Sunday, March 31, 2013

TriState Container Leases 65,000 SF in Bensalem

TriState Container Corp, a manufacturer of corrugated boxes, signed a five-year lease for 65,000 square feet at 2260 State Rd. in Bensalem, PA. 

The 93,860-square-foot manufacturing building was constructed in 1970 and renovated in 1994. The property is located in the Bucks Industrial submarket, just minutes from the I-95 and Woodhaven Road interchange.

Thursday, March 28, 2013

Allentown developer plans tallest building in Lehigh Valley

By Emily Opilo, Of The Morning Call

After decades of spreading out, Allentown could be growing up, its skyline altered by the Lehigh Valley's tallest building.
Developer Bruce Loch unveiled plans Wednesday for the 33-story Landmark Tower at Ninth and Walnut streets. The $60-million project would include nearly 200,000 square feet of office, retail and residential space and eclipse the vacant Martin Tower, the former headquarters of Bethlehem Steel and the Valley's tallest building, by 20 feet.
Loch, an experienced residential builder in the Lehigh Valley with more than $100 million in development under his belt, is making his first foray into this type of project, which he said would be on a lot owned by the Allentown Parking Authority, next to the authority's garage on Walnut Street.
The property is in the city's one-of-a-kind Neighborhood Improvement Zone, which allows developers to tap tenants' state and city taxes, not including property taxes, to finance construction.
Plans, which are in the early stages, call for retail on the ground floor of the tower, topped by 19 stories of offices. Above that would be 10 floors of residential space — of those, six would be for apartments and four for condominiums. The top three floors of the building would be a restaurant and conference center.
Loch said he has been in talks with Philadelphia restaurateurs who might be interested in the space. He has also been working with a possible tenant for the office space. About 150 to 200 jobs would be created by the building's office tenant, he said. Another 200 to 300 would be needed for construction.
The parking authority voted Wednesday to begin negotiations with Loch to hash out a development agreement for the project. Loch said construction could begin by March 2015.
At 350 feet, the new structure would be the tallest in the area, but it wouldn't be the first time Allentown was home to the Lehigh Valley's tallest building. Completed in 1928, the PPL Tower held the title for many years at 322 feet. In 1972, Bethlehem's Martin Tower broke the record, stretching 330 feet into the air.
If built, Loch's tower would also be the tallest building in the state outside of Philadelphia and Pittsburgh, he said. Currently, the tallest structure outside Pennsylvania's two largest cities is in downtown Harrisburg.
But unlike most of those buildings, the tower would fit onto a very small site. The 4,000 square-foot plot for sale by the parking authority is currently just a small green space in the NIZ — about one-third the size of the PPL Tower's footprint. Authority members put it out for bid to explore what might be possible, but they weren't sure what they would get, Executive Director Tamara Dolan said.
"I'm still amazed," she said. "I'm not an engineer, I'm not an architect, I'm not a developer. I could have never looked at 4,000 square feet and seen a 33-story office building."
To fit onto the site, Loch's building would be cantilevered. The first eight floors would be 4,900 square feet each. Upper floors would expand to 6,000 square feet. Loch has offered $100,000 for the property.
Sara Hailstone, executive director of the Allentown Neighborhood Improvement Zone Development Authority, sat in on Loch's presentation as a member of the parking authority. It's promising to see more people who want to invest in the NIZ, she said.
"It certainly is a unique spot to put such a tall building," she said.
Alan Jennings, executive director of Community Action Committee of the Lehigh Valley and a member of the ANIZDA board, said the proposal has not come before the board, but it is an "extraordinary demonstration of the power of the NIZ."
Loch, who is best known for residential development in the Lehigh Valley, said he has had plans for the tower since the 1980s, but the economy tanked as he was preparing to build it. Today, the NIZ makes it possible, he said.
But Loch must clear several hurdles before beginning construction. The lot must be subdivided from an adjacent parking garage, and Loch must get approval from ANIZDA to use NIZ funds for the project.
Loch said he hopes to get 50 percent of the mortgage payment due on the building from NIZ funds.
If it is built, the tower would be a dramatic change to Allentown's landscape. David Bausch, a former city councilman, head of Lehigh County government, and city resident of 81 years, said it would be the first major change to the city's skyline since the 1920s.
Unlike other metropolitan areas that built taller buildings out of necessity, Allentown always had plenty of space, Bausch said. When the city grew, it moved outward, not upward.
But that was the old way of thinking, Bausch said. Today's residents and investors see Allentown as a growing metropolitan area, as evidenced by more modern buildings on Hamilton Street.
"Depending on what the building looks like, I think it would be a very positive thing," Bausch said. "Anything to bring some new business into town."

Two Collegeville office buildings bought

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal

TA Associates Realty invested $33 million to buy two office buildings in the Providence Corporate Center in Collegeville, Pa. Equus Capital Partners of Philadelphia was the seller. The deal was consummated on March 26.
The buildings — Highview I and Highview II — combined have a total of 183,363 square feet. Highview I at 400 Campus Drive totals 78,546 square feet and Highview II at 200 Campus Drive totals 104,799 square feet. Equus constructed the structures in 2003 for Wyeth Pharmaceuticals. They are located on Route 29 just off of Route 422 and across the street from Providence Town Center, a retail development that includes a Wegmans, Movie Tavern and Dick’s Sporting Goods.

Dranoff Breaks Ground on SouthStar Lofts

Dranoff Properties broke ground on SouthStar Lofts, a 150,000-square-foot multifamily building located on the prominent corner of Broad and South Streets in Philadelphia's Market Street East submarket. 

The seven-story building at 521 South Broad Street will have 85 loft style apartments, as well as 10,045 square feet of street level commercial space. Delivery is expected in the spring of 2014. 

Christian Van Horn of Dranoff Properties will handle the leasing of the commercial space. The project architect is JKR Partners.

Wednesday, March 27, 2013

Chris Holtz on Movinng Your Voice and Data

Is Office Space a Thing of the Past?

By: Sam Chandan, Ph.D., is president and chief economist of Chandan Economics and an adjunct professor at the Wharton School.
Is the office obsolete?
The argument has been going on since before the Internet, when its antecedents were limited to connecting university research labs to the Department of Defense. The adoption of new technologies may afford smaller server rooms and fewer filing cabinets, but the location of people dominates everything else when it comes to office space utilization. At least on the margins, the data show we are using less office space for every employee. We cannot assume that reflects the impact of technology, but it’s not an unreasonable hypothesis.
The notion of telecommuting can be traced back 40 years, to prophecy of a more decentralized work force driven by new computer technologies and rising transportation costs. Our office buildings have not emptied out, in part because technology remains—at least for the time being—an imperfect substitute for face-to-face collaboration.
If it was at risk of falling into the background, Marissa Mayer’s decree that Yahoo employees present themselves has rekindled the debate about the future of the office. She has been variously applauded for undertaking badly needed reforms and derided for outmoded thinking. As a means to strategic and operating goals, the rationale was not unsound. From an operating perspective, remote employees were underperforming. From a strategic perspective, employees’ lack of motivation could be framed in terms of the company’s loss of momentum.
Ms. Mayer is betting that by bringing her staff together, she can re-energize them. By all accounts, the execution of the policy shift was short on tact and too rigid. Abstracting away from the organizational and market challenges facing Yahoo!, there is a broader conjecture that may hold merit: we generate more and better ideas in groups.
Imagine a world that bears an uncanny resemblance to a stylized economic model. In this very odd and two-dimensional place, there are two types of people. Creative types are highly productive, but even more productive when collocated with others of their type. Less creative types are productive as well, but their productivity is unaffected by their location—as long as they are monitored.
If the available technology means that what I’ll describe as regular types can be equally productive from any location—and if that technology also supports monitoring—we should observe spatial dispersion in this subset of the work force.
For the creative types, who are more productive when they are located together, there may still be a host of reasons why they will want to remain separate. Perhaps most important, at home you can work in your underwear. It can get a little lonely during the day, but you know how to socialize on your own time. Your perspective may change if you learn that your office-bound friends are earning more.
From the firm’s perspective, higher productivity in this simplified world translates into higher profits. If market mechanisms are functioning reasonably well, management will compensate collocated employees more highly to reflect their higher economic value. Responding to that incentive, we should observe spatial convergence among creatives, even if the occasional day from home is part of the routine.
Things are not static, of course. The available technology may change, producing more effective substitutes for collocation. But until then, there is a productivity advantage to the firm that will bring its creative types together.
Full article:

Ashford Hospitality Trust CEO: What's Working in Hospitality Business Now (Video)

Monday, March 25, 2013

Geissele Automatics Acquires a 70,000 SF Manufacturing Facility

Geissele Automatics  purchased 800 E Walnut Street in North Wales, a 70,000 SF property on 13 acres, for  $1.85M. 

Geissele Automatics currently operates its production facility out of Norristown, PA, a site which has housed the renowned defense contractor and rifle trigger manufacturing company for the past four years.  “A year ago we made the choice to look for a new facility because we needed more space to create better efficiency in the delivery of our products,” stated Bill Geissele, founder and President.  “The new facility will allow us the opportunity to grow and expand for many years to come.”

The North Wales site was the former home of Fitzpatrick Container Corporation, which is a manufacturer of corrugated boxes.  The company has since expanded and moved to a larger plant in Macungie, PA.  

Office Building and Self Storage Site Sold

375 E. Elm Street in Conshohocken, PA. was sold to 375 Elm Street Square, LP for $4.7 million. This is a two-story, 33,000 square foot office building. Current tenants include A. D. Marble & Company, HDR, Inc. and Southwark LLC. The buyer, George Guerra, was excited to become the new owner. The property was developed in 2001 and has maintained steady occupancy. With 10,400+ square feet of space available.

526 Township Line Road in Blue Bell, PA was also sold. This is a beautifully constructed, two-story brick building with 5,259 square feet was built in 2004 by Philameno & Salamone Builders of Plymouth Meeting. The property sold to an undisclosed buyer for $1.1million

Mt. Pocono Mini Storage portfolio in Mt. Pocono, PA was sold. The portfolio consisted of
two facilities located in Mt. Pocono and Mountainhome, PA and is comprised of eight buildings
totaling 28,900 square feet on 2.5 acres. Mt. Pocono Mini Storage opened in 1988 with just
three (3) buildings at the Mt. Pocono site and later expanded with four new buildings on the site.
The buyers were DS & BH Holdings, LLC. 

Dinette World of PA Sold Building

Dinette World of Pa sold their building at 2350 MacArthur Road. The sale included two buildings located on the MacArthur Rd retail strip.  The Buyer is a New Jersey Tile and Marble Company.

Premier Motor Lines Leases 97,000 SF

Third-party logistics and warehousing company Premier Motor Lines, Inc. has signed a lease for 97,453 square feet at Port Jersey Logistics, located at 2 Colony Rd. in Jersey City, NJ. 

The 262,000-square-foot warehouse building was completed in 1976 on 11.5 acres in the Hudson Waterfront Industrial submarket. It features 24-foot ceilings, 600-amp heavy power, nine loading docks, 40 trailer parking spaces, and two active rail spots. The building is convenient to the Turnpike, Rte 78, Newark Liberty International Airport and the Ports of Newark and Elizabeth. 

Premier offers food-grade warehousing, brokerage, and private fleet services to New Jersey, Pennsylvania, New York and New England. 

"We were able to lease the building at a strong market rent with only one month of vacancy," said Matthew Corpuel, first vice president at CBRE. "That really speaks to the strength of the port industrial market. Additionally, the tenant was able to phase in to the building, thus avoiding double rent at their current location."

Sunday, March 24, 2013

Aviv REIT Up Sharply on NYSE Debut

$8.4M Refi fwas arranged or Philly Apts

$8.4 million permanent refinance loan was secured for a portfolio of two Philadelphia apartment communities totaling 120 units in four buildings. 

The seven-year loan has a 3.2 percent interest rate with a 30-year amortization schedule. The loan-to-value comes in at 65 percent. 

"Agency lenders did not represent the best option, since the properties were situated in emerging neighborhoods.But the investor had noted the current low interest rates and made the decision to grow this previously family-owned portfolio with a cash-out, so there was a lender who appreciated the locations’ value-add opportunities." 

"Educating potential lenders was part of the process, as not all were familiar with Philadelphia’s current multifamily growth patterns. But eventually we found one who understood the neighborhoods’ potential, a view we supported through our broker network’s expertise and careful research."

Friday, March 22, 2013

NFIB Optimism Index Discussed on CNBC Squawk Box

CBRE Global Sells Philly, DC Bldgs. to Rosemont Realty

CBRE Global Investors traded three Class A properties to Rosemont Realty. 

The assets include 2000 Market St., a 29-story, 665,649-square-foot office building in downtown Philadelphia and Dulles View, two eight-story structures totaling 360,045 square feet in the Washington, DC, submarket of Herndon, VA. 

A fund managed by CBRE Global purchased 2000 Market St. in December 2009. Since its acquisition, the interior public areas were renovated and 340,983 gross square feet were leased increasing the structure’s occupancy from 77 percent to 95 percent. 

A second fund sponsored by CBRE Global completed construction of the Dulles View spec project in 2008. Since its delivery, more than 340,243 square feet was leased taking the building’s current occupancy to 94.5 percent. 

“We have successfully completed our business plans for these properties in line with the value-added strategy for our CBRE Strategic Partners U.S. series of funds,” said Vance Maddocks, president of CBRE Strategic Partners U.S. “This included making significant investments, either through development or repositioning, to lease these properties to core. As a result, we are now able to maximize the return for our investors through disposition.”

Thursday, March 21, 2013

Zoo Printing Leases 50,000 SF at Mid-Atlantic Corp Ctr

Zoo Printing has added a new location, signing a lease for the entire Mid-Atlantic Corporate Center building at 551 Mid Atlantic Pky in Thorofare, NJ. 

The 50,000-square-foot warehouse sits on more than three acres. The building is fully air conditioned and features 20-foot clear heights, five loading docks and 400-amp heavy power.

Genco Expands at Humboldt Industrial Park

Genco Supply Chain Solutions, headquartered in Pittsburgh, PA, has signed a new lease for 204,379 square feet at 61 Green Mountain Rd. in Sheppton, PA, where it already occupied 203,821 square feet. 

The single-story, 408,200-square-foot warehouse building was constructed in 2004 on 39.4 acres in the I-81 Corridor Industrial submarket of Philadelphia. It features 32 loading docks with levelators, building signage, and is located within an abatement zone. Once the lease commences in the third quarter, Genco will occupy the entire building.

$5.7 Billion REIT Deal (Video)

Wednesday, March 20, 2013

Liberty Property Trust Sells Office Facility

Liberty Property Trust today announced it has sold the property at 8800 Tinicum Boulevard in Philadelphia to an affiliate of Cole Real Estate Investments, for approximately $74.7 million. The 441,000 square foot facility is occupied by PNC Bank, for whom Liberty developed the property in two phases, delivering in 1997 and 2000.

Read more here:

Cost Segregation by Grant Keppel

By: Grant Keppel

Grant G. Keppel, CPA, is a nationally known Cost Segregation practitioner with over 23 years experience as a CPA and consultant. Over the last 10 years he has developed and completed over 3,500 cost segregation consulting projects.

"We have all have heard the old vantage a dollar is worth more today than 30 years from now, well for commercial real estate owners this concept is still well in play with a tax planning technique known as cost segregation. Cost Segregation is a tax and engineering based study for commercial real estate purchased or constructed in the last 15 years in which the IRS allows certain assets to be more rapidly depreciated for tax purposes, thus, affording owners/investors access to their cash flow today versus waiting for the whole life cycle of the real estate of 39 years for non-residential real estate to recoup their investment. Typically on an acquisition an owner of commercial real estate will set up the asset purchased on their tax depreciation schedule over the standard 39-year depreciable life (less land which is non-depreciable), but with a cost segregation study many assets can be segregated an depreciated over say 15, 7 or 5-year lives. Depending on industry type the benefits can vary but take the example of a single tenant retail property acquired in 2013 for $5 million (excluding land). The first year depreciation without a cost segregation study would be approximately $125,000, while that same deprecation with a formal engineer based study would be almost double to $250,000. Taking it out three more years the additional depreciation would net the owner/investor approximately $450,000 in additional depreciation write-offs.

        Too good to be true? Not according to the IRS who has issued many rulings and Audit Technique Guidelines to follow to perform these studies in conformity within the tax regulations. Whether it be the exterior sprinkler systems, the parking lot lighting to the specialized plumbing or decorative lighting, there are many hidden assets buried within the interior and exterior of any commercial real estate that can be depreciated over a much shorter time frame than the customary 39 year period.

        For those of you saying well I just filed my taxes and wish I knew about this before I filed for 2012. Well there is even better news as the IRS has issued a Revenue Procedure that allows you to go back in time (without the need the amend previous filed tax returns) and perform a cost segregation study and catch-up the correctly depreciation on the current years’ tax return 100% as an additional depreciation deduction. And for those who have their taxes or will have their taxes on extension, a study can still be performed and completed prior to filing the extended tax returns.

        Take the example of a class “A” office building acquired in 2005 for $3 million (exclusive of land), after adjusting the depreciation as a result of the cost segregation study, the 2012 additional depreciation amounted to approximately $375,000. This will be a direct offset to income generated by the property to mitigate any federal and state income taxes (depending on the state)."

Grant Keppel, CPA
Managing Member
Grant Keppel, LLC

1890 Copperstone Drive, Unit D
Orange Park, FL  32003
Cell: 904.662.2514

Grant Keppel Bio:

Wells Fargo Monthly Economic Outlook - March

Tuesday, March 19, 2013

Pages 22-23, My Latest Article in the Montco Chamber Magazine

The Games Some Landlords Play!


Let me tell you a story. We were working with a nonprofit on a lease renewal in Ann Arbor. The original landlord of the building was excellent – the trouble only began when he passed away and his son took over. The lease had what we in the business call an ever-greening clause – which means that if the tenant doesn’t send a 9-month notice to the landlord to alert them that they don’t intend to renew the lease, the lease will automatically renew itself.
In our case, the tenant contacted the landlord well within the 9-month period asking for the rental rate, but the landlord neglected to respond until within a 9-month period. In addition, the landlord refused to talk with me on any of the renewal points. He promised the tenant that in order to make more space for them, he would relocate the tenant in the space adjoining our tenant’s current space. The complications of doing so go beyond things we can discuss on this blog, but let’s just say that at the time, our tenant believed him.
We worked to help the tenant with the design of the new space, and the tenant sent our information to the landlord so that we could move forward with the lease renewal. Meanwhile, the landlord refused to take our calls, speaking only with the tenants (a big no no). He also told them that since they had not given 9 months notice (which was untrue, they had, he just hadn’t responded), he (the landlord) would be in financial trouble if they left, and threatened to sue them for damages if they did so!
The minute that the timing wouldn’t allow them to relocate to a third building, the landlord pulled a fast one on them, telling the tenants he would not do their relocation. This had serious repercussions on the tenant’s business. What we know now is this: the landlord never intended to go through with the relocation, but the tenant was understandably na├»ve, and they believed him. Because the landlord refused to liaise with us, there was little we could do to help.
I was sick over this deal at the time, as I knew the landlord was misleading them. Luckily for the tenant, we were able to get the lease term down to a year on the renewal, but it was unfortunate and difficult for us to watch our client believe in someone who we knew to be unfair and dishonest from the beginning.
The moral of the story? Do some digging around on a landlord’s history and the way he treats other tenants before choosing who you’ll go with. Landlords might seem nice when they strike up a deal, but it’s hard to know what they’re capable of. Working with a tenant representative broker and doing your research beforehand can work wonders in helping you secure the best deal and find a landlord who will treat you well as a tenant.

Original from the Compass Blog:

Monday, March 18, 2013

Fund buys industrial properties

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal

Hayden Real Estate Investments and Miller Investment Management paid $35 million for an industrial portfolio along the I-95 Corridor in the Philadelphia region.
The transaction includes four buildings totaling nearly 1 million square feet and an 18-acre parcel of land that is approved for industrial development. The portfolio included 105 Commerce Drive, 20 and 30 McDonald Blvd. and the 18 acres in the I-95 Campus Industrial Park in Aston, Pa., near the Philadelphia International Airport in Delaware County. 

Full story:

Sunday, March 17, 2013

O’Neill Properties looks to sell apartment complex

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal

O’Neill Properties Group has put up for sale the Lofts at Valley Forge, an apartment community along the banks of the Schuylkill River in West Norriton.
The complex consists of seven, four-story buildings with 388 apartments and is about 95 percent occupied. With the multifamily housing market still on fire, investors are still willing to plunk down a lot of money to pick up established properties that are performing well. The Lofts could sell for as much as an estimated $90 million. 
O’Neill Properties bought what was the Betzwood Industrial Park back in 2001 and set out to transform its 63 acres into a mixed-use development that, at the time, included office, apartments and a hotel. The property sits adjacent to Valley Forge Park and has direct access to a multijurisdictional trail that runs all the way to Green Lane to the west and down to Center City to the east.
O’Neill’s plans progressed over the years. The company converted what had been 250,000 square feet of industrial space into office. A portion of that space had once been home to the Lubin Studios. Film producer Siegmund Lubin produced silent films and westerns on the property in the early 1900s.

Full story:

Thursday, March 14, 2013

Almac Clinical Tech Takes 21,000 SF in Lansdale

Almac Clinical Technologies, Inc., a pharmaceutical company, leased 21,205 square feet in the Towamencin Corporate Center's Corner Building, located at 1690 Sumneytown Pike in Lansdale, PA. 

The 77,077-square-foot office building was constructed in 2002 in the West Montgomery County submarket. Lansdale is about 28 miles northwest of Philadelphia.

Big Fish Grill Purchases its Building

Big Fish Grill purchased its property at 720 S. Justison St. in Wilmington, DE from Riverfront Development Corp. for $2.625 million, or about $267 per square foot. 

The 9,825-square-foot restaurant was built in 2009 for the buyer on 1.3 acres. The buyer has occupied the property since its completion and exercised its option to purchase from the developer.

Main Line exodus: Devon deal heads to Frazer in $8M sale

By Joseph N. DiStefano 
Gone from Devon's US 30 business district: Anro Printing, Waterloo Gardens... and now Bob Sloane/Sloane Toyota, of Devon, plans a move to Frazer, two townships west, in booming East Whiteland. The dealership has agreed to pay nearly $8 million for the 8-acre United Artist Movie Theater complex, 593 West Lancaster Ave., Frazer.
"The site was a perfect fit" for Sloane, offering 495 parking spaces and a 40,000 sq ft building adjoining US 30 at US 202, Magarity added. Sloane plans a "total facade renovation."

With Sloane's planned departure, there are several prominent vacant commerical properties along U.S. 30 in the Devon sector of Easttown Township, already one of the most heavily residential communities in the county, as local taxpayers can tell you. Why didn't the multi-dealer chain expand closer to home? 
Sloane's Devon site "is less than 5 acres.  Bob needed almost double that, and there was nowhere to grow contiguously in Devon.  We had known Bob was in the market for 8-10 Acres along Rt 30, and he had been down the road with [Brian O'Neill's organization] on their land at Deerfield, but that didn't work out." "So we scoured the market," west out 30, deeper into Chester County.
"Obviously there are not many 8-10 acre parcels, with 500 parking spaces, along that corridor, so we approached Penn Real Estate Group on the idea of selling the theater site, and found the timing was ripe." He pronounced the result "a great deal for both sides."
What about the bankrupt for-sale Waterloo Gardens property at the top of Devon's hill? "Waterloo is a great location, but not a great site for Sloane Toyota's use.That does not present a lot of frontage on Rt 30, which is vital to car dealers, and it is also only 5 acres that are separated by Devon Rd."

How about the neat, vacant, pale-brick former Anro Printing plant down the hill on the Berwyn side? "Anro is now owned by YBH Audi, and we understand they will be under construction shortly."

Tuesday, March 12, 2013

Oaktree/NFR JV Buys $240 Million Office Portfolio

Oaktree Funds partnered with National Financial Realty to purchase a 40 office building, 3.44 million-square-foot portfolio for $240 million or $70 per square foot. KBS Real Estate Investment Trust was the seller. 

The assets include mission critical operations facilities and branch offices that are 90 percent occupied by Wells Fargo Bank on a long-term basis. They are located in eight states throughout the East and Southeast. 

NFR, a private investment firm based in Los Angeles, already owns Wells Fargo’s operation and data center in Hillsborough, OR. The new deal makes NFR one of the largest companies focused on owning and operating properties leased to regulated financial institutions. 

“Acquisition of this geographically diverse portfolio fits perfectly into NFR’s investment strategy to acquire excellent properties leased to leading financial institutions that offer reliable cash flow and significant potential for appreciation,” said Vincent E. Pellerito, president and CEO of NFR. 

The portfolio includes: 

  • eight buildings totaling 1.24 million square feet in North Carolina, five buildings that comprise 600,000 square feet in Pennsylvania,

  • three structures with 287,061 square feet in South Carolina,

  • eight properties totaling 529,898 square feet in Virginia,

  • three buildings comprising 419,863 square feet in Georgia,

  • eight structures with 141,677 square feet in Florida,

  • five properties totaling 189,937 square feet in New Jersey, and

  • one 26,540-square-foot structure in Maryland.

“This off-market acquisition, principally backed by 11 years of Wells Fargo credit at a 50 percent discount to replacement cost, is another example of Oaktree’s commitment to relationship based transactions with well-positioned strategic operating partners like NFR, in addition to lenders and borrowers in need of capital solutions,” said John Brady, managing director and head of global real estate for Oaktree. 

Ashland Leases 198,000 SF in Bridgewater

Ashland, Inc. has leased 198,000 square feet at the New Jersey Center of Excellence, located at 1041 Route 202/206 in Bridgewater, NJ. The long-term deal is one of the largest signed in the state so far this year. 

The Covington, KY-based tenant provides specialty chemicals, technologies and insights to aid customers in the creation of new and improved products and sustainable solutions. The firm will relocate its specialty ingredients unit from Wayne to this new laboratory and office space later this year. 

"New Jersey has long been considered a premier national life sciences cluster and continues to undergo a paradigm shift. Large single-occupant campuses like The Center of Excellence at Bridgewater create opportunity through existing state-of-the-art infrastructure for life sciences companies to grow in or relocate to New Jersey." 

The New Jersey Center of Excellence is located in the Somerset County Industrial submarket with immediate access to Routes 287, 78 and 22. It is comprised of more than 1.1 million square feet of laboratory, office and GMP production facilities on 110 acres. The landscaped park features a campus setting with a full-service cafeteria, gated entrance and a helipad. 

"Ashland was drawn to the facility’s quality, design, infrastructure, and amenities, as well as to the state’s highly skilled workforce and intellectual property, and access to major highways."

Monday, March 11, 2013

Building boom resumes in Towamencin

By Joseph N. DiStefano

From the curved pedestrian bridge Towamencin Township built over the crossroads village of Kulpsville, you can see the next suburban boomtown rising.

It's taken long enough, says Robert Nicoletti, 82, who bought ground there in 1958.
From the bridge, against a backdrop of the behind-schedule Pennsylvania Turnpike widening at the nearby Lansdale exit, you can watch crews build the four-story Bridgeview apartment complex, which will start renting next month; the thick concrete core of a six-story Courtyard by Marriott hotel, due in the fall;, and the Culinary Arts Institute of Montgomery County Community College, which will enroll its first students in the spring. Farther north stands ball-bearing maker SKF Corp.'s U.S. headquarters, certified "platinum" by the U.S. Green Building Council.

The apartments, hotel, cooking school, and corporate headquarters all are the work of Nicoletti's Philadelphia Suburban Development Corp., better known in the city as a major landlord of parole and welfare offices and other state agencies, as well as a South Philly site proposed by Penn National Corp. for a casino.
Towamencin is 30 miles by road, and far in spirit, from City Hall.

"We're not nowhere - we're 10 minutes from Plymouth Meeting" and highways east, west, and south, said Mark Nicoletti, Robert's son, who runs the daily business operations with his brother-in-law Joseph Ferrier and a staff that includes four of Robert's 11 grandchildren. (Mark's sisters Lori Peruto, a lawyer, and Donna Ferrier, a designer, also have done work for the company.)

"When you take a look at what they're pulling together up there - the college, hotel, residences, the corporate side - it's one of the biggest developments around Philadelphia," said Scott Fainor, president and chief executive of National Penn Bank, the largest bank based in Eastern Pennsylvania and a lender to Nicoletti projects.

The turnpike ties the area to both the Lehigh Valley and greater Philadelphia - which is why SKF followed Merck, Almac, and other drugmakers there, said SKF's top U.S. executive, Poul Jeppesen, who picked Towamencin over Valley Forge and Bethlehem.

"I'd compare what's happening up there to what's happening over at Great Valley," where the state is adding turnpike ramps and attracting new commercial construction after the long slump, said Rob Wonderling, the area's former state senator and now head of the Greater Philadelphia Chamber of Commerce.

"What they're trying to do up there is very much in tune with the future of suburban development," mixing offices, homes, hotels, and retail, said Gerard Sweeney, chief executive of office landlord Brandywine Realty Trust, based in Radnor. It's a contrast, he said, with older, functionally segregated centers like King of Prussia and Cherry Hill, which are now trying to regroup as "mixed-use communities."

When Robert Nicoletti bought his first six Towamencin acres in 1958, his day job was selling rowhouses in Northeast Philly.
Bill Aichele, head of Univest Bank in nearby Souderton, recalls the family companies in the area that shipped through Reading Railroad's Philadelphia terminal: Moyer beef, Longacre poultry, Leidy's pork, Rosenberger's milk. There was an independent national bank and insurer in Harleysville, and the Clemens family's grocery chain, and once-cautious builders that inflated in the single-family-housing boom.

"Almost none of those businesses have stayed as family businesses, unfortunately," said Phil Clemens, boss of the Hatfield food empire, one of the few to make the switch from local supplier to international markets.
As the old German and Mennonite families sold their land, Towamencin officials knew growth was coming but they "didn't want to be like Montgomeryville or Quakertown," with stop-and-go highways lined by big-box and fast-food stores, Township Solicitor John T. Dooley said.

"Nicoletti had the critical piece of land," an eventual 60 acres, Dooley said.
On his first tract, Nicoletti built a 25-room motel. When son Mark started at Villanova in 1982, his father got a Days Inn franchise and put him to work on the desk after classes.
In 1990, their company bought 40 adjoining acres from a developer wiped out in the savings-and-loan crisis, and later added a six-acre lot that once housed the police station.
They spent much of the 2000s fighting township plans for a new road, Towamencin Avenue, to move local traffic off Sumneytown Pike and Forty Foot Road and preserve them as commuter and truck highways. The township won, and the Nicolettis adjusted.

While wrestling with Towamencin, they faced a "no Nicoletti" campaign by Philadelphia union members threatened by their practice of hiring nonunion contractors that didn't pay into industry pension and retirement funds.

That kept the Nicolettis off big federal public-housing rehab contracts, Mark said. "But we didn't leave the city. We moved to a prevailing-wage model," using union masons and ironworkers, but also nonunion electricians and carpenters, and paid union-scale wages without the benefit plans.
The Towamencin logjam ended about the time the national economy stalled in 2008, leaving towns and builders eager to get projects moving.

"We don't get these things done without a lot of arm-wrestling. That always happens between towns and developers. But it's worked out to the benefit of the township," said Republican State Sen. Bob Mensch, who now represents Towamencin.

Mark Nicoletti said his family isn't done there. Lately, he's joined an effort to lure contract-research firms to the Towamencin area, seeking another growth industry to keep crews busy and validate his father's vision:
That a field by a highway is a good thing to own.

Doylestown is home to a bustling biotech center

by Mike Armstrong, Inquirer Columnist

I am no fan of economic- impact studies because, while written by third-party economists, they are usually paid for by organizations who want to tout the good they are doing in a community.

Still, I must admit to being intrigued by the latest impact study on the Pennsylvania Biotechnology Center, a nonprofit research group that has become home to many for-profit life-sciences start-ups.

Doylestown won't make many lists of biotech hotbeds. But it's where the center was started in 2006 in a shuttered manufacturing complex. Today, the parking lot bustles at rush hour with industry and academic scientists, students and entrepreneurs, according to Timothy Block, the microbiologist who has overseen the center's growth.

The three buildings on Old Easton Road contain 40 small life-sciences companies, as well as the "cause-driven" Hepatitis B Foundation, begun by Block and his wife, Joan, and another couple in 1991 to find a cure for the liver infection, and the Institute for Hepatitis & Virus Research, started in 2003 as the foundation's research arm.

Block, who had been at Thomas Jefferson University before joining Drexel University College of Medicine in 2004, views the biotech center, established with a $7.9 million state grant, as a place "in between a university environment and a pharmaceutical campus."

The economic-impact report, released Friday, counted 263 jobs directly tied to the Pennsylvania Biotech Center. Of those, 108 work for the nonprofit organizations. The rest include former executives and scientists from the region's Big Pharma and little biotech sector who are working on new ventures.

Those companies include FlowMetric Inc., begun by former Centocor employees, which provides contract research services to the drug industry; OnCore Biopharma Inc., started by former executives of Princeton's Pharmasset Inc., which was acquired by Gilead Sciences Inc. for $11 billion in 2012, and the publicly traded Synergy Pharmaceuticals Inc., which has corporate headquarters in New York City but its lab in Doylestown, where it develops experimental treatments for gastrointestinal diseases.
Full story:

Sunday, March 10, 2013

Two Liberty Place seeking to include a hotel

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal
One of Center City’s conspicuous blue skyscrapers is undergoing an identity crisis.
The 58-story Two Liberty Place was initially constructed as an office building in 1990. Beginning in 2006 a portion of it was converted into residential condominiums. Now, with demand for those units on the wane, a part of the property is up for sale as a totally new use.
“We want to try to attract a luxury hotel,” said Cynthia Tucker, senior vice president at iStar Financial Inc., which has title to an undeveloped portion of the building and is marketing it as a 150-room hotel called Liberty Tower.
The range of uses for the 1.2 million-square-foot skyscraper reflects the changes in the economy and demand in the Center City commercial real estate market over the last two decades.
Two Liberty was constructed at a time when there was a boom of office buildings in the Central Business District. Once One Liberty Place came out of the ground forever changing Philadelphia’s skyline, developers jumped on the bandwagon and One and Two Commerce Square, Mellon Bank Center and what had been called the Bell Atlantic Tower came onto the market and created a glut of office space. Office construction in Philadelphia has been limited ever since as demand hasn’t warranted it.
What was then Rouse & Associates built Two Liberty at 1601 Chestnut St as the companion tower to One Liberty and as the new headquarters for Cigna Corp. When Cigna initially moved in, it occupied the entire building. That changed in 1999 when Cigna sold its property-and-casualty business to Ace Ltd. The Bermuda-based insurer then occupied half of the tower and Cigna the other half.

800,000-square-foot vacancy

Then Cigna’s needs changed. It decided in 2004 to remain in 450,000 square feet in the building, reducing its space needs by 150,000 square feet. Ace ended up buying 436 Walnut St., a 325,000-square-foot building in Philadelphia, for its new headquarters and moved out of Two Liberty.
That meant nearly 800,000 square feet of space in the building was vacant. That gave Shorenstein Co., Two Liberty’s owner at the time, an opportunity to open the building up to multiple office tenants. However, before Shorenstein got a chance to launch its renovations, it sold the building in 2005 to America’s Capital Partners. The new owner hatched a plan to convert the top 20 floors, or roughly 400,000 square feet, from high-end office space into luxury condominiums. The condo market was on fire at the time.
America’s Capital’s plans entailed putting in about 130 units from floors 37 through 57. (The 58th floor is used for mechanical systems.) The project was watched closely by the real estate and architectural communities to see if America’s Capital and its partner, Falcone Group, could pull off transforming a portion of one of Philadelphia’s modern signature skyscrapers into residential space.
Two Liberty had the potential of serving as a model for the conversion of other trophy office buildings in Center City.

Liberty Property Trust keeps buying land, building warehouses

It was an industrial wasteland.
The property once owned by Bethlehem Stee along Route 412 was left abandoned for years. Its promise was its quick access to Interstate 78 and proximity to downtown Bethlehem. A major drawback to residential, and retail investment in particular, was an adjacent sewage treatment plant.
But now the property is roaring back to life.
Global real estate firm Liberty Property Trust, one of the biggest commercial landlords in the Lehigh Valley, has spent $60 million on a sprawling 1.2 million-square-foot warehouse on the property. Now it just has to find a tenant.
Over the years, Liberty Property Trust has proved itself to be quite good at finding tenants.
Ever since I-78 sliced through the Lehigh Valley more than 20 years ago, the company in Malvern, Chester County, has been a behind-the-scenes force of industrial development that has transformed the rural landscape of UpperMacungie Township and now the brownfields of south Bethlehem.
Its formula is simple. It buys vacant land close to freeways. It builds warehouses and manufacturing space. It rents out the buildings to such companies as Home Depot, online retailer, cereal-maker Kellogg's and soap-maker Dial Corp.
Though they represent different industries, all of those companies have to ship a lot of products to big cities on the East Coast. The Lehigh Valley offers convenient access to a lot of customers, as well as adequate space for the modern, energy-efficient buildings that companies crave.
With its large portfolio of industrial space nearly full, Liberty Property Trust sees no end in sight to demand. As long as the tenants keep coming, it will keep buying land and building warehouses.
"I don't believe there's a better place to do business than the Lehigh Valley," said Bob Kiel, senior vice president. "We love this market."
The company began in 1972 as Rouse & Associates under founder Bill Rouse by building warehouse space in southern New Jersey. It first entered the Lehigh Valley market in 1980 and developed a relationship with the Jaindl family, turkey farmers and developers with vast land holdings.
Developer David Jaindl said his family has been doing business with Liberty Property Trust for nearly 30 years.
"Our relationship has grown through the many transactions we have completed together, but it has also grown in a strong sense of trust," Jaindl said. "When Bob Kiel … or any of the Liberty representatives commit to an idea or strategy, they follow through consistently."
In 1994, the Rouse & Associates went public on the New York Stock Exchange and changed its name to Liberty Property Trust. Rouse retired in 2002 and died of cancer a year later.
Today, Liberty Property Trust has holdings in 22 markets in the United States and the United Kingdom. Most of its industrial growth is focused in the Lehigh Valley.
At first glance, dropping $60 million to build a sprawling warehouse without having a tenant lined up seems like a big gamble. For Liberty Property Trust, there is no alternative. Its inventory is full and it won't attract new tenants without a building to show them, Kiel said.
When large companies look to relocate, they are often under tight timelines as short as two or three months. That's just enough time to customize a vacant building to suit their needs. Building something from the ground up in that short span is impossible, Kiel said.
In 2011, Liberty Property Trust executed a major shift in strategy. The company sold 32 Lehigh Valley office properties totaling 1.4 million square feet to focus on industrial development.
Corporate job cuts, increased telecommuting and a reduction in the amount of space each worker occupies left the office market soft. Office landlords were competing for limited tenants, often pilfering them from one another by offering to pay moving expenses and offering low introductory rental rates.
Liberty de-emphasized offices in favor of industrial properties. The company expects businesses to continue to leave the high taxes, labor costs and congestion of New Jersey for the abundant space and lower costs of the Lehigh Valley, Kiel said. And when they do, Liberty Property Trust will be waiting with modern, energy-efficient buildings close to freeways, he said.
The company's confidence in the Lehigh Valley for industrial real estate helped fuel its transformation, with investments that have attracted big companies that employ thousands of people, said Pete Reinke, vice president of regional development at Lehigh Valley Economic Development Corp.
"They were pioneers," Reinke said. "They saw that Interstate 78 would attract the logistics and distribution markets. They built a couple of buildings which grew into dozens of buildings. …
"We're known as one of the best warehouse and logistics markets in the country, and a lot of that is because of what Liberty Property Trust did. They've been committed to this market for more than two decades."