Monday, August 31, 2015

Valeant Pharmaceuticals Doubles Office Space to 620,000 SF

Valeant Pharmaceuticals is doubling the size of its Bridgewater, NJ office space, leasing another 310,000 square feet at SJP Properties' Somerset Corporate Center in Bridgewater, NJ, to bring its total occupancy there to 620,000 square feet.

The new lease comes less than two years after the maker of CeraVe skincare products, PreserVision and Ocuvite vitamins, and BioTrue lens care solutions first established its presence in the U.S. by setting up its headquarters in Bridgewater. As part of the deal, Valeant signed an early renewal of its original lease for its current 310,000-square-foot office at Somerset Corporate Center IV and expanded into Somerset Corporate Center III.

The five-building Somerset Corporate Center office complex is located near Bridgewater Commons Mall in one of the country's strongest labor pools for the pharmaceutical and technology sectors.

Three Retail Locations Deals Trade In One Day

by Steve Lubetkin
The properties, an Applebee’s in Williamstown, NJ; a KinderCare in Allentown, PA; and a Walgreens in Warminster, PA.

The Applebee’s is a new location, opening in August. The franchise location, which is an outparcel to a Walmart, is part of a 20 year triple net ground lease. The buyer, a limited liability company. The franchisee and tenant, Apple American Group, owns and operates approximately 450 Applebee’s Neighborhood Grill and Bar restaurants in the United States, making it one of the two largest franchisees of any concept in the United States. The Applebee's is located at 1840 S. Black Horse Pike in Williamstown, NJ.

A 7,516-square-foot KinderCare in Allentown, PA was sold. The asset, previously owned by a Florida-based investor looking to move his portfolio south, sold for $1.17 million. The buyer, a limited liability company local to the area. Despite the difficulty that hit day care centers during the recession, strong demographics in the Allentown area has kept this KinderCare profitable. A continuously high occupancy rate and an Average Household Income above $103k has kept the tenant in the same location for 15 years. The Corporately Guaranteed KinderCare also recently renewed its five year lease and routinely has above 90 percent occupancy, currently with 110 children enrolled out of a 116 capacity. The buyer, savvy to the local real estate market and the value of a strong tenant, was motivated by these numbers. KinderCare is located at 7575 Penn Drive in Allentown, PA.

The third property closed was a 13,905-square-foot net-leased Walgreens at 10 York Road in Warminster, PA. The asset sold for $7.55 million. The seller was a developer  that has built more than 100 Walgreens across the East Coast. The buyer, a limited liability company that owns and builds retail, multifamily, and industrial properties, was secured and represented by Ridge MacLaren, Built in 2000, the Walgreens has a 30 year lease.

Friday, August 28, 2015

Conshohocken making moves with real estate

Jessica Parks, Inquirer Staff Writer

For years, Conshohocken has owned not one, but two valuable properties that sat mostly vacant, even as it rented office space for its staff.

This month, the borough is rectifying that problem, with one of the buildings opening as a new borough hall and police station, and the other undergoing a market analysis to see if it might be turned into a bed and breakfast or event venue, or put to some other use.

The progress was years in the making and opens opportunities in one of the region's hottest real estate markets.

Borough offices will be closed Monday as staff settle into their new space in the former Verizon building at Fourth Avenue and Fayette Street.

Conshohocken had owned the building for nearly a decade, as it collected dust and sideways glances from residents and business owners.

"It was horrible," said resident Denise Painter. "I'm glad it's gone."

The 1970s undulating blue facade is gone, replaced by a mix of brick, concrete and glass more aligned with Conshohocken's old-meets-new aesthetic.

The $11 million reconstruction took more than a year, with asbestos and other environmental concerns causing several delays. Crews were still pouring concrete Thursday, even as people inside moved desks and boxes around.

The Police Department's move into another part of the building has been pushed back a couple months, as crews are still outfitting the space with cameras, gates, and other security features. In the meantime, the department will remain in its longtime home, the carriage house at the Leeland Mansion at Fayette and Eighth Avenue.

The borough has owned the Queen Anne-style mansion, built in 1898 for the inventor and manufacturer John Ellwood Lee, since the mid-1960s. In recent years, borough council meetings were held in the first-floor living area, but the rest of the main house sat unused.

Although covered in dust and peeling paint, the eight bedrooms and four bathrooms still have much of their original flooring, fixtures, fireplaces, and other historic accents.

"The building exterior is in remarkably good condition for its age and history," said Philip Scott of KSK Architects Planners Historians, which is consulting for the borough. "It would have been even more ebulliently decorated when it was built . . . but there is plenty to work with."

This month, the council approved a $16,500 market analysis to figure out the best use for the property. One consideration is to turn it into a venue for weddings, conferences, and other events. Another is to lease it as office space for doctors, lawyers, or other small businesses not attracted to the ample - and expanding - corporate-style offices near the Schuylkill.

Councilwoman Anita Barton, whose ward includes the mansion, has her heart set on a bed and breakfast.

"Every time I come in here, I fall in love a little more," she said Thursday, showing off the original claw-foot tubs and stained glass windows, and describing hidden finds like a tunnel to the carriage house "so they didn't have to go outside to get to the pool."

Leeland is one of the last historic houses in the borough, Barton said, after an 1854 home at Sixth Avenue and Fayette was razed in 2011 to make way for a bank.

Dee Harper, having ice cream with her daughter and granddaughters Thursday evening on Fayette, said she liked the idea of a bed and breakfast, a wedding venue, or "a restaurant, fine dining. Anything other than offices. We have too much of that already."

Harper and her daughter, Nicole Chesky, said the mansion should be preserved, but the Verizon building had to go.

"It was so old, not in a nice way. Like '70s old," Chesky said.

A larger project that was originally tied to the Verizon renovation is still tied up in zoning, a common issue in the borough torn between high-rise buildings and small-town charm.

Keystone Property Group in December 2013 signed a package deal with the borough and the Montgomery County Redevelopment Authority to renovate the Verizon building and purchase a plot of land surrounding and including the old firehouse at Fayette and Elm Street.

KPG proposed a 16-story luxury hotel, parking garages, office towers, and a public plaza, and converting the firehouse into a brewpub. Under the original deal, construction was to be completed within two years.

KPG president Bill Glazer could not be reached for comment, but said in an email, "We look forward to beginning the next phase of construction in 2016."

$35 Million in Recent NJ and PA Industrial Sales

by Steve Lubetkin,
Three sales with a total aggregate value of more than $35 million were recently completed .  Two transactions were industrial properties in King of Prussia, PA, and Holmdel, NJ, and the third sale was a land deal in Hamilton, NJ.

“Industrial investment is strong throughout New Jersey and Eastern Pennsylvania with institutional owners leveraging portfolios to attract buyers with discretionary capital that are either looking to enter a new market or expand an existing presence."

Holmdel Realty Development purchased a 540,000 square foot facility at 2182 Route 35 South in Holmdel, NJ, for approximately $24.5 million from Croddick Real Estate.

In Hamilton, NJ, Matrix Development Group, and an institutional owner, bought of 35 acres of land for redevelopment at 530-584 Route130.

The investment sale of a 77,000 square foot facility in King of Prussia, PA was negotiated, on behalf of an institutional owner. Audubon Land Development Corporation purchased the property for approximately $4.9 million, expanding and diversifying the company’s industrial portfolio in the suburban Philadelphia market.

Thursday, August 27, 2015

Virtua proposes $1 billion campus in Westampton NJ

Jan Hefler, Inquirer Staff Writer

Virtua Health is proposing a $1 billion hospital complex on a 110-acre farm that the South Jersey nonprofit acquired in Westampton Township more than a year ago. The project would include a nine-story hospital that would replace the four-floor Virtua Memorial Hospital in Mount Holly, three miles away in Burlington County.

Nine other buildings, including surgical and rehabilitation centers and a hospice and assisted living complex, would be constructed on the new campus under a development plan that Virtua will unveil next Wednesday before the township's Land Development Board.

The 108-page plan Virtua recently submitted to the board outlines a 20-year project that calls for the construction of up to two million square feet of space and nearly 3,000 parking spaces. An anticipated 3,400 employees would work on the campus on the former Hogan Farm, between Burlington-Mount Holly Road (Route 541) and Woodlane Road (Route 630), not far from I-295 and the Burlington County Library and Amphitheater.

"The construction of a world-class medical campus" in Westampton is needed because the existing hospital, built in 1926, is outdated, and its site in Mount Holly cannot accommodate expansion, the plans say.

Westampton Mayor Carolyn Chang said officials would examine the plans closely in coming weeks to make sure they are "appropriate" and do not create "any major traffic issues" in that developing part of the township.
The board recently amended its master plan to allow a hospital and a town center with mixed business and residential use to be constructed in that location.

The proposed medical complex is "great for economic development in Westampton," said Chang, who sits on the Land Development Board. "I believe it will bring additional business to Westampton that will help to stabilize our property taxes."

Virtua, which currently operates three hospitals in South Jersey and has its headquarters in Marlton, anticipates that the new medical campus will generate about $2.3 million in property tax revenues each year. Once approvals are obtained, Virtua expects to begin construction in 2019 and have the hospital built as early as 2022. The project would be built in two phases.

There are no plans yet for the existing hospital, but Virtua says it will consult with township officials and private enterprises to find a new use for the buildings and the complex's 17-acre property.

"Virtua continues to examine the feasibility of developing a replacement hospital on a new campus in Westampton to best meet the needs of the residents of Burlington County and the surrounding areas. As we move forward, the determining factors will be the future of the health-care environment and the economy. At present, there are no specific plans for the current campus in Mount Holly," a spokesperson said in a statement.

While the current hospital has semiprivate rooms, private rooms are becoming the standard, the plans state. The Mount Holly hospital has had seven additions, the most recent in 2013.

Virtua also said it will add features that it is unable to provide in Mount Holly. Plans include a helipad for emergency air transport to the hospital.

The new campus will help "meet the demand for a broad spectrum of quality health-care services," the plans say.

The board meeting is scheduled for 7 p.m. at the municipal building, 710 Rancocas Rd.

Incyte Buying its Leased HQs in DE

Incyte Corp., which moved this past spring into 191,056 square feet of leased headquarters at 1801 Augustine Cut Off in Wilmington, Delaware, has now agreed to purchase the property from Augustine Land II.

Incyte will pay $79.9 million.

Closing of the acquisition is to occur no later than April 1, 2016.

Wednesday, August 26, 2015

Equus Capital Acquires Bay Colony Executive Park for $37.5M

Equus Capital Partners, Ltd. acquired the Bay Colony Executive Park at 565-595 E. Swedesboro Rd. in Wayne, PA from Brandywine Realty Partners for $37.5 million, or about $152 per square foot.

The executive park consists of four office buildings totaling 247,294 square feet that were built between 1984 and 1988.

One Franklin Plaza Sells for $43M

Equity Commonwealth has sold the One Franklin Plaza office tower at 200 N. 16th St. in Philadelphia, PA to PMC Property Group for $43 million, or approximately $71 per square foot.

The 24-story, 607,474-square-foot, 4-Star office tower was built in 1980 on nine-tenths of an acre in the Market Street West submarket of Philadelphia County. GlaxoSmithKline vacated the building in 2013.

PMC Property Group plans to convert the building to mixed-use with apartments on the top floors and office space on the middle floors. The office section will have its own dedicated elevator lobby at the 16th Street entrance.

Chicago firm buys AQ Rittenhouse apartments


LaSalle Investment Management has purchased the newly constructed AQ Rittenhouse apartment building in Center City for $51.1 million.

The Chicago-based investment manager bought the 110-unit high-rise at 2021 Chestnut St. from a joint venture between Aquinas Realty Partners and MB1 Capital Partners.

Tuesday, August 25, 2015

KBS REIT Acquires CrossPoint at Valley Forge

by Steve Lubetkin,
KBS Real Estate Investment Trust III, a Newport Beach, California-based non-traded real estate investment trust has acquired CrossPoint at Valley Forge, a class A office building in Wayne, PA, for $89.5 million.

“We believe that the property’s central location near a growing amenity base will have a positive impact on the tenants of CrossPoint at Valley Forge,” says KBS regional president Marc DeLuca. “We also believe that this node on the Wayne/King of Prussia border is becoming an incredibly attractive live, work, and play community that will contribute to the path of growth for the property.”

Built in 1974 and gut-renovated in 2014, CrossPoint at Valley Forge is a 272,360-square-foot, LEED Gold-certified and Energy Star-rated building. The property includes amenities such as a fitness facility and a café with indoor and outdoor seating, Wi-Fi and television monitors. The surrounding neighborhood includes amenities such as the King of Prussia Mall, the second largest mall in the United States, a Wegman’s and a Walmart Supercenter. The neighborhood will soon be improved with a lifestyle center that will include LA Fitness, Nordstrom Rack, Del Frisco’s and Starbucks, among others.

“We believe the renovations delivered at the property, coupled with the area’s expanding amenity base, will serve to deepen the tenant pool for the property, which already includes Teleflex, Rovi, Medecision, Lewis Brisbois and Principal Financial,” says KBS vice president Shannon W. Hill.

CrossPoint at Valley Forge is located near the intersection of the Pennsylvania Turnpike and I-76. The property also has direct access to Route 202, a well-traveled business route that runs parallel to Pennsylvania Turnpike. Additionally, the property is situated approximately one mile from 1000 Continental, an office asset purchased in February 2014, by a KBS-affiliated company.

Monday, August 24, 2015

Comcast Spotlight Signs $38 Million Lease at Chesterbrook Corporate Center

The Eastern Division of Comcast Spotlight leased 129,459 square feet of Class A office space at 725 Chesterbrook Blvd. in Chesterbrook, Pennsylvania.

The building will serve as the main headquarters for the advertising sales division of Comcast Cable. The Eastern Division is comprised of 15 TV markets including Philadelphia, Washington, DC, New York and Pittsburgh, four of the top 25 markets with 8.8 million subscribers.

The landlord is Pitcairn Properties, based in Newtown, PA. Pitcairn, along with well-known institutional equity partners, has both developed and acquired major suburban office and industrial parks throughout the greater Philadelphia region.

Saxbys Coffee opens in Washington Square West

by Michael Klein,
Saxbys Coffee has opened its 30th cafe nationwide, taking the southwest corner of 11th and Locust Streets in Washington Square West, replacing a hair salon and dog school in a rather caffeinated part of town.

It's the Philly-based chain's second city location to open this year, and has 45 seats.

Next up regionally, due this fall, is an outlet at Bethlehem Pike and Butler Avenue in Ambler, where it will replace the shuttered Ambler Donuts (and an adjacent Subway) and have a drive-thru window.

Dollar Tree Leases Four NJ Locations

by Steve Lubetkin,
Dollar Tree has signed four new leases in New Jersey.

In Orange, the chain signed for an 11,000-square-foot space in a center at 557 Main St. Dollar Tree will occupy an end-cap space that formerly housed Karl's Appliances, which relocated elsewhere in the center. In East Orange, Dollar Tree signed a lease for a 12,682-square-foot space that previously housed a hardware store, at 352 Central Ave.  In Wayne, Dollar Tree leased a 9,400-square-foot end-cap unit in a 29,000-square-foot center at 172 Mountain Blvd., directly across from New Jersey Transit's Mountain View –Wayne train station.  The store in Wayne is projected to open in January 2016, followed by East Orange in March and Orange in July.

Dollar Tree's latest southern New Jersey location will be in Bridgeton, where the company's preferred developer, Elcan & Associates, acquired a 9,040-square-foot freestanding building at 399 East Broad St. that was formerly occupied by another dollar store. The Bridgeton store is projected to debut this September.

In a deal that will bring Dollar Tree to a 13,500-square-foot freestanding building at 1118 Edgemont Ave. in Chester, PA was also signed.  The space was previously occupied by a sneaker store. An October 2015 opening is projected.

Friday, August 21, 2015

Philadelphia Development gets National Recognition

Natalie Kostelni, Reporter- Philadelphia Business Journal
Paseo Verde, a $48 million mixed-use development completed by Jonathan Rose Cos. of New York and Asociacíon Puertorriqueños en Marcha, a Philadelphia community organization, was named Project of the Year by the U.S. Green Building Council.
The development was completed in 2013 adjacent to the Temple University transit center and seemed so special that it could be used as a model for other projects, whether urban or suburban. Paseo Verde is transit-oriented, sustainable, designated LEED platinum, and community-oriented with housing and a technology center as well as retail space. The project also looked to revitalize a corner of North Philadelphia.
Paseo Verde was constructed on a vacant lot that was nearly the size of a city block and is bounded by 9th, Norris and Berks streets. The five-story building totals 200,000 square feet and has 120 affordable and market-rate apartments as well as 30,000 square feet of retail space that houses a community technology center.
The U.S. Green Building Council is the latest of a long list of organizations that have recognized Paseo Verde as a project worthy of praise. It joins the Urban Land Institute’s Philadelphia chapter, the Pennsylvania chapter of the American Institute of Architects, among others in recognizing the development.
Fully story:

Duke Realty Acquires Class A Lehigh Industrial

by Steve Lubetkin,
Duke Realty Corp. has expanded its Pennsylvania industrial portfolio by acquiring West Hills Building B, a 232,655-square-foot, warehouse-distribution building that is 100 percent preleased to NFI Distribution. Located at 9866 West Hills Court in Kutztown, West Hills Building B was completed in May 2015.

“The acquisition of this top-quality building is in alignment with Duke Realty’s focus on top- quality industrial assets in Pennsylvania and other strong distribution markets,” says Jeff Palmquist, senior vice president of Duke Realty’s Northeast region. “This purchase also is reflective of our desire to grow our presence in the Lehigh Valley because of its superior interstate access, strong labor base and access to densely populated areas, including New York, New Jersey, Philadelphia and Baltimore.”

Duke Realty’s newest Pennsylvania property is located in West Hills Business Center, a 230-acre industrial park located in the Lehigh Valley at I-78 and PA 863. West Hills Building B is adjacent to West Hills Building A, which Duke already owns. Building A is a 980,000-square-foot, 100 percent leased bulk warehouse. The acquisition of West Hills Building B brings Duke Realty’s Pennsylvania portfolio to 4.7 million square feet. As previously reported by, Duke recently opened its regional office in Conshohocken, PA under Palmquist’s supervision.

In addition to the acquisition of West Hills Building B, Duke Realty recently announced the development of a new 1.1 million-square-foot, modern bulk industrial building in the Lehigh Valley. As previously reported by, Building One at the 33 Logistics Park at Chrin Commerce Centre is being built on Van Buren Road just off Route 33 at the new four-way diamond interchange at Main Street. The speculatively built warehouse is slated for delivery in late 2015 or early 2016

Wednesday, August 19, 2015

DB Schenker Renews 84,000-SF Lease

DB Schenker, an international transportation and logistics company, signed an 84,471-square-foot lease renewal at 3501 Island Ave. in Philadelphia, PA.

The single-story, 84,471-square-foot flex building was constructed in 1986 and renovated in 2002. It is located on 10.3 acres in the Southwest Philly Industrial submarket.

JV Pays $21M for Gulph Road Office

PM Realty Group and The Roseview Group have acquired the office building at 211 S. Gulph Rd. in King of Prussia, PA from O’Neill Properties Group LP for $21 million, or about $205 per square foot.

The 102,204-square-foot office was originally constructed in 1960 on 9.3 acres in Montgomery County. It is located south of King of Prussia Mall and a short drive from downtown Philadelphia. It underwent renovation in 2007 and is currently 100 percent occupied.

Comverse Renews Office Lease in Mount Laurel

Comverse, Inc. renewed its 30,731-square-foot lease at 1025 Briggs Rd. in Mount Laurel, PA.

The single-story office building totals 61,019 square feet. It was built in 1994 on 6.2 acres near the NJ Turnpike and features a 4.4:1 parking ratio.

NJSIG Inks 20,000-SF Lease at Laurel Corp Ctr

New Jersey Schools Insurance Group signed a lease to occupy 20,073 square feet at 6000 Midlantic Dr. in Mount Laurel, NJ.

The 169,885-square-foot office building, located within the Laurel Corporate Center, was constructed in 1987 on eight acres in the North Burlington County submarket of Philadelphia. The seven-story, multi-tenant office property includes 1,575 parking spaces and features a conference facility and restaurant.

Gallagher Benefit Svcs Leases 35,000 SF on Midlantic

Gallagher Benefit Services, Inc., an insurance company, signed a 34,868-square-foot lease at 4000 Midlantic Dr. in Mount Laurel, NJ.

The three -story, 46,945-square-foot office building was constructed in 1981 in the North Burlington County submarket. It is part of the Laurel Corporate Center.

Tuesday, August 18, 2015

Commercial real estate booming (Video)

Penrose Plaza SC Sold for $25M

Highland Development Group Ltd. acquired the Penrose Plaza Shopping Center at 2900-3000 Island Ave. in Philadelphia, PA from Korman Commercial Properties for $25 million, or about $98 per square foot.

The single-story retail center was built in 1976 and totals 255,969 square feet in the South Philadelphia submarket. The asset is anchored by Shop Rite, but was more than 47 percent vacant at the time of sale.

Cigna Renews Lease at Two Liberty Place

by Steve Lubetkin,
Parkway Properties says it signed a 322,000 square foot 12-year renewal lease with Cigna Health and Life Insurance Company at Two Liberty Place in Philadelphia, PA.

"The early renewal of Cigna at Two Liberty Place secures the asset's anchor tenant through 2027 at a positive mark-to-market," says M. Jayson Lipsey, executive vice president and chief operating officer of Parkway. "With this important renewal, we have further stabilized the asset and believe we are well-positioned to exit Parkway's one remaining non-core market."

Cigna's renewal at Two Liberty Place, located in the central business district of Philadelphia, stabilizes about 34 percent of the building through October 31, 2027. Parkway expects Cigna to vacate the space it did not renew on or about May 31, 2016.  As of July 1, 2015, Two Liberty Place was 99.2 percent occupied, or 89.4 percent occupied pro forma for Cigna's contraction.  The Cigna lease represents an approximately four percent positive cash renewal spread from the expiring rate. Parkway has a 19-percent ownership interest in Two Liberty Place, which is owned in part by Parkway Properties Office Fund II.

Monday, August 17, 2015

Brookwood Acquires 29-Building Office Portfolio in Suburban Philadelphia

By Steve Lubetkin,
Brookwood Financial Partners has acquired a 29-building portfolio of class A and class B office buildings in suburban Philadelphia. With this acquisition, Brookwood now owns and manages 110 buildings throughout the United States consisting of over 8.5 million square feet in 10 states with a current value in excess of $1.2 billion.

The portfolio, which includes 23 office buildings and six office/flex buildings that range in size from 17,750 square feet to 132,385 square feet, contains a total of 1,611,961 square feet and consists of the following four sub-portfolios:

Bucks County Sub-Portfolio, which consists of three Class B office buildings totaling 167,280 square feet with an occupancy of 80.6 percent located in Bensalem, PA;
Fort Washington Sub-Portfolio, which consists of six Class A and B office buildings totaling 457,913 square feet with an occupancy of 88.3 percent located in Fort Washington, PA;
Horsham Sub-Portfolio, which consists of nine Class A and B office buildings totaling 318,137 square feet with an occupancy of 84.6 percent located in Horsham, PA; and
Lehigh Valley Sub-Portfolio, which consists of eleven Class A and B buildings totaling 668,631 square feet with an occupancy of 85.2 percent located in Allentown, PA.
“We are thrilled with this institutional quality acquisition,” says Thomas W. Brown, Brookwood’s president and director of real estate acquisitions. “As value buyers, we look to acquire sound assets at substantial discounts to replacement cost near the inflection point of a market recovery. The office market in suburban Philadelphia is now entering the early stages of its recovery, as evidenced by its consistent positive absorption and high projected rental rates. With limited new construction in the pipeline, we believe increasing demand will continue to push rental rates higher and vacancy levels will drop to pre-recession levels.”

500 Office Center Drive, Ft. Washington, PA, one of the properties Brookwood acquired.
The Greater Philadelphia market has experienced positive absorption in 14 of the last 18 quarters, while vacancy rates are projected to decrease by 10.2 percent to 11.4 percent from the first quarter of 2015 through 2017 and rental rates are projected to experience significant growth in the coming years.

“We are not only buying at an opportune time, but at a purchase price that is substantially below replacement cost,” says Brown. “Given our low basis, we will be able to invest a significant amount of capital in the portfolio, enabling us to offer attractive rental rates and tenant improvement packages to tenants in the market that are looking for excellent space at a competitive price.”

Brookwood expects to spend approximately $7.6 million across the portfolio on targeted capital improvements, including: significantly improving building lobbies, common areas and restrooms; upgrading landscaping; refreshing building exteriors and entrances; replacing building roofs; and modernizing elevators.

“In addition to these building improvements, we plan to build out speculative suites with best-in-class amenities that will accommodate the needs of tenants in the Greater Philadelphia market,” says Kurt M. Zernich, Brookwood’s director of asset management. “We will be able to accommodate both large and small tenants as the Portfolio consists of a variety of office buildings, ranging from single-tenant office and flex space to multi-tenant, multi-story Class A office space.”

Thursday, August 13, 2015

Obermayer Leases 61,000 SF at Centre Square

Law firm Obermayer Rebmann Maxwell & Hippel LLP has leased 60,544 square feet, taking two contiguous floors on a 16-year term at the Centre Square - West Tower office building at 1500 Market St. in Philadelphia, PA.

The 43-story, 1.38 million-square-foot, 4-Star office tower was built in 1974 on 2.4 acres in the Market Street West submarket. The law firm has been in operation for more than 90 years in the Philadelphia area, and will move to its new location in March 2016.

Wednesday, August 12, 2015

PMC Group Acquires Center City Development Land For $28.5 Million

In the latest of a flurry of transactions in Philadelphia's CBD, PMC Property Group has acquired a seven-acre development site along John F. Kennedy Boulevard in Center City from Garrison Investment Group for $28.5 million.

The sale includes five contiguous land parcels located at 2301, 2201, 2101 and 2001 John F. Kennedy Blvd., and 60 N. 23rd St. between 20th Street and the Schuylkill River. Collectively, the parcels have been known as the River City site.

PMC Property Group is one of the city's largest residential developers.

Garrison Investment Group, a New York City-based investment and asset management firm was the buyer.

Parcels located near the growing Market Street West and University City submarkets offer "incredible potential to develop large scale development along the Schuykill River and JFK Blvd." as demand pushes activity west in the Philadelphia CBD.

The parcels are located a few blocks from Comcast Center and across the Schuylkill River near Amtrak’s 30th Street Station and the city’s largest universities, the University of Pennsylvania and Drexel University.

The land parcels are located at 60 N. 23rd St., 2301, 2201, 2101 and 2001 JFK Blvd, with 60 N. 23rd St. being the last large development site left in the Philadelphia CBD. The sites are located only a few blocks from the Comcast Center and across the Schuylkill River, near Amtrak’s 30th Street Station and the City’s largest universities: The University of Pennsylvania and Drexel University.

Tuesday, August 11, 2015

Shorenstein Completes First Phase of 1818 Market Rehab

by Steve Lubetkin,
Shorenstein Properties has completed the initial phase of a renovation of 1818 Beneficial Bank Place, the class A Market Street West office tower it acquired earlier this year.

In the initial phase, a large portion of the 30th floor has been returned to a state not seen since the building was constructed in the early seventies, with exposed concrete decking and the removal of interior walls to open up more of the space for use as a traditional office or an open-plan collaborative environment. Shorenstein has doubled the window line for the space to create more natural light and increase the floor’s city views.

Approximately 10,700 square feet of white-boxed space is now immediately available to tenants.  The landlord plans to make similar improvements to other tenant space as it becomes available.

Future phases of the multimillion dollar capital improvement plan will include cleanup and renovation of the 37-story building’s façade, modernization of the 1980s-era elevator cabs and the addition of LED lighting throughout the garage as well as lobbies and common areas.  Façade renovation will begin later this year.

Located on the corner of Market and 19th Streets, the building, also known as 1818 Market, includes efficient 30,000 square foot floor plates, high ceiling heights, and above-standard parking. The property offers ground-floor retail, including the popular Marathon Grill with outdoor seating in its plaza.

The property has a 408-stall parking garage on floors 2-6 and is convenient to public transit.

Allentown Nursing Home Sells for $4.65M

by Steve Lubetkin,
Liberty Nursing & Rehabilitation Center, Allentown, PA, has been sold by Liberty Allen Square to Owl's Next Properties, a 1031 Exchange triple-net investor with investments in the greater Wilmington, DE area, for $4.65 million. The investors focus on multifamily residential rental properties, smaller apartment complexes and commercial offices.

 The sale was for a four-story, 43,420-square-foot property. The buyer was referred by John Osborn of Patterson-Osborn Exchange Services, a firm with 30 plus years of experience in 1031 Exchange transactions.

"This Allentown, PA investment fit nicely with the desire of our client to move his investment dollars from his intensive, self-managed properties, to a lower impact real estate investment, backed by a well executed 20+ year lease with a high quality tenant," says Moore.

The facility, built in 1969, will remain a nursing home. It will continue to be leased by Health Care and Retirement Corp. of America, a division of Manor Care. This purpose-built facility has gone through several rounds of upgrades, including interior remodeling, HVAC replacement, and conversion of one floor into a specialized care unit focusing on respiratory and tracheotomy patients with an advanced oxygen supply system.

CNNH Leases 17,000 SF in Voorhees

The Center for Neurological and Neurodevelopmental Health (CNNH), a health care provider, signed a lease for 17,000 square feet at the Voohees Town Center at 1285 Echelon Mall in Voorhees, NJ.

The two-story retail building totals 1.13 million square feet in the South Camden County submarket of Philadelphia. General Growth Properties (GGP) renovated the property in 2007 and sold it to Voorhees Township Municipal Government in 2011.

Monday, August 10, 2015

Health care REIT plays (Video)

Firm sells 1,070 MF Units in Philadelphia

by Steve Lubetkin,
Philadelphia’s multifamily housing stock is performing at a year-over-year high for effective rents/low for vacancy rates while also recording strong absorption of new product metrowide, according to Gebroe-Hammer Associates. The firm has arranged sales of more than 1,070 units in the past six months, for sales totaling more than $97.63 million.

Investment appetite is skyrocketing in the city, according to Gebroe-Hammer senior vice president Eli Rosen.

“Philadelphia is a melting pot of property classes, ranging from newly constructed luxury hi-rise buildings to existing post-World War II mid-rise buildings that have been renovated through the years and are poised for repositioning,” says Rosen, who represents prominent investors and developers throughout the metro Philadelphia market and its outlying suburbs. “The city as a whole has experienced an annual increase in effective rents with record-breaking growth every quarter since the first quarter of 2010. Monthly effective rents are now at about four percent over last year alone, with some neighborhoods like Center City performing better than ever.”

The Center City submarket saw a year-over-year effective rent increase of 5.3 percent, Gebroe-Hammer says. Similarly, Northwest Philadelphia also has undergone a multi-family boom laying the groundwork for neighborhood gentrification, says Rosen. Recent multi-family transaction highlights include the $24.5 million sale of Chestnut Hill Tower. Rosen, along with managing director Joseph Brecher, recently represented the seller and buyer in the trade of the 240-unit modern high-rise tower located at 7600 Stenton Ave.

The property, which was acquired by the seller in 2012 for $17 million in a transaction also arranged by Gebroe-Hammer, was repositioned through capital improvements during the past three years. The 18-story property now features hardwood flooring, modern cabinetry and the addition of high-end finishes. It is close to the train, offering a direct link to downtown Philadelphia.

In addition to Chestnut Hill Tower, Rosen arranged the two separate sales of 64 units at Airy Avenue Apartments, a garden-apartment complex in East Mount Airy, and 40 units at Walnut Park Apartments in the West Mount Airy neighborhood.

“Renting remains the mass-majority preference of a tenant base that transcends three different generations – from millennials to retirees,” says Rosen. “Apartment living is no longer dictated by income. It is a choice driven by a desire to avoid mortgage payments and home maintenance costs while having immediate access to job opportunities, mass transit, dining, arts and culture.”

Gebroe-Hammer also has been active is the Temple University Hospital district, where Rosen has sold 102 units in the past six months. Additional transactions arranged by the Rosen/Brecher team include the sale of 181 total units in Northeast Philadelphia; the $20 million sale of several garden-apartment complexes in Montgomery County; and the trade of 120 units in Bucks County.

Thursday, August 6, 2015

New Shooting Range Developed in Warwick Flex

by Steve Lubetkin,
Guardian Academy and Indoor Range is planning the largest indoor gun range in the Northeast, when it expands the 8,750-square-foot office/flex building in Warwick, PA, it acquired for an undisclosed sum.

The Guardian Academy plans to expand the building, on two acres at 1528 Campus Drive within Warwick Business Campus, into a 20,000-square-foot state-of-the-art 22-lane indoor gun range and retail store.  Once complete, the facility will be the largest indoor range in the northeast.  Property highlights include an advanced Carey air filtration system, a 3,500-square-foot shoot house, 360-degree computer-generated simulation training, and a 50-person banquet hall ideal for corporate conventions or private parties.

Construction of the building expansion is slated to begin in August, with a grand opening slated for January 2016.  It will be open to both the public and Academy members.  Chris Sfinas, a NRA-certified nine year Army qualified sniper, will lead the staff at Guardian Academy, which will provide full tactical training for law enforcement and combat military, as well as personal civilian tactical training.

Warwick Business Campus is located just off of Mearns Road near the intersection of Bristol and Mearns Roads in Warwick, PA.  The campus is situated between the Willow Grove and Neshaminy interchanges of the Pennsylvania Turnpike.

Logistics Driving Spec Warehouses in Central PA

by Steve Lubetkin,
Warehousing companies continue moving into Central Pennsylvania to feed the needs of an evolving logistics business. PCCP and Dermody Properties have acquired a 43-acre site where they plan to build a class A, 405,000-square-foot distribution center in Jonestown, Lebanon County, PA.

LogistiCenter78-81, as the property will be branded, is located at the intersection of I-78 and I-81. Construction is starting now with anticipated completion in spring 2016.

“There is much to like about this site.  Aside from great access and visibility, LogistiCenter 78-81 will be developed to be flexible for any number of potential tenant profiles,” says John Randall, managing director with PCCP. “PCCP identified this as a compelling investment opportunity to deliver a quality industrial asset in partnership with Dermody Properties, a best-in-class industrial development firm.”

Randall says the property will be marketed to a single user and was delivered development-ready by the seller, Pennsylvania-based land developer, Vision Group Ventures.

“We are looking forward to increasing our footprint in Central Pennsylvania with LogistiCenter 78-81, as well as continuing our excellent partnership with PCCP,” said Gene Preston, east region partner,Dermody Properties. “LogistiCenter78-81 will meet the needs of companies looking for modern, flexible-use facilities in this market.”

LogistiCenter78-81 will consist of a front-load distribution building and a separate lot providing excess parking capacity. The state-of-the-art distribution facility will include 36’ clear heights; an ESFR sprinkler system; 81 dock doors; two drive-in doors, clerestory glass to allow natural light; 60’ loading bays; T-5 lighting; parking for 220 cars; and one extra trailer parking space per dock door.

The site is in Gateway Logistics Park, a master-planned, three-building center located at the junction of two of the primary distribution corridors servicing the northeastern United States, I-81 and I-78. I-81 serves as the outer beltway of the Northeast and has grown in popularity with users as it provides access to a wide range of outbound distribution locations.

Florence approves 20-year tax break to developer

By Sean Patrick Murphy Staff Writer Burlington County Times
The Township Council voted 4-0 to approve a 20-year tax break to a developer with plans to build a large warehouse and logistics center off Cedar Lane near Route 130.
"It's a good thing for Florence Township with the tax abatement, it guarantees us a payment whether the company is in operation or not," said Mayor Craig Wilkie. "Many people don't realize that when taxes are set, they can be appealed if the property or business is not in operation.
"With the PILOTs (payment in lieu of taxes), it's a guarantee payment, minimal, so it's a good thing for the community."
There was a public hearing and vote for final adoption Wednesday night.
Liberty Property Trust has proposed constructing as much as 760,000 square feet of warehouse, logistics, and office space on 50 vacant acres off the highway adjacent to the Cream-O-Land Dairy site and the Fire Department.
The project, the Cedar Lane South Industrial Park, is expected to create at least 276 full-time jobs, but is contingent on the municipality agreeing to a tax-abatement plan with the Malvern, Pennsylvania-based developer.
Liberty expects to break ground by October in hopes of opening the center by next September. The company plans to rent the proposed space to one or multiple businesses to use for product distribution.
It will become the latest of several industrial development projects that have been built or are near completion in the township's stretch of the Route 130 corridor. The other projects include a Subaru of America distribution center and warehouse complex, an Express Scripts plant, a Destination Maternity warehouse, and a new Burlington Coat Factory headquarters.
Hundreds of new jobs are attached to each of those projects, which local officials said would benefit the town and region.
The project is eligible for the tax break because it is within the township's Route 130 redevelopment area. The zone was created by ordinance in July 2013.
Although the agreement would excuse the developer from having to pay property taxes on the improved value of the 50 acres, it calls for Liberty to pay a quarterly "service fee" in lieu of taxes.
During the first 10 years, the fee, known as a payment in lieu of taxes, or PILOT, will be based on the square footage of the constructed warehouse and office space. After 10 years, the fee will be calculated based on the square footage or a share of the total tax rate, whichever is higher.
About $3.7 million is expected to be paid to the municipality during the first 10 years of the agreement. A minimum of $5.2 million is expected during years 11 through 20.
Five percent of the service fee will be sent to Burlington County in lieu of county taxes. The remaining 95 percent will be divided among the local governing body, school district and fire district, officials said.
Liberty has not identified any tenants for the industrial park yet, but the company has a record of success, with more than 100 million square feet of industrial and office space developed in the United States and United Kingdom.
The company's past projects include redevelopment at the Philadelphia Naval Shipyard in South Philadelphia.
The project received final site-plan approval from the Planning Board in May following two meetings.

Gramercy Property Trust Acquires Penn Jersey Paper Building for $26 Million

Dermody Properties sold the Penn Jersey Paper building at 9355 Blue Grass Road in Philadelphia for $26.1 million, or $102.22 per square foot.

The 255,336-square-foot Class B industrial building was built in 2011. At the time of sale, the property was fully leased to its long term tenant Penn Jersey Paper.

CTDI Leases Space In Logan Township

CTDI signed a lease to occupy 85,480 square feet at 2100 Center Square Road in Logan Township, NJ.

The single-story, 365,760-square-foot Class A industrial building was constructed in September 2008. It features an ESRF sprinkler system, reinforced concrete construction and 1.31 parking spaces.

Tuesday, August 4, 2015

Roseview-PMRG Acquires KoP Office for $21M

by Steve Lubetkin,
Roseview-PMRG Fund I, a $250 million discretionary fund formed by PM Realty Group and The Roseview Group, has acquired 211 South Gulph Road, a single-story, 102,204-square-foot class A office building located in King of Prussia, PA, for $21 million.

It’s the first Philadelphia market acquisition for the fund, which expects to acquire and reposition office properties across the United States. The Roseview/PMRG partnership also owns properties in Atlanta, Houston and Massachusetts.

The seller, a joint venture between O’Neil Properties and The Arsenal Fund, acquired the property in February 2007. Under the new ownership, an additional $1.1 million of capital improvements will be made, including upgrading exterior amenities and signage; updating the building’s façade to enhance its presence; and system improvement.

"This acquisition was strategic for the fund because it is a value-add opportunity that is well located within an in-fill market near downtown Philadelphia,” says Steve Corridan, partner of The Roseview Group. “The area offers all the fundamentals we are seeking which include recent growth in both commercial and residential sectors."

With the building 100 percent occupied at the close of escrow, the fund’s primary aim is to roll existing leases to market rates with extended terms.

"We are confident that we will be able to back fill any upcoming vacancy space, as King of Prussia benefits from continued tightening in Main Line and Conshohocken submarkets which currently have Class A vacancy of 3.7 percent and 10.0 percent, respectively as well as rental growth of 35.98 percent and 36.08 percent during the past five years,” says Angelo Lobosco, executive vice president, PMRG.

Developed in 1960 on 9.31 acres, 211 South Gulph Road is one-half mile south of the King of Prussia Mall; four miles from Main Line towns including Wayne and Radnor, PA; and 17 miles from downtown Philadelphia.

Brixmor Nabs South Shore Center for $32M

by John Jordan,
New York City-based Brixmor Property Group has added the Webster Square shopping center here to its grocery-anchored retail portfolio that now exceeds 87 million square feet nationwide.

The 182,756 –square-foot shopping center that is anchored by grocer Star Market. The South Shore retail property was sold by of Curtis Management of Hingham, MA. Brixmor Property Group disclosed the price in the second quarter financial results recently that it paid approximately $32 million for Webster Square.

The center was 98% leased at the time of the transaction. Brixmor in its second quarter financial announcement released on July 27th stated that the transaction closed on June 30.

In June the company acquired two other shopping centers in Texas and Pennsylvania. The three most recent deals were purchased for an aggregate of $59.2 million and totaled approximately 383,000 square feet of gross leasable area.

On June 10, Brixmor acquired a 96,000-square-foot Hobby Lobby building at Bardin Place Center, in the Dallas market. The shopping center is currently being re-anchored with WinCo Foods and was purchased for approximately $9.3 million. On June 30, the company acquired Larchmont Centre, a 104,000-square-foot shopping center in the Philadelphia market that is anchored by ShopRite for approximately $18 million, including approximately $7 million of assumed mortgage indebtedness.

The strong performance of Webster Square’s anchor tenants attracted the New York City-based investment firm to the property. Webster Square is located at the intersection of Route 139 and Route 3, one of the region’s primary thoroughfares with traffic counts exceeding 24,000 vehicles daily.

“Located on Boston’s affluent South Shore, Webster Square serves as the dominant retail shopping center in a trade area with limited full-size grocery options and high barriers to entry, making the asset very appealing to Brixmor."

“The strong performance of the anchor tenants at Webster Square facilitated significant interest from the investor community and is what ultimately attracted Brixmor to add the asset to its already significant portfolio of grocery-anchored shopping centers."

Brixmor owns and operates a portfolio of 519 grocery-anchored community and neighborhood shopping centers totaling approximately 87 million square feet of gross leasable area located primarily across the top 50 U.S. metro markets. Brixmor is the largest landlord to retailers The TJX Companies and The Kroger Co.

Monday, August 3, 2015

Big builders vs. apartment REITs (Video)

Rite Aid Sells 2 Properties Lists 2 More

by Steve Lubetkin,
Rite Aid Pharmacy has sold two locations in Eastern Pennsylvania, one in Philadelphia and the other in Carlisle. The same medicine is in store for two other locations.

The first property, a 14,564 square foot store located at 4350 N. 5th Street in Philadelphia, was sold to a private buyer based in California. Esperanza, a non-profit, faith-based organization focusing on strengthening Hispanic communities. Rite Aid will continue to lease the site from the new owner. The property was sold at close to list price, though the specifics are not being disclosed at this time.

The second property, a 13,813 square foot site located at 429 S. Hanover Street in Carlisle, PA, was listed for a trust, and was sold for $5.02 million to H. Lipsitz Companies.

“Each of these properties were attractive in the marketplace and received significant activity. There was a competitive bidding process for both. The Philadelphia property’s sale was significant for several reasons, not least of which that it provided a capital boost that Esperanza can now use to further fund the important work it does for Hispanic communities in the region.”

“The Carlisle Rite Aid drew a great amount of interest, withs six competitive offers coming in.It’s in a great location, and it has 11 years remaining on a NNN lease, which is why it sold for list price.”

In addition to the two Rite Aids sold, Gorman and Shover are currently representing the listing of two additional Rite Aid locations in the region. The first is located at 5692 Rising Sun Avenue in a densely populated neighborhood of Northeast Philadelphia. The owner is seeking $5.1 million or a 6.5% cap rate. Rite Aid has 10 years remaining on a triple-net lease. The second store property for sale is 4011 William Penn Highway in Monroeville, PA. This is a strong retail corridor, and Rite Aid reports strong sales at this location. This location also has 10 years remaining on a triple-net lease. The listing price is $6.36 million or a 7.0% cap rate.

Xenia Drops $245M on Hotel Trio Including Rittenhouse Philadelphia

by Jennifer LeClaire,

Xenia Hotels just snapped up $245 million worth of hotels. The firm acquired fee simple interests in three high-quality lifestyle boutique hotels. The company funded the acquisitions with cash and its line of credit.

The 84-room RiverPlace Hotel is located in Downtown Portland right next to the Tom McCall Waterfront Park. The 97-room Canary Hotel is located in Downtown Santa Barbara, CA. And the 230-room Hotel Palomar is in Downtown Philadelphia's Center City District near Rittenhouse Square.

"We are thrilled to have acquired the RiverPlace Hotel, the Canary Hotel and the Hotel Palomar, three luxury lifestyle boutique hotels located in high barrier to entry markets with diverse demand generators," says Marcel Verbaas, president and CEO of Xenia. "The acquisition of these distinctive hotels further exemplifies our strategy of continually enhancing our portfolio by investing in high-quality assets in major lodging markets and key leisure destinations."

The three hotels have posted consistently strong operating results. The hotel portfolio's average RevPAR of $224.59, comprised of average occupancy of 85.4%--and an average daily rate of $262.93—from June 2014 to June 2015. The hotel portfolio has generated RevPAR growth of 10.1% year to date.

Xenia forecasts that the hotels will generate EBITDA of $7 to $8 million for the remainder of 2015 and $18.5 to $20.5 million in 2016. All three lifestyle hotels will continue to be managed by Kimpton Hotels & Restaurants.

“Kimpton's exemplary results have established the company as a leading choice for the management of high-quality boutique properties such as these three hotels,” says Verbaas. “Our relationship with Kimpton gives us confidence that we will be able to achieve continued positive results and growth during our ownership of these hotels."

Saturday, August 1, 2015

Suburban office complex sells for $63.5 Million

Natalie Kostelni Reporter, Philadelphia Business Journal
Liberty Property Trust has sold one of its suburban office complexes for $63.5 million.
The property consists of three buildings at 1170, 1180 and 1190 Devon Park Drive that total 250,185 square feet in King of Prussia, Pa.

The structures are highly visible off Route 202 where drivers can see the USLI sign for the its main tenant, U.S. Liabilities Inc., which maintains its headquarters there, and DrugDev, which moved its North American headquarters from Audubon, Pa., into 31,000 square feet at 1170 Devon Park. The complex is fully leased on a long-term basis to the tenants.
A partnership consisting of a group of undisclosed, local high-networth individuals bought the complex.
“We had nine offers on the property and some were international buyers, which is nice to see in Philadelphia,”

Sales of suburban office buildings have started to pick up is a sign that the one of the last and hardest hit property types during the recession is finally seeing a recovery.
“I know there is a lot more activity this year compared with last year."
Liberty has been selling real estate assets that it has determined don’t fit into its core portfolio.

MRO Corp. Agrees to 38,565-SF Relocation

MRO Corp. signed a 38,565-square-foot lease at 1000 Madison Ave. in Lower Providence, Pennsylvania.

With the health information company relocating from its former King of Prussia location, the 101,650-square-foot building is fully occupied.