 1, and Kimberly Clark moving into 342,500 square feet at 500 Independence Ave.

Rental rates ended the second quarter at $4.48, a decrease over the previous quarter.

A total of two buildings delivered to the market in the quarter totaling 71,858 square feet, with 5,876,105 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 9.2% from the previous quarter, with net absorption positive 46.48 million square feet in the second quarter.
Full report: http://omegare.com/Costar-2Q2012-Market-Report-Industrial.pdf
http://www.omegare.com/

Wednesday, July 18, 2012

PetSmart Selects Berks County for New Distribution Center

"National retailer PetSmart Inc. will locate its new 870,000-square-foot distribution center in Bethel Township, Berks County, and create at least 500 jobs, according to Pennsylvania Gov. Tom Corbett.


PetSmart will construct the distribution center in Berks Park 78, a new industrial park located in Bethel Township. The company will start construction on the $50 million distribution center in the fall of 2012, with completion expected in the first quarter of 2014. The project is expected to create at least 500 new jobs by 2016.

The company received a $2.3 million funding offer from the Department of Community and Economic Development, including a $1 million PA First grant, $245,250 in job training assistance and $1.1 million in job creation tax credits.

The project was coordinated by the Governor’s Action Team, a group of economic development professionals who work directly with businesses that are considering locating or expanding in Pennsylvania. The team worked with the Berks County Industrial Development Authority to bring the facility to Pennsylvania.

PetSmart Inc. is the largest specialty pet retailer of products, services, and solutions for pets. The company employs about 50,000 people and operates more than 1,241 pet stores in the United States, Canada and Puerto Rico."
http://www.omegare.com/

Tuesday, July 17, 2012

Phoenixville looks to develop former steel plant site

by Paul Jablow


"If you're flying over Phoenixville on a weekday, or perhaps glancing at a satellite map of it, the gash is instantly visible: 120-plus acres of unused land flanked by a village of stores, rowhouses and quiet streets.
Five years from now, business and community leaders hope, you will see something very different on the vacant land: apartments, specialty shops, offices and — perhaps most important — streets filled with pedestrians. Maybe even a minor-league baseball park.
The gash is the former site of the Phoenix Steel Co., which closed in 1976 and set off a decline that turned the borough in northern Chester County into what local developer Manny DeMutis calls "a ghost town. Parents were afraid to let their kids out on the street."
Recent developments such as a thriving string of restaurants, the refitting of the old Phoenix foundry as an interpretive center and convention facility, and an expanding art theater have encouraged local leaders to see a real renaissance under way.
And with open land more expensive than ever to develop, Borough Manager Jean Krack sees a bright future for such smaller urban centers as Conshohocken, Coatesville, and Phoenixville, where workers broke ground on a new borough hall last month. The bonds to finance it have been rated AA, Krack says, the highest for a Phoenixville project "in years."
Property assessments in the borough of 16,000 residents have grown from about $587 million in 2002 to $736 million in 2010, an increase of more than 20 percent, much of that in the teeth of the current recession.

Part of that, Krack says, is luck, being in the right place to take advantage of healthy job growth in the area and developments such as the ongoing $100 million expansion of Phoenixville Hospital. "Location is a key to this," he says.
He adds, however, that the borough has followed several strategies open to any city. One has been to work intensively with potential developers to get them answers as quickly as possible about what can and can't work within the borough's master plan and zoning code.
"All too often, developers get caught up in seeking a variance for this and a variance for that. We work on the difficult pieces first," Krack says.
The borough has also concentrated on two types of new development: restaurants to attract traffic from outside and upscale rental apartments rather than single homes or condominiums.
"It's an untapped market," Krack says. "With the flux in the job market, renting is safer."
But "there's still a blank canvas in the center of the community," says Barbara Cohen, manager of the Schuylkill Heritage Center. "We need a full-blown, colorful watercolor."
Cohen, a former executive director of the Phoenixville Area Chamber of Commerce, is encouraged by the first steel site project approved by the borough, a 350-unit rental apartment development to be built by the Philadelphia-based BPG Development Co. Groundbreaking is anticipated for next spring.
Company president Stephen M. Spaeder says the apartments are "the kind young professionals want to be in," near a walkable downtown and a reasonable commute to work.

"The strength is the proximity to so many jobs," Spaeder says. The borough is a short drive from employment centers such as Great Valley, King of Prussia, Phoenixville Hospital, and the area's pharmaceutical companies.

Many young people working there don't want to live in "the subdivision they grew up in," DeMutis says. Plus, "They have no interest in the 45-minute commute to work."

Spaeder and BPG vice president John Forde envision the development — strictly one- and two-bedroom units — as attracting young professionals and empty nesters. It will also add little burden to the Phoenixville Area School District. Out of more than 500 new residents, according to the company's fiscal impact summary, just 24 will be school-age children.

Its entrance will also feature a highly unusual landmark: the oldest known Ferris wheel in the country, fabricated at the Phoenix Steel Co. and installed in 1895 at an amusement park in Asbury Park, N.J. When the park closed, the wheel spent seven years in exile at a Biloxi, Miss., water park and was eventually purchased by the heritage center. The wheel won't be operational.

Cohen is eager to know what will go in the 100-plus remaining open acres of the steel site. The borough so far has approved plans for only a seven-acre project proposed by the DeMutis Group that would include apartments, stores and a 30,000-square-foot office building
To date, however, DeMutis has not arranged financing for his project and the rest of the site remains a question mark, although Krack says that a new road through the steel plant site, for which federal funds have already been approved, will make it more marketable.
David Gautreau, a borough councilman, says Phoenixville has also been in discussions with a minor-league baseball team — which he declined to identify — to come to the borough if funds can be raised for a new ballpark on the steel site.
Parking and traffic are already big issues in the borough. "If you come down here at night you'll see a wall of traffic and that sometimes discourages people," Gautreau says. "If you keep growing and growing, how do you maintain the traffic flow?"
Says Krack, "There's no doubt that parking and transportation are going to be the new priorities. … We don't have a parking garage. We're right at that tipping point of needing a garage. It's very difficult to find parking after 5 o'clock."
During rush hour, the borough already has traffic jams and Route 422, the main thoroughfare in the area is, in DeMutis' words, "a joke."
In recent years there has been talk of rail service through the borough to Great Valley and Paoli, but this has never materialized. The likely alternative, Krack says, is improved area bus service, which is, of course, easier to finance.
Business leaders, including Robert S. Hankin, who led a group that developed the old Phoenix Steel foundry building, view the glass as half-full. "If you're worried about parking," Hankin says, "it means people are coming to your town."
http://www.omegare.com/

Monday, July 16, 2012

Frontage Labs moves, plans to hire 100

by Natalie Kostelni and John George

"Frontage Labs has signed a long-term lease on space at the Eagleview Corporate Center where it will now have room to grow and add up to 100 jobs over the next three years.


The company will relocate its headquarters from the Valley Creek Corporate Center in Exton, which isn’t far from its new space. After considering options around the region, the company took 80,000 square feet of space once occupied by Adolor Corp. The property is owned by Hankin Group.

Frontage’s search for new space came as the company sought to consolidate several of its offices throughout the region as well as a way to accommodate the growth it expects to continue to experience. When it relocated to Pennsylvania from New Jersey in 2004, it had 14 employees. By 2008, the company had 90 employees and now has 180 people working for it.

“We’re certainly going to continue to grow,” said Ron Connolly Sr., senior vice president at Frontage. “We hope to add 50 to 100 jobs over the next three years and the new space certainly allows that to happen.”

The company will relocate from 25,000 square feet it has at 75 E. Uwchlan Ave. in Exton, 6,000 square feet at 224 Valley Creek Blvd. in Exton where it maintains its headquarters, as well as 22,000 square feet at 105 Great Valley Parkway in Malvern where it maintains labs and its bioanalytical group. Frontage had already been subleasing about 7,000 square feet of the Adolor space to conduct small animal research.
Full story: http://tinyurl.com/6mxk5cx
http://www.omegre.com/

American Realty Chairman: $64 Million Acquisitions Plan


http://www.omegare.com/

Cozen O’Connor signs a big lease in One Liberty

by Jeff Blumenthal
Cozen O’Connor has signed a 17-year lease at One Liberty Place, where the firm will occupy nine floors and about 200,000 square feet. The law firm currently is located at 1900 Market St., where it endured an acrimonious relationship with its landlord toward the end of its 31-year stay in the building.


Cozen O’Connor, which has 215 attorneys and 350 staff members in its Philadelphia headquarters, will take floors 21 through 28, as well as the seventh floor of the building, thus filling the space that will be vacated by Reed Smith in 2014 and then some. Cozen will retrofit the space before moving in spring 2015.

That opportunity came when Pittsburgh-based Reed Smith late last year decided to move its Center City offices to 1717 Arch St. after spending more than 20 years at One Liberty. It signed a long-term lease on 115,000 square feet at the building — once known as the Bell Atlantic Tower but now commonly known as Three Logan Square — and will move in early 2014. That created a 150,000-square-foot vacancy at One Liberty on floors 23 through 28 and a portion of the 22nd.
Full story: http://tinyurl.com/739ea9d

http://www.omegare.com/

SBA 504 helps small firms get loans

This is a great example of using commercial real estate as an investment vehicle.

"Las Vegas dentist Chris Cozine wanted to cut costs after the Great Recession. He found an unlikely way: He ditched the office he was renting and bought 6,600 square feet of his own.
Besides improving his surroundings, Cozine is paying $1,800 a month less on the mortgage than he was paying in rent.
"I save money, but the icing on the cake is that the office decor is of my choice," he said.
At an otherwise bleak time for real estate, there's a mini-boom in one corner of commercial property. Dentists such as Cozine, restaurant owners, doctors and other business owners are snapping up space in vacant strip malls and office buildings.
They're doing it with help from a government loan program for small businesses that has been around since 1959. The program has shot up in popularity since the end of the recession, as private lenders are wary about extending real estate loans.
The amount of small-business loans under this program rose at an annual rate of 16 percent in the three years after the end of the recession in 2009 to $4.45 billion, according to the Small Business Administration. After the 2008 financial crisis, banks were so reluctant to lend that 27 percent of such loans disappeared in 2009.

It's a good time to be a buyer now. Commercial real estate prices are at rock bottom, having fallen 30 percent from the peak nationally. And interest rates — for those who can get loans, anyway — are at historic lows.
However, small businesses balk at the 25 percent required up front for a typical loan, especially after they have worked hard to save cash after surviving a brutal recession.
But these government-backed loans make it enticing. Business owners must make a down payment of just 10 percent, compared with the 25 percent to 40 percent demanded in a commercial property loan.
The attraction for banks is that it is a less risky loan, because they commit only 50 percent of the loan, while the government shoulders the 40 percent that's left over.
At some banks, the numbers of these loans have soared. In the first three months of this year, such government-backed loans grew by 16 percent, after growing 23 percent for all of 2011, at JPMorgan Chase. At Bank of America, which didn't provide the latest numbers, such loans grew by 20 percent last year.
Who qualifies for the loans, termed SBA 504, depends on the industry. For the most part, government rules require that the business have less than $5 million in income and fewer than 500 employees.
The loans are typically for 20 years — compared with the standard 30 years for most fixed-rate home loans — and come with interest rates that are slightly below market rates.
It was a winner for Gary and Zell Dwelley, the husband-and-wife owners of Beach Break Cafe in Oceanside, Calif., just north of San Diego. They had leased their restaurant space for 22 years and wanted something bigger.
"What we really felt bad about was that we only had one bathroom, which wasn't even handicapped-accessible," Zell Dwelley said.
Down the street from their restaurant, a developer had refurbished an abandoned gas station with plans to rent space to Starbucks. However, the developer couldn't get Starbucks in after the economic downturn. The Dwelleys noticed that the price on the property dropped from $1.2 million before the recession to less than $700,000 in 2010. They decided to bid.
The restaurant owners clinched the deal at $690,000 and scraped together everything they had for the 10 percent down payment. JPMorgan Chase financed the deal. Now the restaurant has two bathrooms, both accessible to the disabled.
These loans made up just 10 percent of the overall $50 billion commercial real estate that was sold in 2011. But they're helping stabilize prices, which rose 14 percent in 2011.
The Las Vegas dentist, Cozine, kept 3,400 of the 6,600 square feet for his own office and rented the rest to a pharmacy, which is providing him extra savings. He believes that property prices will start rising again at some point.
"I look at my office as a retirement nest egg," Cozine said."
Video on SBA 504: http://www.youtube.com/watch?feature=player_embedded&v=IAukAml0Nbg
http://www.omegare.com/

Thursday, July 12, 2012

Philadelphia's Office Vacancy Decreases to 11.3%

The Philadelphia Office market ended the second quarter 2012 with a vacancy rate of 11.3%.
The vacancy rate was down over the previous quarter, with net absorption totaling positive 44,615 square feet in the second quarter. Vacant sublease space decreased in the quarter, ending the quarter at 1,344,211 square feet.

Tenants moving into large blocks of space in 2012 include: Young Conaway Stargatt & Taylor, LLP. moving into 218,335 square feet at The Courthouse; PJM Interconnection moving into 105,861 square feet at 2750 Monroe Blvd; and Gamesa moving into 66,506 square feet at 1150 Northbrook Dr.

Rental rates ended the second quarter at $20.97, an increase over the previous quarter.

A total of seven buildings delivered to the market in the quarter totaling 82,809 square feet, with 1,755,598 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. national office vacancy rate, which decreased to 12.1% from the previous quarter, with net absorption positive 20.72 million square feet in the second quarter.
Full report: http://omegare.com/Costar-2Q2012-Market-Report-Office.pdf
http://www.omegare.com/

Fiberlink adding Center City office

by Joseph N. DiStefano


Fiberlink, a 300-worker, cloud-based, mobile-device-management firm in Blue Bell, is adding a 30,000-square-foot office at Three Parkway, the former Reliance Insurance building, and plans to add up to 140 engineers, salespeople, researchers, and technicians there, the mayor told me.
Looking for space for new hires and current Philadelphia employees tired of reverse-commuting to the suburbs, Fiberlink called the city Commerce Department on May 14, the day Paoli-based Bentley Systems announced a Philadelphia office at the same tower. The company, like Bentley, hasn't asked for financial incentives, Deputy Mayor Alan Greenberger added.
Nutter said the city has been easier to sell in the last two years, since construction cranes have risen at Temple, Jefferson, the Buck Co.'s Chestnut Street apartments, and hotels by the Convention Center and Penn, among other projects.
"We're seeing population growth for the first time in 60 years because the 25- to 34-year-olds are living in Center City, Northern Liberties, University City, Manayunk, the Kensington area, you name it," Nutter said. Cities "are where the talent is." Nutter and Fiberlink chief executive James Sheward plan a ribbon-cutting next week.
http://www.omegare.com/

Wednesday, July 11, 2012

OSIsoft Signs for 30,000 SF in Philadelphia

"OSIsoft leased 29,884 square feet at 1700 Market St. in Philadelphia. Occupancy is to be determined as the space is currently being built out. OSIsoft is an existing tenant in the building, already occupying the 22nd floor.
1700 Market is a class A, 32-story, 841,172-square-foot office building constructed in 1968. The property is located on 1.4 acres in the Market Street West submarket.
As an international computer software company headquartered out of San Leandro, CA, OSIsoft provides business information management tools worldwide."
http://www.omegare.com/

Landings at Pine Lake Trade for $33M

"TGM Associates LP has sold the Landings at Pine Lake, a 520-unit multifamily complex at 98 Oak St. in Lindenwold, NJ, to Azure Capital Partners for a reported $33 million, or about $63,000 per door.


The two-story, 526,400-square-foot apartment community is comprised of 314 one-bedroom and 206 two-bedroom units spread across 47 buildings. The property boasts 91% occupancy with average monthly rents between $866 and $1,194, and features a clubhouse, fitness center, swimming pool, picnic area and tennis courts. In-unit amenities include a dishwasher, washer/dryer and fireplace."
http://www.omegare.com/

USM HQ in Norristown Receives LEED Silver

"The 90,000-square-foot office building located at 1880 Markley St. in Norristown, PA was awarded the prestigious LEED Silver-CI designation by the US Green Building Council for its investment to sustainability, utility consumption and other green features within the building's commercial interior.
Home to USM, a subsidary of EMCOR Group, some of the features include skylights, a green roof that reduces water runoff by 50 to 90 percent, high efficiency appliances, bike racks, and preferred parking spaces for alternative fuel vehicles, among other amenities.
The three-story building was originally constructed in 2011 on one acre in the Norristown / Valley Forge submarket of Montgomery County."
http://www.omegare.com/

Tuesday, July 10, 2012

Bryn Mawr Trust, Skanska ink CRE deals

by Natalie Kostelni

Bryn Mawr Trust signed a lease with Federal Realty Investment Trust  at the Bala Cynwyd Shopping Center on City Avenue and Belmont Avenue and will open a 4,000-square-foot branch late in the fourth quarter …

Skanska USA Building Group moved into 19,100 square feet at 518 E. Township Line Road in Blue Bell, Pa. The new office space is in the running for a LEED gold designation for commercial interiors. Skanska signed a 15-year deal …


BPG Properties Ltd. of Philadelphia sold Madison at Abbey Court, a 176-unit multifamily community located in Belmont, N.C., for $9.4 million to American Residential Investment Management. The property is seven miles from Charlotte. At the time of the sale, the community was 98 percent leased …

 In another BPG deal, the firm sold Waterfront at Harbor Bay, a 381,439-square-foot office and industrial complex in Alameda, Calif., for $46 million. Amstar of Denver bought the property …

Hill International won a contract from the General Authority of Civil Aviation of the Kingdom of Saudi Arabia to provide project management oversight services for the $1.5 billion King Abdulaziz International Airport (KAIA) improvement program in Jeddah, Saudi Arabia. The one-year contract has an estimated value to Hill of about $3.8 million …
RedGo Development is venturing into North Carolina. It bought 42 acres just outside of Raleigh where it seeks to develop a multifamily complex. It purchased the land from Wells Fargo Bank and the previous owner had partially subdivided the property into 98 single-family lots, but those approvals have since expired …

The owners of 1608 Walnut Street, renwed leases for Diamond Polsky & Bauer and Alexander & Pelli. The two firms combined occupy 7,190 square feet on the ninth floor. Diamond Polsky & Bauer has been in 1608 Walnut since the 1990s and Alexander & Pelli had been in space at 1800 John F. Kennedy Blvd. before relocating.
Full story: http://tinyurl.com/chbo8vq

http://www.omegare.com/

Masonic Village at Lafayette Hill Plans Expansion

Masonic Village at Lafayette Hill has plans for an expansion valued at $14.5 million. The continuing care retirement community is situated at 801 Ridge Pike. The project will add a 62,000-square-foot space featuring 45 apartments, which will increase the count of retirement living units to 143. The facility's facade will also be renovated to provide a contemporary look.

Construction will be commenced after the reservation of 70% of the apartments. The project is expected to be concluded in late 2013 or early 2014.
http://www.omegare.com/

Friday, July 6, 2012

Apartments heating up

by Natalie Kostelni

A developer is proposing another apartment complex along the Delaware River, adding to a bevy of multifamily projects that are either under way or in the pipeline in Center City.
Lou Cicalese’s Ensemble Investments is proposing a $60 million development that would have between 180 and 200 apartment units on Piers 34/35.
Cicalese is also considering constructing another apartment project on Pier 40 that would also have an additional 200 apartments but that proposal has been met with controversy. He wants to build a structure that is 185 feet high but a 100-foot height limit is in place along that part of the river.
Cicalese also recently revived his Marina View project along the Delaware River. The revised project would entail a single, $60 million, 14-story apartment building at 230 N. Christopher Columbus Blvd. The structure would sit atop a garage and have 180 rental units as well as some retail space.
Ensemble’s proposals add to an already bustling multifamily market. In Center City, a dozen projects totaling a tad more than 2,500 units are under way or in the pipeline, causing some observers to wonder if Philadelphia can absorb this many apartments and if a bubble is in the works.

Full Story: http://tinyurl.com/c2fnw28

Two Wayne buildings to be joined in overhaul

by Natalie Kostelni
The new owners of 530 and 580 E. Swedesford Road here are launching a $16 million overhaul of the office buildings.


The project would entail connecting the two four-story structures to create room for a new fitness center, conference center and café. The connector will enlarge the square footage of each floor and create what will end up being 272,000 square feet of contiguous space. It will also get a new name: CrossPoint at Valley Forge. D2 Solutions is the architect.

The properties are about 90 percent vacant. It was bought a year ago by MIM-Hayden Real Estate Fund of Conshohocken along with Davis Cos. of Boston. They bought what had been a $44 million first mortgage at about a $15 million discount.
Full story: http://tinyurl.com/br8y9nf
http://www.omegare.com/

Chester, Pa., apartment complex sold for $3.4M

by Natalie Kostelni

City National Bank has sold Park Terrace Apartments in Chester, Pa., for $3.4 million.
The 216-unit multifamily complex at 1127 Ward St. is a Class C complex was sold to an undisclosed buyer. The Los Angeles-based bank had taken the property back after it bought the now defunct Imperial Capital Bank. The previous loan was at $6.15 million, or $28,472 per unit. Lengthy bankruptcy proceedings and eventual foreclosure had left the property in disrepair, with mold and water damage to 91 units as well as unrepaired damage from a small fire. In all, the complex needed about $3.75 million in repairs.
Full story: http://tinyurl.com/cv5kohh
http://www.omegare.com/

Sunday, July 1, 2012

Ventas REIT CEO Interview with Jim Cramer


http://www.omegare.com/

An update on Philadelphia region's rental-apartment market

"The confluence of low interest rates and falling prices has made homeownership more affordable than in the days of the cave dwellers.
The money, however, remains on the Philadelphia rental-apartment market, whose performance, offers further evidence that "a sustainable recovery has taken hold."

Although a minimum household income of $49,000 is required to afford the monthly mortgage debt on a previously owned house at the region's median price — $206,600 in the first quarter of 2012 — high down-payment requirements and stricter lending rules are deterring prospective buyers.

The apartment-vacancy rate has returned to a normal level: 3.9 percent in the first quarter, down 2.6 percentage points since it peaked at the end of 2009, the firm said.
Demand for in-city residences pushed the Center City vacancy rate to a seven-year low, 4.1 percent. The rate is higher in South Jersey — 8.5 percent in Cherry Hill/Evesham/Medford — but even that is almost a percentage point lower than it was in the first three months of 2011.

This strong demand will continue, predicting the vacancy rate regionwide would fall to 3.6 percent in the rest of the year.

That means property owners have been able to raise rents without much opposition from tenants. Average asking rents rose 0.2 percent in the first quarter from fourth quarter 2011, to $1,046 a month. Effective rents, minus concessions and allowances, rose 0.6 percent, to $1,004 a month.

Since first quarter 2011, asking rents have risen 1.9 percent, while effective rents have climbed 2.4 percent.

Average asking rents are expected to bump up 3.2 percent, to $1,077 per month, during the rest of the year, and that effective rents will surge 4 percent, to $1,038, during the same period.

Investor demand for rental apartments remains keen. In the last year, measured by dollar volume, institutions increased purchases threefold in the Philadelphia region.
A modest shortage of available properties persists, but owners are increasingly acting to take advantage of strong investor demand and compressing capitalization rates — the time it takes for a building to start paying for itself — triggering a gradual rise in sale listings.

The median price of properties sold in the last 12 months was $71,600 per unit. In the preceding 12 months, it was $80,400 per unit.

With greater transparency on values and a narrow bid-ask spread, investors will continue to take advantage of strengthening property operations, limited near-term construction, and low interest rates to execute transactions in the months ahead.

How limited is multifamily construction?

There have been few additions to the local market-rate rental inventory in the last 12 months. Since the first quarter of 2011, just the 97-unit 600 on Broad in Center City has been completed.

Multifamily developers are becoming more confident, the firm said, with 6,500 market-rate units planned for the region — an increase from 4,100 rentals six months ago.

But only a few projects are proceeding, as roughly 1,700 units of for-sale and rental multifamily housing received permits in the last 12 months, a decrease of 8 percent from the preceding year.

Additions to the pipeline of planned projects include the 612-unit Renaissance Walk in Pennsauken and 159 units in the Bordentown Transit Village project, to be completed in 2014.

Developers are on track to add 1,000 market-rate rentals in the region this year, which would be the highest annual output in four years.”
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