Tuesday, November 26, 2013

Prologis Launches JV in China (Video)


ePharmaSolutions to Go to Plymouth Meeting

Global clinical services provider ePharmaSolutions will relocate its corporate headquarters from nearby Conshohocken to 25,000 square feet of space at 1 IMS Drive here.

Philadelphia's Retail Deliveries, Construction and Inventory

During the third quarter 2013, 15 retail buildings totaling 427,588 square feet were completed in the Philadelphia retail market. 

Over the past four quarters, a total of 809,173 square feet of retail space has been built in Philadelphia. In addition to the current quarter, seven buildings with 122,691 square feet were completed in second quarter 2013, eight buildings totaling 154,692 square feet completed in first quarter 2013, and 104,202 square feet in 14 buildings completed in fourth quarter 2012. 

There were 452,361 square feet of retail space under construction at the end of the third quarter 2013. 

Some of the notable 2013 deliveries include: 3450 Fox St, a 124,900-square-foot facility that delivered in third quarter 2013 and is now 90% occupied, and 116 Township Line Rd, a 75,371-square-foot building that delivered in first quarter 2013 and is now 100% occupied. 

Total retail inventory in the Philadelphia market area amounted to 487,038,544 square feet in 38,745 buildings and 2542 centers as of the end of the third quarter 2013. 

This trend is compared to U.S. National Retail deliveries and construction, which saw 660 buildings totaling 13.82 million square feet complete construction, with an additional 42 million square feet of retail space still under construction at the end of the third quarter. American Furniture Warehouse completed a 628,000-square-foot retail center, and The Fashion Outlets of Chicago, a 538,000-square-foot outlet center, delivered in the third quarter. Total retail inventory in the U.S. market totaled 12.37 billion square feet in almost 1.05 million buildings at the end of the third quarter 2013, including almost 97,000 shopping centers.


Mt. Laurel Office Attracts Virtua Health

Virtua Health Inc. has taken 18,650 square feet in a building at the Horizon Corporate Center here. 
The landlord for the 74,000-square-foot building at 2000 Crawford Place is LSOP NJ, LLC, a subsidiary of Somerset Properties. Virtua Health joins current tenants Siemens, 7-Eleven, Burns and Roe, and The Mentor Network.
“It has been exciting to watch Virtua’s growth in South Jersey."
The corporate center is close to restaurants and shopping centers, including Greentree Square Shopping Center and the Moorestown Mall. The location provides easy access to Routes 73 and 70, as well as I-295 and the New Jersey Turnpike.

Retail Leasing Livens in South Jersey

Retail leasing has picked up recently in southern New Jersey. There have been several long-term leases with national retailers and several with local and regional companies.
The transactions include:
  • Dollar General, signing a 10-year lease for 13,500 square feet at the building under construction at 802 Prospect St. in Trenton.

  •  OshKosh B’Gosh, signing for 2,500 square feet at East Gate Square, a 900,000-square-foot power center in Mt. Laurel/Moorestown. OshKosh signed a 10-year lease and will open a store this month, joining its sister store Carters at the development. 

  • National Vision, leasing 3,000 square feet for America’s Best Contacts & Eyeglasses atCooper’s Plaza in Voorhees.

  • Fast Signs of Cherry Hill, signing a five-year lease for a new 1,950-square-foot store at 1006 Haddonfield Road in Cherry Hill across from Wegmans at Marketplace at Garden State.

  •  Lane Bryant, Inc., taking a 10-year lease at Willow Ridge Plaza, situated at the traffic-light intersection of Route 73 and Ardsley Drive in Marlton. The 4,800-square-foot store is Lane Bryant’s first in Marlton.
The retail space is under construction at Willow Ridge Plaza and, in addition to Lane Bryant, Five Below and VisionWorks are leasing the remaining spaces under construction. Lane Bryant will open in March, 2014.

Wednesday, November 20, 2013

Buy, sell or hold real estate? (Video)


Mount Pocono CVS Changes Hands

SCP Capital, Inc. has sold the CVS at 3016 Rte. 940 in Mount Pocono, PA to a private investor for $5.1 million, or about $386 per square foot. 

The 13,225-square foot retail building was built in 2011 on 3.1 acres. CVS will occupy the property through 2036 on a triple-net lease. The property is surrounded by resorts in the Monroe County submarket. 


1500 Spring Garden Trades for $184.5M in Philadelphia

A joint venture of The Nightingale Group LLC and Carlton Associates, Inc. acquired the office tower at 1500 Spring Garden St. in Philadelphia, PA from Square Mile Capital Management LLC for $184.5 million, or about $171 per square foot. 

Originally built in 1947, the 12-story, 1.08 million-square-foot, 4-Star office tower was renovated in 2002. 1500 Spring Garden sits on 3.9 acres in the Market Street West submarket of Philadelphia. It features surface parking, conferencing facilities, a fitness center, and on-site management. 

The asset is 90 percent leased, anchored by Sungard Availability Services, Thomson Reuters, Independence Blue Cross, Day & Zimmerman, and CBS Broadcasting. Available space in the building is currently listed with CBRE, with asking rents between $20 and $21 per square foot. 


Staples Shopping Center Trades for $6.2M

Brandywine Construction & Management, Inc. sold the Staples Shopping Center at 1907 Deptford Center Rd. in Deptford, NJ to Metropolitan Management Corp. and Seven Oaks Investors for $6.16 million, or approximately $230 per square foot. 

The 26,115-square-foot strip center was built in 1984 on 2.6 acres in the Gloucester County submarket of Philadelphia. It features 166 parking spaces on a corner lot. 


F & M Bldg Sold for $3.1M

Myles Land & Improvement Company LLC acquired the F & M building at 2 W. Market St. in West Chester, PA from F & M Building Associates LP for $3.18 million, or about $143 per square foot. 

The six-story, 22,212-square-foot office building was built in 1906 and renovated in 1982. It sits on less than one-tenth of an acre in the West Chester submarket of Philadelphia's Chester County, at the corner of S. High Street. 


Tuesday, November 19, 2013

What's Going on in Commercial Real Estate? (Video)

PREIT Sells Chambersburg Mall for $8.8M

Pennsylvania Real Estate Investment Trust (NYSE: PEI) has sold the Chambersburg Mall located in Chambersburg, PA for $8.8 million, or just $19 per square foot, to an affiliate of Mason Asset Management.

Chambersburg Mall is a 454,356-square-foot regional center developed by Crown American Corp. in 1982 on 160 acres in the Harrisburg Area West submarket of Franklin County, in Greene Township, immediately off the 997-Scotland Exit of I-81

The asset is anchored by JCPenney, Sears, Bon Ton and Burlington Coat Factory, though many in-line spots sit vacant, and restaurants have typically stayed away from the area because of difficulties in obtaining a liquor license. Sales at the mall are $235 per square foot and non-anchor occupancy hovers around 76% -- well below PREIT's portfolio averages of $381 per square foot and 90% occupancy.

"Finalizing the sale of Chambersburg Mall represents a critical step on the path to redefining the quality of PREIT's portfolio. The property has been among our weakest performing properties and we are pleased to be in a position to allocate our internal resources and capital more effectively toward projects that can create long term value for our shareholders," said Joseph F. Coradino, CEO of PREIT.

Proceeds from the sale, net of closing costs, settlement pro-rations and credits, came in at approximately $8.4 million for the real estate investment trust.

Monday, November 18, 2013

Philadelphia's Office Deliveries, Construction and Inventory

During the third quarter 2013, three office buildings totaling 61,700 square feet were completed in the Philadelphia market area. 

This compares to three buildings totaling 33,100 square feet that were completed in the second quarter 2013, eight buildings totaling 726,360 square feet completed in the first quarter 2013, and 276,492 square feet in six buildings completed in the fourth quarter 2012. 

There were 791,386 square feet of office space under construction at the end of the third 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 third quarter 2013 were 3737 Market St, a 272,700-square-foot building and CrossPoint at Valley Forge, a 272,109-square-foot facility. 

Total office inventory in the Philadelphia market area amounted to 396,322,067 square feet in 20,316 buildings as of the end of the third quarter 2013. The Class-A office sector consisted of 127,191,204 square feet in 948 projects. Within the Office market there were 900 owner-occupied buildings accounting for 35,387,640 square feet of office space. 

This trend is compared to U.S. National Office deliveries and construction, which saw 244 buildings totaling 12.2 million square feet complete construction, with an additional 83.8 million square feet of office space still under construction at the end of the third quarter. A 1.05 million-square-foot facility at 250 W. 55th St. in the New York City market delivered, while the 3.04 million-square-foot One World Trade Center in New York City is still underway. Total office inventory in the U.S. market totaled 10.34 billion square feet in almost 497,000 buildings at the end of the third quarter 2013, including almost 20,000 owner-occupied buildings accounting for 876.2 million square feet. 


Friday, November 15, 2013

Real estate can perform in rising rate environment (Video)


Caterpillar Pays $24.5M to Stay on Memory Lane

Construction and mining equipment manufacturer Caterpillar, Inc. has purchased its industrial building at 600 Memory Ln. in York, PA from Rubenstein Properties in an all-cash deal for $24.51 million, or roughly $23 per square foot, according to public records. 

The 1.05 million-square-foot, single-story distribution facility, known as the Caterpillar-York Distribution Center, was built in 1952 on 64.2 acres in York County. Caterpillar has occupied the entire building since it was constructed. 


New York Life Acquires Forest Park Corp Ctr

New York Life Real Estate Investors, a subsidiary of New York Life Insurance Company, purchased the Forest Park Corporate Center consisting of seven warehouses and one office building in South Jersey from MEPT / New Tower Trust Company and Bentall Kennedy (US) LP. 

The deal included 1220, 1222, 1224, 1225, 1226, 1228, 1240, and 1245 Forest Parkway in West Deptford, NJ. The portfolio totals 1,468,225 square feet of rentable building area that was 79 percent occupied at the time of sale. 


Habitat for Humanity Leases 26,000 SF in Burlington County

Habitat for Humanity, a non-profit organization focused on providing housing for those in need, leased 25,690 square feet in the retail building at 530 Rte. 38 E in Maple Shade, NJ. 

The single-story retail building was previously occupied by Cort Furniture. The new tenant will move in Spring of 2014. Habitat for Humanity hopes the office's new location will generate higher visibility for the organization and its Re-Store retail store. 


Keystone Property Grp Pays $40.5M for Philadelphia Office

Keystone Property Group acquired the office building at 100 S. Independence Mall W. in Philadelphia, PA from The Dow Chemical Company for $40.53 million, or about $104 per square foot, according to public records. 

The nine-story, 390,690-square-foot office building was constructed in 1965 on 1.5 acres in the Independence Hall submarket of Philadelphia County. The seller signed a sale-leaseback agreement with the buyers, and will continue occupying approximately half the building. The GSA will lease most of the remainder of the space there.


Wednesday, November 13, 2013

Real Estate Development for the Life Sciences (Video)


Enzium is first company to open HQ at USciences

By Juliana Reyes
The University of the Sciences welcomed its first startup last month.
Enzium, a biotech company previously located in Pittsburgh, will be headquartered at the college for at least one year, according to a release. It will be the first time that an outside startup opens an office at the school, the release said.
Enzium came to University of the Sciences in part because Enzium cofounderPeter Berget is now the chair of the biology department at the college. Berget, who joined University of the Sciences in August of 2011, developed the technology behind Enzium while he was a professor at Carnegie Mellon.
Led by Crystal Falco, Enzium manufactures kits that detect enzyme activity. The company is backed by life sciences investor BioAdvance.

Liberty Pares Office Holdings in $705M Sale

Liberty Property Trust said Friday it’s advancing its strategy to narrow its focus by selling off 97 mostly office properties and 159 acres of land for about $705 million. The REIT did not identify the buyer in the deal, which is expected to close in stages between the final months of 2013 and early 2014.
Totaling 6.6 million square feet, the portfolio includes four million square feet of office, 2.3 million square feet of flex space and 274,000 square feet of industrial. It includes the entirety of Liberty’s Jacksonville, FL portfolio, which comprises 32 of the 97 properties.
Also included are all 24 of Liberty’s office assets in Southern New Jersey, the 23 it owns in Maryland and the six it owns in the Fort Washington submarket of Philadelphia, and a dozen flex properties in Minnesota. Separately, Liberty announced on Thursday that it would sell Pender Business Park in Fairfax, VA for $31.5 million.
"This transaction furthers our strategy to increase our portfolio allocation to industrial real estate and to concentrate our office portfolio in fewer focused markets," says William P. Hankowsky, the REIT’s chairman and CEO. “We expect these steps to enhance our ability to exploit our expertise in creating and managing high-quality office environments in which we can create significant future value.” Four weeks ago, Liberty completed its $1.475-billion buy of the operating assets of Cabot Industrial Value Fund III.

Tuesday, November 12, 2013

Philadelphia's Industrial Vacancy Stays at 9.2%

The Philadelphia Industrial market ended the third quarter 2013 with a vacancy rate of 9.2%. 

The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 1,044,866 square feet in the third quarter. That compares to negative 1,033,043 square feet in the second quarter 2013. Vacant sublease space increased in the quarter, ending the quarter at 2,188,427 square feet. 

Tenants moving into large blocks of space in 2013 include: Perdue moving into 223,750 square feet at 1801 Dulaney St - Building 1, Genco moving into 204,338 square feet at 61 Green Mountain Rd, and Schenker Logistics moving into 181,939 square feet at 700 Allen Rd. 

Rental rates ended the third quarter at $4.52, an increase over the previous quarter. 

A total of two buildings delivered to the market in the quarter totaling 526,590 square feet, with 8,132,177 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 8.3% from the previous quarter, with net absorption totaling positive 50.37 million square feet in the third quarter. Average rental rates increased to $5.31 this quarter, and 202 industrial buildings delivered to the market totaling more than 22.4 million square feet. 


Friday, November 8, 2013

DeKalb Plaza Sells for $9.4M

DDR Corp sold the DeKalb Plaza located at 2640-2714 Dekalb Pike in East Norriton, PA to Broad Street Ventures LLC for $9.4 million, or roughly $53 per square foot. 

The 178,719-square-foot neighborhood center was 83 percent occupied at the time of sale. The seller sold property due to it no longer fitting the criteria of their investment portfolio strategy. The buyer purchased because it fits into their investment strategy. The buyer utilized bridge financing until the property is stabilized or fully leased up, which they hope to do in three years or less. 


Levittown Trace Apts Sell for $26.1M

Emess Management acquired the Levittown Trace Apartments at 3000 Ford Rd. in Bristol, PA from Kamson Corporation for $26.1 million, or about $42,000 per unit. 

The 617-unit multifamily community consists of a mix of junior, one- and two-bedroom units in 12 buildings. It was built in 1974 in the Lower Bucks County Multifamily submarket. The asset was 90 percent occupied at the time of sale. 


VM Development Grp Purchases Easton City Hall

VM Development Group LLC acquired the Easton City Hall building at 1 S. 3rd St. in Easton, PA from Easton City for $4 million, or about $55 per square foot. 

The nine-story, 72,720-square-foot office building was built in 1870 and renovated in 1912. This building was owned and occupied by the City of Easton with other tenants leasing space there. 

VM Development Group LLC plans to convert the top four floors into 30-40 residential apartments. The city will use the money from the sale to go towards reducing financing on building projects.


Morgan Mgmt Sells Beechwood Gardens Apts

Weidel Realtors acquired the 160-unit Beechwood Gardens at 9801-9815 Haldeman Ave. in Philadelphia, PA from Morgan Management for $13 million, or approximately $81,000 per unit. 

The 140,000-square-foot apartment community consists of 80 one-bedroom and 80 two-bedroom units. It was constructed in 1967 and renovated in 2007. 


Griffin Capital Acquires 18-Property Office Portfolio for $521.5M

Griffin Capital Corp. has acquired an 18-property office portfolio totaling 4 million square feet spread across 12 markets in 11 states for $521.5 million. 

The El Segundo, CA-based privately held real estate investment firm acquired the predominantly single-tenant office portfolio, triple-net leased portfolio from Atlanta-based Columbia Property Trust on behalf of Griffin Capital Essential Asset REIT, a non-traded real estate investment trust. 

Key Bank, N.A provided a $300 million term loan, of which $282 million was initially drawn and the remaining $18 million held for future costs. The balance of the acquisition was funded with $250 million of preferred equity provided by an affiliate of Starwood Property Trust. 

With the acquisition, the REIT nearly doubled its holdings and now owns 41 properties with a total capitalization of more than $1.3 billion. More than 80% of the portfolio's operating income is generated from firms Griffin Capital considers investment-grade quality. The transaction includes the following assets: 

ATLANTA: 2500 Windy Ridge, 4100, 4200 & 4300 Wildwood 
CINCINNATI: 4241 Irwin Simpson Road and 8990 Duke Boulevard 
COLUMBUS: Chase Center Columbus and Sterling Commerce Center I and IV 
DALLAS: 4300 Centreway Place and One MacArthur Ridge 
DETROIT: 333 & 777 Republic Drive 
INDIANAPOLIS: College Park Plaza 
MILWAUKEE: 11200 W. Parkland Ave. 
NASHVILLE: One Century Place 
NEW JERSEY: Eagle Rock Executive Office Center IV 
PHILADELPHIA: 1200 Morris Drive 
SEATTLE: 15815 25th Avenue West and 16201 25th Avenue West 
ST. LOUIS: 13655 Riverport Drive 

Griffin Capital's chief investment officer Michael Escalante said the strategy behind the Essential Asset REIT is to own properties that serve as "essential assets" for the tenant, such as national and regional headquarters buildings, primary research & development facilities, and key business servicing centers. 

"We believe that these properties can provide steadier cash flow, and a higher probability of lease renewal at maturity as compared with commodity-type assets," said Escalante. 

For Columbia Property Trust, the publicly traded successor to Wells Real Estate Investment Trust II, the sale supports the REIT's ongoing efforts to reposition its portfolio, from owning assets in 31 markets in 2011 to 16 now, and reducing its exposure in suburban locations in favor of CBD. 

The Atlanta-based REIT said it would use the nearly $500 million in net proceeds from the sale to pay down a $90 million mortgage loan on one of the properties, reduce its outstanding debt, and fund the company's previously announced tender offer of common shares, as well as future acquisitions. 

"This transaction substantially increases our concentration in our top 10 markets, reduces our exposure to suburban markets and raises our percentage of multi-tenant properties," noted Nelson Mills, president and CEO of the REIT. 


Andy Florance - Costar, Talks about the CRE Market (Video)


Thursday, November 7, 2013

Logan Square Shopping Center Norristown Sold for Steep Discount

What started as a klieg-lit dream to put a movie studio in Norristown ended Wednesday with the old Logan Square Shopping Center being bought at a sheriff's auction by its main investor.
Now that the foreclosure suit that spurred the sheriff's sale is over, Montgomery County officials can pursue "whatever remedies are open" to the county to recoup some of the $24.5 million in public funds it put into the project, said the county's chief financial officer, Uri Z. Monson.
Logan Lender, a Wayne firm, bought the two parcels for a total of about $8,000 after filing a foreclosure suit in Montgomery County Court in May against Johnson & Markley Redevelopment, a New Jersey firm led by developer Charles Gallub.
The 24.5-acre property sold as two parcels, which includes where USM, a facilities maintenance company, has offices. Together, the parcels were valued at about $37 million, reflecting Logan Lender's investment.
That total was considerably more than the $100,000 and $200,000 values of other properties being auctioned, prompting murmurs and a loud "whoa" from those attending the sale when they heard the price tags of the parcels - $19.5 million for one and $17.7 million for the other.
Logan Lender actually bought them for the cost of taking the property to the sheriff's sale, including the sheriff's fees and required advertising.
In 2007, Gallub proposed turning the vacant Sears, Roebuck & Co. store on West Johnson Highway, about two blocks from Elmwood Park Zoo, into a film studio. The plan was greeted enthusiastically by Norristown and county officials.
A modified redevelopment project went on after the studio plan crumbled. The project continued to swallow money without making much progress until 2012, when the developer could no longer pay the project's debts. By then, a new county board of commissioners had been elected, and it refused to put in any more public money.
The county is saddled with a $24.5 million debt because commissioners at that time agreed to stand second in line to Logan Lender if the project failed. It will get no money from the sheriff's sale of the property.
It's unclear what Logan Lender will do with the property. Attorneys for it would not comment.

Chesterbrook Shopping Center sold at discount at auction

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal

The Chesterbrook Shopping Center in Wayne, Pa., has been sold.
The lender on the property, U.S. Bank, reportedly bought it for $8.9 million. The bank was the only bidder for the center and went under the name 500 Chesterbrook Boulevard LLC. It will likely look to market the property and eventually sell it, according to people familiar with the transaction. An attorney representing the buyer couldn’t be reached for immediate comment.
The 122,216-square-foot shopping center, which sits on 13 acres, is more than two-thirds vacant. The biggest hit it suffered came when its anchor tenant, Genuardi’s, vacated in August 2010. The grocery store occupied 38,502 square feet. As a result of Genuardi’s closing, the center saw a significant drop off in foot traffic.
The recession didn’t help either as some smaller retailers closed. Many of the empty spaces were never reoccupied. In all, 78,960 square feet of the center is empty and 21 of its 41 units are vacant.
The bank had filed a complaint June 18 in U.S. District Court in Philadelphia initiating foreclosure proceedings against Chesterbrook Village Center Associates, which is an affiliate of Brixmor Property Group. Brixmor inherited the property when it bought Centro Properties in 2011.
Chesterbrook Village Center Associates had owed more than $9.8 million. A loan in the amount of $10.5 million was made in 2004.
Chesterbrook Shopping Center sits in the middle of Chesterbrook Corporate Center. The property has a challenging, albeit outdated, layout and design.
The Tredyffrin Planning Commission supported changing the center’s zoning to make it more conducive for redevelopment into something other than a retail center. This could allow for the center to be redeveloped.

Wednesday, November 6, 2013

Richard LeFrak: Where to invest in real estate now (Video)


Why It Can Be a Financial Mistake to Negotiate with a Landlord Directly

by Richard Neuman (article from September 2012)

When commercial tenants negotiate directly with landlords, they are often treated like captive markets. Without representation, tenants don’t know what they don’t know (for example, the ability to add early termination rights), and that necessarily results in unrepresented tenants leaving important terms, rights, and dollars on the table.

With tenant representation, it costs tenants nothing extra – only providing savings (often extensive), and the result is a financial document much more balanced in the tenant’s favor – plus the likelihood of securing a much better facility for the tenant’s needs than they can find for themselves, based on our comprehensive awareness of market options. Landlords know when the tenant is armed with extensive market knowledge, they cannot withhold any achievable concessions. Landlords also know the brokers may be  negotiating with multiple landlords simultaneously.

Tenant Reps know the vacancy in buildings, but more importantly, the blocks of vacancy that are emerging in specific buildings soon, and what specific concessions certain landlords have granted recently. This knowledge is power for the tenant that they would not have or benefit from working independently.
So armed with this great information, why do tenants still insist on negotiating directly?  Well, often what they are typically concerned about is the commission.

That issue, when addressed directly and transparently and explained in the context of the value of the brokers specific and relevant knowledge of his market, the competing Landlords current situation financial and otherwise (i.e., ownership structure, investment horizon) the knowledge of lease terms and the economic value of renewals, expansions, termination rights, market timed terms etc, should become much less of an impediment.

Keep this in mind.  Tenant representation is what a tenant rep does. It is their business and one would assume that the tenant rep has the knowledge, experience and business savvy to negotiate a deal that is in the best interests of the client.
Here are some thoughts:

By hiring an experienced real estate broker to renew your lease, you signal to the landlord that you are keenly aware of competing office buildings and are prepared to relocate, which in turn will force the landlord to compete more fiercely for your firm’s continued tenancy. The more time spent investigating other space, the better the renewal transaction becomes.

A good real estate broker in today’s market is active day-to-day spending his time negotiating renewal transactions in a similar office market for his clients many of whom, may have the same office space requirements. Because of this experience, certain creative solutions and deal structures can be brought to your firm’s attention that would otherwise remain unknown. Those strategies used in renewing a lease are often times different from those strategies used in searching for new locations.

By using a tenant rep, the tenant will not be required to directly interface with the landlord, who may be taken back by the aggressiveness needed for a successful negotiation. The broker may act as the “bad guy” while the tenant remains a “good guy” at all times, thus allowing for a more favorable long term relationship with the Landlord.

Start with the premise that the landlord (and/or the landlord’s broker) is only looking out for his/her own interest in achieving the best terms for the landlord. The tenant rep broker-without any conflicts of interest creates market competition for the tenant in a renewal. Taking a lease to market benchmarks other alternatives that should demonstrate the merits of a renewal vs. a move.
Sure they’ll save the tenant time, but more important they are skilled and experienced negotiators who clearly earn their fee in achieving the lowest costs and best lease terms.

Article: http://tinyurl.com/lbw849f

Tuesday, November 5, 2013

Philadelphia's Retail Vacancy Stays at 6.4%

The Philadelphia retail market did not experience much change in market conditions in the third quarter 2013. The vacancy rate stayed the same as the previous quarter at 6.4%. 

Net absorption was positive 445,033 square feet, and vacant sublease space decreased by 73,378 square feet. In second quarter 2013, net absorption was positive 128,021 square feet. 

Tenants moving into large blocks of space in 2013 include: Restaurant Depot moving into 72,643 square feet at 2950 Roberts Ave; ShopRite moving into 71,900 square feet at 3450 Fox St; and Burlington Coat Factory moving into 69,655 square feet at 100 S 69th St. 

Quoted rental rates decreased from second quarter 2013 levels, ending at $13.76 per square foot per year. 

A total of 15 retail buildings with 427,588 square feet of retail space were delivered to the market in the quarter, with 452,361 square feet still under construction at the end of the quarter. 

This trend is compared to the U.S. National Retail vacancy rate, which remained at 6.7% from the previous quarter, with net absorption positive 18.41 million square feet in the third quarter. Average rental rates increased to $14.54 this quarter, and 660 retail buildings delivered to the market totaling more than 13.8 million square feet. 


Starwood's focus on land (Video)


Monday, November 4, 2013

Starwood To Spin Off Single-Family Residential Business

Starwood Property Trust plans to spin off of its single-family residential (SFR) business to its stockholders in a newly formed real estate investment trust. The REIT, to be called Starwood Waypoint Residential Trust, will be one of the larger publicly traded investors, owners and operators of U.S. SFR homes and non-performing residential mortgage loans. 

Starwood Property Trust’s portfolio, which will be owned and operated by Starwood Waypoint Residential, consisted of 5,817 units in single-family homes and nonperforming loans (NPL), totaling $750 million of invested capital at the end of the third quarter. The NPL portion consisted of 1,549 loans with $413.4 million in unpaid principal balance and $313.6 million in market value of the underlying properties and $197.7 million in book value. 


Friday, November 1, 2013

Mellon Bank Center to take hit in FMC move

by Natalie Kostelni-Staff Writer, Philadelphia Business Journal

In its search for a new headquarters, FMC Corp. looked in its back yard, across the river in New Jersey and down I-95 in Delaware.
It decided to stay in Philadelphia — crossing the Schuylkill River — and signed a 16-year, 253,000-square-foot lease to move into a building to be called FMC Tower at Cira Centre South. The company will occupy 10 floors at the new building and has an option to take another three floors.
Though the property sits in a Keystone Opportunity Zone, which gives FMC certain tax breaks on state and local taxes, the chemical company decided it will not take advantage of those benefits. Instead, it will take a $10 million incentive package from Pennsylvania after having reviewed similar offers from Delaware and New Jersey. The offer from the Garden State was “extremely competitive.”
Incentives typically compensate for high taxes and offset some costs of doing business.
In 2004 when FMC went looking for a new lease deal, it decided to remain at the Mellon Bank Center and took $1 million in state incentives. The company decided then not threaten to leave the city or try to hammer out a large incentive package, figuring then that Center City real estate market conditions were weak enough to hash out a sweet deal with its landlord.
This time it took a different tack.