Friday, December 27, 2013

Blackstone’s $718M Investment in Shopping Centers (Video)

Mack-Cali Acquires 200 Units in New Brunswick

Mack-Cali Realty Corporation  has acquired the Riverwatch Commons and Richmond Court multifamily properties in New Brunswick, NJ from Applied Development Company, an affiliate of Ironstate Holdings, for $41.1 million, or $205,500 per unit. 

The three-building, 200-unit apartment complex is comprised of three buildings constructed in 2013 on 2.5 acres at 100 Hirma Sq. in Middlesex County. The luxury studio, one-, and two-bedroom units range in size from 623 to 950 square feet, and were 95 percent occupied. 

The property is close to shopping, restaurants, nightlife, theaters, corporate offices, and Rutgers University. It is within walking distance of NJ Transit and offers easy access to the Turnpike, I-287 and Rte. 18. Tenants enjoy numerous amenities including a fitness center, laundry facilitates, parking, and more. 

Mack-Cali subsidiary Roseland will manage and lease the asset, and plans to upgrade the units with high-quality finishes to include new kitchens and bathrooms, in-unit washer/dryers, a clubroom, and expanding other amenities.

Thursday, December 19, 2013

How to Crowdfund Real Estate

Dranoff Aligns With Sam Nazarian's Hotel Platform to Build PA's Tallest Residential-Only Tower

Dranoff Properties and hotel developer sbe announced plans to construct a 47-story hotel and residential tower at Broad and Spruce streets in Philadelphia. 

The project called SLS International Hotel & Residences, under design by architecture firm Kohn Pedersen Fox Associated, will be across the street from the Kimmel Center for the Performing Arts on Broad Street. When completed, it will be among the tallest residential buildings in the state at 562 feet. 

The project unites Carl Dranoff, one of the nation's leading developers, with prominent hotelier and sbe founder, Chairman and CEO Sam Nazarian. It includes 150 boutique hotel rooms and 125 luxury condominiums for sale.

Grace Covenant Church Pays $3.2M for Exton Flex Bldg

Grace Covenant Evangelical Presbyterian Church acquired the Oaklands Corporate Center building at 444 Creamery Way in Exton, PA from Oaklands Business Parks, Inc. for $3.2 million, or about $107 per square foot. 

The single-story, 30,000-square-foot flex building was built in 2003 in the Chester County Industrial submarket.

Peninsula Crossing Shopping Center Changes Hands for $37M

Cole Real Estate Investments purchased the Peninsula Crossing Shopping Center at 26676-26688 Centerview Dr. in Millsboro, DE from Millsboro Towne Center LLC for $37 million, or approximately $112 per square foot. 

The 330,000-square-foot power center sits on 77 acres in the Sussex County submarket of Philadelphia. The retail center is anchored by Lowe’s, BJ’s Wholesale Club and PetSmart.

TIAA-CREF Acquires Philadelphia Office for $18M

Vesper Property Group has sold the office building at 1619 Walnut St. in Philadelphia to TIAA-CREF for $18 million, or about $529 per square foot. 

The six-story, 34,047-square-foot building was constructed in 1937 with renovations completed in 2009. Vesper Property Group purchased the building in 2008 for $7.1 million, according to CoStar data, and invested in renovating the building. Formerly the Westinghouse broadcasting studio, the renovated office property was fully leased at the time of the sale.

Tuesday, December 17, 2013

Llenrock Arranges $50M Permanent Financing at 1845 Walnut

Llenrock Group has arranged $50 million in financing secured by 1845 Walnut St. in Philadelphia, PA. The property is jointly owned by Frankel Enterprises, Allan Domb Real Estate, and Resource America, Inc. 

Llenrock, an independent real estate finance and advisory firm, negotiated a fixed-rate, 15-year financing at less than 5% interest, due in-part to the owners intent to hold the asset for an extended period. The loan was sourced through a leading national pension fund, and carries an interest-only period. 

"We were pleased to work with such a high-quality asset in one of the city’s most prestigious neighborhoods," notes Andrew Benioff, founding partner of Llenrock Group. "The ownership team‘s savvy and organization helped the whole financing process go smoothly." 

The 25-story, 347,900-square-foot, 4-Star office tower was originally built in 1968 on eight-tenths of an acre in the Market Street West submarket. It overlooks the famous Rittenhouse Square, and is over 90% occupied.

The biggest real estate stories of 2013

by Natalie Kostelni - Staff Reporter- Philadelphia Business Journal
When reviewing my list of top real estate stories from 2012 and comparing it to what I have compiled for this year, I'm struck by how vastly different 2013 has been.
The economy gained momentum this year, the future got somewhat more confident and it’s reflected in the commercial real estate activity that took place throughout the region.
This year, I am taking a look at what I think are the biggest stories in real estate, which are more thematic in nature. I'm also writing about the biggest surprises and the biggest deals in two other blogs (stay tuned.) As always, please let me know what you think and if I overlooked something of significance.
Here are my picks for the top stories:
Construction activity is booming. From King of Prussia, Pa., to Philadelphia to South Jersey, construction is booming. A week doesn’t goes by when there isn’t either a ground breaking, topping off, ribbon cutting or an announcement about a new building. It’s not just government money at work, such as with the Family Court building, but across the board including private and institutional investment.
Multifamily sector is healthy. The apartment market in Center City and even in the suburbs is robust. There’s construction of new apartments and conversion of old buildings as well as investors buying and selling multifamily properties. I’ve started to see some concessions being offered, which leads me to believe too much inventory is coming on the market but they haven’t been rampant.
Office investment sales in the suburbs and Central Business District are coming back — as shown by closed deals such as 1500 Spring Garden St. and 2000 Market St. and pending deals such as 1000 Continental in King of Prussia.
The tax increment financing package for the proposed W Hotel. It highlighted, again, the issue of how public funds are used to financially support construction projects in Philadelphia. Any developer will tell you the cost of construction, particularly labor costs, can’t be supported without a TIF, tax abatement or a Keystone Opportunity Zone. These tax breaks essentially subsidize Philadelphia’s expensive construction labor.

Monday, December 16, 2013

Real Estate Opportunities in the New Year (Video)

Pennsylvania State Employees Retirement System Pumping $175 Million into Value Add Properties

The Pennsylvania State Employees Retirement System plans to invest up to $175 million in two new value-added real estate funds. The pension fund plans to invest up to $100 million in DRA Growth and Income Fund VIII and up to $75 million in Exeter Industrial Value Fund III. 
Exeter Industrial Value Fund III is anticipated to be $675 million. It is Exeter’s third in a series of closed-end commingled real estate funds investing in the industrial real estate sector and targeting value-added returns that include a large component (two-thirds of total return) of income yield

Buy to rent lending - Repackaging Real Estate for Investors (Video)

Mall REITs have been forgotten: Trader (Video)

Friday, December 13, 2013

Hedge funds see opportunity in commercial real estate (Video)

Metal fabricator building $2.1M facility in Kensington

By Natalie Kostelni Staff Reporter-Philadelphia Business Journal
A metal fabricator is constructing a new manufacturing facility along American Street in the East Kensington neighborhood of Philadelphia.
Veyko Inc. is constructing a $2.1 million, 11,550-square-foot building on what is now a vacant lot that sits in a federally-designated Empowerment Zone., which gives businesses that move into these zones certain tax incentives. The company is receiving $250,000 in an Empowerment Zone grant and $933,000 in financing from the Philadelphia Industrial Development Corp.

The company is creating 15 new jobs at its new facility and will retain 12 employees. Veyko will relocate from 216 Fairmount Ave. in Philadelphia.

Camelback Mountain building $163 million lodge

By Natalie Kostelni Staff Reporter-Philadelphia Business Journal

Camelback Mountain Resort plans to construct a new $163 million lodge and indoor water park.
The eight-story, 533,000-square-foot development will have 453 rooms, a 170,000-square-foot entertainment center of which 125,000 square feet will be an indoor water park and will be one of the largest on the East Coast. Plans also call for a 10,000-square-foot spa and fitness center, four new restaurants with ski-in-ski out bars and 25,000 square feet of meeting and conference space.

The project is being constructed at the foot of Camelback Mountain in Tannersville, Pa., in the Pocono Mountains. Camelback Lodge & Indoor Waterpark, which operates Camelback Mountain Resorts, is developing the new lodge and water park. It is scheduled to be completed by 2015.

King of Prussia retail project takes shape

By Natalie Kostelni Staff Reporter-Philadelphia Business Journal
When Realen Properties initially designed the Village at Valley Forge, plans called for a total of 1 million square feet of retail space.
That was roughly eight years ago. A lot has changed since then. The retail scene is different and increasingly done online, the King of Prussia Mall has new owners and is expanding, and financing for what Realen first planned — buildings with street level retail and residential use on top — is difficult to finance. In light of that, the retail part of the mixed-use development has been scaled back to 200,000 square feet and a new company has been brought in to construct that portion of the Village at Valley Forge.
JBG Rosenfeld Retail of Chevy Chase, Md., is buying 20 acres next to the Wegman’s in King of Prussia, and will construct a life-style center called the King of Prussia Town Center.
Realen Properties of Berwyn remains master developer of the 130-acre development.
“By collaborating with JBG Rosenfeld on our Main Street retail, we’re getting the benefit of a high-quality and experienced retail developer and that will help us create the place we always envisioned for this mixed-use walkable community,” said Dennis Maloomian, president of Realen.
Full story:

Thursday, December 12, 2013

Warehouse Associates Bldg Sells for $2.9M

Community Volunteers in Medicine, Inc. acquired the Warehouse Associates building at 300 Lawrence Dr. in West Chester, PA from Mauger & Company for $2.9 million, or about 62 per square foot. 

The two-story, 46,818-square-foot warehouse was built in 1998 on 5.1 acres in the Chester County Industrial submarket of Philadelphia. It features six loading docks, 24-foot clear heights and office suites. The buyer was a tenant in the building prior to the sale.

Commerce Court Bldg Sold for $2.6M

MNOP, Inc. acquired the Commerce Court industrial building at 2800 Turnpike Dr. in Hatboro, PA from Eastern Property Group for $2.6 million, or about $32 per square foot. 

The single-story, 81,498-square-foot warehouse was built in 1975 on 5.1 acres in the East Montgomery County Industrial submarket of Philadelphia. It features three loading docks, 16-foot clear heights, and 1,200-amp heavy power.

Randolph Park Shopping Center Sells for $4.7M

Sunshine Management Corporation purchased the Randolph Park Shopping Center located at 1700-1730 S. Queen St. in York, PA from Randolph Park Associates LLC for $4.7 million, or about $193 per square foot. 

The 24,353-square-foot retail strip was constructed in 1955 and renovated in 1980. The shopping center features 95 parking spaces and sits on nearly two acres in York County.

Van Buren Bldg Trades for $4.3M

Eastern Valley Forge Partners LP purchased the Van Buren Bldg at 2626 Van Buren Ave. in Norristown, PA from High Associates Ltd. for $4.3 million, or about $175 per square foot. 

The office building delivered in 1987 and totals 24,512 square feet. The asset is 85 percent occupied by Metropolitan Veterinary Associates.

Wednesday, December 11, 2013

204 Units Trade for $15.5M

Home Properties, Inc. acquired the Camelot Court multifamily property at 532 W. Brookhaven Rd. in Brookhaven, PA from AJI Properties for $15.5 million, or about $76,000 per unit. 

The buyer has renamed the 204-unit, 219,483-square-foot property as Stone Hill Apartments. Built in 1971, the property consists of 11 three-story, garden-style buildings on 9.3 acres in the Lower Delaware County submarket, near I-95 and I-476. 

The asset was 90 percent occupied at the time of sale, with average rents around $918 per month.

Sunday, December 8, 2013

Philadelphia's Industrial Deliveries, Construction and Inventory

During the third quarter 2013, two Industrial buildings totaling 526,590 square feet were completed in the Philadelphia market area. 

This compares to one building totaling 70,000 square feet that were completed in the second quarter 2013, nothing completed in the first quarter 2013, and 3,686,168 square feet in 11 buildings completed in the fourth quarter 2012. 

There were 8,132,177 square feet of Industrial space under construction at the end of the third quarter 2013. 

Some of the notable 2013 deliveries include: Prologis Lehigh Valley West - Building 200, a 493,200-square-foot facility that delivered in third quarter 2013 and is now 37% occupied, and Albert's Organics, a 70,000-square-foot building that delivered in second quarter 2013 and is now 100% occupied. 

The largest projects underway at the end of third quarter 2013 were Liberty at Shippensburg - Bldg 2, a 1,185,750-square-foot building with 100% of its space pre-leased, and West Hills Business Center - Building A, a 980,000-square-foot facility that is 100% pre-leased. 

Total Industrial inventory in the Philadelphia market area amounted to 1,014,384,870 square feet in 19,814 buildings as of the end of the third quarter 2013. The Flex sector consisted of 82,951,153 square feet in 3,235 projects. Within the Industrial market there were 2,553 owner-occupied buildings accounting for 234,330,423 square feet of Industrial space. 

This trend is compared to U.S. National Industrial deliveries and construction, which saw 202 buildings totaling 22.43 million square feet complete construction, with an additional 75.12 million square feet of industrial space still under construction at the end of the third quarter. The Helen of Troy Building, a 1.2 million-square-foot facility delivered in the third quarter, and the 1 million-square-foot N. Chrisman Rd. at Prologis Park Tracy II is still under development. Total industrial inventory in the U.S. market totaled 20.86 billion square feet in almost 615,000 buildings at the end of the third quarter 2013, including almost 90,000 flex projects and 68,000 owner-occupied buildings.

Thursday, December 5, 2013

Brandywine buys land where Cira Centre stands

by Natalie Kostelni Staff Reporter for the Philadelphia Business Journal

Brandywine Realty Trust has paid $23.2 million for the ground on which Cira Centre sits.
Amtrak sold the parcel at 2929 Arch St. to the Radnor, Pa., real estate investment trust. Brandywine declined comment on the transaction. Brandywine constructed Cira Centre, a 29-story, 731,000-square-foot office tower. The building sits in a Keystone Opportunity Zone and this transaction doesn’t effect that special designation, according to two experts on the KOZ legislation.
Amtrak limited the comments it made about the sale. Craig Schulz, spokesman for Amtrak, said Brandywine bought out a 99-year lease it had on the land on which Cira Centre sits. The rail company plans to use the capital raised by the transaction to advance a number of projects across the country, Schulz said in an email.

Destination Maternity Takes Office Space at Moorestown Corp Ctr

Destination Maternity, a leading maternity apparel retailer, has leased 74,258 square feet at Moorestown Corporate Center Bldg 3 located at 232 Strawbridge Dr. in Moorestown, NJ. 

The 74,258-square-foot office building is part of the three-building, 222,823-square-foot corporate center that includes 224 and 228 Strawbridge Drive. The buildings feature three-story glass atrium lobbies, a high ratio of windows and corner offices, and proximity to Routes 38, 70, 73, I-295, the NJ Tpke, Philadelphia Airport and City Center, and numerous amenities, shopping, hotels and restaurants. 

The deal brings the center to 85 percent leased. Keystone Property Group has begun full renovations at the property, which will include upgrades to the main and elevator lobbies, parking, exterior improvements to the landscaping and monument signage, new interior finishes and lighting, and upgrades to the HVAC system. The company acquired the assets in 2012 for $19.85 million, according to CoStar data. CoStar COMPS #2593866. 

"This lease is a testament to the success of our in-progress repositioning and lease-up strategy for this well-located office property," stated Bill Glazer, president of Keystone Property Group. "Our reinvestment program for Moorestown Corporate Center will create a modern and unique work environment for this market that effectively addresses the requirements of tenants today."

Health Network Labs Pays $8.7M for Allentown Flex Bldg

Health Network Laboratories, a local healthcare company, acquired the flex building at 794 Roble Rd. in Allentown, PA from Liberty Property Trust for $8.65 million, or about $85 per square-foot. 

The 101,750-square-foot property was built in 1984 on 16.7 acres in the Lehigh Valley Industrial submarket, part of the Lehigh Valley Industrial Park 3. The building has been vacant since former tenant T-Mobile relocated in the first quarter of 2012. The building features two loading docks with levelators, ceiling heights of 18 feet, and 40-foot by 50-foot column spacing. 

Health Network Laboratories plans on occupying the entire building, and will make this their new headquarters. Health Network approached the sellers directly and settled in about 75 days.

Vantage Properties Pays $68M for Marquis Apartments

Vantage Properties LLC acquired the Marquis Apartments at 251 W. Dekalb Pike in King of Prussia, PA from Metropolitan Properties of America, Inc. for $68 million, or more than $104,000 per unit. 

The nine-story, 804,184-square-foot multifamily building was constructed in 1970 on 26.7 acres in suburban Philadelphia's Montgomery County. The 651 units are an even mix of studios, one-, two-, and three-bedroom apartments ranging in size from 394 to 1,537 square feet. The asset was fully occupied at the time of sale.

Wednesday, December 4, 2013

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

What's Behind Blackstone's Real Estate Investments? (Video)

Monday, December 2, 2013

1000 Continental Drive KOP Under Agreement for $61M

By: Natalie Kostelni Staff Writer for Philadelphia Business Journal
KBS Realty Advisors is looking to get back into the Philadelphia office market and has reportedly put 1000 Continental Drive in King of Prussia, Pa., under agreement, according to people familiar with the matter.
The Newport Beach, Calif., real estate company is offering $61 million for the six-story, 205,424-square-foot building that sits at the crossroads of Route 202, the Schuylkill Expressway and Swedesford Road, these sources said.
Equus Capital Partners of Philadelphia constructed the building on speculation beginning in 2006. Though it took some time to lease up because of the recession, it is now 84 percent occupied by some marquee tenants including the Hartford and Worldwide Clinical Trials.