Saturday, August 31, 2013

Select Top Five Philadelphia Office Leases Signed in Q2 2013

The select top office lease signed during the second quarter of 2013 in the Philadelphia market was at 1818 Beneficial Bank Place in the Market Street West submarket. Beneficial Mutual Bancorp, Inc. leased 95,764 square feet there.  

Public Health Management Corporation leased 89,072 square feet at Centre Square - East Tower in the Market Street West submarket. 

Brandywine Realty Trust represented the landlord in a 59,353-square-foot office lease at First Avenue 1040 in the King of Prussia / Wayne submarket. 

McKesson Health Solutions leased 56,099 square feet at Valley Forge Square 1 in the King of Prussia / Wayne submarket.  

A 54,529-square-foot lease was inked at The Applie Center in Delaware County. 

This trend is compared to the U.S. National Office largest lease signings occurring in Q2 2013, which include the 551,454-square-foot renewal deal signed by the Department of Defense at the Zachary Taylor Bldg in the Washington DC market; the 546,604-square-foot lease signed by Conoco Phillips at Energy Center Three in the Houston market; the Transportation Security Administration's 545,747-square-foot renewal deal at Pentagon City in the Washington DC market; and the 522,862-square-foot renewal deal signed by Simpson Thacher & Bartlett LLP at 425 Lexington Ave. in the New York City market.

Ethermore 905 LP Acquires a 31,000 SF Building in West Chester

Ethermore 905 LP has purchased a 31,000 SF industrial flex building located at 905 Fern Hill Road in West Chester.                              
The sale price of the property was $1,615,000. 

The Buyer, Ethermore 905 LP, is a subsidiary of Nathan Trotter & Co., Inc. a local company which is the largest manufacturer of tin and tin alloys in the US. Their primary location consists of a 25,000 SF state of the art manufacturing facility in Coatesville. 905 Fern Hill will serve as one of their additional off-site facilities which are all located in the Chester County area. 

 “905 Fern Hill Road is an industrial flex warehouse building containing a total of 31,000 SF with office space of 3,500 SF, 2,000 SF mezzanine area above the office space which is used primarily for storage and a warehouse of 25,500 SF with 3 loading docks and 1 drive in door. Built in 1971, the building sits on 2.70 acres and has an abundant amount of parking along the side and rear of the building. 

The property is located within an easy commute of the Borough of West Chester just off of Paoli Pike and Route 202. 

Thursday, August 29, 2013

IMX Medical Pays $2.7M for Paoli Pike Office

IMX Medical Management Services purchased the office building at 1700 Paoli Pike in West Chester, PA from Brandywine Realty Trust for $2.675 million, or about $88 per square foot. 

The 30,406-square-foot office building was constructed in 2000, next to Applebrook Golf Club. IMX Medical will be occupying the entire building after relocating from 2 Bala Plaza.

Bridgeport Shopping Center Sells for $7M

Gelcor Realty, Inc. acquired the Bridgeport Shopping Center at 1624 Lincoln Hwy E. in Lancaster, PA from Bridgeport Acquisition LP for $6.99 million, or about $236 per square foot. 
The property delivered in 1996 and totals 29,612 square feet. The property was 100 percent occupied at the time of sale.

Monday, August 26, 2013

Whole Foods, Best Western plan gets nod

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal
Philadelphia planners gave a nod to Neal Rodin’s proposed mixed-use development that would include apartments and a new 63,000-square-foot Whole Foods grocery store.
The project at 501 N. 22nd St. in the Art Museum area of Center City would also have 293 apartments and 494 parking spaces in a partially below-grade parking garage, something the Logan Square Neighborhood Association wasn’t too happy about. A restaurant is also part of the plan. The development will replace a Best Western hotel that currently operates on the site.
The developer is seeking several variances including extended curb cuts and ceiling heights on the garage.
The community design review and neighborhood group didn’t think the above grade parking was appropriate, that the project lacked urban space on Pennsylvania Avenue and needed additional pedestrian sidewalk lights. While the developer plans to bring in more lighting, the building complies with many of the suggested recommendations and is consistent with the Parkway Plan.
“We feel the building meets the requirements,” said Jim Voelzke of MC+A Architects of Bethesda, Md., which designed the structure.
The plan will go before zoning board Aug. 28.

Saturday, August 24, 2013

Zoning board weighing residential tower at 20th and Market

Representatives of Brandywine Realty Trust implored the zoning board on Wednesday to grant two variances and one special exception for their proposed 28-story mixed-use residential tower at 20th and Market streets. The board heard the applicants’ testimony, as well as the objections of some residents of Penn Center House, a residential complex directly north across Commerce Street from the proposed project, but did not announce a decision about the zoning relief. The board members will discuss the case and issue a decision in the next few weeks. To build the project the way it wants, Brandywine needs variances for a curb cut on 20th Street and a small side yard, and a special exception for an above-ground parking garage with 223 parking spaces. Forty-five of those parking spots will be designated for public use, according to Brandywine attorney Carl Primavera, with the rest reserved for the residents of the building. The main tower of the project would be situated on the southern portion of the property, fronting on Market Street, while the garage is pushed toward the back along Commerce Street and the Penn Center House. Residents of that building argued Wednesday that the parking facility should be put underground to avoid blocking their access to light and air. Primavera, along with Seth Shapiro of Barton Partners, said that the project was designed explicitly to minimize the impact on the Penn Center House.

The parking garage would be about 62 feet tall, with another 10-foot "architectural trellis" on top, and screened to obscure the building’s identity as a parking garage. Residents of the lower levels of the adjacent building said that if the parking were put underground, it wouldn’t mess with their light and air. Brandywine representatives said that digging for the parking garage would add seven months to the construction of the building, and require them to install mechanical ventilation systems. Which, they argued, would be just as unsightly above-grade as the garage, plus add noise and fumes to the mix. A representative of the Penn Center House board of directors hedged. The garage, the board recognized, would put some apartments on the lower half of the building in shadow, but the mechanical ventilation system would be more unpleasant for the rest of the building’s occupants--a "hostile street environment," Carl Primavera called it. The board took no official position on the zoning relief, but its representative said he saw the above-ground garage as “the lesser of two evils.”  Ed Panek, a representative of Logan Square Neighborhood Association, the local Registered Community Organization, essentially repeated his testimony from Tuesday’s Planning Commission, in which he said the group is not opposed to the zoning relief, and is working on an agreement for traffic control on Commerce Street. Carl Primavera said that while the protestants' arguments were "heartfelt," he feels they ultimately aren't relevant to the zoning issues the board has to consider.

Friday, August 23, 2013

Philadelphia's Industrial Deliveries, Construction and Inventory

During the second quarter 2013, one Industrial building totaling 70,000 square feet were completed in the Philadelphia market area. 

This compares to one building totaling 15,500 square feet that were completed in the first quarter 2013, 11 buildings totaling 3,944,948 square feet completed in the fourth quarter 2012, and 2,229,000 square feet in four buildings completed in the third quarter 2012. 

There were 4,149,992 square feet of Industrial space under construction at the end of the second quarter 2013. 

Some of the notable 2013 deliveries include: Albert's Organics, a 70,000-square-foot facility that delivered in second quarter 2013 and is now 100% occupied, and Mid Valley Industrial Park - Building 4, a 15,500-square-foot building that delivered in first quarter 2013. 

The largest projects underway at the end of second quarter 2013 were Berks Park 78 - Dollar General, a 906,919-square-foot building with 100% of its space pre-leased, and PetSmart, an 870,000-square-foot facility that is 100% pre-leased. 

Total Industrial inventory in the Philadelphia market area amounted to 1,015,889,237 square feet in 19,663 buildings as of the end of the second quarter 2013. The Flex sector consisted of 83,056,168 square feet in 3,224 projects. Within the Industrial market there were 2,531 owner-occupied buildings accounting for 234,526,240 square feet of Industrial space. 

This trend is compared to U.S. National Industrial deliveries and construction, which saw 167 buildings totaling 17.46 million square feet complete construction with an additional 56.6 million square feet of industrial space still under construction at the end of the second quarter. The 1.29 million-square-foot Home Depot BTS delivered in the Atlanta market, and the 1.8 million-square-foot Intel Ronler Acres D1X in the Portland market is still underway. Total industrial inventory in the U.S. market area totaled 20.8 billion square feet in more than 611,000 buildings at the end of the second quarter 2013, including almost 67,500 owner-occupied industrial buildings.

Radnor office building sells for $26 million

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal

Keystone Property Group has sold 240 Radnor-Chester Road in Radnor for $26 million, or $260 a square foot.The buyer in this off-market transaction wasn’t disclosed.
Main Line Health fully occupies the 100,462-square-foot office building and signed a long-term lease in 2008 to consolidate its corporate offices and Home Care Network.

Thursday, August 22, 2013

Realty Income Corp Buys Emmaus CVS

Realty Income Corp. acquired the CVS Pharmacy at 702 Chestnut St. in Emmaus, PA from Farog Moonda LLC for $6.38 million, or about $490 per square foot. 

The 13,013-square-foot retail building was built in 2008 in the Lehigh/Northampton submarket.

Office Property Trades for $3.2M

Color Reflections acquired the office building at 475 N. 5th St. in Philadelphia, PA from Seamen's Church Institute of Philadelphia & South Jersey for $3.2 million, or about $97 per square foot. 

The 33,050-square-foot office building was constructed in 1960 and features a newly renovated lobby, which was completed in 2008. The seller did a sale-leaseback, and will occupy a portion of the building for an undisclosed term.

Rossmoyne Bus Ctr Bldg Sells for $5.9M

Szeles Real Estate Development sold the office building at 4900 Ritter Rd. in Mechanicsburg, PA to FB Capital Partners LP for $5.85 million, or roughly $106 per square foot. 

The two-story, 55,000-square-foot, multi-tenant building was constructed in 1988 on 5.4 acres within the Rossmoyne Business Center in Cumberland County. The asset was fully leased at the time of sale.

Keystone plans 18-story hotel in Conshy

This meeting was last night. Private sources tell me the Borough Council was salivating at the proposal and rendering drawings.

by Carl Rotenberg, Times Herald

Conshohocken Council and borough residents will get two presentations Wednesday night during the regular council meeting on how two realty firms plan to rebuild the Verizon building, redevelop a vacant Fayette Street parcel and provide additional parking for downtown shoppers.

Officials of Brandywine Realty Trust (BRT) of Radnor, Delaware County, will make their presentation at 8 p.m., Wednesday, and Keystone Property Group (KPG) of Lower Merion will follow at 8:45 p.m., said Council President Paul McConnell.

“My guess is that council will not make a selection on Wednesday night,” McConnell said. “As council people talk about the two plans, the world of questions will open up.”

McConnell said it was important for Conshohocken residents to attend the meeting to learn the details of the two plans.

“The public should come,” he said, “and they will have a chance to ask questions.”

McConnell said that many residents had already questioned how traffic on Fayette Street would be affected by the two plans. He said it was unclear how much of the historic Washington Fire Co. building and adjacent apparatus building would be preserved and reused in each of the plans.

“I’ve already gotten feedback from many people. It is not just a choice of one plan or the other,” McConnell said. “The question that everyone asks is about traffic and the biggest concern people have is traffic.”

The Times Herald received redacted versions of both proposals from the Redevelopment Authority of Montgomery County (RDA) on Aug. 1 after filing a Pennsylvania Right to Know request. The Times Herald has filed an appeal of the RDA redactions with the Pennsylvania Office of Open Records in Harrisburg.

The redacted version of the Brandywinte Realty Trust proposal included an executive summary and six conceptual drawings illustrating the firm’s plans for replacing the Verizon building, at 402 Fayette St., with a 24,000-square-foot building for borough workers and the Police Department.

“Our development concepts contemplate a 400-car, fully automated parking garage beneath a 226,920-square-foot office building and the addition of 200 parking spaces at our existing parking facility located at 1 and 101 West Elm St.,” the BRT proposal states. “Our development plan utilizes the existing facade of the historic firehouse and incorporates a public amenity in the form of a restaurant into the building’s use.”

The conceptual drawing for the proposed office building on the vacant, 15,768-square-foot parcel at the intersection of Fayette and Elm streets shows a 14-story building. Phase I of the BRT proposal includes the parking garage under the office building.

A two-way garage entrance would be located on West Elm Street. A garage exit ramp and the lobby entrance for the office building would be located off a driveway to Fayette Street.

Phase II includes the demolition of the Verizon building and construction of “a new public park and a new 24,000-square-foot building,” the proposal said. “Our Phase II development includes 70 parking spaces, a portion of which will be secured for police vehicle parking which includes a sally port for secure police access to the building.”

Borough administrative offices and a public meeting space would occupy 10,000 square feet in the three-story building. Police offices would occupy 10,000 square feet on the lower level.

The redacted BRT proposal given to The Times Herald did not include the proposal description, schedule, terms, response to the request for proposal and the exhibits.

The redacted version of the Keystone Property Group proposal included six conceptual drawings showing an 18-story hotel at the Fayette and Elm street intersection with ground-level restaurants, an eight-story parking garage to replace the existing three-story garage and a new, 200,000 square-foot office tower at the intersection of First Avenue and Fayette Street.

The hotel would have more than 200 rooms, conference facilities and a rooftop lounge. The new parking garage would have parking for the hotel guests, office tenants and a minimum of 300 parking spaces for downtown Conshohocken businesses and visitors, said William Glazer, the CEO of KPG.

The historic firehouse would be converted into a brew pub. An outdoor plaza facing Fayette Street would be built between the hotel and office building.

The Verizon building would be renovated with a new facade, roof and building systems. The lower level would be demolished to create additional parking. A “dedicated parking area for police vehicles, as well as a separate sally port entrance into the second floor” would be created for the police department.

Glazer said KPG would “provide Conshohocken Borough with (a redacted) return on their initial $3.25 million acquisition of the building, making their investment ‘money good.’”

The redacted KPG proposal given to The Times Herald did not include the land parcel proposed deal structure and estimated project schedule; the proposed deal structure, capital improvements/schedule and letter of intent for the Verizon building; a standard lease document and examples of tenant billing/CAM statements.

Conshohocken owns the Verizon building and the historic firehouse, while the RDA owns the adjacent apparatus building and the vacant parcel. Borough officials purchased the Verizon building for $3.25 million from the Verizon Corp. in September 2007. Council rejected a purchase proposal for $3.25 million in December 2008.
Full story:

Wednesday, August 21, 2013

CBRE's Sulentic on Real Estate, Hudson Yards (Video)

Companies want to locate where the talent wants to be!

NFIB: Index of small biz optimism up 0.6 in July to 94.1 (Video)

Is it bad timing for REIT IPOs now? (Video)

Curtiss-Wright Corporation To Relocate To Bethlehem, PA

Curtiss-Wright Corporation will invest more than $7 million to relocate a flow control facility from New Jersey to Bethlehem, Pennsylvania, adding 95 jobs in Northampton County.

Curtiss-Wright, a global engineering and manufacturing company, will move its Engineered Pump Division from its existing location in Phillipsburg, New Jersey to the City of Bethlehem, where it will construct a 179,000 square-foot facility. The project is expected to generate a capital investment in excess of $7 million for infrastructure, equipment and employee training costs. The company is projected to create 95 jobs and retain another 766 positions throughout the state.

“We are thrilled to be relocating our operations to the Lehigh Valley and look forward to supplying our mission-critical products and services from our new, modern manufacturing, testing, warehousing and office facility,” Todd Schurra, General Manager, EPD said. “It was a pleasure working with all of the members of the Governor’s Action Team who were instrumental in getting this project completed.”

“Putting Pennsylvanians back to work continues to be a priority of my administration – our unemployment rate remains below the national average and businesses are moving here to grow and succeed,” Gov Tom Corbett said. “Curtiss-Wright’s move to the Lehigh Valley will add 95 jobs to the more than 760 they employ throughout Pennsylvania.”

As an incentive, the company received a funding offer from the Department of Community and Economic Development including a $200,000 Pennsylvania First Program grant and a $42,750 Guaranteed Free Training grant which will be used to train its new workforce. A $2,375,000 loan from the Machinery and Equipment Loan Fund was also included.

The project was coordinated by the Governor’s Action Team in collaboration with the Northampton County Industrial Development Authority and the Lehigh Valley Economic Development Corporation.

“Curtiss-Wright has a distinguished legacy in the aerospace industry and is one of the nation’s top manufacturers of pumping, propulsion, valve and control systems,” Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp. said. “Curtiss-Wright is exactly the type of company we want to attract to the Lehigh Valley and we welcome the addition of an additional 95 full-time jobs at a good salary into the Lehigh Valley economy.”

“Curtiss-Wright's move to Northampton County is a strong indication of the quality of our community as a desirable place for companies, particularly manufacturers, to do business,” Bud Hackett, Chairman of the Northampton County Industrial Development Authority said. “Anytime we can attract a multi-national company that commits to bringing nearly 100 high-tech manufacturing jobs to Northampton County, we’ll do it.”

Tuesday, August 20, 2013

Main Line is abloom with apartments

by Joseph N. DiStefano

Who's going to live in all those new Main Line apartments? Hospital workers, college students - and Philadelphia residents who want to enroll their children in Lower Merion public schools, says Steven Rock, senior vice president at New York-based Marcus & Millichap Capital Corp. Rock has arranged $23.5 million in financing for Cross Properties (that's David Blumenfeld and Kevin Michals) to build 132 apartments, plus medical offices, at the former Baptist seminary on Lancaster Avenue near Lankenau Hospital. That's one of several apartment projects picking up planning, zoning, and financing approvals in Lower Merion. MORE COVERAGE In Philly, 1,000 new apartments coming soon Schuylkill tower draws neighbors' ire There are also Merloc Partners' plan to build 250 apartments near the Wynnewood SEPTA station; Carl Dranoff's Ardmore Place (121 units); Nolen Properties' Righters Ferry Road project (284 units); and, on the Schuylkill, the former Connelly Container Corp. and Pencoyd Iron Works (580 units), by developer Brian O'Neill. Some other projects are still under wraps. Apartments would also fit at St. Charles Borromeo Seminary, east of Lancaster Avenue, says Robert Duncan, township director of planning and building. Overall, "the banks are ready, and they're all coming together," he told me. Supporters hope these apartments will deliver more shoppers to Ardmore, and more workers for aging offices owned by landlords like redeveloper William Glazer's Keystone Property Group.
Full story:

Monday, August 19, 2013

CBS Radio Moving From Burbs to Philly

by Peter Van Allen, Reporter- Philadelphia Business Journal

CBS Radio’s planned move of radio stations from the suburbs will mean a gain of 100 employees in the city of Philadelphia, an executive for the stations said Wednesday.
It’s part of a plan to consolidate CBS’s three area sites into two.
Under the plan, WPHT and WOGL will move from 2 Bala Plaza in Bala Cynwyd, Pa., to 400 Market St. by late spring of next year. WIP, which has AM and FM signals, will remain at 400 Market St.
KYW NewsRadio will move its studios from 400 Market St. to 1555 Hamilton St., joining CBS 3. That move will take place by mid-January — and reunites two news properties that until 2006 had been in the same building, on what is now the site of the National Museum of American Jewish History.
In recent years, on-air personalities on CBS3 have increasingly been featured on radio and vice versa. The move will hasten that process, Marc Rayfield, market manager for CBS Radio, said.
“From a synergy standpoint, being in the same building, things can happen. Right now, [managers] know one another, but the producers and reporters may not know one another,” Rayfield said. “It only makes sense.”
In all, CBS Radio will have 300 full-time employees and about 150 part-timers in the city of Philadelphia. CBS 3 has an additional 200 people.
As reported in today’s Daily News, some employees in the Bala office were not happy about the move since it would entail paying Philadelphia city-wage tax and additional parking or transportation costs.
Rayfield said some employees will receive an adjustment in compensation and/or provisions for parking.

Friday, August 16, 2013

Blackstone's Shift in Real Estate Holdings (Video)

FARO Technologies Inks 90,000-SF BTS Lease

FARO Technologies, a developer and manufacturer of 3-D measurement and imaging systems, signed a 10-year, build-to-suit lease for the entire 90,364-square-foot flex building proposed at 290 National Rd. in Exton, PA. 

The building is expected to break ground in September 2013, with completion scheduled for the third quarter of 2014. The building sits on 13 acres zoned I-2. When completed, it will have at least 24-foot clear height and 40x40-foot column spacing. The number of docks and drive-ins has yet to be determined.

Lehigh Valley WIB Secures New Location

The Lehigh Valley Workforce Investment Board has signed a long-term lease for 30,000 square feet at 555 Union Blvd. in Allentown, PA. The tenant will occupy the entire first floor of Building 1. 

The two-story, 66,078-square-foot office building sits on more than 41 acres adjacent to the Coca Cola Field. The site consists of five connected buildings totaling 294,639 square feet. The portfolio offers training rooms, auditorium, classrooms, and an outdoor covered break area. 

Walgreens, CVS Properties Sold for $22.4M

Menlo Capital Group acquired two net-leased retail buildings, a Walgreens in Saint Albans, NY and a CVS in Phoenixville, PA, from Elion Real Estate Investments for $22.43 million, or about $978 per square foot. 

The Walgreens at 112-55 Farmers Blvd. in the South Queens submarket of Long Island totals 9,988 square feet. It was built in 2011 on half an acre. The CVS at 130 Nutt Rd. in the Exton/Whitelands submarket of Philadelphia totals 12,900 square feet. It was built in 2010 on 2.4 acres.

Tuesday, August 13, 2013

Market Trend: Philadelphia's Office Deliveries, Construction and Inventory

During the second quarter 2013, three buildings totaling 23,100 square feet were completed in the Philadelphia market area. 

This compares to seven buildings totaling 722,360 square feet that were completed in the first quarter 2013, six buildings totaling 275,256 square feet completed in the fourth quarter 2012, and 46,319 square feet in four buildings completed in the third quarter 2012. 

There were 790,192 square feet of office spaceunder construction at the end of the second quarter 2013. 

Some of the notable 2013 deliveries include: Endo Pharmaceuticals, a 300,000-square-foot facility that delivered in first quarter 2013 and is now 100% occupied, and Five Crescent Dr, a 207,779-square-foot building that delivered in first quarter 2013 and is now 100% occupied. 

The largest projects underway at the end of second quarter 2013 were 3737 Market St, a 272,700-square-foot building with 70% of its space pre-leased, and CrossPoint at Valley Forge, a 272,109-square-foot facility that is 31% pre-leased. 

Total office inventory in the Philadelphia market area amounted to 397,855,549 square feet in 20,051 buildings as of the end of the second quarter 2013. The Class-A office sector consisted of 127,387,442 square feet in 936 projects. Within the Office market there were 888 owner-occupied buildings accounting for 35,276,735 square feet of office space. 

This trend is compared to U.S. National Office deliveries and construction, which saw 219 buildings totaling 10.26 million square feet complete construction, with an additional 71.06 million square feet of office space still under construction at the end of the second quarter. A 685,000-square-foot facility at 200 S 108th Ave. in the Omaha/Council Bluffs market delivered, while the 3.02 million-square-foot One World Trade Center in New York City is still underway. Total office inventory in the U.S. market area totaled 10.34 billion square feet in more than 493,000 buildings at the end of the second quarter 2013, including almost 20,000 owner-occupied buildings accounting for 879.9 million square feet.

Monthly Economic Outlook -- August 2013

Wednesday, August 7, 2013

Woodmont Properties, AEW Capital Purchase 1.5M SF in Middletown

AEW Capital Management, in a joint venture with Woodmont Industrial Partners, acquired the Capital Business Center - a six-building, 1.55 million-square-foot industrial complex near Harrisburg International Airport, from Eaton Vance Investment Managers. 

The new owners plan to demolish two circa 1950s vintage buildings and replace them with two LEED-certified, class A warehouse facilities totaling 530,000 square feet. There will be significant capital improvements to other buildings to bring them up to current institutional standards. The center was also renamed Capital Logistics Center to better reflect its strategic location next to Harrisburg International Airport. 

Of the six properties that comprise Capital Logistics Center, three of them are 100 percent occupied, one is at 28 percent occupancy and the other two will be redeveloped. In a premier location, the Capital Logistics Center fronts the PA Turnpike is less than two miles from the Harrisburg East Interchange. It is also located within five miles of I-81 near Routes I-283, I-83 and 322.

Pearl Properties Makes Market Street Purchase

Kimco Realty Corporation sold a portion of the 103,296-square-foot retail and multifamily building at 1401 Walnut St. in Philadelphia, PA to Pearl Properties LLC for $15 million, or about $196 per square foot. Pearl Properties purchased floors 3 through 12, totaling 76,596 square feet of office and residential space. 

The mixed-use building is centrally located at the corner of Broad and Walnut Streets in Market West. The 36 luxury apartments known as the Pearl Apartments range from 1,700 to 2,450 square feet in size. The apartments are located on floors 3 through 7, and 10 through 12. The eighth and ninth floors contain office space. The new owner may convert the vacant ninth floor to additional units.

Arden Grp Pays $31.1M for Doubletree Philadelphia West

LNR Partners, Inc., a special loan servicer, sold the 253-room Doubletree Guest Suites - Philadelphia West to The Arden Group for $31.1 million, or approximately $123,000 per room. At the time of sale, the asset was not distressed and had good operating income. 

Located at 640 Fountain Rd. in Plymouth Meeting, PA, the seven-story, 246,048-square-foot hospitality building sits on almost eight acres. The property was awarded an Energy Star label in 2007 for its operating efficiency. The Arden Group will invest an additional $6 million in upgrades to the asset.

Independence Square Apts Trade for $8.9M

Geller Associates sold the Independence Square Apartments at 1 Maryland Cir. in Whitehall, PA to Andover Properties for $8.94 million, or about $67,000 per unit. 

The 133-unit multifamily building sits on almost five acres in the Lehigh / Northampton submarket of Philadelphia. The complex was over 95 percent occupied at the time of sale. 

Brookfield To Boost Industrial Property Holdings with $1.1 Billion IDI Buy

Brookfield Property Partners (NYSE:BPY) has reached an agreement to buy Atlanta-based Industrial Developments International Inc. (IDI) for $1.1 billion. 

IDI owns 75 industrial distribution facilities totalling 27 million square feet located in 12 states. The deal also includes IDI's third party property management business and development sites it controls that can support 49 million square feet of future warehouse distribution projects. 

Acquiring IDI will provide a significant boost to Brookfield's U.S. industrial property holdings and establish the firm as one of largest global owners of industrial property, capping a series of acquisitions by the recent property spin-off of Brookfield Asset Management. 

Earlier this summer, BPP bought EZW Gazeley Ltd., a warehouse and distribution park developer with locations in the U.K., Western Europe and China. That followed the acquisition last year of a majority position in Verde Realty, which owns 18 million square feet of industrial space in major U.S. distribution markets and markets along the U.S. and Mexico border. 

Following the IDI acquisition, Brookfield will have more than 62 million square feet of industrial property in its portfolio, plus 79 million square feet of future development potential, making it one of the largest owners of industrial and logistics facilities. 

Ric Clark, CEO of Brookfield Property Group, said the combined business will own "irreplaceable assets and development sites near major markets and transport routes" and said one of the firm's investment goals is to create a global industrial real estate company capable of delivering high quality distribution facilities to its clients around the world. 

Brookfield Property Partner is buying IDI from a U.S. subsidiary of Kajima Corp. It will own a quarter-share interest in IDI with the balance owned by Brookfield’s institutional partners. The transaction is expected to close in the fourth quarter of 2013. 

Brookfield also has a partnership arrangement with Dallas-based Hillwood Industrial Partners to acquire industrial properties in the U.S. 

The acquisition will be made through Brookfield’s $4.4 billion Brookfield Strategic Real Estate Partners fund, which targets opportunistic investments in commercial property markets, with an emphasis on North America, Europe, Brazil and Australia.

Franklin Square Capital to move to Navy Yard from Cira Centre

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal

Franklin Square Capital Partners will be relocating its headquarters to the Philadelphia Navy Yard where Liberty Property Trust and Synterra Partners will construct a new four-story, 80,050-square-foot building for the firm.
The firm will be moving from Cira Centre.
Franklin Square signed a long-term lease for the entire building, which is located on just over four acres next to the Courtyard by Marriott that is under construction. The address is 201 Rouse Blvd.
Franklin Square designs and manages alternative investment funds that allow mainstream investors to access asset classes, like investments in private companies, that were previously only available to institutional investors. Company revenues grew from $1.5 million in 2009 to just under $27 million last year, or 1,698 percent. It was formed in 2007 with 15 employees and now has 150 people working for it. It has been ranked 13th on Forbes Magazine’s 2013 list of America’s most promising companies.
“We are excited to keep our headquarters in Philadelphia and to join the growing community at the Navy Yard,” said Michael Forman, founder and CEO of Franklin Square, in a statement. “We look forward to having a custom designed space that will accommodate our rapid growth and foster our company’s energetic, collaborative and innovative culture,” Forman concluded.
The new headquarters will have views of both of a new park and Philadelphia’s skyline, a café-style restaurant, a multi-use exercise facility, conference facilities, and floor plans full of natural light and designed to foster team interaction.

Monday, August 5, 2013

Philadelphia's Industrial Vacancy Increases to 9.3%

The Philadelphia Industrial market ended the second quarter 2013 with a vacancy rate of 9.3%.

The vacancy rate was up over the previous quarter, with net absorption totaling negative 965,846 square feet in the second quarter. That compares to positive 64,473 square feet in the first quarter 2013. Vacant sublease space increased in the quarter, ending the quarter at 2,424,434 square feet. 

Tenants moving into large blocks of space in 2013 include: One Kings Lane moving into 503,423 square feet at Commerce Circle, Perdue moving into 223,750 square feet at 1801 Dulaney St - Building 1, and Schenker Logistics moving into 700 Allen Rd. 

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

A total of one building delivered to the market in the quarter totaling 70,000 square feet, with 4,149,992 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 8.5% from the previous quarter, with net absorption positive 44.6 million square feet in the second quarter. Average rental rates increased to $5.25 this quarter, and 167 industrial buildings delivered to the market totaling almost 17.5 million square feet.

Dow Opens a Northeast Tech Center in Collegeville

Dow Chemical opened its new 800,000-square-foot Northeast Technology Center Innovation Hub this week.
The center serves as lab and office facility for more than 800 employees and contractors. It is one of the largest sites of its kind in Dow’s global network. Company officials said the new center will play a pivotal role for many businesses in Dow’s Advanced Materials portfolio, which is headquartered in Philadelphia.
Pennsylvania Gov. Tom Corbett speaking to 700 Dow employees who attended Wednesday’s ribbon-cutting, said, "Today Dow is making clear that it is committed to Pennsylvania, as a place of business, as a center of research and development, and as a home of innovation. This tech center is part of something special happening all over our commonwealth. Businesses are coming here to become part of our economic comeback."
“The Northeast Technology Center is yet another example of Dow's continued commitment to innovation and collaboration,” added Andrew Liveris, Dow Chairman and CEO. “Working at the intersection of the sciences, Dow scientists and technologists are bridging the gap between chemistry and technology to develop solutions to some of the world's greatest challenges.”
Dow Chemical employs approximately 2,000 workers in the Delaware Valley. The company has started moving employees from its Spring House Technical Center to the NTC and will continue the transition through 2014.

Philly Sears Demolition Makes Way for Office Project

Demolition crews, which have been working at the property for about two months, have begun tearing away the façade of the former Sears, Roebuck & Co. store on Admiral Wilson Boulevard.
The site, owned by Campbell Soup Co. of Camden, NJ, was acquired in June of last year for $3.5 million. The company plans to build an office park of between 250,000 square feet to 500,000 square feet at the property.
The building was built in 1927 and was home to Sears until 1971, when it closed. Since then it has been in progressive deterioration, worsened by a two-alarm fire in December, according to The Inquirer.
Campbell Soup officials say demolition work will be completed by the end of the summer. No start date has been set for construction on the office project.
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Thursday, August 1, 2013

Berk Buys Boyertown Bldgs for $2.5M

Berk Wiper Converting & Packaging acquired the industrial buildings at 400 E. 2nd St. in Boyertown, PA from Cooper Automotive Co. for $2.5 million, or about $9 per square foot. 

This sale involved two industrial building totaling 275,600 square feet. Both building were built in 1956 and are located in the Berks submarket of Philadelphia.

Flex Bldg Sold for $2.5M

Brickbox Investments LLC acquired the flex building at 5060 Ritter Rd. in Mechanicsburg, PA from the Hoberman Family for $2.5 million, or about $48 per square foot. 

This single-story, 52,525-square-foot property was built in 1997 on five acres in the Harrisburg submarket of Philadelphia.

Tremont Shopping Center Sold for $10.4M

BET Investments, Inc. acquired the Tremont Shopping Center at 2500-2544 Welsh Rd. in Philadelphia, PA from Korman Commercial Properties, Inc. for $10.4 million, or about $193 per square foot. 

The single-story 54,006-square-foot strip center was built in 1960 in the Northeast Philadelphia submarket. It is anchored by Planet Fitness.

American Service Corp Pays $3.5M for Exton Office

American Service Corp. acquired the office building at 100 Arrandale Dr. in Exton, PA from Brandywine Realty Trust for approximately $3.49 million, or $100 per square foot. 

The two-story, 34,931-square-foot property was built in 1996 in the Exton/Whitelands submarket of Chester County.

Liberty Property Strikes Deal To Buy 23 Million SF Cabot Industrial Portfolio for $1.5 Billion

In a strategic bid to shift its portfolio to the industrial property sector and away from suburban office, Liberty Property Trust (NYSE: LRY) announced it has agreed to buy the operating partnership of Cabot Industrial Value Fund III for $1.475 billion. 

The transaction, which is expected to close in October of of this year, will add approximately 23 million square feet and 177 properties to the Malvern, PA-based REIT's industrial holdings. Approximately 13 million square feet of the space is located in Liberty’s existing markets, while the REIT will enter 10 new markets as a result of the deal, including Atlanta, Dallas/Fort Worth and Southern California, which together comprise 21% of the portfolio. As of May 31, 2013, the Cabot Industrial portfolio was 93.3% leased to 436 tenants. 

"This acquisition is a compelling opportunity to increase both the size of Liberty's industrial platform and its scope," said William P. Hankowsky, chairman and CEO of Liberty. "With one transaction, we significantly deepen our current industrial presence while extending our footprint to a national level." 

Under the agreement, Liberty will assume approximately $230 million of outstanding mortgage debt. The REIT has obtained a commitment for a $1.27 billion senior unsecured bridge loan to swing the deal, with plans to arrange permanent financing through a combination of debt and equity financing. Liberty also said it plans to sell off certain properties to generate another $150 million. 

The acquisition, which has a $1.5 billion all-in price tag, will accelerate Liberty's shift away from the under-performing suburban office sector, and restructure its portfolio so that industrial property will account for more than half of its holdings. REIT analysts generally supported the deal for strategically repositioning the REIT to the industrial property sector using attractive current financing. 

"While a number of deals have recently commanded 'portfolio premiums,' this deal allows Liberty to meaningfully increase industrial exposure at a time when fundamentals are strengthening and values have been rising," noted Citi Research REIT analyst Michael Bilerman in a note to investors. "Investors are bullish on the US industrial sector, and there are relatively few ways to play this in the public REIT market in size. The question is, is there still enough runway in the industrial cycle for LRY to make money on this investment?" 

Bilerman sees opportunity for the REIT to improve NOI through its local market management approach (the portfolio is currently managed by a third party), but he said the impact from directly managing the properties will take time and the portfolio is 93% occupied. 

Citigroup and Goldman Sachs served as Liberty's exclusive financial advisors on the acquisition.