Friday, March 27, 2015

Fort Washington Holiday Inn sold, will undergo $19M redevelopment

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

A venture consisting of Haverford Hotel Partners and Haverford Properties Inc. bought the Holiday Inn Fort Washington and has plans to invest an estimated $19 million redeveloping the property.
Bill McNamara, managing partner of Haverford Hotel Partners, and Charles Houder, principal of Haverford Properties, picked up the 230-room, full-service hotel on seven acres in Montgomery County from a Washington, D.C., investor who has owned the property since it was developed in 1975. Joe McCann, head of Optimum Hotel Brokerage, arranged the sale.
Terms of the transaction weren’t disclosed though total investment in redeveloping the property, including acquisition costs, stands at about $19 million.
Though state-of-the-art when it was built, the property at 432 Pennsylvania Ave. had been on the decline and had a business that kept just about half of it occupied.
It wasn’t an easy sell, according to McCann.
“We had the property on the market for about a year and we had to go through a year of due diligence with zoning approvals being made,” he said. “The right buyer needed extensive due diligence because of all of the approvals that were needed for his project. It’s an expensive proposition, but it will be nice development.”
Aside from zoning, part of the process involved the seller shuttering the property and laying off its 61 employees. A redevelopment on this scale requires such a drastic measure.
Both McNamara and Houder were attracted to the hotel’s location near the Pennsylvania Turnpike and Route 309 as well as next to a regional rail stop. It’s also within the Fort Washington Business Park and in proximity to other markets such as Horsham, Willow Grove and Plymouth Meeting.
“The Pennsylvania Avenue corridor has been overlooked and neglected because of its historical issues,” Houder said.
The park was known to frequently flood whenever there was a downpour. That issue is being remedied.
The partnership looks for value-add opportunities such as this.
“We like to take something underutilized and reposition it to the product it wants to be,” said Houder, who, at one point, worked at Preferred Real Estate Investments.
Plans call for redeveloping the eight-story hotel inside and out. The façade will be redone as well as other exterior elements. It will no longer be a full-service property — having a restaurant within the hotel — and it will instead have 168 rooms and suites. It will be branded as a Holiday Inn Express.
Full story:

Mack-Cali Enters JV Agreement with Parkway to Develop Luxury Residential Community in Philadelphia

Fully-integrated real estate investment trust Mack-Cali and its full-service real estate development subsidiary Roseland have entered an agreement with Parkway Corporation to form a joint-venture partnership in the development of a luxury multifamily community at 709 Chestnut Street in Philadelphia, PA.

Currently in planning and permitting stages, the proposed development is expected to break ground by the end of 2015. When it does, it will be the newest development on the east end of Chestnut Street, which has historically seen less development than the west end.

Preliminary plans call for a 32-story tower to include 300 luxury apartment homes and more than 11,000 square feet of indoor and outdoor amenity space. It will also include a 125-car, fully-automated parking garage, the third that Parkway has established in Philadelphia.

"As we continue to expand our footprint in the Philadelphia market, we're excited to have the opportunity to partner with Parkway -- a leader in parking management and real estate development -- for this exciting initiative at 709 Chestnut Street," said Mitchell E. Hersh, president and chief executive officer of Mack-Cali. "This community will serve as a cornerstone of the burgeoning Market Street East neighborhood, which is quickly emerging as a dynamic cultural destination in a previously underutilized corridor."

Mack-Cali and Roseland are pursuing ground-up and adaptive reuse opportunities in and around Philadelphia. Along with partner Keystone Property Group, Mack-Cali announced repositioning plans for The Curtis, just around the corner from 709 Chestnut, and Roseland will lead the residential redevelopment of the Center City building. Mack-Cali and Keystone also recently partnered on 100 Independence Mall West, reinvesting more than $20 million.

Ridgeline Developing Logistics Center in York, PA

by Steve Lubetkin,
Responding to the shortage of class A bulk warehouse space in the surging Central Pennsylvania industrial market, Ridgeline Property Group will develop a 423,300-square-foot industrial speculative building in York, PA.  Cabot Properties Inc. will be RPG’s capital partner for Susquehanna Logistics Center, which will be built on a 51-acre site providing immediate access to Interstate 83.

Construction will begin in late March and will be completed in December 2015.  The 423,300-square-foot distribution facility will feature 32-foot clear heights, 87 dock doors, 52-foot by 54-foot column spacing, early suppression fast response (ESFR) fire sprinklers and high-capacity parking, including 179 auto spaces and 146 trailer storage stalls.

“With strong absorption rates combined with the extremely limited supply currently available, this market is primed for the modern and efficient class A distribution space that Susquehanna Logistics Center will provide,” says Greg Thurman, CEO of Ridgeline Property Group. “There is virtually no class A space between 200,000 and 400,000 square feet available in Central Pennsylvania, and this is the only zoned and entitled industrial site between Harrisburg and Baltimore that can bring a class A project to market in the near term. The timing couldn’t be better for us to team with our long-term partner Cabot Properties on this distribution building.”

York County’s strategic location between Baltimore and Harrisburg, its healthy supply and demand fundamentals, and a strong labor pool combine to make the submarket a key logistics hub. The overall vacancy rate for class A product in York County has dipped below four percent, placing supply at shortage levels, and absorption has reached near record levels.

“We’re pleased to partner with a best-in-class developer, Ridgeline Property Group, on this class A industrial building to meet the growing demand for high-quality industrial space in this crucial distribution market. RPG has a successful track record developing bulk distribution space across the country, and we look forward to partnering with them on Susquehanna Logistics Center to provide the Central Pennsylvania market with much-needed class A distribution space,” says Patrick V. Ryan, executive vice president of investments at Cabot Properties.

Located on Second Amendment Drive in York, PA, the Susquehanna Logistics Center site is just over a half-mile from the Exit 8 interchange of I-83 and minutes from US Route 30, two major north-south and east-west routes, respectively, that connect the project to Philadelphia, Washington, D.C., Baltimore and other important industrial markets. In addition, the York County submarket offers distributors and manufacturers convenient access to the Port of Baltimore, three major intermodal rail stations, and FedEx and UPS distribution hubs.

Thursday, March 26, 2015

Floor & Décor Leases 52,000 SF

Floor & Décor, a specialty retailer of hard surface flooring, signed a lease for 52,000 square feet in the retail building at 1501 E. Lincoln Hwy in Levittown, PA.

The single-story building totals 104,000 square feet in Bucks County. The property was constructed in 1964. Floor & Décor’s lease includes half of the building, with Bob’s Discount Furniture occupying the other half.

David Barton Gym Leases 24,000 SF

DavidBartonGym Muscles has leased 24,032 square feet in The Drexel Building at 1435-1441 Walnut St. in Philadelphia, PA.

The store's opening is planned for July 2015

The 57,640-square-foot office building was constructed in 1928 and renovated in 1980. The historic building is located in the Market Street West submarket.

Brixmor Lands Tractor Supply Company

ractor Supply Company leased 19,929 square feet at Boyertown Plaza at 801-823 E. Philadelphia Ave. in Boyertown, PA.

The well-located neighborhood center is anchored by Big Lots and CVS Pharmacy with high visibility of over 20,000 vehicles per day. The extensive highway access makes this 83,229-square-foot retail center a hub of residential and retail growth along the western portion of Montgomery County.

Wednesday, March 25, 2015

Investment Strategist Optimistic On Suburban Office Real Estate (Video)

Plymouth Industrial REIT Buys South Jersey Industrial

by Steve Lubetikin,
The sale of a 156,280-square-foot multi-tenant, light industrial building located at 4 East Stow Road in Marlton, NJ, was completed to Plymouth Industrial REIT, a Boston-based real estate investment corporation.

4 East Stow Road is currently 97 percent leased, under long-term, triple net leases.  Current tenants in the building include Cherry Hill Photo, RiverTech Solutions and MBO America.  The building, situated on 14.54 acres, features 22’ ceiling heights, 22 tailgate loading doors and eight drive-in loading doors.  The building is just off Route 73, within five minutes of Interstate 295 and the New Jersey Turnpike, about 15 miles from Philadelphia.

Tuesday, March 24, 2015

Capital Logistics Center Opens in Central PA

by Steve Lubetkin,
Woodmont Industrial Partners is celebrating the grand opening of 200 Capital Lane, a 400,000-square-foot LEED certified warehouse facility that is the newest addition to Capital Logistics Center.  The industrial park is a six-building, 1.55-million-square-foot industrial complex that is situated on more than 100 acres in Middletown, PA.

Woodmont held a ribbon-cutting ceremony attended by local officials and some of its executives, including CEO Eric Witmondt, managing partner Marc Lebovitz and managing director David Iacobucci.

Dauphin County Board of Commissioners’ chairman Jeff Haste says the new warehouse will bring jobs to the Dauphin County region. “The new Capital Logistics Center will help meet the growing need for quality industrial space in Central Pennsylvania, which continues to be a highly sought after location for companies of all sizes,” says Haste.

A joint venture of Woodmont Industrial Partners and AEW Capital Management acquired the industrial park in 2013. As part of a capital improvement program, two buildings that were built more than 50 years ago were demolished. In their place, the venture constructed 200 Capital Lane and is presently completing demolition work on the site to prepare the second building, 300 Capital Lane, for construction.

“We are thrilled to officially present the new and improved Capital Logistics Center and look forward to welcoming new tenants to the park, which is truly one of the most modern industrial spaces in the region,” says Woodmont CEO Witmondt. “Due to the hard work of all who were involved in the redevelopment, our vision for the facility has become a reality.”

Capital Logistics Center is in a prime location that fronts the Pennsylvania Turnpike and is less than a mile from Harrisburg International Airport. The property is also located near FedEx and UPS facilities, and is in close proximity of interstates 283 and 83, as well as Route 322.

“The strategic location of the Capital Logistics Center, along with the recently added features – T5 lighting, ESFR sprinklers and ample parking – are some of the key factors that we believe will make Capital Logistics Center one of the most sought-after industrial properties in Central Pennsylvania,” says Matthew Crocker, regional asset manager of Woodmont Industrial Partners.

Monday, March 23, 2015

Wawa to open at Broad and Walnut Streets

Michael Klein,

Homegrown convenience grocer Wawa plans to announce that it will open a store at the former Robinson's Luggage store at the southeast corner of Broad and Walnut Streets.

A Wawa rep told me Sunday that the site is under contract, and that the company is working to obtain approvals in time for an April 16 announcement.

Wawa's opening a large (5,300-square-foot) store at one of Center City's busiest intersections could be considered a small step in retailers' acknowledging the booming Center City population. In December, grocery goliath Ahold USA, which operates Giant of Carlisle, Pa., opened a supermarket called Everything Fresh at 1222 Walnut St. It bills it as an experimental urban store.

The new Wawa will have seating inside, one source told me.

People have dined casually at this very location, albeit not on Shorti hoagies.

It was a Horn & Hardart's from the late 1950s till the early '80s, shortly before Robinson's came along in 1984. (See the Philaphilia blog for a short history.)

The family-owned Robinson's closed at the end of 2013.

PREIT Adds Signature Tenants to Premier Malls

by Steve Lubetkin,

PREIT has signed key leases for new tenants at the following premier malls:

Cherry Hill Mall, Cherry Hill, N.J.: lululemon athletica; Tumi, e.l.f. studio
Willow Grove Park, Willow Grove, PA: Primark (opening 2016)
Woodland Mall, Grand Rapids, MI: Garage
These new tenants complement other recent additions to these properties including:

UNIQLO at Cherry Hill Mall and Willow Grove Park
Michael Kors at Willow Grove Park
Vera Bradley at Cherry Hill Mall
"We have been successful in our strategic plan to enhance the shopping experience by delivering sought after national and first-to-portfolio and first-to-market retailers," says Joseph F. Coradino, CEO of PREIT. "As we continue our portfolio transformation, we expect to deliver more key brands that drive traffic and sales to our properties."

Cherry Hill Mall, eight miles from Philadelphia, serves as the dominant shopping center in densely populated southern suburban New Jersey, with a tenant mix consisting of high-end retailers and restaurants.  With the additions of e.l.f studio, lululemon athletica and Tumi this year and UNIQLO and Vera Bradley late last year, Cherry Hill Mall continues its tradition of attracting new tenants to the PREIT portfolio. The high-end tenant strategy appears to have paid off handsomely, PREIT tells

“The customer has really been receptive to the remerchandising that has occurred since we brought Nordstrom to the property,” Heather Crowell, vice president of Corporate Communications and Investor Relations for PREIT, tells exclusively.  “When we set about the plan, sales at the property were $400 per square foot and as of the end of 2014, were well over $600 per square foot so we think that's the best validation of our merchandising strategy we could ask for.”

At Willow Grove Park Mall in Willow Grove, PA, Sears recently announced the planned  opening of Primark in a portion of its space on the 2nd and 3rd levels of the mall. The announcement comes as part of Primark's rollout in the Northeastern United States. Last year, Willow Grove Park continued to improve its merchandise offerings through the addition of Michael Kors and UNIQLO, who opened two stores in PREIT malls as part of its four-store expansion into Philadelphia.

Canadian-based retailer Garage will join Woodland Mall, a premier mall located in western Michigan that features many stores' exclusive Western Michigan presence. Garage will supplement the mall's diverse, high-end tenant mix while catering to the younger, fashion-savvy shopper.  Key stores Vera Bradley and Lush Fresh Handmade Cosmetics opened in 2014.

PREIT says its six premier malls contributed 38.2% of its same store mall NOI and generated sales per square foot of $543 as of December 31, 2014.  The continued merchandise upgrades are a direct result of the Company's effort to improve the quality of its portfolio.

Saturday, March 21, 2015

Collegeville Inn sold for redevelopment

By Carl Rotenberg, The Times Herald
The Collegeville Inn, a former smorgasbord restaurant and cafeteria training facility that closed several years ago, is under contract to be purchased by the Buccini/Pollin Group of Wilmington, Del.

The owner of the property, M&T Bank, agreed to the purchase some time ago, said Township Manager Richard Gestrich.

Representatives of the bank met with township staff and Solicitor John Rice in April 2014 to present two development proposals for housing and retail space along Germantown Pike.

“There were two options. One option was a 9,000-square-foot retail center near Germantown Pike, three-story walk-up apartments with 162 units in eight buildings and 46 town homes in separate buildings,” Gestrich said. “The second option was a 6,000-square-foot retail center and 115 two-story townhomes.”

Gestrich said the apartment proposal would likely need zoning relief to be developed, but the townhouse concept could be a by-right use.

“The board of supervisors is very supportive of developing that tract,” Gestrich said. “There are zoning ordinances that would not allow the apartments.”

Gestrich said the closed building had been under a purchase contract “for some time,” but the purchase price had not been disclosed.

Officials at Buccini/Pollin Group could not be reached for comment.

The Collegeville Inn, with more than 100 years of history on one side of the Perkiomen Creek Bridge, was purchased in 1994 by Nutrition Services Management Co. (NSM) of Kimberton and reopened in 1997 as the Marketplace Restaurant in 1997. The 450-seat restaurant, banquet and conference hall was used by NSM as a training facility for chefs and kitchen workers in their banquet hall system.

In 2008, the township staff received a proposal for a retirement community with 100 to 150 age-restricted units that would preserve the Collegeville Inn building. That proposal never moved beyond the discussion stage.

M&T Bank holds the mortgage on the property.

Thursday, March 19, 2015

Patriot Pays $41M for Allentown Office Campus

Patriot Equities is acquiring 1110 American Parkway, Allentown PA, a 600,000 square-foot class A office campus in Allentown, PA. The property is off Route 22 in close proximity to the Lehigh Valley International Airport.

Mission Capital Advisors says its Debt & Equity Finance Group arranged $41 million in acquisition and repositioning financing for the transaction.

The property includes two class A office buildings totaling approximately 600,000 square feet connected by a glass atrium on approximately 145 acres.  The buildings are served by two parking garages and surface parking. Another 400,000 square feet of office space, for which approvals have already been received, could be built on the property.

Patriot purchased the office campus from LSI Corporation, recently acquired by Avago Technologies, San Jose, CA. LSI retained, on a long-term basis, approximately 110,000 square feet in a portion of one of the buildings. Intel Corporation and the United Way are also tenants in the property. Intel recently acquired a business unit from Avago and Patriot was able to retain them as a tenant in the building with a new 80,000 square foot long term lease (in addition to approximately 50,000 SF they currently occupy on the campus).  Patriot is in talks with several large users for the remaining available space.

"This is the preeminent building in the Philadelphia region and was constructed to the highest standards for a large corporate user,” says Erik Kolar, Patriot's president and CEO. “Its flexible floor plates and superior amenity package will allow us to provide an unmatched facility experience to tenants in the marketplace."

“Our team was tasked with the challenge of arranging full leverage financing on a short-fuse acquisition with 40 days to close. We were also presented with a host of moving parts and unknowns, such as substantive property lease-up during the contract period, including post-lender term sheet execution prior to loan closing, which required additional negotiation and capital source flexibility,” says More. “The property itself is the top suburban office asset in Pennsylvania. The sponsor succeeded in tying it up directly off-market at a very attractive basis after 10 years of courting the seller.  Patriot Equities’institutional-quality sponsorship, along with aggressive and exemplary leasing prowess during the contract period, helped our team craft the right story needed to nearly full-leverage financing.”

Safeguard Scientifics Inks 20,000-SF Lease at Radnor Financial Center

Safeguard Scientifics, Inc., a venture capital firm that has been around for more than 60 years, signed a 10-year lease for 20,000 square feet in the Radnor Financial Center 170 building at 170 N. Radnor Chester Rd. in Radnor, PA.

The company was originally founded as the Lancaster Corporation by Warren V. Pete Musser and Frank A. Diamond as a holding company.

The three-story, 69,787-square-foot office building was constructed in 1985 on 21.9 acres in the upper Main Line submarket of Delaware County, part of the Radnor Financial Center. It is home to Enterprise Rent-A-Car and Central City Steel, Inc.

Burlington Coat Factory Renews in Burlington

Burlington Coat Factory signed a 208,268-square-foot renewal deal at 280 Daniels Way in Burlington, NJ.

The single-story, 416,744-square-foot industrial building was constructed in 2007 in the Burlington Industrial submarket. It has 65 loading docks and 37-foot clear heights.

Crestwood Apts Sell for $11.5M

Brandywine Construction & Management sold the 165-unit Crestwood Apartments at 3241 Hulmeville Rd. in Bensalem, PA to a local investor for $11.5 million, or about $70,000 per unit.

The 110,000-square-foot multifamily community consists of one-, two-, and three-bedroom units across 15 buildings. The complex was built in 1970 in the Lower Bucks County submarket of Philadelphia.

Westtown Farmer's Market Leases 23,000 SF

Westtown Farmer’s Market leased 23,078 square feet at the Westtown Village Shopping Center located at 1193 Wilmington Pike in West Chester, PA. 

The 82,866-sqaure-foot shopping center was constructed in 1989 on 10 acres. The new tenant will join PetKraze, TD Bank, and First Niagra in the center.

Max Finkelstein Tires Signs Lease in Westampton

Max Finkelstein Tires, a tire retailer, signed a lease for about 303,372 square feet in the industrial building at 35 E. Park Dr. in Westampton, NJ.

The single-story building totals 303,372 square feet in the Burlington Industrial submarket. Dolan Contractors, Inc. developed the property in 2002.

Sports Authority Leases 35,000 SF in Abington

Sports Authority leased 35,268 square feet in the Abbington Shopping Center at 1413-1441 Old York Rd. in Abington, PA.

The 75,301-square-foot shopping center was built in 1958 on 5.5 acres in the Horsham / WIllow Grove submarket of Montgomery County. Other tenants include Sovereign Bank, Hunan Village Restaurant, and Mr. P Pizza & Pasta.

Wednesday, March 18, 2015

Cashing in on the Student Housing Boom (Video)

MGM Casinos to Convert to REIT (Video)

First Industrial Realty Trust Developing Lehigh Valley Industrial

by Steve Lubetkin
Chicago-based First Industrial Realty Trust is spending $44 millionto build First 33 Commerce Center, a two-building 584,760 square-foot development on Easton Nazareth Highway in the Lehigh Valley region of Pennsylvania.

“We’ve owned the land for several years now and we’ve been able to get the site fully entitled to be able to build the two buildings,” Jeff Thomas, First Industrial’s senior regional director and market leader for Pennsylvania, tells exclusively.

The company will look to sell some additional land fronting Easton Nazareth Highway (Route 248) for commercial development, Thomas says.

“Coming out of the recession has certainly been good for industrial development,” Thomas tells “We just recently completed a 708,000 square foot speculative building in 2013 that was leased last year to Federal Mogul in the Central Pennsylvania market.”

As to the Nazareth property, “We’ve always liked the location, certainly its proximity to serve the New York metro area is a primary driver of demand along the Route 33 corridor,” Thomas says. “The buildings can be multi-tenanted if necessary.” Route 33 runs roughly north-south through Northampton County, PA, connecting Interstate 78 in the south with Interstate 80 in the north.

The state-of-the-art development will have two buildings, a 341,400 square-foot facility and a 243,360 square-foot building. Both will feature 32-ft clear height, ESFR sprinklers and interior and exterior energy-efficient lighting systems. The buildings are expected to be completed by year-end 2015.

“The Lehigh Valley continues to grow in importance as a distribution hub for the Northeastern US due to its efficient highway networks and talented labor force,” said Peter Schultz, executive vice president for First Industrial. “With limited availability of high quality distribution product in the market, we are excited to develop these facilities which can meet the needs of a range of distribution and other customers.”

Monday, March 16, 2015

Internet Ideal to Show All Real Estate Options: Florance (Video)

Endurance Acquires Northeastern PA Industrial Portfolio

by Steve Lubetkin,
Endurance Real Estate Group has acquired a three building bulk warehouse/distribution portfolio totaling 544,640 SF in Northeastern Pennsylvania. The buildings were constructed in the late 2000s and feature class A warehouse/distribution specifications including 30’ clear ceiling heights, ESFR sprinkler systems, and ample (and expandable) loading capacity with full dock packages. Lighting, office, and other improvements are planned.

“This deal represented a rare opportunity to acquire Class A quality assets below replacement cost in a tightening submarket in one of the strongest warehouse/distribution corridors in the country” says Benjamin Cohen, president of Endurance. “Two of the buildings suffered from persistent vacancy largely due to the timeframe in which they were delivered in the 2006-2008 time frame, though with leasing market conditions tightening and the inherent appeal of these assets combined with a fresh approach to property leasing and management (with suites in move-in condition), we feel confident that we can step in and stabilize the portfolio quickly.”

The portfolio includes 7 and 15 Alberigi Drive in Jessup Borough, consisting of 166,500 square feet and 129,500 square feet, respectively, and a 248,640 square foot building at 32 S. Preston Drive in Wilkes-Barre. The portfolio is situated in the Northeast PA submarket of the I-81/I-78 Distribution Corridor, offering users immediate proximity to I-81 and close proximity to I-476 (PA Turnpike), I-80, I-84 and I-380. The portfolio is currently 50% occupied.

7 Alberigi Drive is fully leased to two tenants including BAE Systems in the majority of the square footage. 15 Alberigi Drive is fully available and was designed with multiple storefront entrances to efficiently accommodate tenant suites ranging from 32,500 square feet up to a full-building presence.

32 S. Preston Drive offers a 124,080 square foot contiguous block of available space which is can be divided into units of 40,000 square feet, with the other half of the building occupied by Rehrig Penn Logistics.

Planned immediate improvements to 15 Alberigi Drive and the existing vacancy at 32 S. Preston Drive include an upgrade of the warehouse lighting to T5 fixtures and the construction of flexibly designed shell office space and restrooms providing an easily expandable and customizable template for new tenants.

Thursday, March 12, 2015

The Village at Highland Park Sold for $13.3M

Westgate Garden Associates sold the 187-unit Village at Highland Park multifamily complex at 1104 Columbus Ave. in Lemoyne, PA to RP Management, Inc. for $13.29 million, or approximately $71,000 per unit.

The 174,866-square-foot apartment community consists of one-, two-, and three-bedroom units across 18 garden-style buildings in Cumberland County.

Riverwalk at Millennium Sold for $80.7M

Scully Company and Long Wharf Real Estate Partners LLC acquired the Riverwalk at Millennium multifamily property at 309 Washington St. in Conshohocken, PA from JPMCB Strategic Property Fund and Riverwalk Realty Co., Inc. for $80.65 million, or about $215,000 per unit.

The 342,500-square-foot, 375-unit apartment community was originally built in 2005 with 189 units completed in 2010. Four buildings sit on 7.9 acres in Montgomery County. Amenities include a clubhouse with fireplace, billiards and a pub room, an outdoor pool with sundeck, river views, fitness center, and business center with conference facilities. This property is located a suburb northwest of Philadelphia that borders the Schuylkill River.

Wednesday, March 11, 2015

Wilson Elser to Relocate Philadelphia Office to Two Commerce Square

National law firm Wilson Elser is relocating its Philadelphia office to 2005 West Market Street, Suite 3100, a class-A high-rise office building also known as Two Commerce Square. The law firm signed a 10-year, 14,600-square-foot lease at Two Commerce Square.

Wilson Elser’s office is currently located in Curtis Center in Philadelphia’s historical district.  The new lease starts in June 2015.

“While our current office space has served us well for more than 25 years, relocating downtown puts us closer to our core business,” says Jonathan Dryer, regional managing partner of Wilson Elser’s Philadelphia office. “Moving into this new space allows us to update our office with the most current design elements, enabling us to realize greater operational efficiencies.”

Tuesday, March 10, 2015

Penn Medicine Expands into 268,000 SF at 3737 Science Center

Penn Medicine University City has signed a 56,000-square-foot lease in the 3737 Science Center building at 3737 Market St. in Philadelphia, PA, expanding its total occupancy there to 267,800 square feet.

Penn Medicine, a facility of Penn Presbyterian Medical Center, has relocated its Orthopedics Outpatient Program and other groups to the building, and will use its new space on the 11th and 12th floors for medical offices.

The 13-story laboratory and office building totals 340,000 square feet in the West Philadelphia submarket. It was built in November 2014, and is now fully leased.

"3737 Market's rapid lease up exemplifies the attractiveness of the Science Center as a location of choice for organizations in the innovation ecosystem," said Science Center President and CEO Stephen S. Tang, Ph.D., MBA. "Penn Medicine University City is a valuable partner of the Science Center and we are delighted that we could accommodate their expansion needs."

Developed by Wexford Science + Technology, a BioMed Realty (NYSE: BMR) company, and Science Center, the property is also home to Spark Therapeutics, a gene therapy start-up from The Children's Hospital of Philadelphia; Good Shepherd Penn Partners, which operates the Penn Institute for Rehabilitation Medicine; and the Corner Bakery Café which is expected to begin service on the ground floor this month.

The asset recently achieved LEED Gold certification for core and shell design, noted for several unique design features focused on energy efficiency, including a green roof with "white roof" insulating membrane, storm water management, and a chilled beam system - an advanced convection HVAC system for large buildings.

Beds and Meds Show Strong Deal Flow in Philadelphia

by Steve Lubetkin,

Deal flow in the healthcare and multifamily sectors has been robust, particularly in the University City area of Philadelphia, according to the Deal Flow Panel at the ALM Media RealShare Philadelphia conference held February 10 at the Union League.

The University City submarket west of 30th Street is experiencing strong demand, according to Paul Garvey, senior director, Cushman & Wakefield. In particular, Garvey points to 3535 Market Street, with Children’s Hospital of Philadelphia and the University of Pennsylvania as primary tenants, which was acquired by an out-of-market purchaser of medical buildings up and down the east coast.

“It’s a 1970s vintage building that’s had one renovation,” says Garvey. “It sold for above $300 a square foot, even with the building facing 150,000 square feet of empty space when Penn and CHOP vacate the property in 2017. That speaks to the health of that market.”

Garvey also pointed to 3737 Market Street, which broke ground two years ago and was delivered in July 2014. The 350,000 square foot building is now fully leased for $30-36 a square foot on a triple-net basis, he says. The University of Pennsylvania is a major tenant, and Garvey  is particularly excited about Spark Therapeutics, a medical technology startup that focuses on eye diseases, which took 30,000 square feet.

Suburban medical office and single tenant medical office is also doing well, says Benjamin Appel, associate director, Healthcare Real Estate Group / Net Leased Properties Group, Marcus & Millichap. “We have one of the largest concentrations of healthcare institutions and teaching hospitals in the country,” Appel says. “We’ve seen in the last year, cap rate compression of 40-45 basis points in suburban product. We’re beating the US on a comparative basis by 30-35 basis points. Still, it’s tenant-specific, it’s market-specific, and it’s what landlords are doing to differentiate themselves.”

Some healthcare is moving off-campus, says Appel, as an aging population finds it more convenient to access healthcare at suburban medical offices closer to their homes.

Increased activity with new companies locating in and around the Philadelphia market is leading to strong demand for multifamily residential properties as well, says Mark Thomson, senior managing director, HFF. HFF is financing a residential development at 2116 Chestnut Street, which he says is “right smack in the middle of everything that’s developing.”

“To see the growth in the eds and meds, on the brokerage side we’ve been using as our sales pitch for years, it’s actually happening, and we can quantify the multiple millions of square feet of office space being developed, the number of jobs that’s going to create,” he says. “The multifamily arena is booming.”

HFF has closed more than $250 million in Philadelphia multifamily deals in the last two months, and expects to close an additional $120 million in March, he says.

Simon Offers to Buy Fellow Mall Giant Macerich for $16 Billion

Simon Property Group (NYSE:SPG) took the next step in its pursuit of The Macerich Company (NYSE:MAC) today, going public with an unsolicited proposal to acquire all of Macerich's outstanding stock for $91 per share. The offer is structured as 50% cash and 50% Simon common stock based on a fixed exchange ratio.

The total value of the proposed transaction is approximately $22.4 billion, once the assumption of Macerich's $6.4 billion of outstanding debt is factored in. The offer represents just under a 5% premium to Macerich's Friday closing stock price of $86.72, and a 30% premium to its closing stock price of $69.88 on November 18, 2014, the day before Simon disclosed its interest in the company by acquiring a 3.6% stake in the company, equivalent to 5.71 million shares.

Simon said it also has an agreement in principle to sell selected Macerich assets to General Growth Properties, Inc. (GGP) if and when a deal to acquire Macerich is consummated.

Saying he believed Simon's cash and stock offer would bring compelling value to shareholders of both companies, Simon chairman and CEO David Simon went on to say, “Simon has consistently delivered outstanding returns to its shareholders and for a decade has outperformed Macerich in virtually every key operating and financial category, including share price performance, comparable NOI growth, sales per square foot, occupancy rates, FFO growth, dividend growth and total shareholder returns. We are confident our proposed transaction provides a highly attractive value proposition to Macerich shareholders," adding that Simon had received "enthusiastic support" for the combination from many of overlapping shareholders.

Macerich has so far resisted its rival's offers to merge despite multiple requests to engage in discussions following the disclosure of Simon's investment in November 2014, and has reportedly considered adopting potential takeover defense measures with its advisers.

Simon released a letter sent to Macerich Chairman and CEO Art Coppola stating, "It has now been well over a week since we met to discuss Simon's interest in acquiring Macerich, and I am disappointed you have not gotten back to me as you said you would. I am therefore providing you with a written proposal confirming the basis on which Simon proposes to acquire Macerich. As discussed, this transaction has strong strategic logic and would bring substantial value to our respective shareholders."

Simon's pursuit of Macerich follows the pattern previously set by the world's largest retail property owner in its bid to acquire General Growth Properties in 2009 shortly after GGP sought Chapter 11 bankruptcy protection. On February 16, 2010, Simon went public with its bid after GGP resisted Simon's overtures. The GGP board favored an investment offer from Brookfield Asset Management and Simon withdrew its offer in May. No doubt it hopes its pursuit of Macerich turns out differently.

Meanwhile Macerich confirmed that it had received an "unsolicited, conditional proposal" to acquire the company for $91.00 per share in cash and stock from Simon. Macerich said its board of directors will review the proposal with its financial and legal advisors, and urged stockholders to take no action at this time.

Analysts say Macerich's 54 million-square-foot portfolio is especially attractive to Simon. Macerich currently owns 51 regional shopping centers located in many of the country's most-populated markets, with a significant presence on the West Coast, Arizona, Chicago and the Metro New York-Washington, D.C. corridor.

The crown jewel in the Macerich portfolio is considered to be Tysons Corner Center, a 2.1 million-square-foot super regional mall in the northern Virginia suburbs outside Washington, DC. A major expansion is underway that will add a 30-story, 430-unit apartment tower and a 300-room Hyatt Regency hotel expected to reach completion in the first half of 2015. The new multifamily and hotel components are in addition to the 527,000-square-foot office tower which opened in August 2014 with major tenants Intelsat and Deloitte.

Most recently, Macerich has been consolidating its ownership in several of its mall properties. In November 2014, the company bought out its joint venture partner's 49% interest in Queens Center, Washington Square, Los Cerritos Center, Stonewood Center and Lakewood Center from a wholly-owned subsidiary of the Ontario Teachers' Pension Plan Board for $1.8 billion, including the assumption of $672 million of property-level debt. As part of the transaction, Macerich agreed to issue approximately 17.1 million shares of common stock, representing a 10.9% common ownership stake in the company, to the pension fund subsidiary to fund the balance.

Also in November 2014, Macerich bought out joint venture partner AWE Talisman's 40% interest in Fashion Outlets of Chicago for $70 million to own the recently-developed, 529,000-square-foot center outright.

Select Top Three Philadelphia Office Leases Signed in Q4 2014

The select top office lease signed during the fourth quarter of 2014 in the Philadelphia market was at Gateway Office Campus - Bldg 4 in the North Camden County submarket. Subaru of America leased 250,000 square feet there.

Brandywine Realty Trust represented the landlord in a 62,880-square-foot lease at Two Logan Square in the Market Street West submarket.

Thomas Jefferson University Hospital leased 43,369 square feet at 833 Chestnut East in the Market Street East submarket.

In the second quarter, Comcast Corporation signed a 982,275-square-foot lease at Comcast Innovation & Technology Center in the Market Street West submarket.

This trend is compared to the U.S. National Office select largest new lease signings occurring in Q4 2014, which include the 1.89 million-square-foot deal signed by Google, Inc. in the South Bay / San Jose market; Amazon's 422,682-square-foot office lease in New York City; ServiceNow, Inc. taking 310,346 square feet in the South Bay / San Jose market; MITRE's lease of 270,000 square feet in the Washington market; and Subaru of America's fourth-quarter deal totaling 250,000 square feet in Philadelphia.

Thursday, March 5, 2015

Zamir Equities Acquires LibertyView Office for $17M

Brandywine Realty Trust sold the LibertyView office building at 457 Haddonfield Rd. in Cherry Hill, NJ to Zamir Equities for $17 million, or approximately $140 per square foot.

The 121,737-square-foot property was built in 1990 on 7.8 acres in the North Camden County submarket.

Garden State Pavilion Bldg 3 Sold for $16.3M

One Liberty Properties, Inc. and MCB Real Estate LLC sold the retail building at 2232 Marlton Pike W in Cherry Hill, NJ to Kimco Realty Corporation for $16.3 million, or approximately $126 per square foot.
Garden STate Pavilion Bldg 3 is a 129,400-square-foot retail building constructed in 1999 on 12.5 acres in the North Camden County submarket.

Merion Bldg Trades for $18.5M

Griffin-American Healthcare REIT III, Inc. acquired the Merion Building at 700 S. Henderson Rd. in King of Prussia, PA from O’Neill Properties Group LP for $18.5 million, or about $252 per square foot.

The historic office building delivered in 1932, and was renovated in 2002. It totals 73,326 square feet in 5.9 acres in Montgomery County.

TGM Associates Sells Metro West Goshen for $36.5M

Metropolitan Management Corp. acquired the 198-Unit Metropolitan West Goshen multifamily complex at 812 Goshen Rd. in West Chester, PA from TGM Associates for $36.45 million, or approximately $184,000 per unit.

The 207,090-square-foot apartment community consists of one-, two-, and three- bedroom apartments across six buildings. It was built in 1972, and renovated in 2007, in the Route 22 Corridor submarket of Chester County.

Wednesday, March 4, 2015

Exeter Property Group is proposing the warehouse in New Kingstown, PA

A plan for a 1.1 million square-foot warehouse has been put on hold Wednesday night as supervisors await a formal list of the developer's offerings as part of the deal, including dedication of land to the township and sizable monetary contributions to a New Kingstown volunteer group's efforts to beautify the neighborhood.

Supervisors and several residents, as well, continue to express concerns about traffic and noise and air pollution that the approximate 200 truck trips each day will bring to the area.

Exeter Property Group is proposing the warehouse at 40 Dauphin Drive in New Kingstown.

A plan for a 176,000-square-foot expansion at its neighboring warehouse was approved by supervisors last month.

Though the items to be warehoused and distributed at the new warehouse have not yet been revealed, project engineer Brian Evans said it will be dry, household items, and not any form of food or hazardous materials.

Supervisors questioned officials for the project on how truck idling rules will be enforced.

Evans said the facility will comply with all Department of Environmental Protection rules, and that they aren't "proposing anything that would be problematic."

In addition to trucks, the warehouse will also be serviced by the nearby railroad. Exeter plans to realign the railroad so only one spur enters both the new warehouse facility and the neighboring Fry Communications facility.

Exeter plans to contribute $150,000 in cash escrow to New Kingstown Vision's design and master plan for a beautification/streetscape project, and also to assist in efforts to minimize the speed limit through town to 25 miles per hour.

They also plan to rehabilitate Dauphin and Fry drives, both private roads, and provide additional street lights in the location.

Plans also include 37 acres of land south of the proposed warehouse and across the railroad tracks, where Exeter would install an approximate nine-acre stormwater detention basin.

The rest of the agricultural land, they said, would be offered to the township for its own use.

Supervisors discussed the possibility of renting the land to a local farmer.

Is Commercial Real Estate Making a Comeback? (Video)

Keystone Relocates HQ to Conshohocken

by Steve Lubetkin,

Keystone Property Group has relocated its offices to SORA Conshohocken at 125 East Elm Street from its former headquarters in Bala Cynwyd. Keystone recently acquired SORA, a multifaceted transit-oriented redevelopment initiative located in the gateway of Conshohocken.

Keystone’s acquisition of the headquarters building represents its fourth commercial property in Conshohocken. A staff of 50 professionals will operate from the new headquarters, while the company operates satellite offices in New York and Miami.

Keystone is currently firming up plans for SORA–formerly known as One Conshohocken–a mixed-use project consisting of four properties within the Conshohocken Redevelopment area. Keystone acquired the land to transform the site into a vibrant public plaza flanked by restaurants, shops, a 200-room hotel and a new class A, 300,000-square-foot office building. The project will enjoy convenient connections throughout Eastern Pennsylvania, including Philadelphia, from the adjacent Conshohocken SEPTA train station.

”As our commercial redevelopment footprint continues to expand throughout the Philadelphia metropolitan area, we aimed to identify a new company headquarters that was located in a central hub such as Conshohocken,” says Bill Glazer, president of Keystone. “It was especially important for us to invest in the area near SORA, which is slated to serve as the commercial and cultural centerpiece of Conshohocken.”

Keystone’s plan for SORA, in line with the Borough’s comprehensive revitalization strategy for Conshohocken, includes a vibrant public plaza situated in the middle of the development, designed as a community event and gathering space as well as the repurposing and restoration of the 136-year-old Conshohocken Firehouse, as a brewpub with indoor/outdoor dining and event experiences. Keystone will also provide local residents, businesses and visitors with approximately 300 additional free parking spaces onsite.

Tuesday, March 3, 2015

Lawndale Plaza Sold for $24.5M

Highland Development Group Ltd. sold the Lawndale Plaza shopping center at 6301-6395 Oxford Ave. in Philadelphia, PA to Cedar Realty Trust, Inc. for $24.5 million, or about $263 per square foot.

The 93,282-square-foot neighborhood center was built in 1996 on 7.2 acres in the Northeast Philadelphia submarket, within the Lawndale neighborhood, a solid trade area with a median household income of $43,000 and a population of 377,000 in a three-mile radius.

The grocery-anchored asset was fully leased at the time of sale, and traded unencumbered by existing debt. A well-performing Shop-Rite occupies 63,000 square feet, with inline space filled by regional and national tenants including Advance Auto Parts, T-Mobile, Subway, Dunkin Donuts, LaundroWorld, and Sun Federal.

"We are excited about the acquisition of Lawndale Plaza, as it complements and grows our presence in the Philadelphia market," said Bruce Schanzer, president and CEO of Cedar. "The acquisition fits perfectly into our Washington DC to Boston footprint and is consistent with the objectives of our capital migration strategy to improve our average asset quality."

Monday, March 2, 2015

RR Donnelley Sells Building in Bloomsburg, PA

by Steve Lubetkin,

RR Donnelley sold its 370,000-square-foot single-story industrial building on 56.6 acres at 4411 Old Berwick Road in Bloomsburg, PA to Sekisui Polymer Innovations, LLC, which has an existing facility near the site and plans to bring an additional 200 new jobs to the area over the next five years.

Key features of the property include 6-inch reinforced concrete floor; concrete block over heavy structural steel frame and insulated metal panel walls; Firestone single-ply membrane roof; columns spaced 30 feet x 40 feet and 45 feet x 45 feet; ceiling heights to 26 feet; T-8 fluorescent lighting; wet sprinkler system; approximately 10,500 square feet of office space; 16 dock doors with levelers and seals; two drive-in doors and parking for 480 vehicles.

 BIDA were assisted in their marketing efforts by the continued aid and cooperation received from numerous other sources including the Board of Columbia County Commissioners, the Governor’s Action Team, the Central Pennsylvania Career Link, the SEDA-COG Joint Rail Authority, the North Shore Railroad and PPL.