Friday, February 28, 2014

Developer's proposals aimed at attracting Millennial

By: Joseph N. Distefano, Staff writer for the Philadelphia Inquirer
Bill Glazer, boss at Keystone Property Group, collects aging office buildings, mostly suburban.
He says his Bala Cynwyd-based firm now controls north of 10 million square feet, about seven times the size of the new tower Comcast wants to build at 18th and Arch Streets.

"It's a big job. But it's a fun job," Glazer told me Wednesday, two days after he agreed to pay $231 million for 12 buildings (2.3 million square feet) in the suburbs of New York.

Keystone last year paid $233 million for buildings totaling 1.6 million square feet in Westlakes Office Park in Berwyn, Sentry Park in Blue Bell, and other suburban sites, from the same seller, Mack-Cali Realty Corp., of Edison, N.J., whose bosses now believe there's more money to be made in apartments.

Glazer convinced some cold-eyed lenders, including Deutsche Bank, to back last year's deals - at prices less than half of what suburban buildings used to fetch, or a third of what new construction would cost.
Cheap for a reason, no? "The whole office sector has been a tough space over the past few years," Glazer acknowledged. U.S. employment hasn't yet recovered to 2007 levels.

So how's he going to turn these deals to profits? "By reinventing the workspace with technology, fitness, and lifestyle," Glazer says cheerfully.
What's that mean? He directed me to his proposal for 100 Independence Mall West, the old Rohm & Haas building, where he's asked restaurant owner Michael Schulson to "craft an outdoor beer garden," plus "a very cool cafe" aiming for the street ambience of the Standard Hotel in New York's Meatpacking District.
Pretty picture. How will he extend it to Blue Bell? Glazer urged me to watch how people my kids' age work - same as they hang out: in open areas instead of cubicles, eating healthy stuff, tapping laptops and handhelds, among a crowd doing the same.

"Baby boomers wanted a sense of entitlement: their own office, in the corner. That's not what the Millennial workforce wants," says Glazer. "They want collaboration. They want connectivity. They want the vibe, the energy you can't get sitting by yourself in the office."
So he's urging suburban townships to zone more eating and drinking establishments, even apartments, for his office buildings. Having bought at bargain prices, he can afford glassy lobbies, hiking trails, landscaping, utility upgrades - and lower rents that appeal to little firms and professional offices that have had to make do with funky unrenovated spaces.
Great. Can I meet some of these cool new tenants? "I'll have plenty to show you in the next few months," he promised.

Sam Zell on Current RE Values (Video)

Wednesday, February 26, 2014

Schindler Opens Elevator Manufacturing Facility in South Central PA

Schindler Elevator Corp. has opened a 150,000-square-foot manufacturing plant in Hanover, PA, the first elevator manufacturing facility in North America to receive a LEED Gold sustainability certification. 

A facility will support the global supply chain of the Morristown, NJ-based company, producing doors, entrances, jambs and elevator cab interiors. The plant also includes an order fulfillment warehouse. 

Schindler has maintained a manufacturing presence in south central Pennsylvania for many years, said Jakob Zueger, CEO, Schindler Americas. 

The new facility achieved LEED for implementing measurable solutions for high performance in sustainable site development, water conservation, energy efficiency, materials selection and indoor environmental quality.

Keystone Buys More Property from Mack Cali

Mack-Cali Realty Corp.  has arranged to sell a 2.3-million-square-foot portfolio of 12 office properties in Northern New Jersey, New York and Connecticut to Keystone Property Group for $230.8 million. 

Pennsylvania-based Keystone and Edison, NJ-based Mack-Cali announced they have agreed to form various joint ventures under which Keystone will pay $201.7 million in cash and the balance in senior and subordinated equity. 

The tri-state transaction, the fifth deal between Keystone and Mack-Cali, extends Mack-Cali's strategy of selling suburban office properties to enter the apartment business. The deal also furthers Keystone's goal of expanding its regional commercial property footprint. 

The companies did not give an estimated closing date for the transaction, which is subject to the usual due diligence and obtaining necessary waivers or non-exercise of certain rights of first offer before the sale can close. 

"This transaction is another step forward in our strategy to redeploy capital into our multifamily platform, while participating in the upside that will be created by the repositioning of this portfolio," said Mitchell E. Hersh, president and CEO of Mack-Cali. 

Keystone has been Mack-Cali's go to buyer lately. Last year, Keystone acquired 14 office properties and three land parcels in suburban Philadelphia from Mack-Cali. That deal was followed by the JV purchase by Keystone, Mack-Cali and Parkway Corp. of 100 Independence Mall West, a 400,000-square-foot office building in Philadelphia's CBD. 

In 2012, Keystone bought Moorestown Corporate Center in Moorestown, NJ; and 16 and 18 Sentry Park West in Blue Bell, PA. 

The Mack-Cali tri-state office portfolio includes the following properties: 

--Two buildings at 555 and 565 Taxter Road in Taxter Corporate Park in Elmsford, NY, 344,563 square feet; 

--570 Taxter Road in Elmsford NY, 77,859 square feet; 

--Two buildings at 200 and 220 White Plains Road in Talleyrand Office Park in Tarrytown, NY, 175,749 square feet; 

--1717 Route 208 North in Fairlawn, NJ, 150,477 square feet; 

--30 Knightsbridge Road in Piscataway, NJ, 686,316 square feet; 

412 Mt. Kemble Road in Morris Township, NJ, 477,843 square feet; 

--Three buildings at 470, 400 and 530 Chestnut Ridge Road in Montvale, N.J., 200,444 square feet; 

--Soundview Plaza at 1266 East Main Street in Stamford, CT, 179,610 square feet.

Tuesday, February 25, 2014

JV Pays $33M for Avenue of the Arts Bldg Philadelphia

MRP Residential, Inc. and Principal Real Estate Investors LLC have teamed up to acquire the residential portion of the Avenue of the Arts Building at 1338-1348 Chestnut St. in Philadelphia, PA from Ashkenazy Acquisition Corporation for $33 million. 

The 17-story, 283,126-square-foot property was originally built in 1987 on almost half an acre in the Avenue of the Arts South submarket of Philadelphia, at the corner of S. Broad Street. It is currently comprised of 74,031 square feet of retail space below 176 two-bedroom apartments currently utilized for student housing by the Art Institute of Philadelphia. The retail portion not involved in this sale is occupied by Capital Grille, Olive Garden, and the Art Institute. 

However, the buyer acquired just the residential portion comprised of 209,095 square feet on floors 4 through 17. The buyer plans to renovate and upgrade the space into 220 upscale apartments, which would result in an acquisition price of $150,000 per unit. Expected delivery for the renovations is scheduled for 18 months.

Tom Barrack Outlook on Real Estate (Video)

Friday, February 21, 2014

Philadelphia's Industrial Deliveries, Construction and Inventory

During the fourth quarter 2013, four Industrial buildings totaling 764,000 square feet were completed in the Philadelphia market area. This compares to two buildings totaling 526,590 square feet that were completed in the third quarter 2013. 

There were 5,023,394 square feet of Industrial space under construction at the end of the fourth quarter 2013. 

Some of the notable 2013 deliveries include: First Logistics Center @ I-83, a 708,000-square-foot facility that delivered in fourth quarter 2013, and Subaru, a 526,050-square-foot building that delivered in second quarter 2013 and is now 100% occupied. 

The largest projects underway at the end of fourth quarter 2013 were West Hills Business Center - Building A, a 980,000-square-foot building with 100% of its space pre-leased, and Berks Park 78 - Dollar General, a 906,919-square-foot facility that is 100% pre-leased. 

Total Industrial inventory in the Philadelphia market area amounted to 1,012,355,131 square feet in 19,861 buildings as of the end of the fourth quarter 2013. The Flex sector consisted of 83,247,212 square feet in 3,244 projects. Within the Industrial market there were 2,549 owner-occupied buildings accounting for 234,313,339 square feet of Industrial space. 

This trend is compared to U.S. National Industrial deliveries and construction, which saw 150 buildings totaling 18.5 million square feet complete construction, with an additional 98.46 million square feet of industrial space still under construction at the end of the fourth quarter. The 1.62 million-square-foot Home Depot Distribution Center delivered in the Chicago market, while a 2.1 million-square-foot manufacturing building was still underway in the Phoenix market. Total industrial inventory in the U.S. market totaled 20.87 billion square feet in almost 615,000 buildings at the end of the fourth quarter 2013, including almost 68,000 owner-occupied projects.

Montco to borrow to pay its bills until tax receipts arrive

As the sale of the county-owned Parkhouse nursing home stretches weeks beyond its intended closing date, Montgomery County faces hundreds of thousands of dollars in costs it had hoped to avoid.
The county expected to have a $35 million check for Parkhouse by the end of 2013, money that would float the county's expenses in the first quarter of 2014. 

Without that check, the commissioners voted Thursday to borrow $9.75 million to pay its bills until tax receipts begin arriving in March.

The amount of the Tax Revenue Anticipation Note approved Thursday is a fraction of what was borrowed in previous years, and Commissioners Chairman Josh Shapiro emphasized that "this is not a budget-related issue. It's a cash-flow issue."

The short-term loan will cost the county $10,000 in interest and $31,000 in fees, said the county finance director, Uri Monson.

County officials said the delays were unrelated to a county controller's report that found an ethical violation by a Parkhouse doctor who was investing in the real estate deal. The doctor was fired Wednesday, but the report found no legal reason to halt the sale in Upper Providence Township.

Although inspections and minor repairs are taking longer than expected, the commissioners said they were a normal part of the due-diligence process. The deadline was extended to Jan. 31, Feb. 13, and now March 6.

In the intervening time, Parkhouse payroll and operating expenses cost the county about $50,000 a week, Monson said.
The county has also paid nearly $15,000 in extra repairs and engineering reports as part of the negotiations.

Thursday, February 20, 2014

Transportation consulting firm takes two new office leases in Center City

Natalie Kostelni Staff writer for the Philadelphia Business Journal

HNTB Corp. has signed two new leases and expanded its local presence.
The New York transportation consulting and engineering firm leased 17,700 square feet at 1650 Arch St. in Philadelphia and will relocate from about 13,000 square feet 8 Penn Center. The company has also taken 6,800 square feet at 680 American Ave. in King of Prussia, Pa., and will be moving from 4,500 square feet at 2 W. Lafayette St. in Norristown, Pa. HNTB has four offices in Pennsylvania with a total of 120 employees.
It picked 1650 Arch because it was still near the commuter rail system and concourse but also had room for it to expand. The King of Prussia location allows the firm to be near major highways as well as PennDot’s sixth district office.
The company has maintained a Pennsylvania presence for the last 20 years, having worked on the first phase of the Blue Route during the 1970s. HNTB then moved out of the state for years and re-established an office in the late 1980s, said Yassmin Gramian, vice president and district leader for HNTB’s Pennsylvania operations.
For years, it focused on traffic engineering and rail services but diversified into highway, aviation and other services. It has locally worked with SEPTA on infrastructure and other improvements, the Pennsylvania Turnpike Commission on converting the highway with an electronic toll system and the Philadelphia International Airport.

Carol Manor Apartments trades for $1,050,000

Carol Manor Apartments, an 18-unit apartment property located at 4300 Pearson Avenue in  Philadelphia, PA asset sold for $1,050,000.

 “The building had some challenges due to a fire around the turn of 2013 which caused occupancy to dip,” said Newton.  “At the time of sale, the building was 65% occupied.  Nonetheless, we generated tremendous interest in the property and the ultimate buyer was focused on future cash flow instead of current income,” he added.  “This transaction speaks to the demand within the multi-family arena today.  Out of state capital tends to be forward looking while local investors often focus on the rear-view mirror. We’re very pleased with how this deal played out.  

Tuesday, February 18, 2014

Polaris Logistics Takes Pennsauken Building

Industrial Investments, Inc. of Blue Bell, PA, has signed a new lease with Polaris Logistics for 142,500 square feet at a building it owns here, about 15 minutes outside of Philadelphia.
Polaris, which is headquartered in Gloucester City, also just across the Delaware River from Philadelphia, will use the building for both warehousing and distribution. The structure is located at 500 Griffith Morgan Lane.
The Polaris Logistics Group offers warehousing nine cities in the United States and Canada.  It offers clients assistance with managing inventory and will disassemble large shipments and re-assemble and re-package them into smaller orders.

Monday, February 17, 2014

1000 Continental KOP office building trades for $63M

by Natalie Kostelni Staff writer for Philadelphia Business Journal
A King of Prussia, Pa., office building has traded for $63 million.
KBS Realty Advisors bought 1000 Continental Drive, a 205,424-square-foot building from Equus Capital Partners Ltd. of Philadelphia. The building was 99 percent occupied at the time of the sale.
The LEED silver building was constructed on speculation in 2008 by Equus development affiliate, BPG Development Co. Tenants include Hartford Insurance, Nationwide, FT Services, Sedgwick Services, Farmers Insurance, UNUM and Guinan Financial Group.

Sunday, February 16, 2014

Greiner Packaging Int'l Inks 114,000-SF Lease

Greiner Packaging International has pre-leased 113,871 square feet at 225 Enterprise Way in Pittston Township, PA. 

The Austrian firm will house its US headquarters here starting in April 2014, creating as many as 128 full-time jobs over the next three years and investing $17 million in manufacturing and equipment at the facility where it plans to package cups, lids, and other items for the food industry. The deal was made possible thanks to funding and grants from the Department of Community and Economic Development, Pennsylvania First Program, Job Creation Tax Credits, and Gov. Tom Corbett's Governor Action Team. 

The 223,000-square-foot industrial warehouse is currently under construction on 24.3 acres in the I-81 Corridor Industrial submarket of Philadelphia's Luzerne County. When completed in March, the warehouse will feature 29 loading docks and a drive-in, 33-foot clear heights, and 800-amp heavy power.

Philadelphia's Retail Deliveries, Construction and Inventory

During the fourth quarter 2013, 15 retail buildings totaling 252,369 square feet were completed in the Philadelphia retail market. 

Over the past four quarters, a total of 1,008,403 square feet of retail space has been built in Philadelphia. In addition to the current quarter, 17 buildings with 436,926 square feet were completed in third quarter 2013. 

There were 282,479 square feet of retail space under construction at the end of the fourth quarter 2013. 

Some of the notable 2013 deliveries include: Wegmans, a 125,000-square-foot facility that delivered in fourth quarter 2013 and is now 100% occupied, and 3450 Fox St, a 124,900-square-foot building that delivered in third quarter 2013 and is now 90% occupied. 

Total retail inventory in the Philadelphia market area amounted to 490,015,456 square feet in 39,257 buildings and 2,552 centers as of the end of the fourth quarter 2013. 

This trend is compared to U.S. National Retail deliveries and construction, which saw 563 buildings totaling 10.42 million square feet complete construction, with an additional 46.5 million square feet of retail space still under construction at the end of the fourth quarter. A 747,500-square-foot retail facility delivered in the fourth quarter at 75 W. Rte 59 in the Northern New Jersey market, and a 628,000-square-foot building delivered in the Phoenix market back in the third quarter. Total retail inventory in the U.S. market totaled 12.4 billion square feet in more than 1.05 million buildings at the end of the fourth quarter 2013, including almost 97,000 shopping centers

Great American Pub to open in iconic Phoenixville building

The family that owns the Great American Pub has put the Columbia House in Phoenixville, Pa., under agreement with an eye toward bringing the popular eatery to the Chester County borough.
The Hemchers anticipate closing on the Victorian building at 148 Bridge St. in a month and has plans to spend roughly $500,000 to renovate the structure on the inside and out.
The 13,555-square-foot property, a landmark in Phoenixville, was put up for sale last year as part of a Chapter 11 bankruptcy proceeding filed by an entity that owned it. The property was initially listed for $1.8 million and then lowered to $1.6 million. The asking price was dropped to $1.4 million and the Hemchers are reportedly paying close to that amount.
This will be the fourth Great American Pub for the Hemchers. Other locations of the popular dining spot include West Chester, Pa., Wayne, Pa., and Conshohocken, Pa.
“It’s going to be magnificent,” Tom Hemcher said.
Plans call for restoring a decorative bar, installing new flooring and booths, putting up new stucco on the exterior among other interior and exterior improvements.
“It just needs a good cleaning,” Hemcher said.
The family had looked in Phoenixville 15 years ago but couldn’t find a property that worked for them. Someone recently mentioned to Hemcher that the Columbia House was on the market and he reached out to West, who had the listing. She told him the property was already under agreement. Then, three weeks ago, West called to tell him that the original deal had fallen through. The Hemchers seized on the opportunity.
“We all fell in love with it,” Hemcher said about the building. “It’s going to be the talk of the town.”
The location was also appealing because of the “good vibe” that Phoenixville has, he said.
“The town is really up and coming,” he said. “There’s a lot of energy there.”
Hemcher expects what will be called the Great American Pub and Hotel to open by summer. (It's not set to be a hotel, it's just borrowing the name from the building's past use.)

Wednesday, February 12, 2014

Troutbrook Development Co Purchases Hampton Inn Allentown

Yamunaji Corporation sold the Hampton Inn Allentown at 7471 Keebler Way in Allentown, PA to Troutbrook Development Company for $9.3 million, or $75,000 per room. 

The 56,280-square-foot hotel consists of 124 rooms and was built in 1988. The buyer is expected to invest millions to renovate the property.

Linden Court Apts Sell for $5.6M

M & M Management has acquired the Linden Court Apartments at 9181 Academy Dr. in Philadelphia, PA from private investors for $5.6 million, or $70,000 per unit. 

The 80-unit, 85,000-square-foot multifamily building was constructed in 1962 on 1.4 acres in the Torresdale submarket of Philadelphia County. The unit mix is comprised of 32 studios, 32 one-bedroom and 16 two-bedroom apartments that are fully occupied.

Tuesday, February 11, 2014

Bellevue Park Corp Ctr Bldgs Sold for $61.5M

Metzler North America sold its three office buildings in the Bellevue Park Corporate Center at 200-400 Bellevue Pky. in Wilmington, DE to the Buccini/Pollin Group (BPG) for $61.5 million, or about $201 per square foot. 

The seven-building, 4-Star, master-planned suburban office park was built in the late 1980s on 52 acres in the North New Castle County submarket of Philadelphia. It is currently 99 percent occupied by multiple tenants such as CIGNA, Blackrock, BNY Mellon, and MasterCard. The three buildings that transferred in this sale include: 

  • Bldg 200: five stories totaling 98,667 square feet; 
  • Bldg 300: three stories totaling 90,106 square feet; and 
  • Bldg 400: four stories totaling 117,277 square feet. 

    The properties have been institutionally-owned and maintained since its recent upgrades in 2005, when Metzler acquired the three-building portfolio for $69.4 million, or about $227 per square foot, according to CoStar data. See CoStar COMPS #1095255. 

    "The acquisition of the Bellevue Park Corporate Center further cements our commitment to the State of Delaware and the Greater Philadelphia office market," said Christopher F. Buccini, co-president of the Buccini/Pollin Group. "We are very focused on owning best-in-class assets whether they are in the office, hotel, residential or entertainment sector. With so many world class corporations calling Bellevue home, this is an extraordinary addition to our portfolio." 

    BPG's portfolio now tops six million square feet of commercial office space in the Greater Philadelphia MSA. The group also has more than $350 million in new projects under construction across the Northeast, including the 316-room Westin and Hilton Garden Inn hotels and the 116-unit Harlan Flats residential community, both in the Wilmington area. 

    Kimco is Cautiously optimistic for retail (Video)

    Monday, February 10, 2014

    Federal Govt. Getting Out of Warehouse Business

    The federal government’s main acquisitions and supply services group is revamping the way it does business, a move that could see it exit millions of square feet of warehouse distribution space. 

    The move comes as the U.S. General Services Administration’s Federal Acquisition Service (FAS) has been coping with reduced budgets. 

    “In this new environment, GSA must find new ways to provide better, faster and more efficient services to our military and civilian customers,” said Tom Sharpe, Commissioner, FAS. “To that end, we are preparing to make important changes to our business model which will transform the way we provide supplies and services to the government.” 

    “We are shifting to a model that uses the capabilities of our vendors to directly support GSA’s customers, simplify federal acquisition, and over the next five years save taxpayers a half billion dollars,” Sharpe said. 

    “In recent years, we have operated a wholesale supply business that relied on warehouse distribution centers serving U.S. customers as well as customers in Europe, Africa, the Middle East and around the Pacific Rim,” he said. “Along with the distribution centers, GSA also manages several retail stores around the world that stocked inventory from those warehouses. This model is costly, cumbersome and no longer the most efficient or effective approach to supporting our federal partners.” 

    Changing this system will mean an overhaul of FSA's wholesale and retail supply chain business models. Instead of routing federal agency orders to its distribution centers for fulfillment, the FSA will have its commercial suppliers ship directly to customers and retail stores. 

    “We will transition out of the warehouse business and GSA will no longer buy, store and ship those retail items,” Sharpe said. 

    While it is not clear just how much of the federal government’s warehouse inventory is used by the FAS, the GSA controls a total inventory of 25.56 million rentable square feet. It leases 16.1 million square feet and owns the remainder. 

    Its largest leased facility is a 1 million-square-foot facility at 1900 River Road in Burlington, NJ, which is used for the federal supply service. Its lease expires in December 2020. 

    The largest facility it owns and classifies as a warehouse is a 1 million-square-foot building at 9700 Page Blvd. in Overland, MO, the Charles F. Prevedel Bldg. 100. At present,, the building has considerable vacancy. The federal government considers about 863,000 square feet of the building available, which would make its vacancy rate about 86%. 

    FAS provides federal agencies more than 12 million different products and services, and more than $55 billion in information technology solutions and telecommunications services, assisted acquisition services, travel and transportation management solutions, and motor vehicles and fleet services annually. 

    FAS manages more than 210 thousand leased vehicles, more than 3 million charge cards, and provides personal property disposal services facilitating the reuse of $1.1 billion in excess/surplus property.

    Philadelphia's Office Deliveries, Construction and Inventory

    During the fourth quarter 2013, five office buildings totaling 374,040 square feet were completed in the Philadelphia market area. This compares to four buildings totaling 24,500 square feet that were completed in the third quarter 2013. 

    There were 797,349 square feet of office spaceunder construction at the end of the fourth quarter 2013. 

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

    The largest projects underway at the end of fourth quarter 2013 were 3737 Market St, a 340,000-square-foot building and Great Valley Corp Center, a 205,836-square-foot facility that is 100% pre-leased. 

    Total office inventory in the Philadelphia market area amounted to 400,032,971 square feet in 20,506 buildings as of the end of the fourth quarter 2013. The Class-A office sector consisted of 128,600,713 square feet in 950 projects. Within the Office market there were 910 owner-occupied buildings accounting for 35,631,708 square feet of office space. 

    This trend is compared to U.S. National Office deliveries and construction, which saw 177 buildings totaling 11.7 million square feet complete construction, with an additional 86.9 million square feet of office space still under construction at the end of the fourth quarter. 4 World Trade Center, a 2.85 million-square-foot facility delivered, while the 3.04 million-square-foot One World Trade Center in New York City is still underway. Total office inventory in the U.S. market totaled 10.37 billion square feet in almost 498,000 buildings at the end of the fourth quarter 2013, including almost 20,000 owner-occupied buildings accounting for 884.5 million square feet.

    Friday, February 7, 2014

    Work Begins at the Science Ctr. Apts.

    By Antoinette Martin  

    Southern Land Company  broke ground WEdnsday on a $110 million project that will transform a parking lot at 3601 Market St. in the Science Center into a 364-unit apartment tower.
    It will be the first residential building in the University City Science Center’s 50-year-plus history.  
    The 28-story residential tower, slated for completion next year, will include 14,600 square feet of retail space on the ground floor. The high-end apartment complex will have a resort-style rooftop pool, yoga and fitness center and a game room. The building will also provide parking for 200 cars and 140 bicycles.
    “3601 Market St. is a signature Southern Land project that we are excited to begin constructing,” said Tim Downey, CEO of the Nashville-based firm. “We take the opportunity to shape a neighborhood’s appearance and bolster its sustainability very seriously. The building will be a modern jewel for West Philadelphia.”
    Southern Land has created similar mixed-use multi-family developments in Nashville and the Dallas-Ft. Worth area, including the first sustainable mixed-use community in the state of Texas. It has several others in various stages of development in North Carolina, Colorado, Texas and New York.
    BLT Architects has designed the Philadephia project to extend the “neighborhood experience” along 36th Street. “We envisioned a modern building that would be both practical and appealing to the local community,” said principal Michael Prifti.
    The Science Center is a long-established incubator for start-up companies and technologies.  Its president & CEO Stephen S. Tang noted that, “The most successful innovation centers like Cambridge, MA., and San Francisco’s Mission Bay have woven into their communities places for people to live and play. “ He said, “3601 Market is a pivotal project for the Science Center as we transform our campus into a 24/7 innovation community.”

    Wednesday, February 5, 2014

    Paradise Property Pays $22.8M for Lafayette Hill Multifamily

    Paradise Property LLC acquired The Glen at Lafayette Hill multifamily community at 555 Andorra Glen Ct. in Lafayette Hill, PA from AEW Capital Management for $22.77 million, or about $163,813 per unit. 

    The three-story, 208,527-square-foot apartment building was constructed in 1999 on 18.1 acres in the Conshohoken / Plymouth Meeting submarket of Montgomery County. The 139 units are a mix of one-, two- and three-bedroom apartments were 91 percent occupied at the time of sale. 

    Security Storage Co Sells New Castle Industrial for $4M

    Calumet Enterprises LLC acquired the industrial building at 705 Morehouse Dr. in New Castle, DE for $4 million, or about $37 per square foot, from Security Storage Company. 

    The 108,000-square-foot warehouse was built in 1980 in the New Castle County Industrial submarket. It contains 15 loading docks and three drive-ins, 21-foot ceilings, and heavy power.

    Montgomery County Human Services Ctr Sells for $17.5M

    The County of Montgomery, PA sold the Montgomery County Human Services Center office building at 1430 Dekalb St. in Norristown, PA to Silverang Hallowell Development Company for $17.5 million, or approximately $51 per square foot. 

    The five-story, 346,000-square-foot office building was constructed in 1958 on 3.1 acres in the Norristown / Valley Forge submarket of Philadelphia. Montgomery County Health Department executed a 15-year leaseback for 125,000 square feet there.

    Interview with Sam Zell on Bloomberg TV

    Tuesday, February 4, 2014

    Liberty Closes Second Half of $697.3M Disposition

    Liberty Property Trust  has closed on its disposition of 48 properties totaling roughly 2.6 million square feet of office and flex space along with 19 acres of land to Connecticut-based Greenfield Partners LLC with Somerset Properties for $329.6 million. 

    The sale marks the final part of the previously announced sale that saw Greenfield take 49 properties from Liberty in December 2013 for $367.7 million. 
    See CoStar COMPS #2920492 

    The second half of this 97-property disposition for Liberty included 2.1 million square feet of office properties and 468,000 square feet of flex properties spread across the Mid-Atlantic. The portfolio was more than 88 percent leased at the time of sale.

    The largest property in this sale is the three-building Longview Executive Park (pictured, above) in Hunt Valley, MD. The 256,961-square-foot office campus was built in 1988 at 309-311 International Cir. on 14.1 acres in the Route 83 Corridor North submarket of Baltimore County. 

    The two sales mark the latest step in Liberty's ambitious asset repositioning program, under which it plans to increase its ownership of industrial property and reduce its exposure to office space in non-core markets. 

    Analysts noted the Liberty portfolio included properties with significant capital improvement requirements and near-term lease expirations. They expect the REIT's earnings to ramp up over the next several quarters as asset sale proceeds are reinvested.

    SEPTA Details $500M King of Prussia Rail Project

    by Jared Shelly Digital Producer- Philadelphia Business Journal
    SEPTA updated citizens today on its plans for the King of Prussia Rail project that could cost as much as $650 million. It plans to add stops to the Norristown high-speed line to serve a community now consumed by traffic.
    At its public meeting at the Radisson Hotel at the Valley Forge Casino, Byron Comati director of strategic planning for SEPTA, laid out three possible routes for the new extension: a PECO utility corridor, along Route 202 and along the Pennsylvania Turnpike. (Check out the accompanying map to see all the route alternatives.)
    "There is so much automobile traffic in that neck of the woods," said Comati, "and getting there from Center City Philadelphia and other points in region is challenging if you have to use the Schuylkill Expressway."
    The total cost of the project is estimated to range from $500 million to $650 million and is still about eight years away from being completed, said Comati in an interview before the event. Plans call for half of the money to come from federal dollars while the other half should come from state or local sources, he said.
    The project would add about three to four stops to the Norristown line to extend it into King of Prussia and Upper Merion Township. The new stops would most certainly include the King of Prussia Mall and are likely to include Valley Forge National Historical Park and the Valley Forge Casino Resort.
    A SEPTA line that extends into King of Prussia is sure to be welcomed by the mall's 30,000 workers, many of whom spend long bus or car rides on the Schuylkill expressway to get to work.
    "You are talking about a lot of delay, congestion and inefficacy for workers to get to jobs," said Comati.
    In the last public meeting about a year and a half ago, citizens were concerned about the aesthetics of the new rail lines and wondered if they should be at ground level or elevated in the air.

    Monday, February 3, 2014

    Philadelphia's Industrial Vacancy Decreases to 8.6%

    The Philadelphia Industrial market ended the fourth quarter 2013 with a vacancy rate of 8.6%. 

    The vacancy rate was down over the previous quarter, with net absorption totaling positive 6,776,750 square feet in the fourth quarter. That compares to positive 1,105,038 square feet in the third quarter 2013. Vacant sublease space decreased in the quarter, ending the quarter at 1,463,921 square feet. 

    Tenants moving into large blocks of space in 2013 include: Walmart moving into 1,200,000 square feet at 2785 Commerce Center Blvd, Subaru moving into 526,050 square feet at Subaru, and Harley Davidson moving into 438,000 square feet at York Business Center. 

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

    A total of four buildings delivered to the market in the quarter totaling 764,000 square feet, with 5,023,394 square feet still under construction at the end of the quarter. 

    This trend is compared to the U.S. National Industrial vacancy rate, which decreased to 8.0% from the previous quarter, with net absorption totaling positive 78.93 million square feet in the fourth quarter. Average rental rates increased to $5.36 this quarter, and 150 industrial buildings delivered to the market totaling more than 18.5 million square feet.