Thursday, January 31, 2013

Teleflex moving headquarters to Chester County, Pa.

by Natalie Kostelni

After having a presence in Limerick, Pa., since the early 1970s, Teleflex Inc. has decided to relocate to new offices off Swedesford Road in Wayne, Pa., that will also serve as its headquarters.
The company has signed a long-term lease on 84,000 square feet at CrossPoint at Valley Forge, a two-building complex at 530 and 580 E. Swedesford Road. 
The medical device company will consolidate its Limerick offices as well as space it has in Reading, Pa., into the new space. About 160 employees will initially move to the Swedesford Road offices though the space can eventually accommodate 200 people. It will continue to maintain one of its sites in the Reading area.

Fully story:

Barry Sternlicht Talks Economic Outlook and Real Estate (Video)

Wednesday, January 30, 2013

Brandywine Realty retains Drinker Biddle & Reath

Natalie Kostelni
Drinker Biddle & Reath has signed a new 15-year lease to remain in One Logan Square.
The company will occupy 155,000 square feet on just over seven floors and will be shrinking from 206,000 square feet on 10 floors at the building at 130 N. 18th St. in Center City. The lease will run from June 2014 through 2029. The law firm, which moved to the building in 1999, will have its offices renovated and has retained Studios Architecture to design a more efficient space. Brandywine Realty Trust is the landlord.
Full story:

Lack of Supply in Commercial Property Market (Video)

Tuesday, January 29, 2013

PHH Mortage Inks Built to Suite Opportunity

PHH Mortgage Corp. (PHH) has agreed to a lease on a 97,000 SF new build-to-suit facility at 1760 Wehrle Drive in Amherst, NY, with plans to move its soon-to-be-acquired mortgage servicing business currently located in Depew, NY. Terms of the deal were not disclosed.

As part of the agreement announced in May 2012 between HSBC Bank USA, N.A. and PHH Mortgage, HSBC will outsource its mortgage processing and servicing business to PHH, and transfer approximately 400 former HSBC employees to PHH Mortgage. PHH was seeking a site that could accommodate its existing operation and a potential future expansion. PHH decided on the Buffalo market because of their ability to retain an experienced workforce, assisted by financing and tax incentives provided by the State of New York and the Amherst IDA.

The new PHH building will be developed by Zaepfel Development of Amherst and is scheduled for occupancy in the fourth quarter of 2013. The 97,000 SF two-story facility will feature an open floor plan design and will have capacity for up to 800 employees. The building will also include underground parking.

Team Capital Bank Buys 74,000sf Building in Bethlehem

GSE Realty East sold Penn Corporate Center to Team Capital Bank. The 74,000 square feet office building is located on 3001 Emrick Boulevard in Bethlehem and sold for 11.2 million dollars.

 Headquartered in Bethlehem, Team Capital Bank is one of the faster growing de novo banks in the country. They provide a comprehensive set of financial services, including traditional retail and commercial banking products, mortgage banking and commercial lending.

Sunday, January 27, 2013

Four new hotels heading to Philadelphia

Calling it a building spree might be premature, but at least four hotels are now under construction or proposed for Philadelphia, the most since such development came to a halt for several years with the recession and its accompanying lending crunch.
The newest project, not yet formally announced, is a Hotel Indigo planned for the Bailey Building at 1218 Chestnut St., less than two blocks from a proposed W/Element Hotel at 1441 Chestnut.
A representative of InterContinental Hotels Group, which owns the Indigo brand, said late Thursday that the proposed hotel was expected to have about 150 rooms and open in the first half of 2014.
Regional hospitality expert Peter Tyson, of PKF Consulting USA, said that although financing was still a challenge, the new hotels here reflect the gradual thawing of the credit markets.
These are "pent-up pipeline additions that were slowed due to the recession and the accompanying dearth of financing," Tyson said. "However, two of the four projects [the Indigo and the W/Element] have yet to be financed, so we're not out of the woods just yet."
InterContinental Hotels has developed 50 Indigo locations worldwide. It has plans to double that number in three to five years, with 50 more Indigo hotels planned for North America. Philadelphia is part of the brand's rapid expansion.

A principal in the Hotel Indigo project is Lenard Thylan, president of Thylan Associates Inc., a New York-based real estate development company.
Thylan declined to comment on the Philadelphia proposal.
Already under construction in the city are a 246-unit Home2Suites at 12th and Arch Streets and a Courtyard by Marriott at the Navy Yard with 172 rooms. Both are due to open later this year.
If all are completed, the four hotels would add a combined 1,268 rooms to the city's inventory of 11,600 - enough to support the expanded Pennsylvania Convention Center, which officials say requires about 12,500 rooms.
In addition, a new hotel tax will kick in July 1, boosting the rate to 15.5 percent from 15.2 percent, or 50 cents per room night - additional revenue that will go toward marketing the city's tourism industry.
Said Jack Ferguson, president and chief executive of the Philadelphia Convention and Visitors Bureau, which is charged with booking the Convention Center: "Each of the other hotels mentioned is important . . . and [will] help us serve multiple market-demand generators: commercial, government, leisure, international, as well as meetings and conventions."
But Ferguson wasn't coy about which would have the most impact: the 700-room W/Element Hotel. His agency has been pushing for a second hotel to complement the 1,408-room Philadelphia Marriott for large conventions or multiple gatherings.
"The more delegates we can house under one roof, within walking distance of the center" the better," he said.
Tyson called the W/Element "a game-changer." Once completed, the Indigo and W/Element will straddle Broad Street, providing lodging in an area that up to now has had few options.
Currently, the Bailey Building has ground-level storefronts and upper-level office space. The W/Element will be built from the ground up on a half-acre site that is now a surface parking lot.
Though the two hotels will help upgrade Chestnut Street, Tyson said, "there won't be direct synergy between the two" because they will cater to "two separate sub-neighborhoods."
Though it would not be a W, which is a "luxury" hotel brand, Hotel Indigo belongs to the "upscale" category two rungs below, according to Smith Travel Research.
InterContinental Hotels' website boasts that each Hotel Indigo "is unique and designed to reflect the local culture, character and geography of the surrounding area."
Upscale boutique hotels with fancy names - Hotel Palomar, Le Meridien, and Hotel Monaco, which opened Oct. 11 - have been cropping up in the city in the last three years.
Last week, Alexandria Frisch of Manhattan stayed at the Monaco at 433 Chestnut St., across from Independence Mall, with her boyfriend.
"I think it's good for Philadelphia," Frisch said. "I think it will attract more couples coming down for weekend retreats, versus just families coming down for tourism."

Saturday, January 26, 2013

The Goat's Beard coming to Manayunk

Sean Coyle, who founded Bourbon Blue, is revving up a new project in Manayunk.
The Goat's Beard - and Coyle is not referring to the hair beneath the chinny-chin-chin of a farm animal but to the native Pennsylvania plant (Aruncus) - is taking shape at 4201 Main St., the former Main Street Bar & Grill and what for many years was Thomas'.
He calls the menu "whiskey bar meets old-American cooking." Chef Dan Connelly (a former owner of Northern Liberties' Copper Bistro) will obtain as much of the American menu from local sources as possible. Industrial-meets-rustic atmosphere.
Opening is projected March 11.

Friday, January 25, 2013

Lancaster Multifamily Portfolio Trades for $28.2M

A Pennsylvania real estate investment company sold its three multifamily properties containing 387 apartments in Lancaster, PA for $28.2 million, or about $73,000 per unit. 

"The portfolio includes three recently improved multifamily buildings in the burgeoning Lancaster area," says Pierce. "These highly desirable assets were in excellent condition, having recently undergone improvements such as new windows, sliding patio doors, renovated pool areas and fitness centers." 

Windsor Court Townhomes at 1821 Hidden Lane totals 126 units in a single-family neighborhood in the western suburbs. Its recent improvements include a renovated fitness center, pool area, community room and leasing office, along with new windows and sliding doors. The asset commanded $10.9 million. 

Cherryhill Villas at 560-02 Estelle Dr. totals 118 units on 12 acres located just three miles from Windsor Court. French architecture and tenant-paid utilities separate the property, which brought a price tag of $8.5 million. 

Sweetbriar Apartments at 1917 Oregon Pike totals 143 units in a heavily-traveled downtown corridor with numerous retail and industrial jobs and a mile from all major highways. The property enjoys a refurbished private pool area and new windows and doors, as well as significant upside potential. The community sold for $8.8 million. 

The sale included the assumption of existing debt from agency lender financing on all three properties.

REITs on the Rails

Philadelphia Area Commercial Sale and Lease Trends

Thursday, January 24, 2013

Schenker Logistics Inks New Deal at Southpoint Industrial Park

Schenker Logistics, a transportation and logistics provider, signed a lease for 181,990 square feet of warehouse space located at 700 Allen Rd. in Carlisle, PA. 

Built in 2001, the 181,990-square-foot warehouse facility, located in the Southpoint Industrial Park, sits on almost 13 acres. Schenker Logistics will be the sole occupant of the building. 

Endurance Real Estate Sell Arcadia Facility

Developer Woodmont Industrial Partners and investment management company AEW Capital Management purchased the industrial building at 9747 Commerce Cir. in New Smithville, PA from Endurance Real Estate Group LLC for $21.3 million, or about $55 per square foot. 

The 384,695-square-foot building was constructed in 2007 in the Arcadia West Industrial Park on a 25.6-acre parcel. The asset was fully leased at the time of sale.

PREIT Sells Power Center for $76.8M

Pennsylvania Real Estate Investment Trust (PREIT) sold the Paxton Towne Centre located at 5125 Jonestown Rd. in Harrisburg, PA to The Kroenke Group for $76.8 million, or approximately $166 per square foot. 

The power center was built in 2000 on 96.8 acres in the Harrisburg Area East submarket of Dauphin County, and was nearly 100 percent occupied at the time of sale. The properties that traded total approximately 462,696 square feet anchored by Weis Markets, HHGregg, Babies R Us, Kohls, Bed Bath & Beyond, Old Navy and Michaels. The center is also anchored by a separately-owned Target and Costco that were not included in the sale, but bring the total size of the center to nearly 736,000 square feet.

Tuesday, January 22, 2013

REITs: A word of caution

by Joe Davis  Ph.D., (Vanguard's chief economist and head of Vanguard Investment Strategy Group)

In my past post on dividend-paying stocks, some of you responded with questions about REITs (real estate investment trusts). You asked whether REITs are effective “bond substitutes,” whether they are a “defensive” equity investment, whether they’re good short-term hedges against inflation, and about their recent outperformance versus the broader stock market.
My answers are “No,” “not recently,” “no,” and “be cautious.”
With current yields on broad fixed-income portfolios less than appealing to many investors, some have argued the merits of substituting dividend-paying stocks—and REITs, in particular—for bonds. They base their argument on the fact that current bond yields are lower than the dividend yield for REITs—1.7% for the Barclays U.S. Aggregate Index versus 3.4% for the FTSE NAREIT All Equity REITs Index—and that the upside potential for stocks in any equity rally is higher than for bonds. However, as you’ll see in the chart below, REITs tend to correlate with the broader equity market, not with bonds. This is especially true in down stock markets, such as 2008-2009.
At times, REITs may outperform the broader equity market (as they have over the past several years), and vice versa. But, as the chart illustrates, if you substitute REITs for bonds in order to generate greater income, the final result is a more aggressive and more stock-heavy strategic asset allocation. In doing so, we would expect an increased likelihood of higher nominal returns over long periods of time, but that’s not necessarily because of the higher anticipated income stream. Rather, it’s because stocks are riskier and more volatile than bonds.
While I certainly sympathize with investors struggling in this low-yield environment, I just hope that we all appreciate that dividend-paying stocks, including REITs, are not substitutes for bonds. That’s not to say they won’t outperform a broad bond portfolio over the next several years. Rather, my point is that such an income-focused strategy is not a no-brainer, nor is it risk-free.

Full story:

Saturday, January 19, 2013

$100M renovation Planned for Presidential City on City Ave.

by Natalie Kostelni

Presidential City, a massive, dated apartment complex on the Philadelphia side of City Avenue, is slated to undergo a $100 million renovation.
The new owner, Post Brothers Apartments of Philadelphia, envisions gutting Presidential City’s four, 12-story buildings, re-skinning the fa├žades and reconfiguring portions of one of the structures fronting City Avenue for up to 70,000 square feet of retail and amenity space.
Even though the property is highly visible and has always maintained an occupancy rate of more than 90 percent, the complex looks every bit of its age. Its more than 1,000 units were built beginning in the early 1950s.
“It’s a big, giant, tired hulking property,” said Matt Pestronk, president of Post Brothers. “It’s so old and capital intensive. That it traded brings it to another chapter of its life.”
Few apartment complexes in the area are as large and well known as Presidential City. It was constructed by renowned Philadelphia builder John McShain.
“He’s part of the history of Philadelphia and he was a great builder,” said Ronald Rubin, who, along with his father, helped construct 555 City Ave. directly across the street from Presidential City. That office building was completed in 1964.
John McShain Inc. was one of the largest builders in the nation, completing more than 300 projects throughout the mid-Atlantic region during the mid-20th century. Most of McShain’s work was done during the New Deal era in Washington, D.C., where he built 80 projects. Some of the projects McShain’s company completed are nothing short of spectacular. The Pentagon, the Jefferson Memorial, the State Department building and the John F. Kennedy Center for the Performing Arts are all his work. He also undertook a major renovation of the White House in 1951.

Where Philadelphia’s office market is headed in 2013

by Natalie Kostelni
The Center City Philadelphia office market ended the year with a 14.1 percent vacancy rate, which equates to about 6.2 million square feet of empty office space.
That vacancy rate is more or less flat when compared with last year but that number is expected to decline this year and eventually put pressure on rents.
“Rental rates are trending upward, slowly but surely.” 
Among some of the other highlights:
• Brandywine Realty Trust  paid $34 million, or $76 a square foot, for 1900 Market St., a 456,922-square-foot structure better known as the Stock Exchange building. No word yet on what the company will do with the building.
• Tenant improvement dollars are expected to diminish as space continues to tighten up and rents rise.
• Net absorption for this year will come in around 150,000 square feet and push the vacancy rate down to 13.75 percent.
• New office construction is a maybe and the market will see more firms moving in from outside of the city.
• While the last couple of years saw tenants relocating to trophy space from Class A space, the new trend this year will see that flight to quality continue but to Class A from Class B.
• Companies will continue to shrink the amount of space they use even though they will maintain or grow their employee base.

Friday, January 18, 2013

Glen Brook Apts Trade for $13.5M

A private investor has acquired the 174-unit Glen Brook Apartments at 201 S. Macdade Blvd. in Glenolden, PA from an unidentified REIT for $13.5 million, or about $78,000 per unit. 

The 14 three-story multifamily buildings total 141,600 square feet and were built in 1962 on 4.1 acres in the Delaware County submarket of Philadelphia. It features 88 one-bedroom, 84 two-bedroom and 2 three-bedroom units with average asking rents between $850 and $1,600 per month.

Wednesday, January 16, 2013

Death of the Shopping Mall?

Drexel University Leases 185,000 SF in Philadelphia

Drexel University has signed a new lease for 119,000 square feet, expanding to a total 185,000 square feet at the Three Parkway office building located at 1601-1645 Cherry St. in Philadelphia, PA. Occupancy will take place in phases through 2015. 

Three Parkway is a 20-story, 561,351-square-foot, class A office tower constructed in 1970 and renovated three times since in the Market Street West submarket. The building has been awarded an Energy Star label every year since 2009. Drexel's 10-year deal will push occupancy at the building up to 96 percent. 

"Three Parkway stands out because of its convenient, highly accessible location in close proximity to all mass transit and major roadways," said Deidre Hardister, senior vice president of asset management with BH REIT I. "It’s also only one block from Hahnemann University Hospital, where Drexel’s nurses currently practice. These factors helped make Three Parkway the most desirable building for Drexel’s School of Nursing."

Tuesday, January 15, 2013

Market Mavens on Economic Outlook (Video)

BPG Properties reports Bucks County leases in 4Q

Natalie Kostelni

BPG Properties Ltd., a private equity real estate fund manager, reported robust fourth-quarter leasing activity.
The Philadelphia company completed 1.3 million square feet of leases, pushing its total leasing activity for last year to more than 4.3 million square feet. Some of its Philadelphia deals include:
• Heraeus Electro Nite Co., which renewed on 10,036 square feet at Summit Square in Langhorne, Pa.
• Bracket Global expanded with 9,486 square feet at Summit Square. 
• Optinose Inc. signed a 5,466-square-foot lease at 1010 Stony Hill Road in the Lower Makefield Corporate Center in Yardley, Pa. 
Aegis Property Group represented BPG in the leases.

Friday, January 11, 2013

AT Chadwick Co Acquires Bensalem Industrial Bldg

The Bucks County Economic Development Corporation sold 2260 State Rd. in Bensalem, PA to A.T. Chadwick Company, Inc. for $3 million, or about $32 per square foot. 

The 93,680-square-foot manufacturing facility was constructed in 1970 and renovated in 1994. It features heavy power, ceiling heights of 18 to 20 feet, and 12,824 square feet of built-out office space

PREIT sells a New Jersey mall

Philadelphia-based mall owner Pennsylvania Real Estate Investment Trust has completed the sale of the Phillipsburg Mall in New Jersey for $11.5 million.
The company (NYSE:PEI), which owns the Gallery in Philadelphia, Willow Grove Park and other area shopping centers, said the sale was part of its strategy to jettison noncore sites. It said the average sales at Phillipsburg were "$235 per square foot and non-anchor occupancy was 66.1 percent as of September 30, 2012, which compare to PREIT’s portfolio averages of $379 per square foot and 89.1 percent."
It didn't identify the buyer.

Thursday, January 10, 2013

Foundry Place Coming to Hale Pump Property

On Monday evening Tisons Homes presented its plan for a residential development, Foundry Place, before the Zoning Commission.  The development would subdivide the Hale Pump property into 35 lots and three open spaces.  If you are trying to visualize the area, the homes on the far right of the image are across the street from Trattoria Totaro.
The community, as proposed on Tuesday, is a mix of single homes, duplexes and town homes.  The singles and duplexes all include a porch and deck and every home, including the town homes, has its own garage.  To create the single homes, the developer sought a relief of five feet, however, Zoning had concerns about this and chose to table making a decision on providing the relief.  Due to this, the developer is considering replacing the single homes with duplexes, which would not require Zoning’s approval.

Bimbo Bakeries to build another Lehigh Valley plant

Bimbo Bakeries USA, which has its headquarters in Horsham, Pa., and whose brands include Entenmann's, is planning to put a bakery in Breinigsville, Lehigh County, that will employ 100 workers, the Philadelphia Inquirer reports.
The company has another Lehigh Valley plant in Palmer Township, Northampton County. The new plant would go online next year. Bimbo is believed to be interested in buying at least a piece of the Hostess Brands company.

Amazon to Open Fulfillment Center in Robbinsville, NJ

Amazon will open a 1 million-square-foot fulfillment center in Robbinsville, NJ, one of a growing number of distribution centers opened by the Internet retailer across the country over the last year. 

Amazon’s multimillion dollar investment in the facility is expected to create hundreds of full-time jobs in addition to temporary, seasonal and construction jobs, said Gov. Chris Christie. 

At the facility, Amazon employees will pick, pack and ship smaller items ranging from books to DVDs to customers. Amazon fulfillment center jobs pay on average 30% more than traditional retail jobs, not including stock grants. 

KTR Capital Partners, a private equity firm, is building the project, with Amazon planning to take occupancy in early 2014. The expected investment in the project will exceed $200 million.

Philadelphia Parking Authority On The Move

The Philadelphia Parking Authority has signed a long-term lease for 83,252 square feet at Mellon Independence Center, located at 701 Market St. in Philadelphia, PA. 

The seven-story, 725,000-square-foot, class A office building was built in 1983 in the Independence Hall submarket. The Philadelphia Parking Authority will be relocating from its current location at 3101 Market. 701 Market was selected due to the organization's specific space needs, and its convenience to public transportation and Center City.

Tenby Chase Apts Sell for $37.5M

Private investment firm Pantzer Properties has sold the Tenby Chase Apartments at 193 Tenby Chase Dr. in Delran, PA to SDK Apartments for $37.5 million, or about $115,000 per unit. 

The 327-unit multifamily complex was constructed in 1975 and renovated in 2001. The residential community was 98 percent leased at the time of sale.

Paramount Realty Buys The Promenade at Lebanon for $12M

Paramount Realty Services, Inc., a New Jersey-based full-service commercial real estate firm, acquired The Promenade at Lebanon East at 801-835 Bowman St. in Lebanon, PA for $12 million, or about $111 per square foot, from Brandolini Companies. 

The center was delivered in 1989 with renovations completed in 2003, and sits on 11 acres. Anchor tenants are CVS Pharmacy and Giant Supermarket with other named tenants like Advance Auto Parts, GameStop, and Nationwide Insurance. The center was 90 percent occupied at the time of sale. 

The buyers took out a $9 million loan with Customers Bank to fund the acquisition after putting down $3 million. Escrow was approximately 60 days.

Wednesday, January 9, 2013

Blatstein presents apartments at Broad and Spring Garden

The developer Bart Blatstein on Tuesday unveiled a $70 million renovation of the former State Office Building at Broad and Spring Garden Streets, the latest outpost in what he calls his "$1 billion commitment to North Broad Street."
Blatstein has made headlines by joining the competition for the city's second casino license. He wants to convert the former headquarters of The Inquirer and the Philadelphia Daily News at 400 N. Broad into the anchor of a three-block, $700 million gaming complex.
But before he does that, Blatstein is developing the northern end of the block, starting with the conversion of the 20-story State Office Building into 204 apartments.
The one- and two-bedroom apartments are renting for $1,500 to $3,000 a month.
Blatstein called the project "transformational."
"Where others may have seen an older, vacant government office building, we saw an opportunity to create attractive apartment dwellings for a wide demographic of Philadelphians," he said.

The project was financed with bank loans, plus "less than $10 million" in historic tax credits through the state, Blatstein said.
The building, which dates from 1957 and is characterized as Midcentury Modern architecture, was placed on the National Register of Historic Places in 2010.
Eight years ago, Blatstein put down his first stakes on North Broad, developing Avenue North on the southern edge of the Temple University campus. That $220 million project included student apartments as well as a movie and retail complex.
The Tower Place apartments are being developed in two phases for a total of $180 million. The second phase will start in five years and include a new 18-story apartment tower, plus two stories of retail space, Blatstein said.
Several nearby projects also are moving forward.
On Saturday, the School of the Pennsylvania Ballet will hold classes for the first time in new studio space at Broad and Wood Street.
A few blocks north, Project HOME has started construction on a $16 million project for 55 apartments at Broad and Ridge Avenue.
Across the street, developer Eric Blumenfeld is trying to finalize financing to restore the derelict Divine Lorraine Hotel into apartments.
And at Cecil B. Moore Avenue, Temple will start housing 1,300 students in a $216 million dormitory this fall.
"North Broad Street used to be the stepsister of South Broad," said City Council President Darrell L. Clarke, who attended the ribbon-cutting at Tower Place. "But I have to tell you, North Broad is where it's at."
Clarke, whose district includes all of the projects, said other developments are in the works, but are not yet public. "We should have the announcement of additional action on North Broad Street relatively soon," Clarke said.

REIT The New American Landlord

Tuesday, January 8, 2013

Fretz Corp Moves to Bucks County Business Center

Fretz Corp leased 54,719 square feet of warehouse space at 1035 Wheeler Way in Langhorne, PA. 

The single-story, 78,213-square-foot industrial facility is located in the Bucks County Business Center. It sits on 5.35 acres, has 19-foot ceilings, heavy power and 12 loading docks.

Philadelphia Energy Solutions Relocating to BNY Mellon Center

Philadelphia Energy Solutions has sublet 22,084 square feet of office space on the 15th floor of BNY Mellon Center, located at 1735 Market St. in Philadelphia. 

The 54-story, 1.3 million-square-foot, class A office tower with ground-floor retail was constructed in 1990 on one acre in the heart of Philadelphia's Market Street West submarket. 

Lehigh Valley Facility Trades for $21M

A warehouse/distribution center here has been sold to a joint venture for $21.3 million, or $55.37 per square foot. Endurance Real Estate Group  of Bala Cynwyd, PA, and its joint venture equity partner, Thackeray Partners of Dallas, made the sale just two years after acquiring the property  at 9747 Commerce Circle.
The 384,695-square-foot building had been upgraded last spring to suit Hearth and Home Technologies, when it signed a lease for 140,000 square feet.
The property, situated in the core of the Lehigh Valley/I-78/I-81 industrial market, was sold to a joint venture of Woodmont Industrial Properties, based in Fairfield, NJ, and AEW Capital Management of Boston.
 The building, constructed in 2007, features 32-foot ceiling heights, up to 40 loading doors, and an ESFR sprinkler system. At the time the Endurance/Thackery partners acquired it, the property was 55% leased to TEVA, the global pharmaceutical company.
During its holding period, the operating partner, Endurance, secured Hearth and Home as a tenant, agreeing to add a 5,000-square-foot office and ten new loading doors to the property. “Our value enhancement strategy entailed a detail-oriented leasing effort and attention to property management,” said Endurance’s president, Benjamin Cohen.
Once stabilized, the property was positioned for the recent sale, he said. The trade comes on the heels of the partnership’s sale of a 394,600-square-foot facility in Reading, PA, last May. The partnership continues to own and operate approximately 4.1 million square feet of warehouse/distribution and flex product in Pennsylvania, most of it in the I-81 Corridor.

Friday, January 4, 2013

West Pharmaceuticals’ move leaves big chunk of Exton office space available

For the first time in 20 years, the building at 101 Gordon Drive in Exton, Pa., is available for lease.
The 262,000-square-foot structure is being vacated by West Pharmaceutical Services (NASDAQ:WST), which is relocating to a new 170,000-square-foot headquarters in the nearby Eagleview Corporate Center that was constructed by Hankin Group.

Office Space 2013

Natalie Kostelni

The region’s commercial real estate market entered the new year with more buoyancy than it had a year ago, giving many in the industry hope 2013 could be even more robust.
Architects, contractors, leasing brokers and landlords said they saw Center City and suburban commercial real estate fundamentals improve across the board last year and expect that to continue throughout the year, even gaining some steam during the latter half. However, they hesitate to say that everything looks promising.
“If we make a comparison to the last three to four years, the last year or so has been much more positive,” said Michael Armento, vice president of Torcon Inc., a construction company. While so-called eds-and-meds showed resiliency during the downturn, corporate real estate still remains weak, Armento said. However, encouraging signs indicate that could change this year.
“One of the trends we follow, and it comes from talking to architects, is there seems to be a long list of architectural firms back in a hiring mode and that is a good indicator for us and future projects,” Armento said.
That is the case at several architectural firms in the region including Stantec. The architectural and engineering firm is hiring across the board, said Anton Germishuizen, vice president at Stantec. All disciplines are busy at the firm and its backlog is growing not only in the firm’s Philadelphia office but across the country, Germishuizen said.
“I think 2013 is going to be a pretty strong year for us,” he said.
The company recently won an assignment from Temple University for the design of a new 300,000- to 350,000-square-foot library.
The office market in Center City continues to improve and brokers are seeing concessions down, rental rates moving up, a tightening in trophy and other classes of space as well as a scarcity of large blocks of contiguous space.
“I expect this to continue because business is getting better, we’re starting to see some organic growth from businesses and companies are starting to come in from out of state and the suburbs. Supply keeps shrinking and occupancy increasing. We could be on the verge of new construction.”
Liberty Property Trust is kicking around a new office building at 19th and Arch streets and Brandywine Realty Trust is close to lining up enough anchor tenants to kick off Cira South near 30th Street Station. With the University of Pennsylvania already secured to take up roughly 150,000 square feet of office space, Brandywine reportedly wants to snag one more tenant totaling roughly 40,000 to 50,000 square feet before breaking ground on the mixed-use development that would have a residential component.
For tenants, new construction is beginning to make some sense as rents begin to rise, space options dwindle and efficient space use can mean taking and paying for fewer square feet.

Thursday, January 3, 2013

UC Science Center plans 27-story apartment tower at 36 & Market

The University City Science Center, an office and lab landlord owned by a consortium of Penn, Drexel, CHoP, USP and their neighbors, says it will start work on a 27-story apartment building -- its first housing project in its 50 years -- at 3601 Market Street this fall, in a joint venture with investor Wexford Equities and Southern Land Co.

"It's really about community development, for innovators and entrepreneurs," UCSC President Stephen Tang Ph.D. told me. "It makes sense in the evolution of this comunity. We're a nonprofit, in the business of developing communities. You have to have mixed use on your campus to develop a sense of place and vibrancy beyond 9 to 5. That's been lacking on our campus for some time."

When I asked why the private sector can't supply the need, Tang demurred:  "We were deeded the land 50 years ago," and "it's time for the community to be established here as a 24/7 mixed-use kind of project. We want to be seen like Mission Bay in San Francisco or Cambridge in Massachusetts. Communities in their own right, not just analogs," or suburban-style office parks in a city. 

The center plans 364 "market-rate" apartments - studio, 1, 2, 3 bedrooms - plus 17,00 sq ft of ground-floor retail, 200 parking spaces, and common area amenities. UCSC calls it "the first new high-rise construction" for non-subsidized tenants in bustling University City since Domus in 2005.  

The units will "broaden the appeal of University City and Philadelphia's innovation cluster," said James R. Berens, president of Wexford Equities, in a statement. UCSC chief Steven Tang, like his predecessors, has been trying to lure more start-up company operators to stay in the neighborhood instead of moving to Malvern or other suburban locations once the big money starts rolling in.

Contemporary Village Sold for $5.4M

Wells Fargo Bank NA sold the 126-unit Contemporary Village multifamily complex at 100 E. Glenold Ave. in Glenolden, PA to a private investor for $5.3 million, or approximately $42,000 per unit. 

The 90,308-square-foot apartment community consists of one-, two-, three-, and four-bedroom units in seven garden-style buildings. It was built in 1970 in the Delaware County submarket of Philadelphia.