Saturday, June 21, 2014

How Much Is the Noise in Your Open Office Costing You?

This is much debated issue in the commercial real estate world. The open office plan is the hottest thing in office space right now. Rumor has it that some office tenants that moved to an open office plan in the Philadelphia Navy Yard are rethinking their decision. 

by Tucker Hughes, Director of Hughes Marino

The overwhelming trend in commercial office space toward more open, collaborative areas for employees, with fewer partitioned work spaces and even fewer enclosed offices, appears to be here to stay.
But it’s also fairly new, meaning it's worth taking a look at just how functional these wide open work areas are for employees. Does the ability to easily talk, brainstorm and chat with colleagues really lead to a free-flowing exchange of ideas? Possibly. Does having an open office save money, by reducing the square footage needed per employee? Absolutely. But does this trend serve as a catalyst for increased productivity?
According to one recent study, the answer is a resounding no. 

According to research conducted by Jungsoo Kim and Richard de Dear of the Center on the Built Environment at the University of Sydney, the open-office plan that has become so wildly popular these days has its fair share of drawbacks. The chief problem? Productivity suffers when employees struggle to concentrate in noisy spaces with minimal privacy.

According to Kim and de Dear, nearly 50 percent of employees in open-office plans and nearly 60 percent of employees seated at workstations with partitions cited the lack of sound privacy as the most frustrating aspect of their work environment.

This begs the question: Is the open-office model worth it? Kim and de Dear's research found that employees in open-office areas or cubicles are not only dissatisfied by their inability to prevent co-workers from hearing what they say but also by not being able to control what they hear from others.

Other studies conducted by psychologists and research organizations have arrived at similar findings. In contrast, those with enclosed offices reported the least amount of frustration with their office environment and were therefore the happiest employees.

But with millions of commercial real estate square feet already embracing open collaborative spaces and more springing up each year, what should employers do if they find that office productivity is less than desirable?

Sound solutions for open-office spaces. There is no doubt that open-office spaces can appear very cool. Employees can see one another and easily access colleagues for impromptu brainstorming sessions. Yet, in the Kim and de Dear study, “ease of interaction” was a problem for less than 10 percent of employees, whether they were in an open-office space or an enclosed space.

Indeed, when opening the doors of a new company or relocating quarters or just optimizing a current space, be sure to include breakout rooms (or small public areas).

Even employers committed to having the look of an open, trendy office space should enclose at least a couple of offices. Pair or group employees in some of these offices, if necessary, but be sure some quiet spaces are available. 

Employees need to be able to speak in private or make phone calls that the entire office doesn’t hear. They also need distraction-free areas to focus on complex assignments. Even if the company can enclose only a single conference room or two small offices, some space needs to have four walls and a door.

Consider installing a white noise machine to ensure sound privacy in breakout areas or conference rooms. Granted, these machines still generate noise, but this type of noise is less distracting than hearing co-workers chatting or having a meeting next to the breakout or conference room. 

If spending 10 percent more on enclosed spaces leads to 20 percent greater productivity, the initial investment will pay for itself over the long haul. Spending a bit more on tenant improvements or rent to create an environment that's more functional can lead to greater satisfaction among employees, which can prompt higher retention of staffers and lower hiring and training costs. 

Moving offices or expanding them. When it's time to renew a lease or move from an existing office, be sure to work with a tenant representative to ensure the highest possible tenant improvement allowance. This way, the company can invest in at least a few enclosed offices, in addition to breakout spaces. The investment will be worthwhile as earlier research from Kim and de Dear found that “the loss of productivity due to noise distraction … was doubled in open-plan offices compared to private offices, and the tasks requiring complex verbal process were more likely to be disturbed than relatively simple or routine tasks.” 

There is nothing wrong in wanting to provide an office atmosphere that promotes unity and encourages collaboration by team members. But the unintended consequences of an open plan should be considered. I've seen many companies switch to open-office spaces only to find that employees start wearing headphones to block out noise.

Studies have indicated that employees wearing headphones while working (whether for listening to music or blocking noise) might lead to decreased productivity and an inability to concentrate. Furthermore, the use of headphones adds a deterrent to collaborative interaction among employees, possibly defeating the purpose of the open-plan office. 

Many reasons may prompt the pursuit of ample space for gathering, brainstorming and team building in an office. But balance is vital to long-term success. By balancing open spaces with enclosed areas, a company may find that the investment is more than worth it and will pay dividends in increased employee satisfaction and productivity. 

Full story:

Friday, June 20, 2014

Shore Area Multifamily Is Heating Up

As Monmouth County communities continue to recover from Superstorm Sandy which hit 20 months ago, multifamily investment sales are heating up along with the weather right now, brokers at Gebroe-Hammer Associates tell
The Livingston-based firm exclusively represented the sellers and secured buyers in two recent sales in Freehold and Asbury Park. G-H’s shore area market specialist Steven Follman, who was involved in both transactions, says investors are trolling for properties ripe for repositioning.
“Monmouth County’s 27 miles of beaches and their surrounding communities continue to make a strong comeback, both in terms of the economy and post-superstorm revitalization,” said Follman. “This re-emergence is drawing investors who recognize the ever-growing strength of the Jersey Shore region’s multi-family market and have past experience in repositioning properties in order to render them more competitive in today’s market.”
In Freehold, Follman, Joseph Brecher and Elimelech Herskowitz orchestrated the $4.7 million trade of Monmouth Pines, a four-building garden-apartment complex with 40 one-bedroom units, which are fully occupied.
The complex is close to Freehold Raceway Mall and Monmouth Battlefield State Park and Point Pleasant Beach is 30 minutes away.
In Asbury Park, Follman arranged the $4.25 million sale of Grand Regency Condominiums, set two blocks from the beach and a block south of Deal Lake. The two-building complex in the northeast section of the city has nine studios, 31 one-bedroom and 10 two-bedroom units.
Allenhurst Train Station is less than a mile from the apartments.
“Monmouth County’s culture, music, shopping, sports entertainment, historic sites and outdoor leisure areas are complemented by ease-of-access to New York City’s job centers and 24/7 lifestyle offerings, via ferry,” said Follman. “This makes it a year-round living destination, building an ever-strengthening renter pool.”

Thursday, June 19, 2014

Marshall’s Leases 23,000 SF in Marlton

Department store Marshall's leased 23,205 square feet of retail space at the Willow Ridge Shopping Center, at 710 Rte. 73 in Marlton, NJ. 

The 145,000-square-foot retail strip was constructed in 1999 in the South Burlington County submarket, part of the 238,000-square-foot Willow Ridge Shopping Center.

Dermody-Granite to Build 750,000-SF Facility

The partnership of Dermody Properties of Reno, NV and Canadia-based Granite Real Estate Investment Trust willl break ground later this month on a 750,000 square foot warehouse and distribution facility at 41 Martha Drive in Berks Park 78 here.
The facility to go up just off exit 13 in the I-81/I-78 corridor will feature 36-foot clear height, 316 parking spaces and 322 trailer parking spaces. The property has LERTA tax abatement statu,s offering tenants reduced real estate taxes over a 10-year period, company officials say.
“This location allows companies to reach the northeastern population base effectively and efficiently,” said Gene Preston, partner, of Dermody Properties’ east region office.
Dermody is serving as the developer and operating partner, while Granite is the majority equity partner on the project.
“Our relationship with Dermody continues to grow and we are excited to commence this new project at Berks Park 78. Granite is most selective in choosing both new developments it undertakes and operating partners it works with. In the case of Dermody and Berks 78, we believe we have the best of both,” says Tom Heslip, CEO of Granite.

Movie Tavern to Build Second Theatre in Philly Area

by John Jordan
Dallas-based Movie Tavern has begun work on a new eight-screen theatre here at the Flourtown Shopping Center at 1842 Bethlehem Pike.
The facility scheduled to open in early 2014 will be the firm’s second theatre in the Delaware Valley, joining its existing complex—the Providence Town Center Movie Tavern—in Collegeville, PA. The deal at the Flourtown Shopping Center was struck with Federal Realty Investment Trust.
“We are very excited to bring Movie Tavern to Flourtown, as part of our plan to increase our presence in the Philadelphia market after we found such tremendous success in Collegeville,” says John H. Hersker, president and CEO of Movie Tavern. “We look forward to providing families in Flourtown and surrounding cities the movie-going experience they deserve with offerings that merge both cutting edge technology and modern convenience with great value.”
Movie Tavern specializes in creating an in-theatre dining experience that utilizes a chef inspired menu and offerings from a full bar, where guests can order food and drinks from their seats throughout the show. Full food and beverage service are also available at the properties. Features of the new build will also include luxury reclining loungers in every auditorium and all-reserved purchase seating, company officials say.

Three New Towers in Philly's Logan Square?

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal
A development company from Minnesota is proposing to construct three towers on a Center City site long known as River City — a grandiose plan that entailed constructing a whopping 15 million square feet.
NP International has great ambitions for the property at 23rd and Arch streets but nothing on that scale.
It wants to build a 42-story tower and two 21-story structures that would have a hotel fronting John F. Kennedy Boulevard as well as space for condominiums, apartments and retail. The developer has quietly been working for months with the Logan Square Neighborhood Association on the project ­— now called River Walk — and went before the Philadelphia Planning Commission last week.
“They have been responsive to all of the needs and concerns of their near neighbors,” said Ed Panek, chair of the neighborhood group’s zoning committee, in an interview. “They gave them the opportunity to preserve as many views as possible.”
This is just one project Logan Square is grappling with. The neighborhood has become a hotbed of development activity and, as Panek said, he’s sitting on “$2 billion of property development.”
Aside from River Walk, Logan Square is reviewing:
  • A proposal from PMC Property Group to construct a 26-story tower at 23rd and Cherry streets.
  • Brandywine Realty Trust’s proposal to construct a 28-story mixed-use building at 1919 Market St.
  • The redevelopment and capital improvement project at Park Towne.
  • The ongoing construction of 1900 Arch St., an apartment building by PMC Property Group.
  • Comcast Corp.’s proposed Innovation & Technology Center.
  • The construction of Museum Towers II, a 16-story apartment building.
  • The proposed redevelopment of the former family court building.
Other projects are already underway, such as the Mormon temple, the proposed 32-story apartment complex and meeting house by the Church of Jesus Christ of the Latter Day Saints, among others.

City trying to lure Dietz & Watson to arsenal site

By Joseph N. DiStefano, Inquirer Staff Writer
Philadelphia officials are assembling property at the former Frankford Arsenal site in Northeast Philadelphia for use by cold-cuts-makerDietz & WatsonInc. as a new warehouse and trucking center. 

The new facility would replace the 260,000-square-foot facility in Delanco, Burlington County that burned down in 2013. That seven-year-old warehouse employed 130 people.

A new warehouse on the proposed property would be convenient to Dietz & Watson's nearby headquarters on Tacony Street - and a coup for the city at the expense of New Jersey, which has been offering buckets of cash to employers in an attempt to lure them from Pennsylvania or stop them from moving away.

Real estate and city sources confirmed Dietz & Watson is the focus of city ordinances introduced in April that would swap city and state property tracts to make way for an unnamed industrial user on land near the Delaware River south of Dietz & Watson's offices and deli-meat production plant.

The ordinances are scheduled for a City Council vote as soon as Thursday. They were introduced with backing from Councilman Bobby Henon, a union electrician who has made restoring industrial jobs in old factory neighborhoods along the Delaware one of his priorities.

Henon also supports rezoning the former Philadelphia Coke Co. property, which had been targeted for riverside residences that were never built, to attract industrial employers.

I'm told by a person familiar with proposals for that site that a computer-recycling company has expressed interest. City planners have supported proposals to return both the Coke and Arsenal sites to industrial use.

Wednesday, June 18, 2014

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Bradford Plaza Trades for $35.7 Million

New York Life purchased the grocery-anchored Bradford Plaza, a 161,000-square-foot community shopping center, for $35.7 million, or approximately $222/square foot. 

“Retail properties - especially those with supermarket anchors - continue to be a highly sought-after investment type in our region,” Iman said. “Chester County, located just outside of Philadelphia, has the highest average household income in the state of Pennsylvania, making any asset that comes online here a prime target. In the case of Bradford Plaza, we had a substantial amount of interest from a range of potential buyers, including private entities, fund operators and REITs.” 

The loan on Bradford Plaza was held in a CMBS trust LB-UBS Commercial Mortgage Trust 2007-C6. The loan was set to expire next month. With the purchase the existing loan with an outstanding balance of a little more than $18 million was paid off. 

Located on 22 acres at 700 Downington Pike, Bradford Plaza serves as home to Giant Foods, the leading grocer in Chester County. Its tenant mix consists of national, regional, and local retailers also including Petco, Walgreens and a Giant fuel sta¬tion. The property is 88 percent occupied and also has a 4,300-square-foot proposed pad site for future development. 

“New York Life will be able to capitalize on the property’s minimal near-term lease expirations and the opportunity to immediately increase cash flow by executing a strategic leasing plan for the remaining vacancy,” Gabriel said. “Bradford Plaza is well positioned to draw tenants. The five-mile radius surrounding the property boasts superior demographics with a growing population of over 100,000 people and an average household income exceeding $115,000.”

Friday, June 13, 2014

Lockheed Martin Offers Complex for $30M

by John Jordan
Lockheed Martin has decided to sell its complex at 100 Campus Drive here. The firm has set the asking price for the property at $30 million.
Lockheed Martin has said it will close its Space Division campus here and several California facilties next year as part of company-wide cutbacks.
The 52.52-acre campus has three office, lab, and research and development buildings totaling 460,514 square feet. The campus also includes a stand-alone conference center built in 2010 and is approved for 192,000 square feet of office expansion. The complex features extensive infrastructure, including an electrical substation and clean room space.
“100 Campus Drive is one of the largest available commercial sites in the submarket. As a high- tech research and manufacturing facility, the site provides an investor or user with a unique opportunity for reuse. The expansive nature of the corporate campus lends itself to redevelopment at a discount of the replacement cost. The area boasts excellent demographics, a well-educated work force and attractive housing options.”

Gladstone Acquires PA Warehouse for $39M

by John Jordan,
Gladstone Commercial Corp. of McLean, VA reports it has acquired a 955,935 –square-foot bulk distribution warehouse in the Scranton suburb of Taylor, PA for $39 million.
The transaction calculated out to an average cap rate of 8.7%. The property is occupied by a regional third-party logistics company under a 10-year absolute net lease, according to the Gladstone announcement.
"This acquisition is consistent with our strategic decision to focus our acquisition efforts on high-quality, functional properties in primary and strong secondary markets,” says Matt Tucker, managing director of Gladstone. "The property is a high-quality front-loading distribution building, with 35-foot clear heights and 169 dock doors. We believe that this property, located in the Northeastern Pennsylvania submarket of the I-81 distribution corridor, a very strong primary distribution market, will provide stable long-term accretive returns to our shareholders."
With the acquisition,Gladstone Commercial's real estate portfolio now consists of 93 properties located in 23 states, totaling approximately 10.5 million square feet.

New York Life Acquires Bradford Plaza

by John Jordan Globest. com
New York Life Real Estate Investors reports it has acquired the nearly 161,000-square-foot Bradford Plaza shopping center here.
The property, located at 700 Downingtown Pike, is anchored by a Giant Foods store. Other major tenants at the property include WalgreensDollar TreePetco and a Giant fuel station. Bradford Plaza also includes a proposed 4,300 square foot pad site. The property is currently 89% leased to 18 tenants. No financial terms of the transaction were released.
New York Life Real Estate Investors is a division of New York Life Investments and NYL Investors, LLC, wholly-owned subsidiaries of New York Life Insurance Co.
“Bradford Plaza is representative of New York Life Real Estate Investors’ strategy to pursue high quality shopping centers anchored by the dominant grocer in the respective market,” says Kevin Smith, managing director, New York Life Real Estate Investors.
“With a very strong performing Giant Foods combined with Walgreens, Petco, Dollar Tree and the Giant fuel station, the center offers good upside potential by leasing the vacant space, as well as the pad site,” he adds.

Gramercy Property Trust Pays $18.7M for Two Industrial Properties

Gramercy Property Trust, a New York-based REIT, acquired two single-tenant industrial buildings totaling 295,000 square feet located at 8051 Allentown Blvd. in Harrisburg, PA and 195 Corporate Dr. in Elgin, IL, for a total of $18.7 million, or $63.39 per square foot. 

Both properties are 100% leased with an average weighted lease term of approximately 13 years. The 183,000-square-foot industrial building in Harrisburg was built in 2001 and is leased through February 2025. The 112,000-square-foot industrial property at 195 Corporate Dr. in Elgin, IL was built in 1996 and is leased through August 2028.

Allen Distribution Moving to Mechanicsburg

Allen Distribution has leased the entire 180,333-square-foot industrial building at 34 E. Main St. in Mechanicsburg, PA. 

The single-story warehouse was constructed in 1981 on 10.6 acres in the Harrisburg Area West Industrial submarket of Cumberland County. Renovated in 2013, the building has 24-foot ceilings, 20 loading docks with levelators and one drive-in bay. It is equipped with heavy power, has rail access to Norfolk Southern, and 3,200 square feet of designated office space. It is conveniently located on Route 11, near the Pennsylvania Turnpike and I-83

Advance America Leases 13,000 SF in Wilmington

Advance America has leased 12,736 square feet at the Red Brick Building, located at 750 Shipyard Dr. in Wilmington, DE. 

The four-story 58,945-square-foot building was constructed in 2004 on 3.1 acres in the Wilmington CBD submarket of Philadelphia. Now 100 percent leased, the property offers free parking and views of the riverfront.

Tuesday, June 10, 2014

How You Can Be a Real Estate Mogul for $100 (Video)

Best place for your $100,000

Philadelphia's Curtis Center Sells for $125M

A joint venture comprised of affiliates of Keystone Property Group and Mack-Cali Realty Corporation (NYSE: CLI) have acquired the iconic Curtis Center office building at 601 Walnut St. in Philadelphia, PA from Walnut Street Capital and Apollo Global Management LLC for $125 million, or about $141 per square foot. 

Overlooking Independence Hall and Washington Square Park in the heart of Center City, the 12-story, 885,786-square-foot, 4-Star property was originally built in 1909 on 2.3 acres in Independence Square West. The asset is home to multiple tenants including various departments and government agencies under leases held by the General Services Administration (GSA). 

The new owners plan to reposition the landmark property into a world-class, mixed-use environment through repurposing 90,000 square feet of existing office space into 90 luxury rental apartments while adding an enhanced pedestrian-friendly retail aspect along the streetscape, to include new corner restaurant spaces and landscaped outdoor seating areas. The additions will complement the property's office and multifamily focus, and will round out with a capital improvement program to update the elevators, HVAC systems, roof, facade, and parking garage. 

Curtis Center was originally home to Curtis Publishing, with such titles as Ladies' Home Journal, The Saturday Evening Post, The American Home, Holiday, Jack & Jill, andCountry Gentleman. The property was last updated in the 1980's, when it underwent an $80 million renovation that restored tenant spaces, common areas, and building systems. Walnut Street Capital acquired the property in September of 2006 for $94 million, or $106 per square foot, according to CoStar data. 
See CoStar COMPS #1147723. 

"Not only is Curtis Center rich with cultural importance, but it's also perfectly aligned with our company's overarching goal to expand our regional footprint by creating exciting live-work-play spaces in dynamic markets," stated Bill Glazer, president of Keystone Property Group. "We're thrilled to have the chance to transform this icon into a vibrant mixed-use environment while maintaining the historical significance of one of Philadelphia's most recognizable buildings. Our strong relationship with Mack-Cali will enable us to leverage our collective knowledge to create truly unique tenant and resident experiences." 

This all-cash transaction is just the latest for high-profile partners Keystone and Mack-Cali, with Keystone looking to expand its focus on lifestyle centers while Mack-Cali continues to grow its multifamily portfolio. An affiliate of Keystone will manage the office and retail portions, while Roseland, a subsidiary of Mack-Cali, will design, construct, lease, and manage the new residential component. 

Mitchell E. Hersh, president and CEO of Mack-Cali, commented, "Curtis Center offers us a unique opportunity to strengthen our multifamily presence in the heart of the growing Philadelphia housing market. Through our bold conversion strategy, this building is well positioned to capitalize on the upside of one of the region's most exciting hubs for entertainment, culture and transit."

Monday, June 9, 2014

CNA Insurance signed a long-term lease

CNA Insurance signed a long-term lease of 52,517 sf at 1 Meridian Blvd in Spring Township. They were previously located at 401 Penn Street in Reading.

1 Meridian Blvd in Spring Township, Berks County is a 367,000 SF Class A Multi-Tenanted office building.  The building has an on-site cafe, training rooms, and security.

JC Ehrlich-Rentokil leases 26,000 SF

Rentokil (JC Ehrlich) signed a long-term lease of 26,000 sf at 1125 Berkshire Blvd in Wyomissing. They were previously located along Spring Ridge Drive in Spring Twp.

The building which is located at 1125 Berkshire Blvd, Borough of Wyomissing, Berks County is a 57,364 sf. Multi-Tenanted single story office building.  The building was previously occupied by Sovereign Banks Operations center.

Thursday, June 5, 2014

CRE Loan Quality Continues To Improve Among All Major Lenders

Delinquency rates for commercial and multifamily mortgage loans continued to decline in the first quarter of 2014, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. 

During the first quarter of 2014, the 30+ day delinquency rate for loans held in commercial mortgage-backed securities (CMBS) decreased 0.69 percentage points to 6.16%. 

The 60+ day delinquency rate for multifamily loans held or insured by Fannie Mae was unchanged at 0.10%. The 60+ day delinquency rate for multifamily loans held or insured by Freddie Mac decreased 0.05 percentage points to 0.04%. 

The 60+ day delinquency rate for commercial and multifamily mortgages held in life company portfolios were unchanged at 0.05%. 

The 90+ day delinquency rate for loans held by FDIC-insured banks and thrifts decreased 0.13 percentage points to 1.57%. 

“The last two quarters marked the largest percentage point declines in CMBS delinquency rates ever,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “We also see continued improvement in the performance of commercial mortgages held by banks and very low delinquencies in loans held by life insurance companies and the GSEs. With property incomes and values rising, loan performance should continue to benefit.” 

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of the first quarter were as follows: 

• Life company portfolios: 0.05% (60 or more days delinquent); 
• Freddie Mac: 0.04% (60 or more days delinquent); 
• Fannie Mae: 0.10% (60 or more days delinquent); 
• Banks and thrifts: 1.57% (90 or more days delinquent or in nonaccrual); 
• CMBS: 6.16% (30 or more days delinquent or in REO).

Wednesday, June 4, 2014

IFM Efector to Relocate HQ in Malvern

by Natalie Kostelnie, Staff writer for the Philadelphia Business Journal
IFM Efector will relocate its headquarters to a new building that will be constructed at the Atwater Corporate Center in Malvern, Pa.
Trammell Crow Co. will construct the $15 million, two-story, 45,000-square-foot structure.
“We’ve been in the United States since 1985 and really excited about the next chapter for our company,” said Roger Varma, chief executive officer for IFM Efector.
IFM Efector, which designs and builds sensors used in a range of industries, currently leases 35,000 square feet at 782 Springdale Drive in Exton, Pa., and is nearing the end of its lease. It used the lease expiration as a trigger to explore its options for new office space and how it will use that space to position itself for the future.
“We’re a technology company and we worry about our brand and image in the market,” Varma said. “As a tech company, we want the right image.”
The company also found that it was increasingly using its space with its customers.
With the new Pennsylvania Turnpike interchange at Route 29, IFM Efector decided to look for new space in the Malvern area and took into consideration the driving distance of its employees. The company also wanted the design of its new offices to be contemporary with an open space concept that allowed more natural light to come in and more room where employees can gather, Varma said. It also features added amenities for employees, such as an exercise facility and cafe.
“We wanted to give employees an environment where they could thrive and have shared spaces that will encourage movement in the building for collaboration,” he said.
Bernardon Haber Holloway Architects designed the structure while Nelson is designed its interior.

$85M could breathe new life into Chesterbrook shopping center

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

A partnership that owns the forlorn Chesterbrook Shopping Center has an $85 million plan to breathe new life into the property.
That work calls for razing a large portion of the existing center and constructing a mixed-use development with a community of townhouses with just a small retail strip. It’s what the partnership believes the site can sustain and, after struggling for so many years, also make it thrive.
“When we bought the property, we wanted to figure out why it was broken and how we could fix it,” said Robert F.Whalen Jr. of RW Capital Partners Inc., a Plymouth Meeting, Pa., real estate investment company.
The conclusion was that it no longer worked as a pure retail outlet.
When the 122,216-square-foot center was constructed in 1981, Genuardi’s was its anchor and the grocer had a devoted following throughout the region. For a time, the center held its own in spite of just 9,600 vehicles passing along Chesterbrook Boulevard on a daily basis. The grocer’s sales were just about $200,000 a week.
As time went on, competition ate into those meager sales. Trader Joe’s moved into the Gateway Shopping Center, which isn’t too far away. Wegman’s, Whole Foods, and even other retailers that incorporated groceries into their stores (such as Wal-Mart and Target) took business away. Then, Safeway bought Genuardi’s and the once-family-owned chain of grocers lost much of its luster.
The lack of pedestrian and vehicular traffic combined with poor visibility also hurt the center. Its design didn’t help either, Whalen said. It was no secret that a courtyard that was incorporated into the center’s original design hid stores and deterred shoppers from milling around.
The economic downturn was the final nail. The recession wore on and Genuardi’s vacated in 2010 its 38,502-square-foot store. Some of the other retailers closed up and many of its vacancies were never re-leased. A total of 78,960 square feet was empty and 21 of its 41 store fronts were vacant at the time Whalen’s partnership bought the property last fall.

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Tuesday, June 3, 2014

Fairview Plaza Trades for Nearly $12.5M

By John Jordan, a contributing writer for Real Estate Forum and 

The Fairview Plaza shopping center here has been sold by Cedar Realty Trust of Port Washington, NY to Cincinnati, OH-headquartered Phillips Edison-ARC Shopping Center REIT Inc. for $12.45 million.
This transaction that calculated out to $172.97 per square foot for the 71,979-square-foot shopping center anchored by Giant Food Stores. The grocer currently occupies 59,237 square feet and has been the anchor tenant at Fairview Plaza since 1992.
The property at 120 Old York Road, constructed in 1992, was 100% leased at the time of sale. Other retail tenants at Fairview Plaza include PA Wine & Spirits, Fulton Bank, Holiday Hair and Subway.
 “This property attracted regional and national buyers and was heavily bid because of its high historical occupancy with no tenant turnover since 2005. Having a well-established tenant like Giant Food Stores, who is performing well above their industry average, occupy over 82% of the GLA made the property especially attractive, which allowed us to seek premium pricing for the seller.”

Three Tenants Renew at North American Bldg.

Antoinette Martin, the New Jersey and Philadelphia editor for

three lease renewals we negotiated at the North American Building at 121 South Broad St., for a total of 18,206 square feet.

In the largest of the lease extensions at the 21-story tower, the Urban League of Philadelphia renewed for 9,700 square feet on the 9th and 10th floor.  The aggregate rent sum of the lease extension exceeds $1.4 million.

Shein Law Center extended its lease of 6,610 square feet on the 21st floor of the building.  They are a legal firm that specializes in representing clients suffering the consequences of asbestos exposure,

The Philadelphia Musicians' Union Local 77 of the American Federation of Musicians extended its lease of 1,726 square feet on the third floor of the building.

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