Sunday, May 31, 2015

An Additional $325 million to price for Gallery Redevelopment

Jacob Adelman, Inquirer Staff Writer
he Pennsylvania Real Estate Investment Trust and the Macerich Co. say it will take $325 million in new investment to transform the Gallery at Market East into what they are calling Fashion Outlets of Philadelphia.

That is on top of the $250 million already spent by PREIT to assemble what had been privately owned property in the project area, bringing the total development cost to about $575 million.

The rest of the area still owned by the Philadelphia Redevelopment Authority will be conveyed to the developers as part of the revitalization plan being reviewed by City Council.

Here is a look at where the $325 million in new spending - for construction, renovation, and other costs - will come from:

Philadelphia funds: PREIT and Macerich plan to borrow $55 million that will be repaid over 20 years with city tax revenue it gets to keep through an arrangement called tax increment financing. The total cost to the city over that term, once interest is figured in, will be $127.5 million.

Pennsylvania funds: The state has awarded the developers $14.5 million from three grant programs, including the Redevelopment Assistance Capital Program, which targets development projects with the potential to jump-start economic development and employment. The developers have applied for $20 million more from that program.

Company spending: The developers plan to pay $234.5 million of the project costs themselves. Of that amount, $100 million will be borrowed through the federal EB-5 program, which offers U.S. visas to overseas citizens who invest in big, job-creating projects here.

Separately from the development costs, Philadelphia would commit $175.2 million over 43 years to maintain common areas of the Gallery, a continuation of a financial responsibility it has borne since the mall's opening. PREIT has cited a $58 million figure for this spending in the past, which is the amount in today's dollars.

Friday, May 29, 2015

Future of Retail: Malls are Adapting (Video)

Woodmont Acquires 437K SF Pittston Industrial

by Steve Lubetkin,

Woodmont Industrial Partners has acquired a 437,000-square-foot warehouse building at 1 Commerce Road in Pittston, PA.

A former Penguin Random House LLC book distribution center, the facility is now available for lease.

Woodmont will implement a capital improvement program that will include new trailer parking and the addition of up to 20 loading docks. Additional renovations will give the metal-paneled building a more modern feel and add extra functionality.

“The property appealed to Woodmont because of its prime location in the heart of the Northeast Pennsylvania market. The new Avoca interchange under construction now will connect Commerce Road directly to I-81, just south of the property,” says David Iacobucci, managing director of Woodmont Industrial Partners. “The building is highly functional in its current configuration, but adding the new loading docks will further increase its potential.”

Strategically located off of Interstate 81 in Northeast Pennsylvania, the warehouse is situated just east of the Wilkes-Barre Scranton International Airport, and is part of the Northeast Industrial Corridor. The Pennsylvania Department of Transportation has begun construction on a new access road that will connect the exit off of I-81, directly to Commerce Road. The new interchange will connect the airport to the surrounding industrial parks, making the warehouse even more conveniently located.

The property also features a high bay section offering 48’ to 54’ clear height with racking in place, and a parking lot that can accommodate up to 269 cars as well as a rail line behind the building, which can be activated.

Thursday, May 28, 2015

Willner Properties Completes Five Leases at Courtside Square King of Prussia

by Steve Lubetkin,

Willner Properties finalized five leases at the mixed-use retail and office complex, Courtside Square, at the intersection of Allendale Road and Route 202 across from the King of Prussia Mall in King of Prussia, PA.

Four new retail and office tenants including Hand & Stone Massage and Facial Spa, Box Pack N Ship, Best Brains and State Farm opened at Courtside Square. Existing tenant, Bharat Bazaar, expanded into a new space, which doubled the ethnic grocer’s footprint.

“Our new tenants will enhance the exceptional existing retail experience that is complemented by our anchor tenants, Panera Bread, DXL, The Melting Pot, Pier 1 and Fidelity."

State Farm, a Fortune 500 insurance company, Hand & Stone Massage & Facial Spa, a national spa franchise, Box Pack N Ship, an independent boxing and shipping company, and Best Brains, a national education enrichment center, in total leased over 6,000 square feet of retail and office space in the center. The tenants chose Courtside Square due to its attractive location at a major retail crossroads as well as the hands-on management style and value.

As the King of Prussia submarket gains momentum in retail and office sectors, Willner Properties is continuing to benefit from the flight to quality trend, as more businesses are seeking greater value per square foot. To stay ahead of the trend curve, 600 West DeKalb Pike and 150 Allendale Road in Courtside Square recently underwent capital improvements including lobby and common area renovations, new signage and lighting fixtures, elevator upgrades, roof replacement and the installation of herculite glass doors.

Wednesday, May 27, 2015

Crowdfunding Underwrites Philadelphia Area Residential Fund

by Steve Lubetkin,

When InvestCo LLC wanted to raise capital for a group of multifamily properties in the Philadelphia market, it turned to Miami-based crowdfunding platform EarlyShares to help seal the deal.

The crowdfunding site helped InvestCo add $513,000 to its capital for the Philadelphia Residential Fund, which is focusing on 1-6 unit properties in Drexel Hill/Upper Darby that it believes have good prospects for future rent growth and property appreciation. The estimated IRR on the fund is 15.2 percent, and the cash-on-cash return is posted at 12 percent, with an estimated hold time of five years for the properties.

EarlyShares co-founder Joanna Schwartz says the firm is “right in the center” of the crowdfunding real estate market place.

“We started the company with a very broad vision, to leverage the JOBS Act to enable companies to raise money through those new regulations,” she tells exclusively. “We have a platform that really properly services those who are raising money and those who are investing money.”

Investors want collateral, security, and cash flow, Schwartz says. The company’s platform services project sponsors with multiple levels of security and privacy, and is “compliance-driven” to ensure that its network of accredited investors receives the right information. Currently, EarlyShares is only open to accredited investors, those who have specified levels of net worth and investable capital as provided in the JOBS Act.

EarlyShares employs a “two-stage” due diligence process, Schwartz says, with both internal and external review of deals before they come into the funding platform.

“It’s almost like an online investment bank where we are really helping the issuers promote their offerings,” she says. The firm is in the process of becoming a broker-dealer, she adds.

Crowdfunding has become an attractive tactic mainly because it adds “a new distribution channel,” to a process that has long depended on multiple sources of capital, usually raised through private placements or other sources.

“For the investors, this really actually is revolutionary,” she says, “because unless you knew people who were doing these transactions, usually you weren’t given access to them, or the price of entry was just much higher. Because of the flexibility or the streamlined nature of the online process, we’re able to reduce the minimum size of each investment, opening the door for many more [accredited investors] to participate at lower dollar volume across more deals.”

Multifamily properties and retail strip shopping centers have been funded on the site, and even some funds investing in single family properties, which have generated interest among some niche lenders, she says.

“Everything we do in our world is moving online,” Schwartz says. “We’re just a very big funnel for transactions that people want to fund.”

Tuesday, May 26, 2015

Anchor Health Opens Outpatient Facility in Chester County, PA

by Steve Lubetkin,

Anchor Health Properties has opened Penn Medicine Southern Chester County, a 72,000 sq. ft. healthcare facility anchored by Penn Medicine Chester County Hospital (Penn Medicine) in Jennersville, PA.

Located in Penn Township, Penn Medicine Southern Chester County offers comprehensive outpatient services to residents of southern Chester County.  Penn Medicine services include lab draw, physical therapy, primary care, and imaging consisting of MRI, CT, X-ray, Ultrasound and Bone Density.  In addition, specialty physician practices lease space in the building including cardiology, ENT, GI, ophthalmology, orthopedics and pediatrics.

“As a local resident to Jennersville, it’s been particularly rewarding to develop this project in my own backyard,” says Katie Jacoby, senior vice president of Anchor Health Properties.  “We designed Penn Medicine Southern Chester County with the patient experience first and foremost. From its visible and convenient location to the amenities and services within, every element is designed to make the experience seamless and pleasant.”

Penn Medicine Southern Chester County is located at the intersection of Routes 1 and 796, two heavily traveled roads in the most rapidly growing community in Chester County, offering easy access for all points between Avondale and Oxford.  The project’s 45-acre site includes walking trails, meadows, landscaping and ample parking. The project architect is Array Architects and the construction manager is Norwood Company.

“Many of the patients who utilize ancillary and inpatient services of Chester County Hospital are residents of Southern Chester County. With this population growing, Penn Medicine Southern Chester County allows individuals and families to be seen locally in one convenient location.  We anticipate that this will make a very positive difference in the lives of those living in this part of our region,” says Michael J. Duncan, president and CEO of Penn Medicine Chester County Hospital.

You can watch a video about the facility in the player below.

Friday, May 22, 2015

King of Prussia's Nordstrom Rack to relocate

Natalie Kostelni, Staff Writer for Philadelphia Business Journal

Nordstrom Rack plans to relocate a store that now sits across from the King of Prussia Mall to the King of Prussia Town Center, which is about a mile away and under construction.
The new store will total 35,000-square-feet and is scheduled to open in the fall of 2016. Its current Nordstrom Rack at the Overlook at King of Prussia is slightly bigger at 45,000-square-feet and opened in 2002. It is on the second floor of a structure that houses a Best Buy.

Though not far from its current location, the company expects the move to be an improvement.

“We thought this would be a good opportunity to be part of new center and it will be a better location for our customers,” said a spokeswoman from Nordstrom Inc.
Nordstrom Rack will join Ulta Beauty at the King of Prussia Town Center, which is a 230,000-square-foot retail center off North Gulph Road in King of Prussia, Pa. It is being developed on 20 acres by JBGR Retail of Maryland.

Other tenants in the retail center haven't been disclosed though they are expected to be a mix of restaurants and stores.
Full story:

Firm developing wearable health monitors leaves Philadelphia for New Jersey

by John George Philadelphia Business Journal
Echo Therapeutics’ tumultuous four years in Philadelphia are over.
The formerly Center City-based medical device company has moved its corporate headquarters from its 7,900-square-foot-office at 8 Penn Center to a 2,800-square-foot office in Iselin, N.J.

• Saw its former CEO Patrick Mooney take of “leave of absence” and never return to the company

• Twice cut its workforce, first by 33 percent, or about 12 people, then by another 10, to conserve cash

• Suspended operations temporarily while it sough new funding sources

• Engage in a lengthy battle with largest investor, Platinum Management, that New York-based Plantinum ended up winning — which led to a new management team and a new board of directors being installed,

Earlier this month, Echo signed a lease for a 10,000-square-foot research and development facility in Littleton, Mass. The facility will replace the 37,000-square-foot research center it had in Franklin, Mass.

Echo expects to move into the new facility on or around July 1.
According to documents filed with the Securities and Exchange Commission, Echo ended last year with a staff of seven. It has since grown to 18 full-time employees.
Echo relocated its corporate offices from Franklin to Philadelphia in 2011. At the time, the company said the move was being made to accommodate expansion plans.
The company spent its four years in Philadelphia developing a non-invasive, wireless, continuous glucose monitoring system for hospitalized patients and for use by diabetics. The company’s new management is still working on the glucose monitoring system while also attempting to expand the use of Echo’s technology to the wearable fitness, weight loss and personal lifestyle product market.

In the company’s quarterly report issued last week, Scott W. Hollander, Echo’s president and CEO, stated the company was making progress on its product development efforts. Hollander, who was named CEO of Echo in December, noted the company has “implemented a number of cost reduction measures, including moving our offices to right-sized and less expensive facilities,” that won’t diminish Echo’s ability to execute its short-term and long-term plans.
Full story:

Thursday, May 21, 2015

Delaware Physicians Care Renews 19,000-SF Lease

Delaware Physicians Care, Inc., a healthcare provider, renewed its lease for 19,169 square feet in the Christiana Office Building at 252 Chapman Rd. in Newark, DE.

The two-story building totals 77,000 square feet. It was built in 1985, renovated in 2004, and sits on 3.3 acres in teh South New Castle County submarket.

Delaware Physicians Care occupies a portion of the second floor there. Other tenants include Nemours Health and Prevention Services, and Schaller Anderson, Inc.

Bunzl Philadelphia Signs 185,000-SF Renewal

Bunzl Philadelphia signed a 185,000-square-foot lease renewal to continue occupancy at 10814 Northeast Ave. in Philadelphia, PA.

The single-story, multi-tenant warehouse building was constructed in 1983 and sits on more than 13 acres in the Greater Northeast Industrial submarket. The industrial property totals 217,000 square feet and features 18 loading docks, one drive-in bay, and 22-foot clear heights.

Wednesday, May 20, 2015

Is the mall dead? Au contraire, says mall CEO

Jane M. Von Bergen, Inquirer Staff Writer

But isn't the mall dead, our photographer asked Joseph F. Coradino as we wrapped up his Leadership Agenda interview published in Sunday's Philadelphia Inquirer. It was like waving a red flag at a bull, because Coradino, the chief executive of a company which owns the Cherry Hill Mall, the Gallery, and two dozen other malls and shopping centers, leaped to his feet and ushered, or maybe dragged us, into his office.

There, framed and mounted on the wall in Coradino's sanctum at the Pennsylvania Real Estate Investment Trust, was the cover of a Time Magazine with the headline "Kiss Your Mall Goodbye."

The date?

July 20, 1998.

Not dead yet, evidently, cackled Coradino in triumph.

People think online shopping is killing the mall. If anything, retailers and online selling go together, Coradino said.

"WiFi, we think that's key," as a mall amenity, Coradino said. "When we think about customer amenities, we’re working on delivering merchandise to our customers. We have a mall app where you can download it, go into one of our malls and tell them you’re looking for a pair of blue leggings and they’ll tell you every store in that mall that sells them and what they sell for.

Question: That’s interesting.

Answer: So you, in essence, can replicate the Internet shopping experience.

Q. While you’re in the mall.

A. While you’re in the mall.

Q. Because isn’t that frustrating for retailers when customers go to the store to shop and then to the Internet to buy?

A. Well, that’s actually not the case.

Q. No?

A. First off, I’m going to ask you a question. What percent of retail sales occurred on the Internet last year?

Q. I don’t know.

A. Six percent.

Q. Wow, that’s all?

A. Yeah, that’s all.

Q. How do you know that?

A. It’s my business.

Q. Okay.

A. So people tend to relate to growth, because what you hear after the holidays the Internet growth grew at 20 percent and bricks and mortar sales grew at 4 percent. But the base that we’re growing at compared to what the base that they’re growing is ridiculous. If we’ve got Internet selling for the next hundred years, they won’t catch us. But you know what? That’s even a parochial view, because the real way to look at Internet sales and bricks and mortar sales is what we like to call omni-channel sales. So think about this for a moment. There are really like four pieces to a sale. There’s what’s called product discovery.

Q. Okay.

A. So what’s product discovery? You said today when you came in I decided to wear this today because I knew I was coming to a retail company. Well, what if you said to yourself two weeks ago, `I’ve got a meeting with that Joe Coradino and I want to get something special.'

Q. And my Temple shirt’s in the wash. (I threw that in because both Joe and I graduated from Temple.)

A. Yeah. And I saw something I liked. I want to see if I can find it. You’re going to go on your device there and you’re going to find it. There it’s going to be. You’re going to buy this multicolored dress that you found. That’s discovery. Then there’s some research. Then you say gee, I want to do some research. You say, you know what, touching is important. I want to see what this fabric feels like. So that’s moving into a research phase, a discovery phase where you feel it, touch it, etc.

Q. Now we’ve got to get to the buying phase.

A. So the buying phase can occur in bricks and mortars or online. It doesn’t matter. They’re both together because here’s another important factor: That is that retailers who have bricks and mortars presence do better online than those who don’t. So you’re seeing even Amazon opening stores. So I don’t think we’re in an either, or situation. I think what’s happening today is that we are beginning to cooperate with one another. Renews 483,000-SF Lease in Breinigsville

Amazon, Inc. has renewed its 483,200-square-foot lease at 650 Boulder Dr. in Breinigsville, PA.

Boulder Business Center is a 1 million-square-foot industrial building was constructed in 2002 on 67.9 acres in the Lehigh Valley Industrial submarket. It features an ESFR sprinkler system, 134 loading docks, four drive-in bays, 36-foot clear heights, and 3,000-amp heavy power.

Center City Medical Office Sells for $161M

by Steve Lubetkin,

833 Chestnut Street sold for $160.75 million. It's a 12-story, 705,061 square foot medical office building across from Thomas Jefferson University Hospital in Center City Philadelphia.

The seller was Digital Realty Trust.  HCP, a publicly traded healthcare REIT, purchased the asset.

Originally built in 1928 as an addition to the original Gimbel Brothers retail department store complex, 833 Chestnut was substantially renovated and is currently 92 percent leased.  The property’s major tenants include Thomas Jefferson Hospital, JUP, Thomas Jefferson University, Nemours Children’s Clinic, the US Government and Ballinger Company.  The total GLA includes approximately 60 percent clinical use, which continues to grow year-over-year.

In addition to Thomson, the HFF investment sales team representing the seller was comprised locally of senior managing directors Andrew Scandalios and José Cruz, and nationally by managing directors Michael Bennett and Philip Mahler who are team leaders of the medical office building group within HFF’s national healthcare practice.

“833 Chestnut is an excellent example of the synergies that exist between HFF offices.  Our local team realized it was more than just a general office deal; we enlisted the help of our healthcare group, put the best team on the field, collaborated keeping the client’s best interests in mind, and ultimately secured significant proceeds over and above for what a general office might have traded,” says Scandalios.

“We marketed this asset to all of the typical office buyers in the northeast but the demand for medical office simply priced those groups out of the market,” says Thomson.

“We had significant interest from all the ‘usual suspects’ in the medical office building space, as well as private equity, pension fund advisors, and even some foreign capital.  The size of the property can really move the needle for some of these groups.  Pricing was aggressive, and this transaction is a testament to how accretive the current MOB market is for sellers,” says Bennett.

“TJUH and its affiliates has significantly increased its presence in 833 Chestnut over the last seven years and now is the anchor tenant in the building, leasing over 50 percent of the net rentable area,” says Mahler. “This significant hospital-related tenancy created an opportunity for a medical office investor to develop a strategic relationship with TJUH which tremendously increased competition for this asset.”

Tuesday, May 19, 2015

5 Properties in Delco and Chestco Sell for a Total of $2M

by Steve Lubetkin,

Five properties sold totaling 13,563 square feet for more than $2 million. Two of the properties are in Media, two are in Chadds Ford and one is in Upland, PA.

The five properties sold are:

Media: two-story, 3,000 square foot office building at 10 Beatty Road and a prime commercial corner at 120 East Baltimore Avenue.

Chadds Ford: 258 and 262 Wilmington Pike, includes two buildings containing a total of 5,663 square feet of office and retail space.

Upland: The property known as The Upland Diner is an investment property with a long-term, triple net lease in place

Monday, May 18, 2015

United Plaza and 1650 Arch Recently Acquired

by Steve Lubetkin,

A fund sponsored by CBRE Global Investors has acquired United Plaza and 1650 Arch, two recently renovated class A buildings in Center City Philadelphia.

The 20-story, 617,476 square foot United Plaza, at 30 S. 17th Street, and the 27-story, 553,349 square foot 1650 Arch are both 94 percent leased. The buildings, which are located in the Market Street West office corridor, were constructed to above-market standards as corporate headquarters and have been extensively renovated and maintained.  They feature highly efficient floorplates with minimal columns and excellent multi-tenant elevator exposure.

The team’s capital plan includes implementation of CBRE Global Investors’ proprietary 5-Star Worldwide service and amenity program in both buildings to further enhance their appeal. The 5-Star program will enhance the work environment for tenants by offering high-quality and service-oriented property management, concierge services and a video-linked conference center.

The team intends to pursue LEED certification and completion of base building systems upgrades and cosmetic work. CBRE Global Investors intends to engage best-in-class leasing and management teams.

“Philadelphia is a focus market for us and is projected to be a top 10 rent growth market over the next five years. These buildings are high-quality properties in a market that is in high demand. With class A vacancy at 9.1 percent and limited new supply coming into the market, we believe these properties will appeal to a wide range of tenants.”

Church-Owned Land Trades in Montgomery County, PA

by Steve Lubetkin,
First Baptist Church of Huntingdon Valley sold a 4.45-acre parcel.  The property was sold to Artis Senior Living, which plans to develop a 72-bed memory care assisted living residence specializing in care and treatment of patients with Alzheimer’s disease and other forms of dementia. The sale price was $850,000.

"We first sold this site to First Baptist Church of Huntingdon Valley in June 2004 to accommodate its proposed expansion. Unfortunately, their dreams to build a new facility on the site never materialized, even though approvals were obtained to construct a 12,000-square-foot state-of–the-art house of worship.  After receipt of final approvals, the timing was not right for the church, but I believe good things eventually come to good people, and I am confident that their dreams will one day come true.”

The Rev. Bruce Wayne Petty, Sr., pastor of First Baptist Church of Huntingdon Valley, says he is glad the land will be used for a facility that will contribute to the betterment of the community.

"Although the church was not able to build an edifice in the Huntingdon Valley community, we are happy the facility proposed by Artis Senior Living will be one that helps Alzheimer’s patients and their families, as more and more people suffer with this affliction every day," says Pastor Petty.

Groundbreaking for the 72-bed community is anticipated early this summer and will mark the company’s fourth Artis community under construction or in operation.  Artis Senior Living of Lower Moreland will join future communities in Evesham Township, NJ; and Boca Raton, FL; as well as an existing community in Mason, OH.

"We are confident that this new memory care residence will be a great addition to the community and are thankful for the warm welcome the Township has provided.  We look forward to serving the senior citizens and families of Lower Moreland Township and the surrounding area."

Located on a cul-de-sac on Lieberman Drive in Huntington Valley, Montgomery County, the property sits directly behind the Huntingdon Valley Post Office on Welsh Road.

East Coast Port Plans Need to Include Industrial Property

by Steve Lubetkin,
Dramatic port capacity expansion in Asian countries is outstripping the capabilities of North American ports to accommodate the increases in shipping, transportation consultant John Vickerman told members of the Philadelphia CREW Chapter last night.

These issues have important implications for how smaller US ports like Philadelphia should position themselves, and how industrial properties are developed, say Vickerman and Bill Hankowsky, chairman,president and CEO of Liberty Property Trust, a major developer of industrial properties, who was also on the panel.

Efforts to increase capacities at the Panama and Suez Canals also will fall short, says Vickerman, who notes that Asian shipbuilders are already planning ships capable of carrying 22,000 TEUs (20-foot container equivalent units), while the canals can barely accommodate ships of 12,000 TEUs. The Maersk cargo line already has an 18,000 TEU vessel that is 1.5 times larger than what the new Panama Canal can accommodate.

Multinational shippers have several key priorities, with 43 percent citing schedule reliability and consistency as most important, followed by competitive freight rates (38 percent) and transit time and speed (12 percent). But their markets don’t really care about the challenges they face, Vickerman says.

“The consumer doesn’t give a diddly about a port or a railroad or a truck,” he says. “They could get it by Star Trek transporter and it wouldn’t matter at all. What matters to the consumer is availability of the product at a price point they can afford, in the quantities they want, now.”

Philadelphia’s port benefitted from the location of refineries along the Delaware River and the presence of the Navy Yard, says Hankowsky. Both of these activities helped justify efforts to deepen the Delaware River channel for larger ships. Today, however, distribution centers like the warehouses along the New Jersey Turnpike are a critical factor in the success of ports like Philadelphia.

The huge consumer market in the Northeast, says Hankowsky, makes it essential for companies to have warehouse space for the goods they need to ship into the region.

“There’s been an explosion in the real estate side of this business. Which port wins this battle may not actually affect where all the real estate gets located,” Hankowsky says. “The one thing we have is a huge number of people live in the northeastern part of the US, and they have to get served. The companies have decided that bigger boxes are more efficient to serve them.”

Distribution centers have been migrating south in New Jersey with significant new developments along the New Jersey Turnpike in the vicinity of Exits 8A and 7A.

“North Jersey has basically been built out. It’s impossible to find a site to put a million square foot warehouse,” he says. “We’ve seen them come down the Turnpike to Exit 7, and all the way to Exit 6 now that it’s been widened, but that’s almost all built out, so basically what they did is they went west. Pennsylvania was not big in this market 20 years ago, but it is big now.”

Industrial vacancy rates in the Lehigh Valley are now around two percent, Hankowsky says.

Also appearing on the panel were Thomas J. Holt, Jr., of Holt Logistics Corporation, which runs major port properties along the Delaware River; and Susan Howland, president and CEO of The Howland Group, a transportation and logistics consulting firm.

Curalate and Lyquix, Web Firms, Relocate and Expand in Center City

by Steve Lubetkin,
Two technology firms, Curalate and Lyquix, are expanding their presence in the Center City business district, underscoring a trend for high tech companies to return to the city’s core after years in the suburbs.

In the larger of the agreements, Curalate, which provides marketing and analytics software for web companies, has added 6,805 square feet at 2401 Walnut Street. This will expand Curalate’s space to about 10,700 square feet on the 5th floor at 2401 Walnut.

Lyquix, a marketing, advertising, web design and development agency, will relocate to about 1,500 square feet on the third floor of 400 Market Street, from its current offices at 620 Chestnut Street in Philadelphia. The lease amount with Kaiserman Company, the owner of 400 Market Street, exceeded $210,000

Saturday, May 16, 2015

Live Nation To Relocate Regional HQs

Live Nation Worldwide Inc. (dba Live Nation Entertainment) signed a lease with Keystone Property Group to relocate its regional headquarters to One Presidential Blvd. in Bala Cynwyd, Pennsylvania. Live Nation Entertainment’s 12,000-square-foot lease spans 10 years.

This move to a larger space enables Live Nation Entertainment to accommodate four of its affiliates under one roof: Live Nation Philadelphia, Live Nation Arenas, Ticketmaster and Maverick.

Relocating from nearby Bala Pointe Office Center, Live Nation will occupy Keystone’s former headquarters space at One Presidential. The building, a four-story, 130,804-square-foot facility, is now 98% occupied.

Earlier this year, Keystone relocated its offices to SORA Conshohocken at 125 E. Elm St. in Conshohocken from its former headquarters at One Presidential.

Thursday, May 14, 2015

ABB Process Automation Leases 116,000 SF in Hatboro

ABB Process Automation, a technology-based provider of power and automation products, systems, solutions, and service, renewed its lease and expanded into addtional office space at 101-163 E. County Line Rd. in Hatboro, PA. The tenant's footprint now totals 115,839 square feet there.

The three-story flex building totals 426,384 square feet in the County Line Commerce Center. Industrial Investments developed the property and sold it in 2010 to 125 County Line Road Holdings,.

ABB Process Automation's lease is on the first floor. Other tenants in the building include Affinity Insurance Services and Advanced Coating Processors.

Suburban Philadelphia Storage Sales War

Chicago-based Metro Self Storage, which operates more than 100 self-storage facilities in 11 states, just purchased a portfolio of three self-storage facilities in suburban Philadelphia from PFG Capital of York, PA. The portfolio was purchased for $29.25 million, or about $153 per square foot.

The aggressive pricing was based on the strong fundamentals of the self-storage industry. HFF, which brokered the sale, says there is an abundance of institutional money chasing quality self-storage properties.

At sale closing the properties were at about 89 percent occupancy. Included in the sale was 1600-1634 Mearns Rd. in Warminster, PA; 418 N. Sumneytown Pike in North Wales, PA; and 100 Upper Silver Lake Rd. in Newtown, PA.

Brandywine Sells Suburban Delaware Office Portfolio for $50.1M

BPG Real Estate Service LLC acquired the Delaware Corporate Center in Wilmington, DE and the Christiana Corporate Center in Newark, DE. Brandywine Realty Trust sold the five office buildings for $50.1 million, or about $103 per square foot.

1 and 2 Righter Pky in Wilmington are both three-story office buildings constructed in 1987 with a 3.4:1 parking ratio. They total 104,761 and 95,514 square feet. Christiana Corporate Center is made up of three buildings, each three-stories tall. 100 Commerce Dr. was built in 1989 and is 62,787 square feet, 200 and 400 Commerce were both built in 1998 and are 68,034 and 154,086 square feet, respectively.

Friday, May 8, 2015

Philadelphia Office Vacancy Increases to 10.8%

The Philadelphia Office market ended the first quarter 2015 with a vacancy rate of 10.8%.

The vacancy rate was up over the previous quarter, with net absorption totaling negative 386,143 square feet in the first quarter. That compares to positive 378,460 square feet in the fourth quarter 2014. Vacant sublease space increased in the quarter, ending the quarter at 1,306,325 square feet.

Tenants moving into large blocks of space in 2015 include: Incyte Corporation moving into 191,056 square feet at 1801 Augustine Cut Off; National Penn Insurance Services moving into 126,369 square feet at 645 W Hamilton St.

CoStar subscribers can access the recording and PDF for the State of the U.S. Office Market - Q1 2015 Review & Forecast. The webcast aired on Tuesday, April 21. Log on and register by clicking the Knowledge Center tab.

Rental rates ended the first quarter at $21.89, an increase over the previous quarter.

A total of seven buildings delivered to the market in the quarter totaling 145,650 square feet, with 2,602,750 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. National Office vacancy rate, which decreased to 10.9% from the previous quarter, with net absorption positive 15.4 million square feet in the first quarter. Average rental rates increased to $22.74, and 244 office buildings delivered this quarter totaling more than 16.5 million square feet.

Wednesday, May 6, 2015

$141M Construction Loan Closed for 1100 Market Street

National Real Estate Development has closed a construction loan with Ullico, Inc. for $141 million. This construction loan is for the East Market project at 1100 Market Street in Center City Philadelphia.

Upon completion, East Market will include an 18-story, 500,000-square-foot, mixed-use complex. The bulk of the project will be a 322-unit, 16-story residential tower. Also included will be 19,000 square feet of amenity space and an outdoor deck that will be located above a two-story, 105,00-square-foot retail area. There will also be 187 parking spaces below grade.

Brandolini Companies Completes $38M Refi For Main Line Retail Center

by Steve Lubetkin,
A $38.3 million in financing round for Paoli Shopping Center, a 165,617-square-foot, Acme Markets-anchored retail center was completed in two phases in Paoli, PA.
Brandolini Companies secured the long term, fixed-rate mortgage with an institutional lender advised by Quadrant Real Estate Advisors.  The loan will be used to refinance existing indebtedness.
Paoli Shopping Center was redeveloped by the owner in 2000 and expanded from a 70,000-square-foot property to the current center, which contains six one-story buildings, a service station and 650 parking spaces on 18.8 acres.  As the only grocery-anchored shopping center within a 2.8 mile radius, the 96.8-percent leased center is home to Acme, Pier One, Talbots, Loft, Chico’s, JoS. A. Bank, Francesca’s, Einstein’s Bagels, Bravo’s Pizza and Kitchen Capers and is shadow-anchored by Paoli Hardware True Value.  The center is located at the intersection of Route 252 and Route 30, known as the “Main Line” or Lancaster Avenue, which connects Philadelphia to the suburbs and houses several corporate headquarters. 
“Paoli Shopping Center enjoys one of the best, in-fill locations for retail of any property in the Philadelphia market,” says Ade.  “Lender interest was very high in this financing and afforded Brandolini the luxury of choice in selecting their capital provider.”

Tuesday, May 5, 2015

New retail space to hit North Broad Street

by Natalie Kostelni Reporter- Philadelphia Business Journal

An additional 35,000 square feet of new retail space is on the horizon for North Broad Street in Philadelphia.
EB Realty Management has a series of residential projects along the corridor in which, once redeveloped, will add new apartment units to the area and bolster the amount of space for retailers and restaurants.

Those projects include redeveloping the Divine Lorraine, the Met Opera House, Studebaker Building, and Mural Lofts. The largest of the projects is the Divine Lorraine and, once completed, that is expected to have a significant impact on North Broad and the areas surrounding the property.
Full story:

Monday, May 4, 2015

Wells Fargo Monthly Economic Outlook – April 2015 (Video)

Student Housing Fund Partners Seek Value in Dorms

by Steve Lubetkin,

Two large players making a major bet on the student housing sector say students want nicer living facilities near the schools they attend, while the schools are less interested in paying for it themselves.

Enter Campus Apartments, the oldest and one of the largest privately held student housing companies in the nation, and Clarion Partners, a leading real estate investment manager. The pair recently completed Campus-Clarion Student Housing Partners, a closed-end investment vehicle focusing on student housing in the U.S.

The vehicle closed with $402.9 million in equity commitments from high-quality domestic and international investors, predominately institutional. The fund will have approximately $1.2 billion in buying power, and is the largest student housing fund by a vertically integrated manager. Campus Apartments and Clarion Partners are co-general partners for the fund.

“The demand side is fundamentally solid, it’s not superstrong, but most projections indicate you’re looking at about 1.2 percent growth in the student population,” says Rob Greer, managing director for Clarion Partners and portfolio manager for the fund, in an exclusive interview with

Greer says the steady but unspectacular demand growth and universities’ preference for investing in their academic programs instead of in housing. “So they are leaning on the private sector to provide capital and expertise to provide the housing opportunities for them,” he says.

Housing stock is also aging at most universities, he says.

“Our kids today have a higher standard,” he says. “That provides an opportunity to provide not only new product, with fancy pools and nice facilities, tricked-out meeting spaces and that kind of thing, but there’s also existing stock that really hasn’t been revitalized to its highest potential.”

Greer says the market is highly fragmented, and the Campus Apartments platform will enable investors to gather assets from smaller operators.

“We can find those kinds of assets that are very close to campus, that have good fundamental bones, and we can come in and make the necessary updates to them,” he says. “We might change out the furniture, we might update kitchens and bathrooms, and improve conference centers, and pool areas and fitness centers, and then bring a level of professional management to the effort.”

The fund will seek investments in student housing and university-related real estate throughout the U.S. and will look to execute its value-add strategy through the acquisition and development of on- and off-campus projects.

“We’re targeting value add returns,” says David Adelman, president and CEO of Campus Apartments, who also spoke exclusively to “To achieve those returns, we’ll be buying product where maybe it’s first generation product or wasn’t really built as student housing. In the last five years we’ve done half a billion dollars in development. What you’ll also see sprinkled in is some public-private partnership where we help schools redevelop their land using our balance sheet.”

David Adelman, president, Campus Apartments
The fund expects to invest its capital over the next three years, Adelman says.

“We believe the fund benefits from a strong partnership between two platforms with a long and successful track record of investing in real estate,” says Greer. “The fund offers investors exclusive access to Campus Apartments’ pipeline of investments and operational expertise as well as Clarion’s long history as a leading real estate investment manager.”

Saturday, May 2, 2015

Liberty Breaks Ground on 45,000sf Building at Navy Yard

Liberty Property Trust broke ground this week on a 45,500-square-foot building at the Philadelphia Navy Yard to be occupied by Shanghai-based WuXi AppTec. The pharmaceutical company will use its third building at the Navy Yard to manufacture new cell- and gene-based treatments for cancer and other diseases, Felix Hsu, WuXi AppTec's senior vice president for U.S. business, said in a statement. The building will be finished next year, Liberty spokeswoman Jen Meyer said.

Friday, May 1, 2015

Biotech's real estate boom (Video)

Hill Completes HQ Move to Philadelphia

by Steve Lubetkin,

Hill International has completed the relocation of its global corporate headquarters into Center City Philadelphia. Hill's new address is One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, PA.

“Relocating Hill’s global corporate headquarters to Center City Philadelphia will increase our presence as a leader in the local business community and broaden our opportunities to hire the highest-quality workforce as the best and brightest young professionals continue to look to work in urban communities,” David L. Richter, Hill's president and chief executive officer, tells exclusively. “Our new headquarters will put us closer to major air and rail transportation hubs giving our professionals immediate access to New York City, Washington, DC and other key locations.”

The company's new headquarters office contains approximately 60,000 square feet of office space under a 12-year lease with Brandywine Realty Trust. The new office space was designed by architecture and interior design firm L2Partridge and built by INTECH Construction. Hill was assisted on the relocation by real estate advisor Newmark Grubb Knight Frank.

Hill's former office in Marlton, NJ, has been closed. The company has opened a new office in New Jersey located at 10 Woodbridge Center Drive, Suite 430, Woodbridge, NJ 07095.

5 Reasons to Believe in Philly CRE

by Steve Lubetkin,

There are at least five reasons to believe in Philadelphia. They include: the rising number of companies locating in Center City; growth in the professional/business services segment; the changing demographics of Center City residents; rising office rents and a shortage of trophy office space; and the positive impact of university expansion and the presence of cable giant Comcast on the city.

“We do think Philadelphia is undergoing a resurgence. It’s been a little later to the game than other metro areas, but we think Philadelphia is beginning to turn the corner. Philadelphia offers some of the lowest commercial rents compared to some of its major metropolitan area cohorts.”

Among companies relocating or expanding in Philadelphia recently are: The American Bible Society (100,000 square feet, 200 jobs); EisnerAmper (42,000 square feet, 130 jobs); Hill International (60,000 square feet, 290 jobs); Axalta (38,000 square feet, 100 jobs); and Independence Blue Cross/Blue Shield (112,000 square feet, jobs to be determined).

Philadelphia also provides tax credits of up to $25,000 per job created or two percent of the annual wages paid for firms that create at least 25 new full-time jobs or increase their Philadelphia full-time workforce by 20 percent within five years, Learner says.

“That’s an added benefit to companies that may be looking whether to stay put or look at other areas,” she says.

Professional and business services firms are growing faster than other commercial sectors, research shows. Much of that growth in 2014 vs 2013 was in “computer systems design,” which grew 13 percent. Advertising and public relations firms were second in growth in that period, rising 6.9 percent.

The percentage of the Philadelphia County population in the 20-34 age demographic increased by 5.9 percent from 2007 to 2013, the research indicated, compared to a 5.1 percent increase in New York County, NY. The younger population living in the urban environment is driving some of the office relocation, as companies vie to attract Millennials with “live-work-play” models.

Trophy office space is at a premium in Philadelphia, with just under a dozen buildings regarded as “trophy” properties. The low vacancy is leading to some firming of office rents, but still at levels below other comparable metropolitan areas, Learner says.

Expansion of Philadelphia’s universities also encourages growth of the office sector, she says.

“Particularly as each of these universities continues to grow their incubation and innovation centers, that certainly will allow emerging companies to develop a presence and maintain a presence over time."

Philadelphia Industrial Vacancy Stays at 8.0%

The Philadelphia Industrial market ended the first quarter 2015 with a vacancy rate of 8.0%.

The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 2,325,770 square feet in the first quarter. That compares to positive 2,438,459 square feet in the fourth quarter 2014. Vacant sublease space increased in the quarter, ending the quarter at 1,928,064 square feet.

Tenants moving into large blocks of space in 2015 include: Zulily, Inc. moving into 800,250 square feet at 10 Emery St, moving into 700,000 square feet at 2 Ames Dr, and Jacobson Companies moving into 300,000 square feet at Harrisburg Distribution Center #4.

Rental rates ended the first quarter at $4.47, a decrease over the previous quarter. 

A total of eight buildings delivered to the market in the quarter totaling 2,721,284 square feet, with 10,814,461 square feet still under construction at the end of the quarter. 

This trend is compared to the U.S. National Industrial vacancy rate, which decreased to 7.0% from the previous quarter, with net absorption positive 49.59 million square feet in the first quarter. Average rental rates increased to $5.63, and 284 industrial buildings delivered this quarter totaling almost 37.5 million square feet.