Monday, December 29, 2014

Biggest Commercial Real Estate News in Philly 2014

The Philadelphia commercial real estate market continued to experience dynamic changes in 2014, from the biggest deals, to the latest developments and market trends.

Here are the stories that you, our readers, considered to be the most interesting and newsworthy in the Philadelphia market over the past 12 months.

1. Forest City Divests Philadelphia Shopping Center for $92.3M
Cedar Realty Trust Acquires 456,000-SF Quartermaster Plaza

     Forest City Enterprises, Inc. (NYSE: FCEA, FCEB) has sold the Quartermaster Plaza retail power center at 2200-2370 W. Oregon Ave. in Philadelphia, PA to Cedar Realty Trust, Inc. (NYSE: CDR) for $92.3 million, or about $202 per square foot.

2. Atlantic City May Need to Find Another Way to Make Money
New Jersey Shore Market Faces Its Fourth Casino Closure This Year

3. Comcast to Build $1.2B Skyscraper in Philadelphia
Massive Project Would Reunite Media Giant With Comcast Center Developer Liberty Property Trust

4. Liberty Closes Second Half of $697.3M Disposition
Greenfield JV Acquires 2.6M SF, 19 Acres for $329.6M

5. Bellevue Park Corp Ctr Bldgs Sold for $61.5M
BPG Real Estate Acquires 306,000 SF in Wilmington

6. Keystone, Mack-Cali Team Up to Buy Philadelphia's Curtis Center for $125M
Walnut Street, Apollo Global Mgmt Sell 886,000-SF Office Bldg

7. Brandywine Completes $248.9M Acquisition in Philadelphia
Parkway Properties Sells Ownership Stake Following Thomas Properties Merger

8. Host Hotels Sells 89% Stake in Ownership of Philadelphia Marriott Downtown for $270M
Oaktree, Clearview JV Take Control of 1,400 Rooms on Market Street

9. KBS Closes on $63M Acquisition of 1000 Continental
Equus Capital Sells 205,000 SF in King of Prussia

10. KBS REIT II Sells I-81 Industrial Portfolio for $105.7M
1.6M SF Trades Hands in Eastern PA

11. COPT Signs PRA Int'l to 150,000 SF in Blue Bell
Tenant Takes Some Space Now, Preleases Under-Development Bldg at Arborcrest Park

12. Philadelphia's Edgewater Apts Sell for $113M
JP Morgan Chase & Co Take 290 Units on Race Street

13. Horsham Seeks Master Developer For Willow Grove Base Redevelopment
Former Base North of Philadelphia Expected to Generate Nearly $1B In Construction Investment

14. Sunoco Pays $23.5M for Redevelopment Project in Newtown Square
Company to Relocate from City Center

15. Brandywine, LCOR Team Up For Center City High-Rise

Wawa gets approval to expand DelCo HQ

Borough Council unanimously approved the proposed expansion of Wawa Corporation’s Red Roof headquarters at a sparsely-attended public hearing last week.

The hearing was the first official business conducted in the newly-renovated Chester Heights municipal office.

Three borough ordinances were amended during Monday’s meeting to allow construction of four buildings on the 26-acre corporate campus. The new structures will include an 11,260-square-foot, two-story storage building, a 1,500-square-foot salt shed, multi-level parking garage, and the Annex 5 office building.

The recent acquisition of the 4.3-acre Robinson property on the east side of the campus will lead to demolition of the existing residence and garage, then construction of the storage building and salt shed. The Robinson property will also be utilized for stormwater management and on-site septic disposal purposes.

The new parking garage will have two underground levels and three above ground. Of the total of 557 parking spaces, 525 will be dedicated to employees, while the rest will be handicapped- or van-accessible. The garage will have multiple access points, including a skywalk connecting to Annex 5.

Sitting atop the parking garage will be a new innovation and design center, which will include a test kitchen. The design center will feature a glass curtain wall to utilize natural sunlight.

The 98,000-square-foot Annex 5 office building will be located directly behind the Red Roof mansion and next to Annex 1 and 2. The height of both Annex 5 and the parking garage/design center will not exceed the height of the Red Roof mansion.

The additional office space will allow 212 Wawa employees, who are now occupying rented space at the old Franklin Mint complex, to join the rest of the Red Roof staff. The influx of employees will bump the number of Red Roof employees from the current 515 to over 700. By the end of build-out in 2024, Wawa expects the total Red Roof headcount to be closer to 900.

According to Wawa’s traffic Engineer Matthew Hammond, the additional workers on site should generate about 150 more vehicles at the Red Roof Drive entrance on Baltimore Pike at peak traffic hours.

To accommodate the additional cars, Wawa is petitioning PennDoT to extend the southbound Route 1 left-turn stacking lane from its current 85-foot length to 225 feet, while re-timing the traffic signal to give employees more time. PennDOT would not need to take any property or additional right-of-way along the pike to make the requested turn-lane extension, Hammond noted.

Prior to the borough’s formal hearing, the Wawa expansion plan was reviewed by the Chester Heights Planning Commission and the Delaware County Planning Department, with both advisory bodies recommending plan approval.

According to Wawa Attorney Joseph Damico, a total of 29 nearby residents were directly notified of the Wawa plan, and no objections were raised.

Of the three residents that attended the hearing, only Wawa neighbor Robert Benz asked questions, expressing concerns over stormwater runoff and potential traffic problems on Baltimore Pike.

The lack of opposition led Councilman Patrick Patterson to second the first of three motions for conditional approval.

“This information is very thorough, and we’ve all been privy to a lot of this on an ongoing basis here,” Patterson said prior to the vote. “Based on the fact that our planning commission and the county planning commission, and everyone else who has reviewed this professionally, has not found any fault, and in light of the fact that the neighbors and others and the questions presented here tonight were satisfied, I’m happy to provide a second.”

Chester Heights Council Vice President Frederick Wood abstained from all council approval votes, as he is a retired Wawa employee.

$1B in real estate transactions for Center City in 2014

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

he Center City investment market shrugged off any remnants from the recession and pulled out a year in which $1 billion worth of commercial real estate traded.

Twenty-four transactions were logged in the Central Business District compared with 16 totaling $700 million in 2013 and eight in 2012 totaling $96 million. The data excludes a $505 million transaction in which Comcast Corp. bought a majority stake in Comcast Center.

Property owners have decided to seize on the interest in commercial real estate and deals are getting done.
"We're seeing more velocity this year than I've ever seen."

Large institutional investors who historically shied away from Philadelphia are bidding on buildings that come up for sale and have managed to execute transactions.

Another factor in play is where the investment money is originating. Domestic institutions have been unable to compete with the onslaught of international capital flooding primary gateway cities, such as New York and Washington D.C. This has meant they have turned their investment attention to cities such as Philadelphia.

"Philadelphia shines in that second-tier, non-gateway market."
While office properties in the Central Business District are in high demand, all property types are getting investor attention.
Retail space has become a hot commodity and has recorded some of the biggest deals on a per square foot basis. For example, the 19,963-square-foot space at 1801 Walnut St. where Anthropologie occupies space, sold for $1,528 a square foot, and 1705 Walnut St., which totals 6,138 square feet, traded for $815 a square foot.

Some of the top office sales include: 1835 Market St. at $100 million; 1515 Market St. at $85 million; Curtis Center at $125 million; and 3535 Market St. at $140 million. Examples of some multifamily trades include the Sansom at $42 million, Edgewater at $113 million and the Avenue of the Arts at $33 million.
The suburban office market was not as robust as Center City.
Full story:

Sunday, December 28, 2014

GSH Providing Ops and Maintenance at Former Lansdale Ford Plant Refit

by Steve Lubetkin,

GSH Group, Inc., a multi-national facilities and energy management provider throughout the United States, Europe and India, will deliver operations and maintenance services at a 675,000 square foot former Ford Motor Company electronics plant, at 2750 Morris Road in Lansdale, PA owned by Advance Realty and joint-venture partner, The Davis Companies.

Advance and Davis are repurposing the plant into a multi-tenanted, high-technology assembly and warehouse facility.

GSH assisted Advance/Davis during their initial inspection of the facility, prior to the purchase in September 2014, and continues to provide operations and maintenance services within the facility. GSH will also provide support for the upcoming capital improvements within the facility.

“We are excited to take ownership of 2750 Morris Road with The Davis Companies, and with the expertise of GSH’s engineering services, we are looking forward to making this facility the premier location for high technology companies in the region,” says Rick Zack, managing director of property management, Advance Realty.

“We are glad to assist Advance Realty and The Davis Companies in this endeavor, and look forward to continued success as we work with Advance to develop and maintain the facility,” says GSH group regional operations director Steve Wallis.

GSH holds two other contracts for operations and maintenance services with Advance Realty including One Gateway Center in Newark, NJ and Riverview Park in Trenton, NJ.

Monday, December 22, 2014

Top real estate stories of 2014: From Comcast tower to East Market

by Natalie Kostelni staff writer for the Philadelphia Business Journal

Each year when I look back at the top real estate stories and try to narrow them down to 10, I struggle. This year, I'm nearly paralyzed with indecision.

It's a good thing.

So many significant things took place in Philadelphia's suburban and Center City real estate scenes over the past year that I came up with 10 big stories with no problem. I had to stop myself at 25 because it was just getting ridiculous. I smiled, though. Philadelphia is achieving so much these days when it comes to real estate. Outside investors are taking a shine to it, cranes jut out of the sky, billion-dollar deals are still rare but are happening, and there's a sense of excitement about the city's future.

The suburbs are holding their own, too, and changing along with demographic and other forces demanding dense, walkable, amenity-filled communities or at the least buildings and campuses.

Three of its prime markets — Conshohocken, Pa., Bala Cynwyd, Pa., and Radnor, Pa. — are seeing rents rise and new construction around the corner. King of Prussia, Pa., is having its own building boom and suburban landlords are readily redefining office space to meet the needs of tenants looking to attract and retain top employees and appease Millennials crowding into the workforce.

Where to begin?

The year started with a bang and, though I didn't know it at the time, it was just a harbinger of what lied ahead.

It was mid-January when Liberty Property Trust and Comcast Corp. announced they would joint venture on a $1.2 billion new skyscraper called the Comcast Center for Innovation and Technology that would be designed by world-renowned architect Lord Norman Foster.

The University of Pennsylvania unveiled plans for the Pennovation Center on 23 acres at the old Marshall Labs site on the Schuylkill River now called South Bank. That, in conjunction with Drexel's Innovation Neighborhood, has the potential to create an innovation cluster that could be an incredible economic engine for the region.

Keystone Property Group bought Mack-Cali Realty Corp.'s suburban Philadelphia office portfolio for $230 million. While that was a big deal and made Keystone a bigger suburban office player, it also underscored a bigger underlying transition in the commercial real estate world: Companies are shedding their pasts and evolving into something new and redefining themselves. Mack-Cali is now focused on multifamily development.  Brandwyine Realty Trust is now an owner of Class A office buildings in urban centers and ventured into transportation-oriented mixed-use development, which veers from its genesis as a suburban office landlord. Liberty Property Trust is putting the finishing touches on transforming itself into an industrial real estate investment trust by selling non-core suburban office buildings.

Lubert-Adler was an investor involved in a $9 billion transaction to buy Safeway Inc. Always looking for the real estate play, Lubert-Adler has done these sort of deals before where it buys a company for the underlying properties it may own. Safeway owns much of its real estate from which it operates its stores and in areas with high-barriers of entry.

Crosspoint at Valley Forge at 530 and 580 Swedesford Road in Wayne, Pa., isn't a huge building at 272,000 square feet but its quick lease up — going from fully vacant to fully leased in a year — spoke volumes about the direction of suburban office buildings. Tenants will gravitate to well-designed, totally renovated office buildings packed with amenities and cool spaces.
Full story:

BET Investments breaks ground on $12M mixed-use project

by Natalie Kostelni, staff writer for the Philadelphia Business Journal
BET Investments Inc. has broken ground on a $12 million mixed-use development in Dresher, Pa.
Called Dresher Commons, the project involves constructing 40,000 square feet of mostly retail space and 24 townhouses on nine acres at Susquehanna Road and Limekiln Pike. The townhouses will be rentals. A CVS and Chipotle are among the retail tenants that have been lined up. The historic Clime House that sits on the property will be converted into office space.
BET has been working on this project for more than 10 years, said Michael Markman, president of BET Investments. "It has gone through so many different plans," he said.
Full story:

MAUGER AND CO, INC. Buy Two Condo Suites in West Chester, PA

The sale of two office/flex condominium suites situated within the Park Valley Corporate Center located at 1157 Phoenixville Pike in West Chester.
The Sellers were Stephen F. Horstmann and Megan T. Horstmann, and the buyer was
Mauger and Company, Inc. Sale price to purchase the two suites was $1,060,000.

 There were two office/flex condominium suites included in the sale. Unit 106 contained 6,326 SF of
office and production/warehouse space with 2 tailgates, 1 with dock leveler, and Unit 107 with a total of 3,764 SF of office and warehouse space also with 2 tailgates, 1with a ramp. Additional features also include ceiling heights of 18’to 20’, gas heat and
ample parking on site”.

Park Valley Corporate Center is an exceptionally well-located facility at the center of the rapidly growing Route 202 Corridor within minutes of the Route 30 Bypass, Route 100 and the Pennsylvania Turnpike.

Nightingale Properties Adds Fourth Center City Property

by Steve Lubetkin,
New York real estate investment firm Nightingale Properties has added its fourth Center City property with the acquisition from Arden Group of 1635 Market Street, a 19 story, 286,574 sq. ft. building that was originally developed as a regional headquarters for IBM.

Nightingale, founded in 2005 by Elie Schwartz and Simon Singer,  already owns 1835 Market Street, 1700 Market Street, and 1500 Spring Garden Street. The buy makes it one of the largest commercial property owners in the city.

Nightingale’s CEO, Elie Schwartz, has committed to $5 million in major renovations, to begin immediately, including renovating the facade, the main lobby, the concourse, the elevators, including cab, lift systems, and controls, the common corridors, and the bathrooms.

“This is an exciting opportunity for this building. The owner is committed to transforming 1635 Market into a modern, high tech facility. It could potentially house a single tenant on 86,000 sq. ft. across six floors. This building is an ideal location for a wide variety of tenants, especially with its easy access to transit. It is situated right in the heart of downtown and is part of the ongoing makeover of Philadelphia’s CBD.”

Montgomeryville Building Leases 8,000 SF Industrial Lease in

by Steve Lubetkin,

 Ambler-based Integrated Image, Inc. to leased an 8,000-square-foot space at 140 Commerce Drive, Montgomeryville, PA, for its sign manufacturing business.  The owner is K&B Montgomery Real Estate LP in the transaction.

“We’re pleased to have leased this space on behalf of our client and to welcome Integrated Image to Montgomeryville.  The building recently underwent major capital improvements making it a very desirable fit for this rapidly expanding company.”

Located in Montgomeryville Industrial Park in Montgomery County, PA, 140 Commerce Drive is a 20,000-square-foot single-story, modern industrial building featuring 15-foot clear ceiling heights and one loading dock.  The industrial park is located near Route 202, offering easy access to both the Pennsylvania Turnpike and the Blue Route.

Industrials Rising in South Jersey as Dermody Expands LogistiCenter

by Steve Lubetikin,

Reno-based Dermody Properties has started construction on a new multi-tenant facility in LogistiCenter Logan, its 7.4-million-square-foot industrial park.

The multi-tenant facility at 1110 Commerce Blvd. will total 171,600 square feet. Construction is expected to be complete in summer 2015. The facility, with 32-feet of clear height, 105 car parking spaces and 39 trailer parking spaces will be suited for e-commerce, food and beverage, and consumer product warehousing and distribution.

“Last spring we updated the master plan for LogistiCenter Logan to offer a wide variety of building sizes and configurations to meet the broad spectrum of industrial demand,” says Gene Preston, partner, Dermody Properties East Region Office. “It is exciting to now be starting construction on the first building in that revised master plan.”

LogistiCenter Logan is halfway between New York City and Washington, DC., in the heart of the Northeast transportation corridor. The location has nearby access to Interstate 295, the New Jersey Turnpike, the Pennsylvania Turnpike, and Interstate 476. The industrial park is within 15 miles of Delaware River ports in Camden, Philadelphia and Wilmington.

Blue Rock Construction is Dermody Properties’ construction partner, and Colliers International is marketing the property. Great Point Investors LLC is the strategic capital partner on the project.

“We are pleased to be starting construction on another facility in LogistiCenter Logan,” says Douglas A. Kiersey, Jr., president of Dermody Properties. “The demand for industrial properties across New Jersey has been on the rise, and we will continue to provide state-of-the-art facilities in this highly desirable market.”

LogistiCenter Logan is a 1,100-acre industrial park with 11 available lots ranging from 17,000 to 1,000,755 square feet. The center currently has a diverse group of tenants, including Performance Food Group, Mission Produce, Albert’s Organics, Kimberly Clark Corporation, Sears and hh gregg.

Commercial Real Estate Spot Assessments in the Philly Bubs

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

Cash-strapped suburban school districts have begun an aggressive campaign of initiating reassessments on everything from hotels and retail centers, such as the King of Prussia Mall, to multifamily properties and the Valley Forge Casino — costing some property owners tens of thousands of dollars a year.

Their target is commercial rather than residential real estate since it has the biggest bang for the buck. Apartment buildings have become a particular favorite as their values have shown some of the biggest gains over the last decade.

In Pennsylvania, school districts have the authority to appeal assessments on properties if they believe they are too low. Hamstrung from raising funds through other means and continuously facing funding cuts, these so-called reverse appeals have become an increasingly common method for districts to get more money into their coffers.

The owners of these properties, especially those of apartment buildings, believe districts are illegally "spot assessing" their real estate and the process goes against Pennsylvania's uniformity clause. This law states that taxes should be "uniform" across all property types and that a property type, such as office, industrial or apartment, can't be singled out or taxed at different levels.

Some of the biggest owners of real estate in the region have banded together to stem the situation. Along with the Pennsylvania Apartment Association, they are pushing legislation that would prohibit districts from having such power.
It's an issue that won't go away any time soon and will likely only get more contentious.
"When you have a loss of revenues, which the school districts have experienced, you have services cut, employees that are let go and at the end of the day the students get hurt," said Robert J. Ianozzi Jr., an attorney who represents several districts in Montgomery County. "You need to replace the lost revenue and school districts avail themselves to their statutory right and apply that to those properties that are under-assessed. What the districts are doing is leveling the playing field. This is about all property owners paying their fair share."

A chilling example
An example of this situation, which sent chills throughout the real estate community, took place in Chester County. An organization called the Chester County School District Managers hired a real estate appraisal firm to review the market values and assessments of all apartment properties from 2004.

Appraisal firms are typically paid a certain percentage of the reassessed value of a property.
The hired firm identified several apartment complexes in the county that it determined where potentially under-assessed. Five of those were in the Downingtown School District. The firm recommended that an assessment appeal be made on one property, the Black Hawk Circle apartments, owned by Westover Cos. of King of Prussia.

Black Hawk consists of two parcels. One that is 6.5 acres with 108 apartments and, at the time, was assessed at $3.17 million. The other parcel totaled 3.5 acres with 93 apartments and was assessed at $2.94 million.

The Chester County Boards of Assessment Appeals, where all of these issues initially go to, increased the fair market value of each parcel by $1 million. That resulted in increased assessments of roughly $53,000 in annual tax revenue for the district.

Westover appealed the reassessment to the Chester County Court of Common Pleas, arguing that the district singled the property out and didn't follow the uniformity clause. Westover won.
The school district then appealed the case to the Commonwealth Court of Pennsylvania, which sided with the district in a ruling handed down in March 2013. Westover filed a petition to appeal that result before the Pennsylvania Supreme Court, which declined to hear the case.

That final ruling, which sided with the school district, put commercial property owners on notice that they would be facing an uphill battle when it came to reassessments by school districts....

Full story:

Thursday, December 18, 2014

Riverside REtail Sold for $3.1M

A local owner sold the retail building at 2904 Rte 130 in Riverside, NJ to Noble Properties for $3.07 million, or about $286 per square foot.

The 10,719-square-foot restaurant sits on 2.7 acres in Burlington County. The seller has agreed to leaseback the property for a period of 15 years from the new owner.

WRDC Pays $5.6M for Kmart Shopping Ctr in Mechanicsburg

RDC acquired the Kmart Shopping Center at 5600 Carlisle Pike in Mechanicsburg, PA from Cumberland Partners Kmart Burr Wolff for $5.6 million, or about $53 per square foot.

The 106,500-square-foot retail center was built in 1965 on 22 acres in the Harrisburg ARea West submarket of Cumberland County. It was renovated in 1992 and is anchored by Kmart, though the buyer has listed the entire center for lease, divisible to 10,000 square feet.

Lochwood Pro Ctr Bldg Sold for $2.5M

The Gambone Group sold the Lochwood Professional Center building at 2024 Cressman Rd. in Skippack, PA to MDI Management for $2.5 million, or about $104 per square foot.

The two-story, 24,000-square-foot office building delivered in 2007 in the West Montgomery County submarket of Philadelphia.

Market Street Retail Bldg Sold for $8M

A local investment firm acquired the retail building at 1020-1024 Market St. in Philadelphia, PA from another investor for almost $8 million, or about $127 per square foot.

The historic retail building delivered in 1900 and totals 63,182 square feet in the Market Street East submarket of Philadelphia County.

Tague Lumber Acquires Pipersville Industrial for $3.2M

A local owner sold the industrial building at 6100 Easton Rd. in Pipersville, PA to Tague Lumber for $3.15 million, or $90 per square foot.
The 35,000-square-foot industrial building was constructed in 1939 and renovated in 1984. It sits on a nine-acre site in the Bucks County Industrial submarket of Philadelphia.

TriGate Closes on $53M Acquisition of National Retail Portfolio

TriGate Capital LLC has acquired a national portfolio of retail properties spread across five states for an aggregate purchase price of $53 million, or an average $86 per square foot, from Project Development Services, Inc. (PDSI)

The seven-property, 619,161-square-foot portfolio was 84.7% leased at the time of sale to 76 tenants. Almost 20% of the portfolio is occupied by grocery stores, with other anchor tenants including Rite Aid, Tractor Supply, and Stein Mart.

Included in the sale is:
Lower Makefield, a 74,953-square-foot shopping center in Yardley, PA;
Ephrata Commons, a 54,810-square-foot shopping center in Ephrata, PA;
Harbison Center, an 187,975-square-foot retail development in Columbia, SC;
Deans Bridge, a 53,016-square-foot shopping center in Augusta, GA;
Regency Square, a 49,155-square-foot retail center in St. Charles, MO;
Independence Corners, a 72,956-square-foot center in Independence, MO;
Gateway Village, a 126,286-square-foot shopping center in Glendale, AZ.

This was an all-cash deal, though the buyer secured a loan from Bank of America in the amount of $39 million that it will apply towards planned improvements and lease-up efforts at the shopping centers, which were reportedly acquired as a value-add play for TriGate.

Wednesday, December 17, 2014

Lennox Apts Sold for $8.8M

Wexford Property Management sold the 156-unit Lennox Apartments at 232-242 W. Walnut Ln. in Philadelphia, PA for $8.75 million, or about $56,000 per unit, to a private owner.

The 88,600-square-foot multifamily property is comprised of one-bedroom units across three buildigns. The property was originally built in 1930. Prior to the sale the property did undergo a $1.5 million renovation with upgraded kitchens, bathrooms, plumbing and electric.

J.G. Petrucci Opens Manayunk Luxury Apartments

by Steve Lubetkin,
.G. Petrucci Company Inc. has expanded its multi-family portfolio with the completion of The Station at Manayunk, a first-class 149-unit LEED certified luxury apartment community located at 1 Parker Avenue in Manayunk, Pennsylvania. The Station at Manayunk is J.G. Petrucci Company Inc.’s fifth luxury apartment complex and by the end of 2017 that number will rise to eight.

The Station at Manayunk features stylish and sophisticated one and two bedrooms apartments. The pet-friendly apartment community includes a complete 24-hour fitness center, outdoor and garage parking, full-size washer and dryer in each unit, personal balconies, and energy efficient stainless steel appliances with granite countertops.

“The Station at Manayunk embodies our live, work and play approach to luxury apartment living in a major metropolitan. We are very proud of how well the project is being received in the community,” says Greg Rogerson, principal of J.G. Petrucci Company Inc

Monday, December 15, 2014

Conshohocken Office Construction (Video)

Stockton College Acquires Showboat for $18M

by John Jordan
The Richard Stockton College of New Jersey has purchased the former casino Showboat Atlantic City here for $18 million.

The deal, which closed on Dec. 12, begins the property’s “transformation into an island campus designed to spur economic and community development and help prepare Atlantic City’s workforce for the jobs of the future,” the college stated in its press announcement released on Friday.

“Stockton is committed to southern New Jersey’s continued social and economic development,” says college president Herman Saatkamp. “Our roots officially began at the former Mayflower Hotel in Atlantic City, and as our campus has expanded, so has our mission to provide higher education, research and community partnerships that enhance the region and state."

Stockton purchased the 1.73 million-square-foot property from Caesars Entertainment with funds from the college’s Investment Fund. No state-appropriated funds were used in the purchase and no new debt was issued.

"Stockton's acquisition of the Showboat exemplifies the efforts of the governor and legislative leadership to bolster Atlantic City's non-gaming offerings. The diversification of activities available in AC stands to benefit all of the city's stakeholders," says Gary Loveman, chairman and CEO of Caesars Entertainment.

The transition from a casino-hotel to a college campus and hotel will take far less time in terms of design, approvals and renovation than would new construction, benefiting Atlantic City and Stockton, president Saatkamp noted.

The property, which sits on more than 26 acres on the Boardwalk, will likely continue to operate as a hotel, with 479 rooms in Tower 1 available for guests, along with retail and restaurant amenities.

The former gaming floor will be used for academic, administrative and community purposes. This would include approximately 20 mixed-use classrooms, 10 lecture facilities, music, dance and choral instruction rooms, an experimental theatre and dance studio. The plans include community access to conference spaces, meeting rooms and workforce development areas.

The hotel operation may be operated by Dolce Hotels and Resorts, which operates Stockton Seaview and another 22 properties throughout North America and Europe, the college stated.

53,733 SF Boothwyn Office Property Sells

by Steve Lubetkin,

Neltson Edison LP has acquired 5 Chelsea Parkway, a 53,733 square foot property on 10.5 acres in Boothwyn, PA. The seller was PX Properties LC.

Neltson Edison purchased the building as an investment with long term leases in place.  Access Information Management occupies 47,233 square feet, and Priority Express Courier leases 6,500 square feet.

“There is a strong demand in the market for modern industrial buildings in the 25,000 to 60,000 square-foot size range. The 10.5 acre site also allows for future expansion of the building”.

The building has direct access to Route 322 and Chichester Avenue and is minutes from Route 452 and Interstate 95.

Friday, December 12, 2014

Wharton Buys Lancaster Shopping Center for $35M

by Steve Lubetkin

Eatontown, NJ-based Wharton Realty Group has acquired Manor Shopping Center, 1204 Millersville Pike, Lancaster, PA, from The Real Estate Equity Company (“TREECO”), Englewood, NJ, for $34.99 million.

Manor Shopping Center is a 248,567 square-foot community shopping center, originally developed in the 1950s, co-anchored by a 61,450 square foot Regal Cinemas and a 52,000 square foot WeisMarkets. WeisMarkets has been at the property since its construction in 1959. The center was 93 percent occupied at the time of the sale with additional retail tenants, including Big Lots, Guitar Center, AdvanceAutoParts, CVSPharmacy, PAWine& Spirits, and RubyTuesday.

“Lancaster is a prosperous, growing market with low unemployment attracting out of state capital,” says Nathanson. “The maturity of the shopping center supporting long term viable occupancy, combined with Regal’s recent investment in a complete state of the art renovation to the interior of its theatre, proved very attractive in the marketplace.”

Thursday, December 11, 2014

MM Partners to invest $60 million in Brewerytown

by Natalie Ksotelni, Staff writer for the Philadelphia Business Journal
Over the next two years, MM Partners plans to invest roughly $60 million in Brewerytown, a Philadelphia neighborhood where it has already invested more than $45 million in just over a decade.
The focus of MM Partners has been across five blocks in the heart of Brewerytown where it has already amassed more than 50 residential, retail and mixed-use properties and created a critical mass that is helping to reshape and revitalize the neighborhood.

Some of the projects MM Partners is working on include:

The Braverman Building, which is currently under construction at Girard Avenue and Taney St. and is expected to be completed next spring. The project involves 16 residential units and two retail spaces.

Girard27 is a new development at 27th Street and Girard Avenue and will include 15,000 square feet of retail, 68 apartments, 60 parking spaces, and 10 townhouses. MM Partners is joint venturing with ADCO American Development on the project and expects to break ground in the spring.

The Hat Shop at 2841-43 W. Girard Ave., an existing building, will have four apartments and five retail spaces.

A.F. Bernot Dye Works, a 75,000-square-foot building at 1626-44 Fairmount Ave. will be converted into 18 loft apartments and 15,000 square feet of retail. It is under construction and scheduled to be completed next spring.

Full story:

ProLogis CEO on the Industrial Real Estate Market (Video)

Crowdfunding real estate (Video)

Wednesday, December 10, 2014

Glassboro Industrial Sold for $2.7M

A private investor acquired the industrial property at 600 Ellis St. in Glassboro, NJ from Archer Daniels Midland Company for $2.7 million, or about $25 per square foot. 

The 107,364-square-foot building delivered on 39.3 acres in the Gloucester County Industrial submarket.

ClientLink Leases 65,000 SF at Montgomeryville Industrial Ctr

ClientLink, a direct marketing and fulfillment company, leased 65,219 square feet at 220 Commerce Dr. Montgomeryville, PA.

The tenant will occupy the entire warehouse building previously occupied by Affiliate Computer Services, Inc. Located in the East Montgomery County Industrial submarket, it is part of the Montgomeryville Industrial Center located approximately 20 miles north of Philadelphia.

Salvation Army Pays $2.7M for Turnersville Retail Bldg

The Salvation Army acquired the retail building at 3840 Route 42 in Turnersville, NJ from Stelaur LLC for $2.7 million, or about $115 per square foot. 

The single-story, 23,458-square-foot, freestanding building delivered in 1969 on 3.3 acres in the Gloucester County submarket.

Tuesday, December 9, 2014

U.S. jobs channeling real estate growth (Video)

Liscio’s Bakery Acquires 107K SF Manufacturing Facility from ADM

by Steve Lubetkin
Liscio’s Bakery, encouraged by $13.5 million in Grow New Jersey tax incentives, is nearly tripling its manufacturing facilities in Glassboro with the acquisition of a 107,364-square-foot industrial building formerly owned by Archer Daniels Midland at 600 Ellis Street in Glassboro, NJ.

“We are pleased to welcome Liscio’s Bakery to this outstanding facility in Glassboro. Moreover, we are thrilled that through our commitment to keeping business in New Jersey, and the outstanding incentives programs offered by our administration, that Liscio’s will continue to call New Jersey home and bring new jobs to our state.”

The transaction nearly triples the size of Liscio’s current manufacturing facility on Delsea Drive in Glassboro.  While considering a move to Philadelphia, the company received $13.5 million in “Grow New Jersey” tax incentives from the New Jersey Economic Development Agency.

Liscio’s Bakery also operates three retail stores – one in Glassboro and two in Washington Township, NJ. The new facility will primarily serve as its bread and roll manufacturing facility.  The company currently employs 176 workers and plans to add another 71 jobs at this location.

600 Ellis Street is a 107,364-square-foot single-story industrial building located in Glassboro, just off Route 55.  ADM previously used the building for its cocoa manufacturing business, until closing its operations in 2009. The building, situated on a 40-acre lot, features 28’ clear ceilings, five tailgates, two drive-in doors, ample parking and a fenced yard

Monday, December 8, 2014

Mack Cali buys 3 Acres in Conshohocken

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

O'Neill Properties Group has sold a development parcel in Conshohocken, Pa., to Mack-Cali Realty Corp.
The 3.1-acre parcel at 51 Washington St. is approved for 310 apartments. The site is located on the western side of the Fayette Street bridge or to the left while heading into Conshohocken. The property fronts the Schuylkill River.
Mack-Cali's affiliate, Roseland, intends to begin construction of a multifamily complex on the site during the first quarter of next year, said Ilene Jablonski, a company spokeswoman. Jablonski declined to disclose the purchase price until the company does so through Securities and Exchange Commission filings. The Edison, N.J., company bought the site because it fits within its strategy to take positions in markets that have high barriers of entry and are served by mass transit.

Full story:

Stradley Ronon Renews at One Commerce Square

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

Stradley Ronon, a Philadelphia law firm, has decided to remain in One Commerce Square where it has been since 1988.
The firm leased 92,000 square feet of space that covers four floors in the building at 2005 Market St. in Center City. It will undertake a major renovation of the space and has retained Gensler to lead that effort.

The firm shaved some square feet off of its current space. It is now in about 100,000 square feet. The firm started its search early even though its lease at One Commerce didn't expire until 2017.
Joe McManus and Morgan Murray of CBRE Inc. were the brokers who represented the law firm. Brandywine Realty Trust is the landlord.

"We conducted a thorough assessment of the Center City real estate market and decided to remain in Commerce Square because of its convenient location for employees and clients, top-notch amenities and Brandywine's substantial capital investment in the Commerce Square project," said Stradley Ronon Chairman William R. Sasso in a statement. "Our redesign project takes into account the significant role of technology and collaboration in today's workplace, and will provide us with a modern, efficient space for our lawyers, staff and clients."
Full story:

Subaru Confirms Location for New HQ in Camden, NJ

Subaru of America Inc. confirmed that it has identified an all-new development in Camden, NJ, as its preferred location for a new corporate headquarters. The site, which is four miles from the company's current location at 2235 Marlton Pike W in Cherry Hill, NJ, is adjacent to the Campbell Gateway District and is currently owned by Campbell Soup Co.

Subaru of America expects to house more than 500 employees and contractors in the new 250,000-square-foot facility, will be double the size of its current building.

Subaru of America's application is now subject to New Jersey Economic Development Authority (EDA) approval. Final decision is expected by April 2015 and Subaru would expect to complete the project by early 2017.

PREIT Completes Sale of Whitehall Mall in Allentown, PA

by Steve Lubetkin
Pennsylvania Real Estate Investment Trust has sold several properties including its 50% interest in Whitehall Mall in Allentown, PA, with an aggregate transaction value of $25 million.

PREIT said the asset sales are part of its strategic disposition program. PREIT started selling assets in 2012 and has sold 15 assets to date, generating total proceeds of approximately $420 million, the firm says in a statement.

"We remain on track in executing our ongoing disposition program and today's announcement demonstrates the progress we are making," says Joseph F. Coradino, CEO of PREIT. "Our selective disposition program has enabled us to generate proceeds to upgrade our core, high-quality properties, while maintaining solid operational performance and a strong balance sheet. Today, PREIT boasts a premier portfolio, supported by a healthy and flexible balance sheet, strategically positioning the Company for long-term success and continued value creation."

Whitehall Mall is located in the Lehigh Valley, previously owned in a joint venture with Washington Prime Group subsequent to its spin-off from Simon Property Group.  The other properties sold were outparcels adjacent to PREIT’s Magnolia and Francis Scott Key Malls.

Friday, December 5, 2014

Hatzel & Buehler Extends Lease for 8,430 SF at Ten Penn Center

Hatzel & Buehler, the nation’s oldest electrical construction company, has renewed and expanded its lease for approximately 8,430 square feet at Ten Penn Center, 1801 Market Street, Philadelphia, PA.

Hatzel & Buehler will continue to occupy the second floor of the 27-story building at the northwest corner of 18th and Market Streets. Terms were not disclosed.

The oldest electrical contracting company in America established by two electricians who worked with Thomas Edison, Hatzel & Buehler employs 700 IBEW electricians and is signatory to 21 local unions in Delaware, Michigan, New Jersey, New York, Ohio, Pennsylvania and West Virginia.

Accesso Acquires 1515 Market St. For $85 Million

by Steve Lubetkin
Accesso Partners LLC has acquired 1515 Market St., a 20-story, half-million square-foot office tower in downtown Philadelphia that houses Temple University’s Center City campus, for $85 million.

Renovated in 2007, the class A property is being sold by a joint venture between Winthrop Realty Trust of Boston and Stockton Real Estate Advisors of Philadelphia. The property is 87% leased.

“We’re delighted to be entering the Philadelphia market with the acquisition of one of the city’s premier office buildings,” says Ariel Bentata, co-founder and managing partner, investments for Hallendale Beach, FL-based Accesso Partners, formerly known as Beacon Investment Properties.

“Education, healthcare and professional services are strong industries in Philadelphia and 1515 Market is represented in each sector,” says Bentata. “Temple University, the 128,000 square-foot anchor tenant, recently extended the lease on its Center City campus through 2022.”

Other tenants include Heffler, Radetich & Saitta, CPAs, the law firms of Sweeney & Sheehan, Simon & Simon and Rocco Law, LLC and the Commonwealth of Pennsylvania. The building includes 15,189 square feet of ground floor retail space anchored by Citizens Bank and First Trust Bank.

“The city’s newly completed $70 million investment that re-invigorated Dilworth Park across the street is a game-changer for downtown Philadelphia and the biggest beneficiary of any building would be 1515 Market,” he says. “Plus, the SEPTA subway station is directly below the building and can be accessed through the lobby.”

Philadelphia Industrial Deliveries, Construction and Inventory

During the third quarter 2014, four industrial buildings totaling 906,337 square feet were completed in the Philadelphia market area. This compares to 10 buildings totaling 3,377,992 square feet that were completed in the second quarter 2014.

There were 12,035,258 square feet of Industrial space under construction at the end of the third quarter 2014.

Some of the notable 2014 deliveries include: West Hills Business Center - Building A, a 980,000-square-foot facility that delivered in second quarter 2014 and is now 100% occupied, and Berks Park 78 - Dollar General, a 906,919-square-foot building that delivered in second quarter 2014 and is now 100% occupied.

The largest projects underway at the end of third quarter 2014 were Liberty at Shippensburg - Bldg B, a 1,700,000-square-foot building with 100% of its space pre-leased, and Majestic Bethlehem Center - Site 2, a 1,644,450-square-foot facility that is 100% pre-leased.

Total Industrial inventory in the Philadelphia market area amounted to 1,027,459,201 square feet in 20,288 buildings as of the end of the third quarter 2014. The Flex sector consisted of 85,700,596 square feet in 3,302 projects. Within the Industrial market there were 2,646 owner-occupied buildings accounting for 241,022,503 square feet of Industrial space.

This trend is compared to U.S. National Industrial deliveries and construction, which saw 206 buildings totaling 30.84 million square feet complete construction, with an additional 148.9 million square feet of industrial space still under construction at the end of the third quarter. 6100 Garfield Ave is a 620,000-square-foot facility that delivered this quarter in the Los Angeles market, while the 1.7 million-square-foot RidgePort Logistics Center in the Chicago market is still under way. Total industrial inventory in the U.S. market totaled almost 21.08 billion square feet in more than 621,000 industrial buildings at the end of Q3 2014, including almost 71,200 owner-occupied properties.

Thursday, December 4, 2014

Exton Corporate Center Announces Three New Tenants

by Steve Lubetkin
Willner Properties has signed three new tenant leases at the Exton Corporate Center located at 102 Pickering Way in Exton, PA with Lee Johnson & Associates, Supreme Lending and Trinity Consultants. The class-A, 80,000 square foot, five-story building recently completed the first phase of interior and exterior renovation.

Lee Johnson & Associates relocated from a neighboring property into 1,126 square feet. Supreme Lending, a national mortgage banker and brokerage based in Dallas, TX. Established its Philadelphia-area presence by leasing 1,950 square feet. Finally, the Exton, PA office of Trinity Consultants is the first entry into the Philadelphia market for the national environmental and business-consulting group, with a 2,199 square-foot lease.

“We are very excited to count these three high quality companies among our diverse tenants and look forward to marketing the remaining available space at Exton Corporate Center to a wide range of professional service industries,” says Craig R. Bradley, vice president of Willner Properties. “Exton Corporate Center offers class “A” corporate office space for immediate occupancy in the market’s premier location and at below market rates,” says Mr. Bradley.

Wednesday, December 3, 2014

PNC Bank Branch in West Chester Sold for $4.1M

A private investor acquired the newly-constructed retail bank branch at 1599 W. Chester Pike in West Cheter, PA from Pintzuk Brown Realty and Pineville Station West Chester, Inc. for $4.06 million, or about $1,000 per square foot.

The single-story, 4,020-square-foot retail property was built in 2014 on 1.6 acres in the West Chester submarket of Chester County. The asset is fully occupied by PNC Bank, holding a 20-year, triple-net ground lease on the property. PNC invested heavily in this location, a relo for an existing branch with $95 million in deposits. It is LEED certified and features a triple drive-thru in affluent West Goshen Township.

Jemstone Group Pays $3.2M for Cherry Hill Retail

The Jemstone Group LLC purchased the retail building at 220-226 Haddonfield Rd. in Cherry Hill, NJ from ARC Properties for $3.1 million, or approximately $131 per square foot.

The two-story, 24,000-square-foot storefront building is located on 1.6 acres in the North Camden County submarket of Philadelphia.

Tuesday, December 2, 2014

Real Estate Is an Important Part of Retail: Sadove (Video)

Trio Investments Sells Lancaster Office

Archive Warehouse LLC acquired its office building at 2150 Noll Dr. in Lancaster, PA from Trio Investments LLC for $3 million, or aobut $236 per square foot.

The 12,000-square-foot, single-story office building was never on the market, but the seller received an offer from its tenant that was, in their opinion, "too good to pass by."

Langhorne Portfolio Trades for $7.3M

A family partnership acquired the office and retail property at 1939 E. Lincoln Hwy and 210 S. Woodbourne Rd. in Langhorne, PA from McCafferty Ford of Langhorne for $7.25 million. 

The deal totals 37,831 square feet and includes a retail property constructed in 1940 and a 3,770-square-foot office building constructed in 1850 in the Lower Bucks County submarket of Philadelphia.

Monday, December 1, 2014

Allentown Office Sold for $2.8M

Basin Property Development LP acquired the office buildign at 265 Lehigh St. in Allentown, PA from Lexington Realty Trust for $2.8 million, or about $39 per square foot.
Lehigh Street 265 is a 71,055-square-foot office building constructed in 1975 on 11 acres in the Lehigh / Northampton submarket of Philadelphia.

Sunday, November 30, 2014

Edens Investment Trust CEO: Shopping malls not dead yet (Video)

Dranoff Properties Pays $3.7M for Broad Street Office

Dranoff Properties acquired the 69-year-old office building at 311 S. Broad St. in Philadelphia, PA from Assorted Music Partnership for $3.7 million, or about $202 per square foot.

The office building delivered in 1945 and totals 18,300 square feet in Philadelphia County.

Tuesday, November 25, 2014

Danger ahead for commercial real estate? (Video)

Commercial real estate improvement continues (Video)

One & Olney Square Trades for $53M

by Natalie Kostelni, Staff Writer for the Philadelphia Business Journal

One & Olney Square, a grocery-anchored retail center in Philadelphia, has sold for $52.5 million.
Wharton Realty Group of Eatontown, N.J., bought the 339,425-square-foot property from Feil Organization, a New York firm that bought the center in 2002.

The center was put up for sale in June and got a lot of investor attention.
"We had tremendous interest from a broad spectrum of buyers including institutional investors, [real estate investment trusts] and private investors, Investors were drawn to the ShopRite's excellent sales history and the dense population in the trade area. In addition, the property boasts a variety of national, regional and credit retailers and tremendous upside potential."

The property sits on 25.74 acres at 5675 N. Front St. It is 84 percent full and ShopRite anchors the center.

Breslin Realty of New York constructed it in 1986 on what had been a factory operated by Kelsey-Hayes Co., a Michigan manufacturer of jet and helicopter engines. Around 1984, Kelsey-Hayes relocated from the plant at Front Street and Olney Avenue to a site on Roosevelt Boulevard.
When Breslin opened the center, Caldor was one of its main tenants as well as Crazy Eddie's – once popular retailers that have diminished in status or faded away.

Wharton owns Grant Plaza in Northeast Philadelphia as well as a Redners Market in Leesport, Pa.

Full story:

Woodmont Sells 34 Dauphin Drive in Central PA

by Steve Lubetkin Staff Writer for

Woodmont Industrial Partners has sold 34 Dauphin Drive to Exeter Property Group for $8 million. WIP acquired the 180,333 square-foot, rail-served distribution center in November 2012 and after completing extensive renovations, leased the facility to Allen Distribution, a third-party logistics provider.

WIP completed an intensive 6-month rehab, upgrading the building to modern standards, including the incorporation of an ESFR Sprinkler system and T-5 lighting, among other improvements. The building, which sits on 10.64 acres of land and can support the space requirements of single or multiple tenants, features 3,200 square feet of office space, 24-foot-high ceilings, 20 dock positions and 10 rear rail doors.

Situated approximately 12 miles south of Harrisburg, 34 Dauphin Drive is located in an established industrial park on Route 11 near I-76 and 81.

“We were able to highlight the prime location of this property in the heart of Central Pennsylvania and the success of our renovation program, which has helped to position this facility strongly among tenants looking for modern features,” says Eric Witmondt, principal of Woodmont Industrial Partners. “This sale will enable us to redeploy capital into future investment opportunities as we look to expand our footprint throughout New Jersey, Central Pennsylvania and the Lehigh Valley.”

Simply Fashion Inks Lease at Liberty Center I in Erie, Pa.

Discount women’s clothing retailer Simply Fashion has leased 5,800 square feet of space at Liberty Center I, re-joining the tenant mix at this key northwestern Pennsylvania shopping destination. Levin Management, exclusive leasing and managing agent for the 227,000-square-foot shopping center, announced the lease.

Simply Fashion’s varied collection of women’s apparel and accessories caters to shoppers who are both style and price conscious. Simply Fashion will be operating this location as a Dots store.

“We are excited to welcome Dots, which is under new management, back to Liberty Center I,” says Korris. “The store was extremely popular with local consumers, and upon re-opening will continue to provide a wide selection of trend-driven women’s apparel and accessories at an amazing price. Dots complements an impressive retail lineup at Liberty Center I and helps enhance the overall tenant mix at this neighborhood shopping destination.”

Situated near I-90 at the intersection of West 38th and Liberty Streets, just off of Peach Street, Liberty Center I is located in the residential heart of Erie, PA. Anchored by full-serve supermarket chain Tops Friendly Markets and Peebles department store, Liberty Center I’s lineup of national and regional tenants includes Harbor Freight Tools, Dollar Tree, Rent-A-Center, Payless ShoeSource, H&R Block, and GNC, among others.

Saturday, November 22, 2014

Philadelphia Retail Deliveries, Construction and Inventory

During the third quarter 2014, five retail buildings totaling 80,793 square feet were completed in the Philadelphia market. Over the past four quarters, a total of 842,776 square feet of retail space has been built in Philadelphia.

There were 389,251 square feet of retail space under construction at the end of the third quarter 2014.

Some of the notable 2014 deliveries include: 4300 Broadway, a 59,840-square-foot facility that delivered in third quarter 2014 and is now 100% occupied, and 332 S Broad St, a 45,000-square-foot building that delivered in first quarter 2014 and is now 100% occupied.

Total retail inventory in the Philadelphia market area amounted to 500,055,236 square feet in 41,234 buildings and 2,554 centers as of the end of the third quarter 2014.

This trend is compared to U.S. National Retail deliveries and construction, which saw 542 buildings totaling 13.91 million square feet complete construction, with an additional 53.3 million square feet of retail space still under construction at the end of the third quarter. 837 Washington St, a 58,200-square-foot facility in the New York City market, delivered this quarter, as did the 148,000-square-foot Main St N. Brunswick Costco in the Northern New Jersey market. Total retail inventory in the U.S. market totaled more than 12.54 billion square feet in almost 1.1 million retail buildings at the end of Q3 2014, including 97,500 shopping centers.

Friday, November 21, 2014

Canadian Firm Walks Away From Revel Buy

Issues related to Revel Casino-Hotel’s power plant have apparently pulled the plug on Brookfield US Holding LLC’s $110-million purchase of the shuttered gaming facility here.

Brookfield spokesperson Melissa Coley said on Wednesday night that Brookfield decided not to move ahead with its court approved purchase of Revel. She said Brookfield’s decision was based on bondholders’ refusal to rework debt connected with the construction of Revel’s power plant, according to the Press of Atlantic City.

Glenn Straub, the Florida developer whose $95.4 million bid for Revel was named the backup offer at a bankruptcy auction, believes his appeal of the award prompted Brookfield’s decision to walk away from the casino purchase.

“We will make the place successful, mark my words,” Straub says.

While Brookfield said it would have run a casino-hotel at the Revel, Straub says that gambling would not be the main draw at the property that cost $2.4 billion to construct.

The construction of the power plant caused Revel to incur more than $1.5 million in monthly power-plant financing fees, which contributed to the casino owner’s fiscal woes.

KBS REIT II Sells I-81 Industrial Portfolio for $105.7M

Chambers Street Properties acquired four industrial buildings in the I-81 / I-78 Corridor of Eastern Pennsylvania from KBS Real Estate Investment Trust II. The Newport Beach, CA-based REIT sold its I-81 Industrial Portfolio for $105.7 million, or about $64 per square foot.

The portfolio of core properties includes four industrial buildings totaling 1.64 million square feet that are fully leased to tenants including Kimberly-Clark, Amazon, Bimbo Bakeries, Two Chefs on a Roll, Cardinal Glass, and Haband Company.

The buyer, a Princeton, NJ-based REIT that focuses on long-term holds of net-leased industrial and office properties, was reportedly attracted to the asset's location, critical use, and tenant quality.

14-46 Alberigi Dr. in Jessup, PA is a 140,800-square-foot, high-bay warehouse built in 2007 on 106 acres in Lackawanna County. In Luzerne County are three bulk industrial buildings including the 615,600-square-foot distribution facility at 550 Oak Ridge Rd. constructed in 2005 on 50 acres in Hazleton, the 744,080-square-foot distribution building at 325 Centerpoint Blvd. in Jenkins Twp. built in 2008 on 49 acres, and 125 Capital Rd. in Pittston, a 144,000-square-foot food processing facility built in 2007 on 14 acres.

In connection with the sale, KBS repaid $56.2 million in outstanding principal on a portfolio mortgage loan secured in-part by the properties. KBS acquired the portfolio in 2011 for $90 million, and incurred expenses of $2.9 million during ownership.

"The I-81 / I-78 corridor has become highly sought-after by investors," commented Hines. "This market has a low vacancy rate, 8.4% for modern bulk, and tremendous leasing activity averaging 21.7 million square feet from 2011 to 2013, including a 41% year-over-year increase in 2013."

Thursday, November 20, 2014

DaVita Dialysis Ctr Sold for $3.2M

A private investor sold the medical office building at 133-135 Cheltenham Ave. in Cheltenham, PA to a family trust for $3.15 million, or about $262 per square foot.

This office building delivered in 1960 in the Horsham/Willow Grove submarket. It totals 13,650 square feet, and is occupied by DaVita Dialysis Center.

Tuesday, November 18, 2014

Gary Shilling on the State of Real Estate (Video)

Malvern Office Building Trades for $23M

by Natalie Kostelni, Staff Writter for Philadelphia Business Journal

Hayden Maguire Real Estate Funds has picked up its second acquisition and paid $23 million for 1200 Atwater Drive in Malvern, Pa.

The 151,447-square-foot building in the Atwater Corporate Center at Route 29 and the Pennsylvania Turnpike was constructed more than 10 years ago by Trammell Crow Co. as a regional headquarters for Allstate Insurance Co. At some point, Trammell Crow sold the building to Invesco Real Estate, which was the latest seller of the property.

The deal took a little longer than expected to get done.
"The transaction had some fits and starts," it was an off-market sale.

Mayock had the building under contract last year to a different, undisclosed buyer. But when Shire Pharmaceuticals decided not to build a new headquarters at Atwater and Endo Pharmaceuticals decided to lease out half of its new headquarters also in Atwater, the buyer got cold feet.

"Both of those things made that buyer nervous," Mayock said. "They said: 'No, thanks anyway.'"
The deal was dead but Mayock was confident another buyer would come along. The market started to strengthen and office space in the Malvern area was getting absorbed. Mayock was also aware Hayden was wrapping up the leasing of Cross Point and wanted a presence at the Malvern interchange.

A deal was struck.
Hayden Maguire is a fund based in West Conshohocken, Pa. It has a strong presence in Exton, Pa., the Valley Forge, Pa., area and Conshohocken, Pa. It was eager to get a building in Malvern, said Tony Hayden Jr.
Full story:

Monday, November 17, 2014

Lexington Realty Trust Acquires HealthSouth Rehab Hospital for $19.1M

HealthSouth Corporation sold the health care facility at 1237 W. Sherman Ave. in Vineland, NJ to Lexington Realty Trust for $19.1 million, or about $507 per square foot.

The new owner kept in place a 40-year lease to HealthSouth Rehabilitation Hospital of South Jersey LLC in a deal guaranteed by the seller, one of the largest owners and operators of inpatient rehab hospitals in the country.

HealthSouth Rehabilitation Hospital is a single-story, 37,660-square-foot facility that was constructed in 2002 on 8.9 acres in the Southern New Jersey submarket of Cumberland County, just two miles from NJ Rte 55 and along a heavy medical corridor located 40 miles south of Philadelphia.

"The current demand for stabilized, quality real estate is much greater than the supply. Through an intense and competitive marketing effort to both 1031 exchange buyers and institutional purchasers, we were able to tap into that demand and deliver great pricing for our seller."

The asset traded at 5.8% CAP rate based on 2014 NOI of $1.11 million in annualized rent.

Stockton College Plans to Buy Shuttered Showboat Casino

by John Jordan
Officials with Richard Stockton College and Caesars Entertainment Corp. announced on Wednesday that the college intends to acquire the shuttered Showboat Atlantic City casino and repurpose the property as a branch campus.

Caesars and Richard Stocktown College reportedly signed a letter of intent for the purchase of the 28-acre property that includes a more than 1.4-million square-foot building, according to the Press of Atlantic City.

State Assemblyman Chris Brown told the newspaper that the college also intends to use the shuttered casino as a hotel. No purchase price for the Showboat was disclosed. The two parties stated that the transaction “is subject to completion of due diligence by the college and the negotiation and execution of a definitive agreement."

Stockton College President Herman Saatkamp hopes the branch campus at the Showboat property "enhances Stockton's educational growth, offerings and cost-containment while at the same time brings new educational opportunities to Atlantic City."

Gary Loveman, CEO of Caesars Entertainment, says, “The transformation and revitalization of Atlantic City requires the addition of a diverse set of reasons for people to come visit. I believe the construction of a Stockton campus there will help to diversify the economy of the city, which is critical to its future well-being."

Wednesday, November 12, 2014

Boothwyn Warehouse Sold for $4.2M

PX Properties LLC sold the industrial building at 5 Chelsea Pky in Boothwyn, PA for $4.2 million, or about $78 per square foot, to Neltson Edison LP.

The 53,733-square-foot warehouse is located in the Delaware County Industrial submarket. It was fully leased at the time of sale to Priority Express Courier.

Batesville Casket Bldg Sells for $6M

Industrial Property Trust acquired the Batesville Casket Building at 9770 Commerce Cir. in Kutztown, PA from Hillenbrand, Inc. for $6 million, or about $72 per square foot. 

The single-story, 88,000-square-foot warehouse was constructed in 2000 in the Lehigh Valley Industrial submarket, part of Arcadia West Industrial Park. The building sits roughly on 11 acres, and features 12 loading docks and two drive-ins. 

The building is fully leased to Batesville Casket Company, Inc., a designer, manufacturer, distributor, and seller of funeral service products.

Tuesday, November 11, 2014

"The Liar's Ball": The Book Donald Trump Doesn’t Want You to Read

Largest Philly Development Land Parcel on Market for Sale

by Joseph N. DiStefano Staff writer for the Philadelphia Inquirer

Commercial real estate broker CBRE Inc. is offering the former Frankford Chocolate factory, a 241,000 square foot brick complex on a 100,000 sf lot at 2101 Washington Ave., For Sale. "This is the largest piece of available development land in the city at the moment," CBRE's Robert Fahey says. Has Center City finally reached that old industrial strech of Washington? "It's the hottest residential neighborhood in the city for people of decent means who want to walk to work," Fahey insists.

The ex-factory's late owner, Vienamese immigrant turned New York low-rent hotelier Truong Vinh Tran, paid a modest $5.75 million for the property in 2007, and proposed a $100 million senior housing/medical/grocery mixed-use development centered on the city's Vietnamese community. Troung's project was scaled down and approved by the city, but languished in the recession; he died in 2012, leaving the project in litigation among his many descendants. At double the 2007 price -- say, $100/sf -- it could go for $12 million, Fahey says.

Truong's assets -- he was majority owner of Alphonse Hotel Corp. -- are being sold in liquidation, says lawyer Kevin Smith, at Stroock & Stroock & Lavan, which represents estate administrator Ernst Rosenberger, a retired judge. The estate has agreed to sell the Hotel Carter, Truong's flagship property, to Chetrit Organization of New York for a price Smith confirmed was "more than $175 million."

The Frankford Chocolate site is zoned I-2 and offers buyers a choice: "to convert the existing building into a residential use with commercial space while emphasizing the historic aspect, or demolish the building and start from the ground up," CBRE says. The brick heart of the complex dates to 1865 and may be eligible for federal Historic Investment Tax Credits.

'Strong' Demand for Commercial Space: Greenslade (Video)

Skip to min 6:00 if you want to hear about office trends

Monday, November 10, 2014

Philadelphia Office Deliveries, Construction and Inventory

During the third quarter 2014, two office buildings totaling 219,036 square feet were completed in the Philadelphia market area. This compares to nine buildings totaling 455,834 square feet that were completed in the second quarter 2014.

There were 3,506,297 square feet of office space under construction at the end of the third quarter 2014.

Some of the notable 2014 deliveries include: Two City Center, a 296,025-square-foot facility that delivered in second quarter 2014 and Five Crescent Dr, a 207,779-square-foot building that delivered in first quarter 2014 and is now 100% occupied.

The largest projects underway at the end of third quarter 2014 were Comcast Innovation & Technology Center, a 1,566,794-square-foot building and FMC Tower / Walnut Street Tower, an 830,000-square-foot facility.

Total office inventory in the Philadelphia market area amounted to 402,879,847 square feet in 20,930 buildings as of the end of the third quarter 2014. The Class-A office sector consisted of 129,867,900 square feet in 966 projects. Within the Office market there were 985 owner-occupied buildings accounting for 37,487,321 square feet of office space.

This trend is compared to U.S. National Office deliveries and construction, which saw 233 buildings totaling 13.16 million square feet complete construction, with an additional 108.2 million square feet of office space still under construction at the end of the third quarter. 8 Education St, a 321,503-square-foot office building in the Boston market delivered this quarter, as did the 409,000-square-foot facility at 3965 Eagan Outlets Pky in the Minneapolis market, while the 1.5 million-square-foot State Farm Campus in the Dallas / Ft. Worth market is still underway. Total office inventory in the U.S. market totaled almost 10.44 billion square feet in more than 502,400 buildings at the end of Q3 2014, including some 22,000 owner-occupied buildings accounting for 930 million square fee

Whole Foods planned for Ellis Preserve in Newtown Square

by Natalie Kostelni, Staff Writer for the Philadelphia Business Journal

Whole Foods Market has signed a lease at Ellis Preserve in Newtown Square, Pa., and will serve as the anchor for the first phase of the retail portion of the 210-acre mixed-use development.
The grocer leased 41,700 square feet and the store will have direct access from Route 3 and Winding Way.

Equus Capital Partners, the Philadelphia developer of Ellis Preserve, plans to construct a total of 114,000 square feet of retail space in the first phase. A portion of that space will be occupied by Whole Foods and the remaining 72,300 square feet will be leased to other tenants.
Equus will seek to fill that space with a "high-end mix of shops and restaurants," said Steven Spaeder of Equus Capital. "Whole Foods use and the architecture will set the tone. Walnut Street will be our prospecting turf."

The first phase will also include constructing a 127-room hotel. Work is scheduled to begin on the project in the spring.

Full story:

Sunday, November 9, 2014

EPR Properties CEO: Industries very healthy (Video)

Negotiating Your Commercial Lease? Why Should You Use a Broker?

Unless you work for a brokerage firm, you are not an expert when it comes to commercial real estate leases. Leave it to the experts when it comes time to negotiate your lease.
Often times, a landlord will be more willing to discuss a better deal to the tenant based on the simple fact that they are working with a broker. A broker’s mere presence shows the landlord that the tenant is serious about a competitive offer. The key to a successful contract negotiation is competition. A broker will ensure that the tenant has their needs met and help them to lock down the best deal possible.

A broker has the time and resources to investigate and negotiate on behalf of the tenant. For someone without the resources of an experienced broker, these negotiations can be very time consuming. During a lease negotiation, a broker would be able to bring five important services to the table on behalf of their tenant.

1) Investigate the economic market to grab the best deal for a tenant
2) Create a competitive bidding environment between a landlord and a tenant
3) Handle the paperwork and transactions involved in a negotiation
4) Serve as a representative on behalf of a tenant’s legal rights
5) Analyze the needs of a tenant and investigate all properties suitable for those needs
Original Blog:

Friday, November 7, 2014

Luxury Apartments Where the Berlin Wall Once Stood (Video)

Our kids will not even believe there was a wall there at one time.

Sears higher on REIT exploration (Video)

CIT Refinances Five Tower Bridge

by Steve Lubekin,
CIT’s Real Estate Finance unit helped MIM-Hayden Real Estate Fund I, LP, an investment fund sponsored by Hayden Real Estate Investments and Miller Investment Management refinance Five Tower Bridge, an eight-story class A office tower located in West Conshohocken, PA. CIT provided a $55 million senior secured loan through CIT Bank, the US commercial bank subsidiary of CIT. Terms of the transaction were not disclosed.

“This property, along with a few other properties in the area, set the highest asking rents in the market, says Anthony J. Hayden, managing director of MIM-Hayden Real Estate Fund. “Many executives living along the Main Line prefer the easy commute to West Conshohocken and appreciate that employees are not subject to the city of Philadelphia wage tax. CIT’s single lender execution, market knowledge and flexible terms were the keys to awarding this business. CIT performed flawlessly. We are already working with them on other financing and look forward to continuing to grow our relationship."

This is CIT’s third transaction in the last year in the suburban Philadelphia office market. In November 2013, CIT financed the recapitalization and repositioning costs of a six-building, 200,000-square-foot office park in Conshohocken and an 89,000-square-foot, class A office building in Malvern, PA.

“We’re pleased to provide this financing to MIM-Hayden Real Estate Fund to support the refinancing of its Five Tower Bridge office tower, which is located in one of Philadelphia’s strongest suburban office markets,” says Matt Galligan, president of CIT Real Estate Finance. “Our extensive expertise in the greater Philadelphia market and our deep experience in financing commercial real estate assets allowed us to develop a customized financing solution in a timely manner. We look forward to building on this new relationship.”

Thursday, November 6, 2014

Weis Plaza Sold for $4.2M

Phillips Edison & Company sold the Weis Plaza shopping center at 15260-15262 E. Kutztown Rd. in Kutztown, PA to Nassimi Realty Corporation for $4.15 million or approximately $36 per square foot.

The 115,000-square-foot retail strip was constructed in 1976 on 12.9 acres in the Berks County submarket of Philadelphia.

Korman Commercial Sells Interstate Business Park Bldg 24

Korman Commercial Properties, Inc. sold Bldg 24 in the Interstate Business Park, located at 281 Benigno Blvd. in Bellmawr, NJ to Bellmawr Laundry LLC for $2.81 million, or $38 per square foot.

The single-story, 74,000-square-foot industrial building was constructed in 1970 in Camden County.

Shippensburg Lowe's Sells for $24.4M

A New York-based investor acquired the retail building at 250 S. Conestoga Dr. in Shippensburg, PA from Excel Trust, Inc. for $24.4 million, or about $143 per square foot.

The 171,069-square-foot, freestanding retail building was constructed in 2008 on 21.3 acres in the Harrisburg Area West submarket of Cumberland County, in Central PA.

Monday, November 3, 2014

Philadelphia Industrial Vacancy Decreases to 8.3%

he Philadelphia Industrial market ended the third quarter 2014 with a vacancy rate of 8.3%.

The vacancy rate was down over the previous quarter, with net absorption totaling positive 3,482,534 square feet in the third quarter. That compares to positive 3,536,167 square feet in the second quarter 2014. Vacant sublease space decreased in the quarter, ending the quarter at 942,647 square feet.

Tenants moving into large blocks of space in 2014 include: Walmart Distribution moving into 1,200,000 square feet at 2785 Commerce Center Blvd, Ocean Spray moving into 980,000 square feet at West Hills Business Center - Building A, and Kane Warehousing, Inc. moving into 955,935 square feet at Distribution Center 6 in the Stauffer Industrial Park.

Rental rates ended the third quarter at $4.49, no change over the previous quarter.

A total of four buildings delivered to the market in the quarter totaling 906,337 square feet, with 12,035,258 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 7.5% from the previous quarter, with net absorption positive 64.71 million square feet in the third quarter. Average rental rates increased to $5.47, and 206 industrial buildings delivered to the market totaling more than 30.8 million square feet.

Recent Real Estate Deals

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

Hagen Properties sold a 15,150-square-foot building on 1.22 acres at 1642 Woodhaven Drive in the Woodhaven Industrial Park in Bensalem for $840,000. Creative Commercial Prop bought the property to house its Creative Architectural Metals Inc., which is leasing space at 309 Cramer Drive in Bensalem. 

Laborers District Council Benefit Fund leased 13,667 square feet at 665 N. Broad St. in Philadelphia. The union had been in 475 N. 5th St. in Philadelphia.

R.C. Moore Inc., a distributor for Monster Beverage Corp., bought a 289,000-square-foot warehouse building at 301 Oak St. in Pittston, Luzerne County, for $9.4 million from Endurance Real Estate, which bought the building in 2012 for $4.36 million. R.C. Moore leased the building while Endurance was in due diligence and later negotiated to buy the property. 

Hayden Maguire Real Estate Fund paid $45.6 million for a five-building office-flex portfolio totaling 317,782 square feet in the Avion Business Park in Chantilly, Va. The portfolio was in foreclosure and bought through a special service. It was about 85 percent occupied.

Brandywine Realty Trust is teaming up with LCOR and the California State Teachers' Retirement System to construct 1919 Market St. in Philadelphia.
Work is expected to begin soon on the 29-story, 455,000-square-foot mixed-use project. It is scheduled to be completed by spring 2016.

$20M mixed-use development planned for Bryn Mawr

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

Blank Aschkenasy Properties has plans to construct a $20 million mixed-use project on Lancaster Avenue in the heart of Bryn Mawr.

The project, called Bryn Mawr Village, will be built at 909 Lancaster Ave. on several parcels that Aschkenasy assembled over the last few years on Lancaster and along Merion Avenue. The site includes a surface lot and adjacent structure that had been used by Verizon.

Bryn Mawr Village will consist of nearly 60,000 square feet. The main part will be 53,000 square feet and roughly 35,000 square feet will be retail space and 17,000 square feet will be office space. The architect is Bernardon Haber Holloway.

That spot in Bryn Mawr has been somewhat of a "hole" along Lancaster Avenue, said Paul Aschkenasy.

"Bryn Mawr is really the center and the heart of Lower Merion in many ways," he said. "These two blocks have struggled and there has been a hole in this area for a long time. For that market, it has been somewhat of a blight."

The company is in the process of getting its land development approvals.
Full story:

Friday, October 31, 2014

Mack-Cali Leases 40K SF in South Jersey Properties in 3Q

Mack-Cali leased about 40,000 square feet at its office and office/flex commercial real estate properties in Southern New Jersey during the third quarter.

Highlights of the third quarter transactions include:

EVO Merchant Services, LLC, a payments service provider, renewed its lease for 19,200 square feet at 102 Commerce Drive in Moorestown, NJ. Located in Moorestown West Corporate Center, the 38,400-square-foot office/flex building is 100 percent leased.

Tricomm Services Corporation, an IT technology service provider, is relocating within the building to 12,000 square feet at 1247 North Church Street, also in Moorestown. The transaction represents an expansion of 7,200 square feet and an extension of 4,800 square feet. Also located in Moorestown West Corporate Center, the 52,790-square-foot office/flex building is 86.7 percent leased.

SCSK, a subsidiary of Sumisho Computer Systems Corporation, a Japanese IT services company, signed a new 9,600-square-foot lease at 3 Terri Lane in Burlington Township, NJ. Located in Bromley Commons, the 64,500-square-foot office/flex building is 100 percent leased.

Wednesday, October 29, 2014

Kahns Sells Montgomeryville Retail, Land for $3.5M

Chick-Fil-A, Inc. acquired the retail building and adjacent lot at 794-798 Bethlehem Pike in Montgomeryville, PA from Kahns, Inc. for $3.5 million.

Included in the sale was a 22,050-square-foot, freestanding retail building on 1.9 acres in the Ft Washington / Spring House submarket of Montgomery County, and the adjacent 0.64-acre vacant lot - a pad site for the Route 309 Mall.

Retail mogul: Tech converging with brick & mortar (Video)

Newly Renovated Auburn Station Sold for $10.6M

Moshe Weiss acquired the 85-unit Auburn Station at 375 Auburn St. in Allentown, PA from Auburn Realty Corp. for $10.55 million. Included in the sale was additional land that could hold an additional 49 units.

The 90,330-square-foot, loft-style, multifamily property was originally built in the early 1900's. When originally built the property only offered 40 units. Prior to selling the property was fully gutted and renovated. The renovation was completed in June of this year and more than doubled the available units. At the time of sale the property was 95 percent occupied.

Predictions for Center City office market: Dark clouds for landlords

Philadelphia Business Journal

For any tenant looking to lease Class A office space in Center City Philadelphia today, they are encountering something they haven't seen in quite some time: a landlord's market. While there are still some buildings experiencing softness, many of the higher end towers are at near record occupancy levels and, therefore, commanding much higher rents than we saw in 2008-2010. The good news for tenants? Over the next three years, several scenarios are playing out which could very likely throw the Center City market into a tailspin.

Here are 10 scenarios which, individually and in the aggregate, could put significant downward pressure on Center City rents by 2017:

1. In mid 2016, FMC Tower at Cira Centre South will open with about 200,000sf of speculative office space. Unless this space is leased by new tenants in the market or new demand from growing tenants in the city, this space will likely create net vacancy in the Center City market.

2. Comcast's new Innovation and Technology Center is slated to open in 2017. Until then, Comcast has been accommodating its growth by leasing up short term space around the city. Comcast will soon have close to 500,000sf of office space in the city outside of Comcast Center. If a good portion of this Comcast space consolidates into the new tower in 2017, it will create significant vacancy in the city's Class A market.

3. FMC (200,000sf), Sunoco (200,000sf) and Bank of New York/Mellon (180,000sf) have all announced that they are either vacating Mellon Bank Center (FMC and Sunoco) or significantly downsizing (BNY Mellon). With close to 500,000sf of vacancy in Mellon Bank Center by 2017, this will create downward pressure on rents.

4. Cigna recently announced that it is downsizing its Center City presence by close to 150,000-200,000sf and may decide to vacate Two Liberty all together. In addition, the Two Liberty owners recently changed their mind about converting the top of the tower into a hotel (the planned condos haven't been selling well). If the owners decide to convert this space back to its original office use, this increase in inventory will drive down rents in other trophy towers and Class A buildings.

5. One Franklin Plaza, which was vacated by GlaxoSmithKline last year, has still not come back onto the market. Unless all of this building is repurposed for university, health care system, apartments and/or hotel, it could provide another option for office tenants. To date, Center City landlords have been spared any negative impact from Glaxo's move to the Navy Yard. When the company moved, it freed up over 800,000sf of office space in the CBD which many landlords feared would put significant downward pressure on rents. However, Three Franklin Plaza (200,000sf) was quickly purchased by a new performing arts charter school and One Franklin Plaza (600,000sf+) remains in limbo while the owner, Commonwealth REIT, figures out what to do with it. If One Franklin Plaza comes back into the office building inventory, especially if it is renovated and upgraded, it could change the landscape for office rents.

6. 1900 Market Street will soon have close to 300,000sf of vacancy when Cozen O'Connor vacates in 2015. The owner, Brandywine Realty Trust, will deal with this vacancy carefully as it could negatively impact the value (and rental rates) of its remaining and substantial Center City portfolio. As the largest property owner in the city, no one is more aware of the pending threats to the office market than they are.

7. The trends in corporate space utilization continue to go in the wrong direction for landlords. Companies are consuming less and less square feet per employee and corporate America hasn't even truly embraced hoteling or telecommuting in a big way yet. These emerging trends could transform office demand across the globe. Glaxo went from close to 300sf/employee to less than 150sf/employee when it moved to the Navy Yard. And virtually every large law firm in the city has given back one or two floors of space as their leases have expired over the past three years. As general demand continues to shrink, rents should drop.

8. Two important trends have saved Center City landlords over the past five years: (1) office buildings have been converted into apartments at a dizzying pace thereby reducing total office supply and (2) health care systems and universities have been leasing up center city office space to free up "on campus" space for core business uses. These two trends may both be coming to an end. Recent reports show that apartment rent growth is slowing in the region with a large number of new units still in the pipeline. If the multi-family bubble bursts and conversions are no longer economically viable, the office inventory will stabilize. Drexel is planning an Innovation neighborhood in University City. When development proceeds, Drexel may bring their folks back near campus freeing up office space in the CBD. If Innovation Neighborhood takes off, it could draw other Center City tenants West of the Schuylkill.

Full story:

Tuesday, October 28, 2014

Clarion and MRP To Develop 1.5 Million Square Foot Gateway Logistics Park

by Steve Lubetkin

Real estate investment manager Clarion Partners and MRP Industrial, the industrial real estate affiliate of MRP Realty, have acquired the former I-81/I-78 Logistics Park, a planned 129-acre, two-building, 1,502,000 square foot class A industrial center in Union Township, Lebanon County, PA. The development, which will now be named Gateway Logistics Park, includes pad-in-place development parcels for both a 1,002,000 square foot and 500,000 square foot distribution center.

"Clarion is very excited to be partnered with MRP Industrial on the acquisition and development of this project in Central Pennsylvania. With the market’s supply constraints we feel we are well positioned to capture build-to-suit opportunities or build spec inventory,” says Andy Sitzer, senior vice president with Clarion Partners. “This will be the third project the two companies have joined forces; the others are Fulling Mill Road in Harrisburg and Burlington Industrial Park in Burlington, NJ.”

“This acquisition addresses the surging demand for modern, bulk distribution centers with the ability to service the entire Northeast region from a single facility,” says D. Reid Townsend, principal with Baltimore-based MRP Industrial. “Over the past 12 months, the Central Pennsylvania market has experienced nearly eight million square feet of new absorption, with a steady pipeline of new tenants entering the market. The park’s visibility, access and amenities will be an attractive option for a wide range of future distribution requirements.”

Gateway Logistics Park is located at the intersection of Interstate 81 and Interstate 78. The development will provide prominent interstate visibility and convenient access to the region’s major metropolitan areas of New York, Philadelphia, Baltimore and Washington DC, all located within 150 miles. The property is also located within 30 miles of FedEx Ground, FedEx Freight and UPS distribution hubs, responding to the growing trend of direct-to-consumer fulfillment requirements for the retail market. MRP Industrial, in partnership with Clarion Partners, has completed building design and is evaluating both build-to-suit and speculative development opportunities.

In early 2014, the property was approved into the Commonwealth’s Local Economic Revitalization Tax Assistance (LERTA) program, providing future tenants with partial real estate tax relief during the initial ten years of occupancy. When fully developed, Gateway Logistics Park is projected to support over 1,000 new, full time jobs in Lebanon County and provide an immediate boost to support the Union Township, Lebanon County and Northern Lebanon School District operating budgets.

Brandywine, LCOR Team Up For Center City High-Rise

A 29-story, 455,000-square-foot residential glass tower will serve as the centerpiece for a mixed-up development in central Philadelphia under a newly announced joint venture of Brandywine Realty Trust (NYSE: BDN) and LCOR, which is partnering with the California State Teachers Retirement System (CalSTRS).

Construction will begin immediately with an expected spring 2016 delivery.

The 50/50 joint venture at 1919 Market Street will include residential, retail and parking, with 321 luxury units and 24,000 square feet of commercial space that is 90% pre-leased to Independence Blue Cross and CVS, plus a 215-car structured parking facility.

Brandywine contributed the land and will manage the retail and parking. LCOR will oversee construction of the project and will be responsible for the marketing, leasing, and management of the apartments.

Barton Partners is the architect for the project and Hunter Roberts Construction Group is the construction manager.

"Brandywine has a significant investment in the Philadelphia CBD and is committed to the resurgence of the Market Street West submarket," said Brandywine President and CEO Gerard H. Sweeney, noting that the development "adds tremendous neighborhood value to our 7 million square feet of office space."