Wednesday, April 29, 2015

Home Gallery Leases 26,000 SF on Market Street

Home Gallery Furnishings signed a two-year, 25,840-square-foot lease at 4021-25 Market St. in Philadelphia, PA.

The two-story, 25,840-square-foot retail storefront building was constructed in 1915 in the West Philadelphia submarket.

CRE Growth strong in US (Video)

Tuesday, April 28, 2015

Paoli Medical Plaza Sold

by Steve Lubetkin,

Paoli Office Park Partners, L.P., a partnership affiliated with Blank Aschkenasy Properties of West Conshohocken, PA, has sold its Paoli Medical Plaza, a 99,059 square foot medical campus adjacent to Paoli Hospital, to Griffin-American Healthcare REIT III, Inc., through its sponsor, American Healthcare Investors, LLC, for an undisclosed amount.

“This is a premier medical center with some of the highest quality multi-tenant medical office space in the Philadelphia region. It is strategically located next to Paoli Hospital, and there is a great synergy between the tenants of the campus and the hospital.”

“We continue to experience significant capital focused on healthcare real estate investment, causing on-going yield compression. Paoli Medical Plaza attracted a diverse mix of institutional and private investors from across the US.”

Paoli Medical Center is comprised of three buildings and is anchored by Main Line Health, which also owns and operates Paoli Hospital. Main Line Health occupies 37 percent of the properties for clinical, billing, and administrative uses. The campus also includes several other prominent healthcare tenants including Paoli Hematology/Oncology, Philadelphia Hand Center, Premier Orthopedics, Aligned Medical Group, Urology Health Specialists, Women’s Health Care Group of PA and LabCorp.

Aztec Group Arranges $23.4M Refi for Bartonsville Shopping Centers

Florida-based real estate investment and merchant banking firm Aztec Group, Inc. has arranged $23.35 million in financing for two retail shopping centers located in Bartonsville, PA.

Aztec Group secured $13.2 million in financing for Bartonsville Square, and an additional $10.15 million for the adjacent Bartonsville Plaza.

Developed by an affiliate of Legend Properties, the two assets are located just east of Routes 611, 33, and I-80, about five miles from the Delaware Water Gap and State of New Jersey, in Philadelphia's Monroe County submarket.

Bartonsville Square is an 80,000-square-foot neighborhood center anchored by a 50,000-square-foot Dick's Sporting Goods. The three-building plaza was built in 2014 and is currently 95 percent occupied.

Basis Investment Group, a New York City-based conduit lender, provided the financing on a 10-year term and 30-year amortization schedule. The fixed-rate loan carries several years of interest-only payments and a 75% LTV.

Bartonsville Plaza is a 49,000-square-foot retail center shadow-anchored by Lowe's and Kohl's. The four-building strip was built in 2010 and is currently 94 percent occupied.

Ladder Capital, a New York City-based conduit lender, provided the financing on a 10-year term and 25-year amortization schedule. The fixed-rate loan also carries several years of interest-only payments, and a 70% LTV.

"The sponsor’s conservative loan request, proven track record and strong tenant mix enabled Aztec to arrange financing terms that truly exceeded the client’s expectations.".

Liberty Developing Two DCs for Long Term LV Tenant Uline

by Steve Lubetkin,
Liberty Property Trust has signed an agreement with shipping, industrial and packaging materials company Uline to occupy two build-to-suit warehouses in the company’s new Lehigh Valley development, Liberty Business Center III.

The 200-acre park, located in mostly Upper Macungie Township with the balance in Lower Macungie Township, is on Mill Creek Road between Hamilton and the Route 222 Bypass.

“We are excited to begin the project in Liberty Business Center III, particularly as it is with our long term tenant Uline,” says Robert Kiel, senior vice president and city manager, Liberty Property Trust. “Having worked together for years on previous buildings, it is gratifying to again be able to provide them with a first class development solution which in this instance allows them to effectively consolidate their operations into a campus setting.”

Currently, Uline leases space in four Liberty buildings in the Lehigh Valley. The new buildings will nearly double the company’s space with Liberty. Liberty is slated to break ground this summer.

“We have been working closely with both Townships for months to create a development plan that will provide our tenants with the features they need and want while being respectful of our neighbors,” says Kiel. “To ease traffic flow, we will invest in road improvements, including a new slip ramp on the Route 222 Bypass.”

Monday, April 27, 2015

Shorenstein Acquires 1818 Market Street

by Steve Lubetkin,
Shorenstein Properties has acquired 1818 Market Street, a 988,000 square foot commercial office tower in the city’s Market Street West submarket.

The class A office building includes ground floor retail space, parking for more than 400 vehicles and is the headquarters location for both Beneficial Bank and retailer Five Below.  The building is near Comcast Corporation’s 1.5 million square foot Innovation and Technology Center, a 59-story mixed-use tower now under construction adjacent to Comcast’s current headquarters, and is surrounded by new residential development designed to appeal to a growing population of young professionals choosing to live and work in Philadelphia’s Center City area.

“This is an extremely well located asset in an area which is undergoing a revitalization and will continue to appeal to tenants seeking to recruit and retain young professionals," says Douglas W. Shorenstein, chairman & CEO, Shorenstein Properties.  “1818 Market Street offers the kind of flexible, large blocks space that appeals to broad swath of growth tenants.”

Terms of the transaction were not disclosed.  Shorenstein made the acquisition on behalf of its eleventh real estate investment fund, formed in 2014 with $1.22 billion in committed capital from Shorenstein and its investors.

Friday, April 24, 2015

Philadelphia Retail Vacancy Increases to 6.0%

The Philadelphia retail market did not experience much change in market conditions in the first quarter 2015.

The vacancy rate went from 5.8% in the previous quarter to 6.0% in the current quarter. Net absorption was negative 637,609 square feet, and vacant sublease space increased by 48,894 square feet. In fourth quarter 2014, net absorption was negative 62,004 square feet.

Tenants moving into large blocks of space in 2015 include: Under Armor moving into 16,348 square feet at 1529 Walnut St; AutoZone moving into 15,874 square feet at 200 S Best Ave; and La-Z-Boy Furniture moving into 14,800 square feet at 101 Ironlake Blvd.

Quoted rental rates decreased from fourth quarter 2014 levels, ending at $13.88 per square foot per year.

A total of 19 retail buildings with 138,704 square feet of retail space were delivered to the market in the quarter, with 696,250 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. National Retail vacancy rate, which decreased to 6.0% from the previous quarter, with net absorption positive 15.41 million square feet in the first quarter. Average rental rates increased to $14.96, and 604 retail buildings delivered this quarter totaling almost 13.3 million square feet.

Thursday, April 23, 2015

Wilmington Office Trades for $61.8M

Medistar Corp. acquired the office building at 3 Beaver Valley Rd. in Wilmington, DE from a joint venture between KBS Realty Advisors and Gramercy Property Trust for $61.8 million, or about $233 per square foot.

Constructed in 1995, the five-story office building totals 265,503 square feet and is situated on 17.9 acres in the North New Castle County submarket of Philadelphia.

Construction Begins On Hamilton Crossings Shopping Center

by Steve Lubetkin,

The Goldenberg Group and TCH Development have begun construction of the Hamilton Crossings Shopping Center in Lower Macungie Township, Lehigh County, PA.  The 565,000-square-foot project–one of the largest open air shopping center developments in the country in recent years—will be anchored by Target, Costco Wholesale Club and Whole Foods, and will also include Dick’s Sporting Goods, Nordstrom Rack, Old Navy, Rally House, Five Below, Designer Shoe Warehouse (DSW), Pier 1 Imports and Ulta Cosmetics.  The Hamilton Crossings Shopping Center is scheduled to open in July of 2016.

The project comprises approximately 70 acres of commercial property between Hamilton Boulevard and the Route 222 Bypass at Krocks Road, with direct access to the shopping center from Route 222.  Hamilton Crossings also will have the first Costco and first Whole Foods in the Lehigh Valley. The project includes a number of public improvements, including significant regional roadway improvements, new technology in the form of adaptive traffic control signals and a regional storm water detention facility that will help address flooding conditions. The project will also include amenities such as bike and walking paths, public gathering areas and a connection to the historical log cabin site on the adjacent Wescosville Park.

Tim Harrison, owner of TCH Development, credited the concerted effort across all parties for bringing the Hamilton Crossings project to fruition.

"The project reflects years of teamwork and collaboration among Township planning, engineering and legal staff, the Commissioners, the Planning Commissioners, many different representatives of the Commonwealth of Pennsylvania, as well as countless constituent groups, neighbors and other stakeholders,” says Harrison.  “Hamilton Crossings is truly a shared vision that will become a uniquely positive asset for the Township and for Lehigh County for many years to come.”

The project’s developers also cited support of state Senator Pat Browne and state Representative Ryan Mackenzie as a critical factor in moving the project forward, as well and the participation of several key Commonwealth agencies, including the Department of Community and Economic Development, Commonwealth Finance Agency, PennDOT and the Pennsylvania Infrastructure Bank.  Financing for Hamilton Crossings was provided by lead bank M&T Bank, as well as Susquehanna Bank, National Penn Bank and Beneficial Bank.

“This project really represents an amazing achievement for everyone involved, both private and public,” says Jeremy Fogel, principal with The Goldenberg Group.  “We truly value all the relationships we’ve forged and now look forward to executing on our commitments so that Lower Macungie Township and Lehigh County ultimately view this project as the tremendous asset for the region that we all envisioned.”

Wednesday, April 22, 2015

Recent Deals Complete at the Triad Building in King of Prussia

Here is a list of recent tenants that moved in or renewed in the Triad Building in King of Prussia:

Telerx Marketing, Inc.
16,000 SF

Seasons Hospice & Palliative Care
5,000 SF

ASI Business Solutions
15,000 SF - renewal

Spring Mill Partners
3,000 SF

Communications Media, Inc.
10,000 SF - renewal
5,000 SF

Genomind, Inc.
9,000 SF

Comcast, Liberty buy land for what could be third Comcast Tower

by Jacob Adelman, Inquirer Staff Writer

For the first time, Comcast Corp. and Liberty Property Trust acknowledged Tuesday they were partnering on a third real estate deal in Center City, which some have speculated could be the site of another Comcast office tower.

The companies have jointly bought land at 19th and Arch Streets, diagonally across the street from where they are building the 59-story Comcast Innovation and Technology Center, company spokesman John Demming said.

Comcast and Liberty have no specific plans for the parcels, as the companies concentrate on developing the new tower, Demming said.

The new innovation center will be the tallest building in the country outside New York and Chicago. Liberty also developed the 58-floor Comcast Center near the new tower's construction site.

Demming's comments came after Liberty CEO William Hankowsky discussed the deal earlier in the day during an earnings call with analysts.

It was the first confirmation by the companies that they were cooperating on land purchases at 19th and Arch.

"People have asked about this in the past," Hankowsky said on the call. "We are acquiring some real estate at 19th and Arch. This is a great relationship and has yielded, I think for both parties, good real estate and good investments."

Liberty spokeswoman Jeanne Ackerly Leonard had no immediate details about the size of the plot being acquired or the number of properties that have been bought.

Hankowsky said during the call that Liberty had yet to make any announcement about how it intends to develop the parcels.

"There's nothing around the corner," he said.

Bill Luff, executive managing director for Colliers International's Philadelphia office, said there had been speculation among real estate watchers that Liberty was acquiring the properties at Comcast's behest, since the cable company could soon need more space even after filling out its first two towers.

"I can see the logic that there could be a third building," he said.

Why Is Real Estate a Safe Investment? (Video)

Presbyterian Pensions Board Renews Lease at 2000 Market

by Steve Lubetkin,
Rosemont Realty has renewed its lease with The Board of Pensions of the Presbyterian Church (USA) at 2000 Market Street, where the Board has been headquartered since 1996.

The 12-year, 76,998 square-foot lease renewal represents the third lease executed at 2000 Market Street in March. The three leases total 114,166 square feet, and include a 20,657 square foot lease by Aetna and 16,511 square feet secured by Shechtman Marks Devor PC.

“We’re honored that The Board of Pensions has renewed the lease for its headquarters at 2000 Market,” says Tina Renee McCall, senior vice president of asset management of Rosemont’s East region. “The building’s prominent location at the top of Market Street coupled with the class A office environment factored into their decision to renew.”

“We were pleased with Rosemont’s willingness to work with us to make it feasible for us to remain in this great location,” says Frank Spencer, president of The Board of Pensions.

2000 Market is a 29-story, 665,649 square foot class A office building located in the Market West submarket of Philadelphia’s Central Business District. The building is now 97 percent leased and its tenant roster includes Fox Rothschild LLP, Marshall Dennehey, and Zurich Insurance Group, Ltd., among others.

Monday, April 20, 2015

Rosewood Expands Self Storage Property Portfolio with 18-Property Acquisition

Dallas-based Rosewood Property Co., a subsidiary of a private investment concern owned by the Caroline Hunt Trust Estate, recently acquired an 18-property self-storage portfolio for an undisclosed price.

The acquired portfolio includes over 1,140,000 rentable square feet of storage space located in Pennsylvania, Maryland, New Jersey, Kentucky, and Indiana. The acquisition represents a significant expansion of RPC's existing self-storage holdings, which are located in Oklahoma City, Denver and Colorado Springs, CO, Arlington, TX and Houston.

Bill Flaherty, president of Rosewood Property, said, "We have aggressively built our portfolio and intend to continue to grow it through acquisition and development."

Flaherty added that the company also recently announced a new $75 million program with Dallas-based Cornerstone to develop multi-story and drive-up self-storage facilities in infill locations in such markets as Dallas/Fort Worth, Austin, San Antonio, Houston, Denver and Kansas City.

RPC has tapped Extra Space Storage, a public REIT based in Salt Lake City, to manage the newly acquired properties. Extra Space currently manages RPC properties in Denver and Colorado Springs.

Debt financing was arranged through the team at Talonvest Capital, Inc. of Irvine, CA. The non-recourse acquisition loan, structured with 10 years of interest-only payments, a sub-3.9% fixed interest rate, and release provisions for individual properties, was funded by an undisclosed U.S. money center bank.

Hearth & Home Renews, Expands in Woodmont's Kutztown Industrial

by Steve Lubetkin,
Hearth & Home, the world’s leading producer and installer of hearth products, has renewed and expanded its lease with Woodmont Industrial Partners at 9747 Commerce Circle in Kutztown, PA.

In the new five-year lease, Hearth & Home will expand its existing space from 138,457 square feet to 173,701 square feet—an increase of more than 35,000 square feet.

“The prime location was a crucial factor in Hearth & Home’s decision to remain at 9747 Commerce Circle,” says Eric Witmondt, principal of Woodmont Industrial Partners. “This latest lease is a testament to the growing demand for quality industrial space in the Lehigh Valley, which has become a hot spot for business activity and logistics companies.”

Located within the Arcadia West Industrial Park, less than half a mile away from Interstate 78, the property is a 385,000-square-foot, class A distribution center in the heart of the Leigh Valley industrial market. The strategic location not only provides easy access to I-78, but also to I-476 and Route 22, giving tenants the logistic ability to interact with Central and Northeastern Pennsylvania as well as Central and Northern New Jersey.

Woodmont, in a joint venture with AEW Capital Management, acquired the building in January 2013. AEW owns the property on behalf of AEW Partners VI, an opportunistic real estate fund.  Built in 2007, the building is equipped with an ESFR sprinkler system, T5 lighting, 32-foot ceiling heights, 50-by-50-foot column spacing, 20 loading dock doors and 10 additional knock-out dock door panels.

Sunday, April 19, 2015

Kid City Stays in Philadelphia

Kid City, a discount children's apparel store, has renewed its 16,623-square-foot lease in the South Philadelphia Shopping Center at 2412 S. 24th St. in Philadelphia, PA.

The 283,415-square-foot center sits on about 14 acres in the South Philadelphia submarket, in close vicinity to I-76.

Mercer Carpeting & Hardware Leases 23,000 SF in Cinnaminson

Mercer Carpeting and Hardware signed a five-year lease for 22,500 square feet in the Main Line Shopping Center at 1210 State Hwy 130 N. in Cinnaminson, NJ.

The shopping center totals 77,870 square feet of retail space in the North Burlington County submarket of Philadelphia. Mercer’s lease includes the largest space to be occupied by a single tenant in the center, home to Rite Aid, Bottom Dollar and a Shell Gas Station.

Friday, April 17, 2015

PREIT, Macerich Reach Deal to Redevelop Center City Mall

Pennsylvania Real Estate Investment Trust (PREIT) and The Macerich Co. reached a tentative agreement with the city of Philadelphia to partially finance the redevelopment and re-branding of the Gallery, a shopping mall and transit center in Center City.

If approved by the city council, the Philadelphia School Reform Commission and the Philadelphia Redevelopment Authority, PREIT and Macerich plan to begin a two-renovation to rebrand the property as the Fashion Outlets of Philadelphia at Market East. The total project is expected to cost an estimated $325 million, with the developers agreeing to cover $234 million along with tax increment financing for the project from the city.

Redevelopment plans call for opening the site to Market Street and redesigning the shopping, dining and entertainment space for tourists, commuters, office workers, and residents.

"We believe that the proposed redevelopment will position The Gallery as the next great urban marketplace in the United States, capitalizing on its central location where mass transit, tourism, the residential population and employment bases converge," said Joseph F. Coradino, CEO of PREIT, in a statement announcing the tentative agreement.

The project, which is patterned after other recent Macerich mall renovation projects, most notably the Fashion Outlets of Chicago.

The city funding must be approved by city council and the School Reform Commission and the transaction must be approved by the Philadelphia Redevelopment Authority.

Under the proposed redevelopment plan, the Gallery will undergo a top-to-bottom redesign that will reconfigure the 1.5 million-square-foot, mixed-use facility by reconnecting it to Market Street with open storefronts, sidewalk cafes, a new streetscape, digital signage and graphics, all complementing the existing office space. Inside, the plan calls for a three-block corridor containing approximately 125 new stores, including dining and entertainment options. The highlight of the newly-reimagined space will be a new glass-walled Center Court at 9th and Market.

If all goes as planned, the rebranded complex will reopen in spring 2017 after a two-year construction schedule.

The developers have promised to maintain access to public transit during construction, with commuters able to gain access through street-level entrances at 8th and Market, 10th and Filbert, 11th and Filbert, and the Reading Terminal Headhouse at 12th and Market streets.

"We have worked for more than a decade to reach this point, and we are excited to move forward with a project that will make Philadelphia proud," said Coradino. "The time is right for Market East, and we can't wait to get started."

PREIT purchased The Gallery in 2013 for $60 million and brought Macerich in as a partner for the project in July 2014.

Commercial Real Estate Thrives on Record Price Surge (Video)

IBC has decided to take 112,000Sf at 1900 Market St

Natalie Kostelni Reporter-Philadelphia Business Journal

Independence Blue Cross will lease a significant portion of 1900 Market St. in Center City to consolidate offices it has in the suburbs.

IBC has decided to take 112,000 square feet, or two floors, of the 456,922-square-foot building that many know as the Stock Exchange.

The move had been considered by the insurer for a while.
“Our wholly owned subsidiary AmeriHealth Administrators has been weighing options for moving its two offices from Horsham and Fort Washington to a single, larger site in Center City,” said Judimarie Thomas, an IBC spokeswoman in an email. “This week the company decided to relocate those operations to 1900 Market Street ... AmeriHealth Administrators anticipates the new space will create an environment that will better reflect its collaborative culture and accommodate future growth.”

It expects to move those operations early next year.
The property sits directly across from its headquarters at 1901 Market St., a 50-story, 760,000-square-foot building in which it will continue to occupy.
By expanding into 1900 Market, IBC begins to form an urban campus of sorts along West Market Street. Aside from occupying 1901 Market, IBC has installed what it calls an innovation center in 5,000 square feet at 1700 Market and has leased a portion of space at 1919 Market, a 29-story mixed-use building totaling 455,000 square feet that is under construction and will have 24,000 square feet of office and retail space.
Full story:

Kennett Square Developing Apartments

Natalie Kostelni Reporter- Philadelphia Business Journal

StanAb Real Estate Development Co. is proposing to invest an estimated $50 million to construct two apartment projects in Kennett Square, Pa.

While Kennett Square is better known for its rural setting and rolling hills, the developer is making a bet that there’s pent up demand for multifamily units.

“We had a market study done and while multifamily is booming in many areas around Philadelphia, Kennett is underserved,” said Tony Stancato of StanAb of West Chester, Pa. “There hasn’t been a new project within nine miles of Kennett but for the Victory Bewing project, in forever. We think Kennett Square is prime.”

Victory Brewing Co. is opening a new restaurant at 650 W. Cypress St. this month.
Stancato also points to the companies that make Kennett Square their base like as Genesis Health Care, Chatham Financial and Exelon Energy. They have employees who rent in West Chester but many of them would rather live closer to where they work.

One of the projects StanAb is looking to do is on a block bound by State Street, Washington Street, Bernard Alley and South Mill Street in the borough of Kennett Square. It had been the site of Kennett Motors and Kennett Transmissions.

The developer is seeking to construct a four-story building with 175 apartments that will have 8,700 square feet of ground-floor retail space that would have a craft brew pub. The project would have what Stancato referred to as a Piazza akin to the one Bart Blatstein developed in Northern Liberties but on a much smaller scale. It would have a pool deck, an outdoor theater and dining areas. The development would be called the Lofts.

The other project is on 14 acres of undeveloped land in Kennett Township that is next to the Exelon operations and not far from Anson B. Nixon Park. The land is off of Millers Hill Road.
Full story:

Thursday, April 16, 2015

Fishtown factory building to become concert venue

Jeff Blumenthal Reporter-Philadelphia Business Journal

The former Ajax Metal Co. in Fishtown will reportedly be converted into a $32 million entertainment and concert venue to be operated by Live Nation.

The Philadelphia Inquirer said the project at the shuttered factory across Delaware Avenue from the SugarHouse Casino at Frankford Avenue will include two music venues under one roof — a two-level, 2,500-person-capacity concert hall called the Fillmore and the separate 450-patron Foundry club (plus bars and restaurant). The facility will be run by the House of Blues Entertainment (HoBE) division of Live Nation.

The 141,000-square-feet facility will be called Penn Treaty Village and will join other attempts to revitalize that portion of Fishtown.
Live Nation is the region’s largest concert presenter — contracting music acts for the Wells Fargo Center, Susquehanna Bank Center, Festival Pier, Tower Theater, and Theater of Living Arts.

Here’s more from the Inquirer, which questions whether rival concert promoters will be displeased by the additional competition.

"Can you hear the teeth-grinding of rival promoters at the smaller Ardmore Music Hall, World Cafe Live, and Underground Arts; the medium-size Trocadero, Union Transfer, and Keswick Theatre; and the Fillmore’s most obvious rival, the 2,500- to 3,000-person-capacity Electric Factory, steered by former Live Nation exec Larry Magid?"

“It’s crazy,” said rival concert booker Jesse Lundy of Point Entertainment. “This town is out of control, over-clubbed. It’s become a seller’s market. We’re fighting, competing over everything, even acts worth $5. Talent agents are looking at us and licking their lips like we’re a big lamb chop.”
Full story:

Greenphire to add 35 at new KofP HQ

by Joseph N. DiStefano, staff writer at the Philadelphia Inquirer

Flush with new investor cash, clinical-trials payment-technology provider Greenphire says it has moved to an 18,000 sq. ft. office at 630 Allendale Road, King of Prussia, from a smaller location nearby. The company employs 65, and plans to have over 100 by the end of 2015, a spokeswoman told me, expanding on a statement by Jennifer Peters, Greephire's "Chief Experience Officer."

The company said in January it has raised an undisclosed amount from investor Loren Schlachet's New York-based Riverside Capital. Greenphire raised $5.8 million from investors in 2011 and 2012, according to SEC Form D filings, see them here.  The 2011 investors included FirstMark Capital, whose founder Gerald Poch joined the board. Greenphire's payment-systems partners include Citibank and Wilmington-based The Bancorp, among others,

Greenphire was backed earlier by Pennsylvania's state-funded Ben Franklin Technology Partners.

Tuesday, April 14, 2015

Tutor Perini Inks $117M Contract to Build Center City Philly's East Market Project

The developer of East Market, one of downtown Philadelphia's most long-awaited redevelopment projects, has awarded a $117 million contract to Tutor Perini Building Corp. to build the first phase.

The initial $5.5 million demolition of the blighted area known to many local residents as Girard Square is already under way, and the ensuing construction phase of the contract from National Real Estate Development, LLC is valued at about $112 million.

East Market, a pedestrian-oriented development covering a full city block of Center City from Market to Chestnut and from 11th to 12th streets, is owned by a partnership led by National Real Estate Advisors, LLC, an asset management subsidiary of the National Electrical Benefit Fund.

The other partners in the project include private investment firm Joss Realty Partners, Young Capital LLC, a Philadelphia-based real estate investment firm; and privately held CRE company SSH Real Estate.

The Philadelphia office of Tutor Perini Building Corp., a subsidiary of civil engineering and building construction global giant Tutor Perini Corp., will build the $230 million first phase, which will consist of an 18-story, 500,000-square-foot mixed-use complex.

The project will include a 16-story, 322-unit apartment building, an 19,000-square-foot amenity level and outdoor deck above a two-story, 105,000-square-foot split retail podium, and 114,000 square feet of below-grade parking.

Most of the project is slated for completion by late 2016. BLT Architects is the project architect.

CP Flexible Packaging Leases 120,000sf in Bristol

by Steve Lubetkin,

CP Flexible Packaging leasing the entire 120,557-square-foot industrial building at 181 Rittenhouse Circle in Bristol, PA.

This building perfectly meets the expansion needs of our client, including their manufacturing requirements for heavy power and high ceilings. We are pleased to have represented CP Flexible Packaging in this transaction and to bring another quality company to Bristol."

The lease represents an expansion for CP Flexible Packaging from its current locations in York, Newtown and Bensalem, PA. The company specializes in flexographic print technologies and lamination to create custom packaging for clients.

Located within the Bucks County Enterprise Zone, 181 Rittenhouse Circle is a 120,557-square-foot industrial building located within Keystone Industrial Park. The building features 21’-25’ ceiling heights, 14 loading docks and one drive-in loading door. Keystone Industrial Park is easily accessible from Interstate 95 and the Pennsylvania Turnpike.

Monday, April 13, 2015

Warmth in Philly’s Multi Family Market

by Steve Lubetkin,
Vacancies declined and rents edged upward in the Philadelphia multifamily market, according to research.

Optimism about the economy and employment prospects are contributing to the construction activity that “may be seen as a response to growing rental housing demand and shifting housing preferences away from ownership,” says the report, prepared by senior research analyst Art Gering. “From another perspective, the recent and expected additions to rental stock may be merely catch-up to upgrade stock after limited building during and immediately following the recession.”

Among the report’s key trends were:

Tenants moving into 2,000 units during the first quarter, reducing the overall market vacancy rate by 30 basis points to 4.4 percent. In the South Jersey submarket, vacancy also declined to the low four-percent range.

Older properties built in the 1970s are performing well, with vacancy dropping to the four percent level, a 70 basis point decline.

Rents in the metropolitan Philadelphia area rose 0.9 percent. In South Jersey, the increase was about 2.6 percent.

In 2015, developers will make available 4,800 units, most of which are market-rate apartments.
Cap rates start in the low-five percent range for class A properties or buildings in highly urbanized areas of the metropolitan market, and extend higher than 7.5 percent for class C assets in secondary submarkets.

“The Federal Reserve recently indicated that it may raise its short-term lending benchmark any time after its April meeting,” says William E. Hughes, senior vice president, Marcus & Millichap Capital Corporation in the report. “The timing of the first increase in the Fed funds rate rests upon the central bank’s confidence that inflation will move back to its target two percent rate over the medium term. For this to occur, the labor market must tighten further and wage growth must accelerate. Against the prospect of an inevitable rise in interest rates, investors remain highly motivated to purchase multifamily assets and debt providers continue to compete for market share while also maintaining discipline.”

Friday, April 10, 2015

Dermody Breaks Ground at Two LogistiCenters in Suburban Philadelphia

National industrial development and operating company Dermody Properties has broken ground on two industrial facilities totaling 773,850 square feet across two industrial parks totaling 6.8 million square feet in the northeastern U.S.

LogistiCenter Logan:

In Logan Township, NJ, the developer and its capital partner Great Point Investors LLC have broken ground on a multi-tenant facility at 1110 Commerce Blvd.

When completed in June 2015 it will total 171,600 square feet of fully operational industrial space ideally suited for e-commerce, food and beverage, or consumer product warehousing and distribution.

The property will feature 32-foot clear heights and parking for 39 trailers and 106 cars - part of the proposed 5.5 million-square-foot LogistiCenter Logan industrial park in Southern New Jersey.

LogistiCenter Carlisle:

 In Carlisle, PA, the developer broke ground on another facility with PCCP LLC, a real estate finance and investment management firm, at 1 Ames Dr.

Available for preleasing now, the 602,250-square-foot facility will feature 36-foot structural heights, 142 loading docks, and parking for 93 trailers and 187 cars when completed in September 2015.

The building is part of the 1.3 million LogistiCenter Carlisle industrial park in Central PA, where Dermody completed the 700,000-square-foot 2 Ames Dr. last fall, currently fully leased to Amazon.

"There has been a great amount of industrial activity in submarkets like Carlisle and Logan recently," said Gene Preston, partner, Dermody Properties East Region Office. "We continue to work with our partners to develop best-in-class warehousing and distribution facilities that will enable companies to reach the northeastern U.S. population efficiently."

LogistiCenter Logan is a 1,100-acre industrial park with 11 available lots ranging from 17,000 to 1 million square feet. The park is located halfway between New York City and Washington D.C. LogistiCenter Carlisle is centrally located just one mile from I-81, a major North-South thoroughfare that puts approximately 40 percent of the U.S. population with a one-day drive. The area is home to numerous household brand names.

Two Center City Leases Worth $3.3 Million Get Locked Up

University of the Arts renewing University of the Arts’ lease for approximately 11,461 square feet on the 18th floor of the building in 1608 Walnut Street. The University established its offices at 1608 Walnut Street in 2005 and the renewal will continue that presence to the middle of the next decade. The aggregate value of the lease extension was approximately $2.5 million.

Bayada Home Health Care relocated from 24th and Walnut to 21st and Arch Streets. Bayada leased 7,850 square feet on the 4th floor of 2133 Arch Street to provide for the expansion and relocation of Bayada’s offices presently at 2401 Walnut Street in Philadelphia.  That move is scheduled for August of this year. The multi-year lease that has an aggregate rental exceeding $776,700.

Oracle Pushes Keystone Foods out of Conshohocken

by Kevin Tierney, MorethattheCurve

The Philadelphia Business Journal published an article yesterday detailing the expansion of Oracle at 5 Tower Bridge in West Conshohocken and how the the landlord of the building had to break a lease to make space. Below are the first couple of paragraphs:

In a sign of how tight the Conshohocken, Pa., office submarket is and how competitive it can be to keep marquee tenants, the landlord of Five Tower Bridge booted one company out to make room for another that was expanding.

Hayden Real Estate Investments broke a 50,000-square-foot lease it had with Keystone Foods so that Oracle Corp. could expand by 35,000 square feet. Oracle already occupies 49,000 square feet at Five Tower at 300 Bar Harbor Drive in West Conshohocken, Pa. It is planning to relocate operations it now maintains at Three Bala Plaza in Bala Cynwyd, Pa. Under a 10-year deal, the company will lease a total of 84,000 square feet and become Five Tower’s biggest tenant.

As we have reported, there are a handful of proposed and/or approved (but not built) office buildings in Conshohocken. We have heard several times a 50,000 square foot tenant is needed to move forward with building one of these buildings. Will Keystone Foods be the anchor tenant for a new office building in Conshy?

Wednesday, April 8, 2015

Silk Factory Lofts Sell in Lansdale

Lowe Enterprises Investment Management LLC and First Capital Advisors LLC have purchased the Silk Factory Lofts luxury apartment community at 200 S. Line St. in Lansdale, PA from Morgan Properties for an undisclosed price.

The three-story, 118,987-square-foot building was originally constructed as an industrial building in 1922, serving as the Interstate Hosiery Mill. The property was completely renovated and converted to a 116-unit multifamily community in 2008. It is currently comprised of 64 one-bedroom, 47 two-bedroom, four three-bedroom, and a four-bedroom units.

ALDI Purchases Bottom Dollar Food Locations

ALDI, Inc. purchased a total of 66 Bottom Dollar locations spread across Pennsylvania, New Jersey, and Ohio.

As a part of the 66 assets, some of these were leases on properties not owned by the seller, Delhaize America, Inc. and as such the real estate did not transfer in all centers.

The total purchase price of the portfolio was $15 million. The Delhaize Group in an international food retailer headquartered in Belgium, with its American headquarters in Salisbury, NC.

excelleRx Renews 100,000-SF Lease in Philadelphia

ExcelleRx, Inc., a pharmacy distribution provider, signed a renewal deal for its 99,675 square feet of office space in the Three Parkway office bulding located at 1601-1645 Cherry St. in Philadelphia, PA.

The 20-story building totals 561,351 square feet. Kneedler Mirick Pearson & Bachelor designed the building in 1997. The tenant occupies the entire 17th through 20th floors of the building. Other tenants include Drexel University, Reliance Insurance Company, and Legion Insurance Company.

Matrix Construction Leases 61,000 SF in Harleysville

Matrix North American Construction leased 60,652 square feet at 189 Main St. in Harleysville, PA.

The single-story warehouse was built in 1967 on 8.2 acres in the West Montgomery County Industrial submarket of Philadelphia. This single-tenant property features 14 percent office buld-out, 26-foot ceilings, seven loading docks and three drive-in bays.

Matrix NAC provides procurement, construction, maintenance, and repair services to the North American energy, power and industrial markets.

Six Senior Housing Communities Sold for $54.5M

Care Investment Trust acquired six senior housing communities totaling 299 units across four states from The Hollinger Group for $54.48 million, or about $182,000 per unit.

The portfolio boasted an average occupancy of 94 percent, and includes:
The Gardens at Cross Keys in Glassboro, NJ;
Graysonview Harrisburg in Harrisburg, PA;
Allzwell Assisted Living in Chesapeake, VA;
Autumn AL at Bel Air in Bel Air, MD;
Autumn AL at Cockeysville in Cockeysville, MD;
Autumn AL at Hagerstown in Hagerstown, MD.

Last month, Care Investment Trust closed on the purchase of Hollinger Group's Southern Portfolio for $29.13 million. This brings the total portfolio value to $83.6 million.

Brandolini Companies Refinances Glen Mills Retail Center

by Steve Lubetkin,

HFF arranged $60 million in financing for Concordville Town Centre, a 397,188-square-foot, Home Depot- and Acme Markets-anchored retail center in Glen Mills, PA.  

HFF worked on behalf of the borrower, Brandolini Companies, to secure the long-term, fixed-rate mortgage with an institutional insurance company.  The loan will be used to repay existing indebtedness.

The 99.3-percent-occupied Concordville Town Centre consists of 12 buildings and one pad site leased to Marshalls, HomeGoods, Staples, PetSmart, Wells Fargo Bank, Outback Steakhouse, Santander Bank and Bertucci’s along with anchors Home Depot and Acme Markets.  Additionally, Target shadow-anchors the center.  The 69-acre property at 101 Byers Drive is near the intersection of Routes 1 and 322.  Within one mile of the property, there has been a 100-percent increase in growth over the last 10 years and, currently, there are several new multi-housing and medical office developments that will further increase the residential and daytime populations proximate to the center.

Managing director Ryan Ade led the HFF team representing the borrower.

“Brandolini Companies engaged HFF on an exclusive basis in order to find the best available rate and terms in the permanent mortgage space for one of their premier, core assets,” says Ade.  “With benchmark treasury rates running near all-time lows, lender interest in a financing of this size was very high and allowed Brandolini to benefit in the form of low borrowing costs and flexible terms.”

Tuesday, April 7, 2015

Philadelphia Office Vacancy Drops 180 BP to 13.9%

by Steve Lubetkin,

Renovation of older office space in the Philadelphia suburbs is driving leasing demand and vacancy has declined dramatically in submarkets like Plymouth Meeting, northwest of the city.

In the Blue Bell/Plymouth Meeting area, class A vacancy has dropped from 26.7 percent at the end of 2010 to “a staggering” 3.0 percent in the first quarter of 2015.

“My general sense is there’s a lack of quality product in these suburban markets. Developers are starting to realize that by starting to make an investment in these lower quality buildings and turning them into A and A-plus buildings, they’re able to achieve higher rents on those buildings.”

As examples of the renovation activity, Kairos Real Estate Partners, which, as previously reported by, is renovating 600, 601, and 602 Office Center Drive, a 393,561 square-foot campus in Fort Washington, recently purchased for $77 per square foot. Earlier, Kairos successfully renovated 2200 Renaissance Blvd., a trophy property in the King of Prussia submarket, attracting one company to relocate its world headquarters there.

After ending the year with two trophy sales, suburban sales activity remained strong from late December through the end of the first quarter. There were five sales totaling $77 million, but assets in core submarkets like King of Prussia/Wayne received a premium on a per square foot basis compared to secondary, non-core suburban markets. In King of Prussia, the Merion Building sold for $254 per square foot, while buildings in non-core suburban markets have sold at a fraction of the cost of core markets.

In Center City Philadelphia, the University City market west of the Schuylkill River has been strong because of expansion by the University of Pennsylvania and Penn Medicine, its healthcare arm, and Drexel University. “The institutions are increasing their footprints there, and we’ve seen declining vacancy in a lot of the buildings. Especially as companies seek to be close to the universities, we’re seeing increasing rents.”

The nearly complete second Cira Centre tower, which will be mostly occupied by FMC Corporation, a chemical company, is almost completely pre-leased. “The vast majority of the building is already spoken for, and given the lack of quality large blocks of space that we have in the central business district, the timing for a new trophy tower in the office market is right. We’ll see an expanding demand base, driven largely from companies interested in the city coming in from out of market and from the suburbs.”

Comcast Corporation, which already occupies a signature tower in the Center City district, is constructing a second tower, and its plans for space have expanded. Originally intending to lease out some of the new tower, Comcast recently said it would occupy the entire building, and has also pushed out some smaller tenants in its existing headquarters to take over the space.

“Just given where they are with growth, especially with the pending Time-Warner merger, they are on an expanding trajectory."

One surprising sector of the Philadelphia office economy is the growth of coworking space providers. We identified 17 coworking providers in Center City. “Where coworking used to be small scale, we’ve increasingly seen more interest from national groups, more corporate groups." Since 2014, the number of sole proprietor-owned businesses in Philadelphia has leaped 149 percent, making shared office space an increasingly attractive play.

Other highlights:

Philadelphia’s office market recorded +641,881 square feet of net absorption in the first quarter, compared to net absorption of -171,699 square feet during Q1 of 2014.  
Class A CBD average asking rents grew 2.9 percent year-over-year to $29.41, driven by limited quality blocks of space and expanding tenant demand.
Since Q1 2014, total vacancy in the regional office market has declined 180 basis points to 13.9 percent.

Friday, April 3, 2015

Federal Realty Investment Trust CEO Don Wood on Mad Money (Video)

Construction Begins On Hamilton Crossings Shopping Center

by Steve Lubetkin,
The Goldenberg Group and TCH Development have begun construction of the Hamilton Crossings Shopping Center in Lower Macungie Township, Lehigh County, PA.

The 565,000-square-foot project—one of the largest open air shopping center developments in the country in recent years—will be anchored by Target, Costco Wholesale Club and Whole Foods, and will be complemented by first-class retailers including Dick's Sporting Goods, Nordstrom Rack, Old Navy, Rally House, Five Below, Designer Shoe Warehouse (DSW), Pier 1 Imports and Ulta Cosmetics.  The Hamilton Crossings Shopping Center is scheduled to open in July of 2016.

The project occupies about 70 acres of commercial property between Hamilton Boulevard and the Route 222 Bypass at Krocks Road, with direct access to the shopping center from Route 222.  Hamilton Crossings will showcase the first Costco and first Whole Foods in the Lehigh Valley. The project includes a number of public improvements, including significant regional roadway improvements, new technology in the form of adaptive traffic control signals and a regional storm water detention facility that will help address flooding conditions. The project will also include amenities such as bike and walking paths, public gathering areas and a connection to the historical log cabin site on the adjacent Wescosville Park.

"The project reflects years of teamwork and collaboration among Township planning, engineering and legal staff, the Commissioners, the Planning Commissioners, many different representatives of the Commonwealth of Pennsylvania, as well as countless constituent groups, neighbors and other stakeholders, " says Tim Harrison, owner of TCH Development.  "Hamilton Crossings is truly a shared vision that will become a uniquely positive asset for the Township and for Lehigh County for many years to come."

The project's developers also cited the leadership and unwavering support of state Senator Pat Browne and state Representative Ryan Mackenzie as a critical factor in moving the project forward, as well and the participation of several key Commonwealth agencies, including the Department of Community and Economic Development, Commonwealth Finance Agency, PennDOT and the Pennsylvania Infrastructure Bank.  Financing for Hamilton Crossings was provided by lead bank M&T Bank, as well as Susquehanna Bank, National Penn Bank and Beneficial Bank.

"This project really represents an amazing achievement for everyone involved, both private and public," says Jeremy Fogel, principal with The Goldenberg Group.  "We truly value all the relationships we've forged and now look forward to executing on our commitments so that Lower Macungie Township and Lehigh County ultimately view this project as the tremendous asset for the region that we all envisioned."

Cornerstone Sells Montgomery Mills for $56.4M

International real estate investment company CBRE Glboal Investors has acquired the Montgomery Mills multifamily community at 1000 Regatta Cir. in Norristown, PA from Cornerstone Communities for $56.46 million, or about $167,000 per unit.

The 338-unit apartment property totals 364,486 square feet. It delivered in 2004 on 30.8 acres in the King of Prussia / Norristown submarket of Philadelphia's Montgomery County. It is comprised of a mix of one- and two-bedroom apartments and three-bedroom townhomes across 23 garden-style buildings.

Industrial Project Planned in York

Ridgeline Property Group has broken ground on the proposed development of a 425,000-square-foot industrial warehouse on Susquehanna Trail in Glen Rock, PA with partner Cabot Properties.

The Susquehanna Logistics Center will feature 32-foot clear heights, 87 dock doors, ESFR sprinklers, and abundant car and trailer parking in close proximity to I-83 and Route 30. It is tentatively planned to be completed in December 2015.

"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," said 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."

Thursday, April 2, 2015

Hollinger Sells Senior Care Properties for $83.6 Million in Mechanicsburg, PA

by Steve Lubetkin
The Hollinger Group, a private owner and operator of assisted living communities, independent living communities and transitional care facilities, has shrunk its property portfolio dramatically with the sale of eleven senior care properties for $83.6 million.

Buying the properties is a private real estate investment trust that plans to partner with two separate senior care providers to manage the day-to-day operations of the eleven properties with a combined 717 beds and 583 units.

The sales process was accomplished in two phases. In February, Hollinger sold five senior care properties in South Carolina and Florida. The second and final phase closed on the remaining six properties in Maryland, New Jersey, Pennsylvania and Virginia.

Post sale, The Hollinger Group and its affiliates will own and operate four properties including a continuing care retirement community in Columbia, SC; an assisted living facility in Kulpmont, PA and a 96-bed transitional care facility in Mechanicsburg, PA.

"When we acquired these eleven properties, all but four were meaningfully underperforming and now all are financially strong and well positioned," says Brad Hollinger, founder and CEO of Vibra Healthcare, LLC and The Hollinger Group. "We felt the timing optimal to realize the embedded value in our portfolio while generating the capital and resources needed to move us into a new strategic direction, primarily the growth of our transitional care model branded VibraLife. The VibraLife model is a continuum concept facility designed and equipped to meet the growing demands for medical rehabilitation, extended skilled care and memory care."

Hollinger says the company plans to build three to five VibraLife facilities annually in markets where it is already operating specialty acute care and specialty acute rehabilitation hospitals.

Wednesday, April 1, 2015

Connolly Healthcare Leases 31,000 SF in Blue Bell

Connolly Healthcare, a payment integrity firm, signed a long-term lease for 30,845 square feet in the Hillcrest III office building located at 731 Arbor Way in Blue Bell, PA.

The single-story, 137,680-square-foot property sits on 54.5 acres in the Plymouth Meeting / Blue Bell submarket of Montgomery County, part of the Arborcrest Park Office Park. Connolly Healthcare will share the building beginning in the second quarter with PRA International, which leases approximately 75 percent of the space there.

Liberty rethinks Great Valley

by Natalie Kostelni Staff writer for the Philadelphia Busines Journal

Liberty Property Trust is proposing a dramatic plan to level nine office buildings in Great Valley Corporate Center that would create a 50-acre swath of developable land where it wants to construct a mixed-use community totaling more than a million square feet.
The plans are in the early stages and Liberty is just beginning the approval process with East Whiteland. Pa. The company wants to see if it can get the area, which is at the northwest and southwest quadrants of Route 29 and Great Valley Parkway, rezoned to have increased heights and more density.
Liberty envisions three high-end apartment buildings with 800 units, a hotel with 125 to 130 rooms, office space totaling 820,000 square feet, 25,000 square feet of retail, parking garages as well as community space that would be constructed in three phases on the site.
It will be developed with an eye toward making that segment of Great Valley a walkable, cohesive community, active throughout the entire week and not just during business hours.
“You need a sense of place and we’re trying to create that here,” said Tony Nichols Jr., vice president at the real estate company.
Liberty’s predecessor company, Rouse and Associates, established Great Valley in 1974. The nine structures slated for demolition were constructed during the 1970s and 1980s.
In recent years, the buildings became vacant and Liberty decided to mothball them as it began a process of re-imagining the suburban office park to seize upon current market demands and stay relevant.
With more and more real estate companies shedding their suburban office assets and focusing on urban centers connected to mass transit, companies such as Liberty have been trying to figure out what to do with suburban properties it wants to hold onto. Liberty decided it needed to totally recast a portion of the corporate center. It wants to position it to be a financial success for its shareholders as well as establish a blueprint for how it can create a thriving, new mixed-use community with an eye toward possibly replicating the process at other part of the corporate center and other markets it is in.
For the Malvern, Pa., real estate investment trust, analyzing the business park, what now surrounds it, and where it should be 20 years from now has led it down its current path. Some buildings in Great Valley are functionally obsolete and would be better demolished, laying the ground work for a fresh start.
It took Liberty about seven years to formulate its strategy.
During the recession, when construction was at a lull, Liberty engaged Design Workshop, a Colorado planning and design firm, to help it formulate a plan.
Liberty also did its own research on the role of who it is catering to these days: the knowledge worker, the creative class. It asked the questions: How do these people like to work and in which environments do they prefer to work?
Technology is inherent for these so-called “digital natives.” They like to share and look at work as part of their lifestyle, according to Pew research. They like a variety of choices, social spaces and places to collaborate. Liberty studied and planned.
The area surrounding the corporate center also is not what it used to be, which also played a role in its analysis.
“Great Valley has really been in play over the last few years,” Nichols said.
Many projects have reshaped the area, such as the new Pennsylvania Turnpike ramp at Route 29 and the expansion of Route 202, Nichols said. Atwater is becoming a mixed-use development with residential and retail under way. Closer to Route 30, Uptown Worthington continues to expand with more retail and multifamily projects. CubeSmart built a new headquarters nearby.
Full story:

Tech Companies in San Francisco Drive Commercial Real Estate to New Heights (Video)