Friday, September 30, 2016

Real state of real estate (Video)

Retailer Five Below Leasing 180K SF On Market Street In Philadelphia

by Steve Lubetkin,
Five Below is relocating its corporate headquarters to Philadelphia’s historic Lit Brothers Building at 701 Market Street where it will occupy approximately 180,000 square feet of class A office space plus approximately 15,000 square feet of multi-level retail space.

The 15-year agreement was negotiated with Independence Realty, a division of Brickstone, which owns the building with Madison International, according to Real Capital Analytics, a proprietary research database. Brickstone also owns The Wanamaker Building and other assets in the Market East submarket.

Five Below is relocating from 1818 Market Street, and plans to remodel the space that was once the home of Lit Brothers department store by infusing its own unique brand culture into the building’s rich history.   Financial terms were not disclosed.

“We are so excited to continue our great legacy in Philadelphia,” says Joel Anderson, CEO of Five Below. “It’s been our top priority to keep our home base in the city where it all started. This new space will allow our associates to unleash their passions further in a collaborative environment.”

The collaborative efforts of state and city officials over the last three years to keep the retailer in Philadelphia and observed that 701 Market Street offers sufficient space to accommodate current operations as well as the retailer’s anticipated growth in the years ahead.

“Since day one, we knew Five Below needed to stay in Philadelphia,” says Tom Vellios, executive chairman and co-founder of Five Below. “Our first store opened in Wayne, PA, and our headquarters have always remained in center city Philadelphia. Keeping our headquarters in the city is a no-brainer for us. Five Below is a Philadelphia brand. Always has been, always will be. ”

Planet Fitness Leases 16,000 SF in Vineland

Plant Fitness leased 16,380 square feet in the Vineland Shopping Center at 22 W. Landis Ave. in Vineland, NJ.

The 105,370-square-foot square foot shopping center was originally built in 1977 and renovated in 1991. Planet Fitness will join Family Dollar and Sir Speedy Prints & Signs.

Tuesday, September 27, 2016

Winndevelopment Completes $15M Affordable Housing Renovation In Philadelphia

by Steve Lubetkin,
WinnDevelopment has completed a $14.7 million rehabilitation of Breslyn House in Philadelphia, protecting affordable housing in the city’s rapidly gentrifying Walnut Hill neighborhood.

The extensive renovation work was fueled by a public-private refinancing agreement that also preserves the community as federal Project-Based Section 8 Housing until the year 2034.

“As the owners of Breslyn House since 1983, we are proud to invest in this community’s future as badly needed affordable apartments in a fast-changing neighborhood,” says Gilbert Winn, CEO of WinnCompanies. “This project is another example of our commitment to maintaining the highest possible quality subsidized housing in urban communities.”

Breslyn House consists of 48 two-bedroom units and 12 three-bedroom units. There are 30 units set aside for families and individuals whose household income does not exceed 50 percent of Area Median Income (AMI) and 30 units set aside for residents below 60 percent AMI.

The renovation effort included energy efficiency and environmental improvements, building exterior restoration, and enhancement of community spaces, including a new ADA-compliant community room and expanded laundry facilities. Each apartment underwent kitchen and bathroom overhauls, including the installation of new cabinetry, appliances, and fixtures. In addition, three apartments have been made ADA-accessible.

“WinnDevelopment’s investment in the revitalization of Breslyn House Apartments represents a vote of confidence in our diverse and vibrant community,” says Pennsylvania State Sen. Vincent J. Hughes. “The Walnut Hill neighborhood has seen a good deal of investment over the past few years, and we’re grateful to companies like WinnDevelopment for ensuring that we have housing solutions for our most vulnerable residents.”

Financing for the project was made possible by the US Department of Housing and Urban Development; the Pennsylvania Housing Finance Agency, through tax-exempt bonds and the allocation of Low-Income Housing Tax Credits; as well as Bank of America and Citi Community Capital.

Located in the western part of Philadelphia adjacent to the University City area, Breslyn House was built as apartments in 1913 and consists of five, three-story brick and granite buildings with Beaux Arts architectural elements. WinnCompanies converted the property into affordable housing after purchasing it in 33 years ago.

WinnCompanies owns eight housing communities in Pennsylvania totaling 889 apartments. In addition to Breslyn House, the company owns:

The Fred B. Rooney Building, 150 units in Bethlehem;
E.B. McNitt Apartments, 101 units in New Brighton;
Cobbs Creek, 85 units in Philadelphia;
Venango House, 106 units in Philadelphia
Maple Ridge, 91 units in Pittsburgh;
Grant Towers, 60 units in Pittsburgh;
Alleghany Commons, 136 units in Pittsburgh; and,
The Village at Somerset, 100 units in Somerset;
WinnResidential, the company’s property management arm, manages all of those properties, as well as two other Pennsylvania housing communities, totaling 595 units: Governors Square, 291 units in Harrisburg, and Foxwood Manor Apartments, 304 units in Levittown.

WinnDevelopment will begin work later this year on a similar rehabilitation project at the E.B. McNitt Apartments.

Monday, September 26, 2016

$3M Ground Lease Sale Trades For A Planned Sheetz

by Steve Lubetkin,
The sale of a 15-year Sheetz ground lease located in Manheim, PA traded.  The asset sold at list price, $3 million.
Both the buyer and seller came to the table with different strategies. The developer was looking to pay down debt and invest in future projects, while the buyer was preserving equity in a 15-year corporate-backed lease.”
The triple-net property was sold pre-construction with approved development to include Sheetz, a town center and hotel, part of a three phase development plan. The 6,103-square foot convenience store is part of the company’s new prototype launch that includes 24-hour service and car wash. Sheetz is scheduled to open for business in September 2016.
“These types of transactions highlight the strong appeal for ground leases of well- respected convenience store brands. Brands such as Sheetz, Royal Farms and Wawa have such a strong demand we are noticing these rates have been compressing over the past 15 months compared to the rest of the net-leased market,” says Garthwaite.

Thursday, September 22, 2016

RRG Norristown Acquires Two Montgomery County Multifamily Properties

by Steve Lubetkin,
RRG Norristown Apartments has acquired Riverstone East and West Apartments and Hunter’s Run Apartments, two multi-housing properties totaling 83 units in Norristown, PA.

There were two separate sellers, a local private investor in the case of Riverstone, and Hunter’s Run Apartments on behalf of Concordia Properties.  The debt placement to new owner to secure a seven-year, fixed-rate loan through a regional bank for the acquisition of both properties.

Hunter’s Run Apartments is located at 1151 West Sterigere in Montgomery County less than five miles from the Plymouth Meeting Mall and King of Prussia Mall.  The property provides access to all major employment centers in Pennsylvania via major roadways, including Interstates 476, 276 and 76 and Route 202 and the Norristown Elm Street Southeastern Pennsylvania Transit Authority (SEPTA) train station.  The property has 39 one- and two-bedroom units, which are 97 percent occupied.

Riverstone East and West Apartments encompasses two adjacent buildings totaling 44 one- and two-bedroom units averaging 864 square feet each, and is one block south of Hunter’s Run.  Riverstone East is located at 1015 West Beech Street and Riverstone West is located at 920 Buttonwood Street.

“The demand for value-add apartments in suburban Philadelphia remains robust,” says Fiebig.  “Our team was able to procure an eclectic mix of local and regional buyers to the opportunity.”

Wednesday, September 21, 2016

Binney & Smith Leases 108,000 SF in Lehigh Valley Industrial Park

Binney & Smith, the precursor to coloring giant Crayola, leased 108,000 square feet in the industrial building at 200 Cascade Dr. in Allentown, PA.

The building totals 510,238 square feet in the Lehigh Valley Industrial Park. The property was developed in 1971, renovated in 2005, and sits on 48.2 acres in the Lehigh Valley Industrial submarket.

Campus Apartments Developing On-Campus Residence At University Of The Sciences

by Steve Lubetkin,
Campus Apartments, one of the nation’s largest providers of on- and off-campus student housing, is developing on-campus housing with University of the Sciences that will begin to replace the University’s on-campus housing stock and help to bring new life to Woodland Avenue in the University City section of Philadelphia.

The new 128,000-square-foot live-learn facility, located at 46th St. and Woodland Ave., will accommodate approximately 400 students and will include generous social, study, classroom and programming spaces, as well as ground floor retail space. The estimated $50 million development of the new residence hall marks the start of a multi-phase effort to improve facilities across the entire University over the next several years.

“The new first-year residence hall is the first of a multi-phase effort to improve the quality of our housing and learning facilities to enhance interaction and collaboration at the University and to attract more students to our institution,” says Dan Severino, director of facilities at University of the Sciences. “Through this project, we also strive to energize this corridor of Woodland Avenue and further integrate our campus and University with our neighboring community. The retail and public space will create a new hub within the community, which will benefit the neighborhood for years to come.”

Slated for completion by August 2018, the six-story building will include two-person semi-suites designed to serve the University’s first-year student population, two staff apartments, as well as 16,000 square feet of communal social and study lounges. The live-learn facility will feature 5,000 square feet of classroom space and new Resident Life office space for the University.

In addition to University facilities, the building will include two ground floor retail spaces (2,700 square feet) along Woodland Avenue and a publicly accessible open courtyard. The building will incorporate numerous sustainable features to achieve Green Globe certification.

The live-learn facility will be located on the site of the former Alexander Wilson Elementary School, which the University bought from the Philadelphia School District in 2014.

Replacing the vacant structure, the new University development will provide the local community with new stores and meeting and green space, in addition to streetscape repairs and lighting. The University will also offer community-driven programming.

“This project will transform an underutilized site into a vibrant corridor by creating modern facilities for students to live and learn, and new retail and programming spaces for the local community,” says Daniel Bernstein, president and chief investment officer at Campus Apartments. “The University’s long-term commitment to enhancing its campus will help attract and retain the best and brightest students. University of the Sciences is a great partner, and we’re excited to bring this new facility to students, university staff and community members in our hometown.”

Campus Apartments was awarded the residence project after a competitive RFP process. Campus Apartments and the University partnered with architect Design Collective and general contractor Torcon Construction for this development. Construction is set to begin in January 2017.

Tuesday, September 20, 2016

Pharmula Leases Space in Plymouth Meeting, PA

by Steve Lubetkin,
Pharmula Laboratories, which provides formulation and analytical development services to pharmaceutical and biopharmaceutical companies, leased 7,114 square feet of office and laboratory space at 5207 Militia Hill Road in Plymouth Meeting, PA.

Headquartered in Conshohocken, PA, Pharmula has been experiencing rapid growth and required this additional space in response to its increased business activities.

Dr. Lijuan Tang is the general manager/partner of Pharmula Laboratories. “We greatly look forward to moving into our new space.”

Monday, September 19, 2016

Philadelphia CRE Deal-Tracker

by Steve Lubetkin,
Here is a rundown of smaller deals reported recently in Pennsylvania.


WYOMISSING, PA—Gaming and Leisure Properties closed its previously-announced transaction to acquire The Meadows Racetrack and Casino in Washington, PA, a suburb of Pittsburgh, PA, from Cannery Casino Resorts for $440 million. It also sold the entities holding the gaming licenses and operating assets to Pinnacle Entertainment for $138 million and entered into a 29-year triple net lease agreement, with initial annual rent of $25.4 million.

PHILADELPHIA, PA–Lawndale Suites was sold. It was a former hospital in Northeast Philadelphia, PA and sold to Metal Unruh, on behalf of Lawndale Classic Suites. The property, located at 623-637 Unruh Avenue, was previously the Lawndale Hospital, part of Temple University’s Jeanes Hospital system. While under contract, the property was rezoned and the owner is planning to perform major renovations to convert the property to 30 market-rate apartments. Lawndale Suites is situated in the Lawncrest neighborhood of Philadelphia, within walking distance of the Lawndale train station providing access to Center City.


ERIE, PA—Locally based luggage and travel goods retailer Luggage Designers has leased 3,900 square feet at Liberty Center in Erie. It is a 229,000-square-foot shopping center.

Several lease deals were completed in Central Pennsylvania recently, including several at 3525 N. 6th Street in Harrisburg. Ridgeline Executives leased 1,225 square feet of office space, Global Auto Collision, an automobile body and paint workshop, leased 3,400 square feet of warehouse space, Integrated Agriculture Systems leased 3,300 square feet of warehouse space and I-Deal Cars, an automobile repair workshop, leased 3,300 square feet of warehouse space at the property.

Medical Group of Pennsylvania leased 1,819 square feet of office space at 801 E. Park Drive, Ste. 100 in Harrisburg.  The lessor was Patriot Investment Associates.

4349 Associates purchased the 6,400 square-foot office at 4349 Carlisle Pike, Mechanicsburg, PA.

Friday, September 16, 2016

60K SF ShopRite Opens In Philadelphia’s Whitman Plaza Center

by Steve Lubetkin,
A new ShopRite supermarket has opened in South Philadelphia. The new, 58,980 square-foot ShopRite store, at 330 Oregon Ave., occupies the former Pathmark store, and is operated by Colligas Family Markets, members of the Keasbey, NJ-based Wakefern Food Corp., a co-operative of more than 250 independently owned stores.

After an $8 million renovation, and with the opening of ShopRite, Whitman Plaza in South Philadelphia “once again stands out as the pre-eminent shopping center in South Philadelphia”, says Wilbur F. Breslin, CEO of Breslin Realty Development, and principal of South-Whit Shopping Center Associates.

Breslin arranged and negotiated the transaction that allowed the supermarket to relocate from a nearby site. South-Whit contributed to the cost of the new store’s buildout.

The new supermarket was renovated extensively to include a fresh bake shop; full service meat and seafood departments; prepared foods and catering; and grab-and-go meals such as sandwiches, heat-and-eat entrees and Asian cuisine. The store also features a specialty cheese department, an in-store café, and a shop-at-home delivery service. It employs around 300 workers.

“We are pleased to welcome the Colligas family and ShopRite to our center, and know that they will continue to provide residents of this densely populated South Philadelphia neighborhood with an exciting, modern supermarket to serve their everyday needs,” Breslin says.

ShopRite joins such national and regional tenants in the more-than 200,000-square-foot GLA community shopping center as Burlington Coat Factory, Ross Dress for Less, Pet Valu, PennDOT, Club Metro USA, Citizens Bank, Rainbow Shoppes, GameStop, GNC, Payless Shoe Source, and Party City. The center offers easy accessibility and high visibility from Oregon Avenue, I-76 and the Walt Whitman Bridge.

Breslin Realty Development of Garden City, NY, manages the shopping center, which was built in 1980 by the Breslin organization, and was previously renovated in 2003. It now sports a completely new façade and more than 20,000 square feet of updated interior space.  New York architect Frankie Campione, of CREATE Architecture Planning & Design, redesigned the center’s façade using influences from the nearby industrial areas and the nearby stadium.

Thursday, September 15, 2016

Summit Healthcare REIT Acquires Interest in Two Skilled Nursing Facilities

Summit Healthcare REIT's wholly-owned subsidiary Summit Healthcare Operating Partnership LP in a joint-venture partnership with Union Life Insurance Co., Ltd's wholly-owned subsidiary Best Years LLC acquired an interest in two skilled nursing facilities located in Millsboro and Smyrna, DE for a total purchase price of $54.1 million.

The facilities consist of a total of 332 licensed beds, and will be operated by and leased to a third-party operator.

"The acquisition of an interest in these two skilled nursing facilities is a great fit for Summit and our first acquisition in the state of Delaware," said Kent Eikanas, president and COO of Summit, which has partnered with Union in 15 other acquisitions. "This is an exciting time for the REIT as we continue our expansion and diversification throughout the United States."

Chicago Investor Buys Pennslyvania Lottery Bldg

Boyd Middletown DGS LLC, a Chicago-based real estate investment firm, acquired the Pennslvania Lottery building at 1200 Fulling Mill Rd. in Middletown, PA for $14.9 million, or about $110 per square foot, from Platinum & Partners III.

The single-story, 136,000-square-foot flex building delivered in 2007 on 12.5 acres in Dauphin County and features 95,995 square feet of built-out office space. The PA Lottery leases the entire building under a master term through 2022, with Scientific Games occupying space on a sublet deal.

High Associates Leases Franklin Street Building to City of Lancaster

The City of Lancaster signed a 28,275-square-foot lease for 515 N. Franklin St. in Lancaster, PA, taking immediate occupancy of the building.

The two-story former Farms Supply building is in the Lancaster County Retail submarket.

Equus Capital Sells Newark Office Properties

Rockford Capital Partners purchased two office buildings at 242 and 248 Chapman Rd. in Newark, DE from Equus Capital Partners for $15.55 million, or about $108 per square foot.

The portfolio totals 148,660 square feet built between 1987 and 1990.

Real estate reality check: Investing in REITs (Video)

Apex Financial Buys Maple Shade BJ’s

Kennedy-Wilson Properties Ltd. sold the freestanding retail building at 131 E. Kings Hwy in Maple Shade, NJ to Apex Financial Advisors, Inc. for $15.6 million, or about $142 per square foot.

The 109,841-square-foot building delivered in 1991.

Coca-Cola Renews 198,000-SF Lease in Macungie

The Coca-Cola Company, a global leader in the beverage industry, has renewed its lease for 197,500 square feet in the industrial building at 7533 Industrial Park Way in Macungie, PA.

Coca-Cola occupies a portion of the 535,000-square-foot warehouse, with Pratt Industries in the remainder. The 5-Star industrial property was built in 2008 on 40 acres in the Lehigh Valley Industrial submarket, and features car and trailer parking, a 130-foot truck court, ESFR sprinkler, 60 loading docks and four drive-ins, 32-foot clear heights, 4,000-amp heavy power, 50-foot column spacing and metal halide lights.

NFI Leases 21,000 SF in Voorhees

Supply chain solutions provider NFI has leased 21,026 square feet of first floor office space at 220 Laurel Rd. in Voorhees, NJ.

The two-story, multi-tenant office building was constructed in 2008 within the Voorhees Town Center in Camden County.

Aramark Selects Site for New Global HQ in Philadelphia

Aramark (NYSE: ARMK), the $15 billion, Fortune 200 global leader in food, facilities management and uniforms, has confirmed plans to relocate its global headquarters in fall 2018 to 2400 Market St. in Philadelphia, PA from current locations at 1101 Market St. and 100 Penn Square East.

For its new digs, the company will take over the four-story, former Hudson Motor Car Company plant, watching the 95-year-old facility transform into a modern, nine-story, 600,000-square-foot building with an emphasis on innovation, sustainability and green space.

Aramark will occupy the top five floors, totaling nearly 300,000 square feet, as the anchor tenant. The new location will provide the firm with a larger space that remains easily accessible to as many as 1,200 current and future employees. Aramark has called the City of Brotherly Love home for more than five decades.

Final building plans are pending city approval, but are expected to feature the Aramark logo as seen atop its current headquarters. Aramark's space will offer dynamic work spaces to promote collaboration, an associate dining facility, training facilities, a fitness center and green space with outdoor terraces.

"Earlier this year we proudly announced that the Keystone State and the historic and vibrant city of Philadelphia, which have been part of Aramark's success and growth for over half a century, will remain our home," said Eric J. Foss, Aramark's Chairman, President and Chief Executive Officer. "Today, we are announcing a new riverfront headquarters that will provide our associates with a dynamic work environment and exciting amenities to enable us to continue enriching and nourishing the lives of our clients, consumers and communities we serve."

The existing lower four floors will be re-built to accommodate current and future commercial and retail tenants, with 225,000 square feet of available office space as well as 70,000 square feet of restaurant and retail space facing a promenade overlooking the Schuylkill River Walk between Chestnut and Walnut Streets.

Continuing its commitment to the neighborhood, Aramark has announced a $100,000 contribution to the Schuylkill River Development Corporation (SRDC) to support the ongoing transformation along the Schuylkill River Trail and River Banks, an eight-mile corridor between the Fairmount Dam and Delaware River.

The site is owned by Philadelphia-based joint-venture partners The Lubert-Adler Real Estate Funds and PMC Property Group. Design work is being handled by Gensler as design architect and Varenhorst PC as executive architect.

Aramark's lease, which runs through September 2032, was facilitated with $20.5 million in state-sponsored incentives to the company, including infrastructure, redevelopment and employee training funds, in addition to expected incentives from the City.

"As one of the largest international corporations headquartered in Philadelphia, it was extremely important to the state that Aramark continued to call Philadelphia its home," concluded Pennsylvania Governor Tom Wolf. "The commonwealth served as a strategic partner throughout the process, working to ensure that Aramark remained here. We made the decision to further support Aramark by making a commitment to support the public infrastructure and redevelopment at the company's site to ensure the high number of jobs and private sector investment remain in Pennsylvania."

Tuesday, September 13, 2016

The Solana Horsham Trades for $31.5M

by Steve Lubetkin,
A joint venture of Capitol Seniors Housing and Formation-Shelbourne Partners, continuing a series of divestitures of assisted living and memory care communities in the Philadelphia and New Jersey markets, has sold The Solana Horsham, a 76-unit community in North Wales, PA, for $31.5 million or $414,474 per unit. As previously reported by, the joint venture earlier this year sold Solana properties in Williston, PA, and Roseland, NJ.

The lender originated a five-year, non-recourse floating rate loan with three years of interest-only from a regional bank for an undisclosed amount.

Located at 1419 Horsham Road, The Solana Horsham is a newly constructed facility developed by the seller in 2013. The occupancy at the time of the offering was approximately 89 percent and at the time of closing was 95 percent.

Monthly Economic Outlook – September 2016 (Video)

Monday, September 12, 2016

Positive Effect For Philadelphia Retail From Strong Hiring

by Steve Lubetkin,
Led by the professional and business services sector and the burgeoning medical community, Philadelphia added nearly 62,000 positions in the last 12 months ending in the second quarter, according to research.

The commercial real estate services firm says hiring in these typically well-paying employment sectors facilitated a lift to the metro’s median household income, which rose faster than the national average in the second quarter to more than $67,500 annually and boosted annualized retail sales.

The hiring “will bode well for retail spending, further intensifying tenant demand. Rising demand for space has prompted builders to move forward with a number of projects, including several in suburban locations, that are slated for delivery in 2016. While the majority of these developments are smaller in scale, a number of projects with more than 100,000 square feet are underway with completion scheduled next year. With minimal large-scale deliveries lined up for this year and strong absorption, vacancy will fall below 6 percent, encouraging the average asking rent to rise to an eight-year high.”

Improving market conditions will remain a draw to Philadelphia as investors scour the area for retail assets. As the average cap rate for retail assets recently dipped by 50 basis points and the amount of value-add opportunities on the market is limited. Investors will have to rearrange their standards to obtain desired returns.

“Whether this means targeting space in tertiary submarkets, acquiring centers requiring aggressive lease up, or bidding on centers with any size of undeveloped parcels, buyers can expect increased competition for both class B and C properties,” the research report concludes. “Assets priced between $1 million and $10 million should garner the most local and regional buyer interest, with prices rising alongside competition. Cap rates in the multi-tenant space will range widely from six percent for grocery-anchored centers to nine percent for suburban-located strip centers. Recent transaction figures suggest neighborhood centers should represent the most sought after multi-tenant type, as these properties often present buyers with the most creative flexibility.”

Friday, September 9, 2016

Prologis CEO: Real Estate Vacancy Rates at 20-Year Lows (Video)

Skanska USA Will Build Inspira Hospital In Mullica Hill, NJ

by Steve Lubetkin,
The Philadelphia regional office of Skanska USA will be building Inspira Health Network’s new hospital building in Mullica Hill, Salem County, about 15 miles from Philadelphia, PA.

“Skanska’s extensive regional national healthcare experience and innovative construction and delivery models enable clients like Inspira to focus on providing a superior service to the community,” says Skanska USA executive vice president and general manager Ed Szwarc. “At Skanska, we build for a better society – and we are committed to enhancing and expanding the Philadelphia region’s capacity for quality healthcare through these world-class facilities.”

It’s Skanska USA’s second major hospital contract in the Delaware Valley in the third quarter. In August, Skanska USA announced it would build the Women and Children’s Health Building for Christiana Care Health System in Newark, DE.

The new Inspira Health Network Medical Center will be built under the Integrated Project Delivery (IPD) approach, which brings together the client, designer and the builder to align stakeholders and streamline the execution of the project. The new medical center will be Skanska USA’s largest IPD project to date in North America.

With its partners Array Architects and Leach Wallace Associates, Skanska USA will construct a five story hospital building with 204 beds. The main tower consists of operating rooms, an emergency department, imaging suites, as well as administrative, dining and support services. The project also includes constructing a new central utility plant, which will provide electrical power, heating/hot water and chilled water to the new hospital.

“A new medical center conveniently located in the heart of Gloucester County will be a great asset to the entire region,” says John DiAngelo, president and CEO of Inspira Health Network. “This modern facility will allow our physicians and staff to offer our neighbors easy access to an even higher level of quality health care.”

Construction will begin in the first quarter of 2017 and is scheduled to be complete by December 2019.

Skanska has extensive healthcare experience in the Delaware Valley including the Capital Health Replacement Hospital, Christiana Care’s Women and Children’s Health Building, Wilmington Hospital Expansion, and the Nemours/A.I. duPont Hospital for Children. Other major regional projects include SugarHouse Casino, Nicholas and Athena Karabots Pavilion Addition at the Franklin Institute, Terminal F Baggage Claim Addition and Ticketing Renovation at the Philadelphia International Airport, and University of Delaware East Campus Residence Hall.

Thursday, September 8, 2016

Zenith Products Sells Riveredge Park Lot I in New Castle

STAG Industrial Management LLC has acquired the industrial building at 400 Lukens Dr. in New Castle, DE from Zenith Products for $27.5 million, or about $57 per square foot.

The 485,987-square-foot industrial building delivered in 2002 on Lot 1 in Riveredge Park.

Is the Lehigh Valley the next 'Inland Empire'?

By Matt AssadContact Reporter Of The Morning Call
If you're a frustrated Lehigh Valley driver hoping that the next giant, truck-attracting warehouse is the region's last, you will almost certainly be disappointed.

With its proximity to the ports of New York, robust interstate system and rapid growth in distribution centers, the Lehigh Valley could be poised to become the nation's second "Inland Empire" for freight, joining the one just east of Los Angeles, according to an expert panel that gathered Wednesday in Bethlehem for the Lehigh Valley Planning Commission's annual Build LV development summit at SteelStacks.

As the region's warehouse market footprint bulges and grows together with a neighboring market in the Harrisburg area, it is poised to create one large pipeline of warehouse and logistics centers serving the entire Northeast.

While planners touted the increased tax base and thousands of jobs it could create, drivers who have to share the road with all that new truck traffic may be less excited.

"We have the infrastructure, we have the population base and we have the available space to be on that level to California's Inland Empire. We have the capacity and when you consider that we're just scratching the surface on e-commerce, we're going to need a lot more inventory. Growth is almost inevitable."
That kind of growth and the truck traffic that comes with it won't come as a surprise to Planning Commission officials, who released their annual development report during the three-hour event that was co-hosted by the Urban Land Institute of Philadelphia.

Noting that 90 percent of all freight though the Valley is moved by truck, Planning Commission Executive Director Becky Bradley has already forecast that the 40 million tons of freight that passes through the Valley each year will double by 2040.

That kind of growth has planners comparing this region to what's known as the Inland Empire, a two-county region just east of the Port of Los Angeles. It was once known for its citrus crops, but with the port receiving 176 million tons of cargo a year, it's now more prominent for the 360 million square feet of warehouse, distribution and industrial facilities that dot its interstates.

The Lehigh Valley and neighboring Harrisburg regions are positioned to grow into an "Inland Empire East."

All those warehouse owners will be paying millions of dollars in taxes and likely creating thousands of jobs, but is that worth adding traffic to the highways and chewing up hundreds — and maybe thousands — of acres of green space to do it?

The answer is an emphatic no for Scott Slingerland, director of the Coalition for Alternative Transportation, which promotes pedestrian and bicycle safety and the reduction of congestion through mass transit and ride-sharing.

"With a growing number of warehouses, we lose our sense of place. They're so huge, it almost makes an area seem less habitable," Slingerland said. "There has to be a better way to use this land."

Matthew Tuerk, a vice president at Lehigh Valley Economic Development Corp., stressed that not all new facilities that park along Interstate 78, Interstate 81 or Route 22 will be giant distribution facilities. Many will follow in the mold of Ocean Spray in Breinigsville or industrial pump maker Curtiss-Wright in Bethlehem to make products, creating jobs that pay more than the $12 to $14 an hour warehouse facilities pay.

"I'd say that 60 percent of the companies that come to us are looking to make something here," Tuerk said. "We will not become some wasteland of warehouse and distribution centers."

But the task of the panel was not to debate whether this transformation should happen, but rather to discuss whether all the signs suggest that it will.

Being close to the ports of New York and New Jersey — connected by a robust interstate system — gives the Valley an inherent advantage when attracting new e-commerce businesses.

From there, forecasting where development will happen is based on a complex matrix of factors, but the three key factors suggesting a continued warehouse and distribution boom in the Lehigh Valley are fairly simple, Knowles said.

For one, the combined big box industrial inventory — defined by Knowles as buildings of more than 100,000 square feet — of the Lehigh Valley and Harrisburg region has already topped 200 million square feet, thanks to rapid building in the last five years.

That's well short of the nearly 370 million square feet in California. However, industrial land in the Valley and Harrisburg regions that has already been proposed for big box industrial development would support additional 47 million square feet in just the next few years.

But the biggest factor is probably population, the panel agreed. While that bulging western Inland Empire sits within 300 miles of 28 million people, the burgeoning one in the East has 68 million people in that same 300-mile radius.

With the growth of e-commerce and one-day delivery prompting more companies looking to get products to their customers, they're going to need more distribution centers in that population zone.

"The density, capacity and velocity of truck traffic on Interstates 78 and 81 is going to keep coming. You might as well get ready for it."

It's possible that municipal planners that oppose the warehouses could choose not to approve the projects, but with nearly 50 million square feet of projects already proposed for land zoned industrial, that's unlikely.

As director of a tiny Bethlehem-based organization, Slingerland has grown used to losing these kinds of battles, but he tried to find a nugget of hope to cling onto in this one.

"These are monster facilities," Slingerland said. "Maybe at the very least they can put solar panels on the roof."

Slice Communications Takes Space At 234 Market Street

by Steve Lubetkin,
Slice Communications, which specializes in the creation and delivery of strategic messaging through public relations, social media, and various other methods, is subleasing 6,000 square feet of office space from Dorado Systems at 234 Market Street, Philadelphia, PA.

Dorado Systems designs healthcare eligibility verification, EDI tools and applications for rapidly processing complex transactions, making more accurate decisions, and reducing costs.

234 Market Street is in the Independence Mall submarket. This location is convenient to I-95 and the Ben Franklin Bridge.

Wednesday, September 7, 2016

iGPS Logistics Renews 109,000-SF Industrial Lease

iGPS Logistics LLC, a shipping solutions and third-party logistics company, has renewed its current lease for 108,665 square feet at 301 Railroad Ave. in Shiremanstown, PA.

The single-story industrial building totals 245,549 square feet and was delivered in 1963 in the Harrisburg Area West Industrial submarket. It features 19 loading docks and one drive-in, 24-foot clear heights, 1,200-amp heavy power, 40-foot column spacing and a 130-foot truck court. The balance of the building remains available for lease.

Retail Centers Evolving Away From Dependence On Department Stores

by Steve Lubetkin,
Department stores will play a less-pivotal role in retail centers of the future, as sales declines lead to foot-traffic declines. The good news is that other retail uses with better traffic will replace them and improve the sales prospects for such malls over time, he says.

“Trends take time, trends just don’t happen overnight, trends often take years or even decades to play out. One would be the decline in importance of what we call traditional old-fashioned department stores as being relevant in projects.”

As sales in department stores decline, traffic also declines. “You don’t tend to have lots of traffic and no sales, and vice versa,” he says. “We see that with Macy’s announcing closings in the Philadelphia area. People lament that, but they really shouldn’t, because the traffic they were generating has been on the decline for years, and what will replace them will undoubtedly be uses that create more traffic.”

Unconventional uses like fitness, food, and medical are likely to replace department stores in many retail mall settings, Gartner says.

“An office-shared concept like we work, will in theory bring as much traffic to a property as a mundane retailer,” he says. “It’s all about being relevant in today’s world. If we look at the history of the suburban mall, it was to create a climate-controlled version of downtown. Retail real estate is one of the few parts of commercial real estate where you have to lease space and attract the public to buy stuff. Office doesn’t have to do that.”

Restaurants will continue to play a key role in the transformation of retail malls, because the restaurant experience can’t be replicated online, adding that grocery stores offering prepared foods and malls with food trucks also are becoming popular. Fitness stores are also a rising element of the tenant mix, he says.

“Having versatile real estate is important. If somebody is developing a new project, the ability to have proper venting that only restaurants need is important. That’s hard on the ground floor of a mixed-use project. These are things we give advice to owners about. A restaurant will need about double the parking of conventional retail, because a restaurant has more people in its confines than a traditional retail store at any one time.”

 “Rents a holding, we’re seeing the reuse of a lot of buildings.” At Suburban Square Mall in Ardmore, PA, a former Macy’s building is being repurposed for multiple tenants, he says.

Entertainment retail, such as theaters, bowling, ping-pong, pool, golf stores, “getting people together in places and landlords liking it because it drives traffic,” will also be among the key trends, he says. Center City Philadelphia will announce tenants, projects, and deals this year, particularly in East Market and in the Gallery reimagining, Gartner says.

Tuesday, September 6, 2016

Accesso Partners Boosts 1515 Market’s Occupancy 10 Points

by Steve Lubetkin,
When Accesso Partners acquired 1515 Market Street for $85 million in December 2014, it pledged to improve the 20-story, 502,000 square foot office tower that houses Temple University’s Center City campus and dozens of professional service firms.

Accesso, chosen from 100 potential buyers, kept its promise, made significant improvements and has raised occupancy from 82% to 92.3% in the past 18 months. Some 47,081 square feet of office space leases were executed in the first half of this year and leases totaling another 10,000 square feet are out for signature.

The Hallandale, FL real estate investment manager added a ninth-floor conference center as an exclusive free amenity for tenants. The lobby, elevator cabs, the underground concourse entrance leading to SEPTA, common corridors and bathrooms have been upgraded. Elevators at the property are being modernized and aesthetic changes are underway.

“Accesso is a serious owner and the first in a long time to actually make substantial investments in this building as evidenced by capital improvements already completed and planned,” says Keli Wallace, senior property manager for Accesso Services, the owner’s property management subsidiary.

Recent new tenants include Sage Acquisitions, a real estate law and asset management firm, the law firm of Steven L. Chung Esq., McMahon Engineering, GZA Geoenvironmentalists, HDR Engineers and Architects and law firm Manley Deas Kochalski.  Law firms Brainard Partners and Walker Nell renewed their leases. Law firms Litchfield Cavo; O’Brien, Rulis and Bochicchio; Wade, Clark Mulcahy;  Legal Search  and R-T Specialty, a service provider for insurance agents and brokers, expanded their offices.

“Philadelphia has been a sharply growing and improving office market in the last four to five years. To enter and compete here, Accesso realized it would have to put the right amount of capital into the right improvements and they did exactly that.”

Various “spec suites” with stylish finishes were recently built out with one immediately leased to Formcraft Interiors, an architectural firm.

Wallace says 1515 Market’s location has long been a “magnet” for attorneys, legal and professional service firms.

“We have 29 law firm tenants and the Administrative Office of the Pennsylvania Supreme Court,” he says. “We’re right across the street from City Hall so lawyers can easily make court appearances or have meetings with judges and city officials. Our proximity to public transportation makes it easier for clients to visit their offices.”

1515’s largest tenant, accounting for 130,000 square feet, has developed a strong relationship with the building owner. Temple University, which occupies the first five full floors and part of the ground floor, has invested $3 million in improvements to its space and another $500,000 into new classroom technology, says Bill Parshall, director of the Center City campus.

The improvements included Temple University’s Café Bookstore, operated by Barnes & Noble, located on the ground floor.

“The owner has systematically upgraded the building including the heating, air conditioning and outside lighting which is very important to us because we offer many evening classes for working adults and graduate students,” says Parshall. “Plus, we couldn’t have a better location –right at the center of Philadelphia’s transportation hub.”

More than 3,000 students take credit and non-credit courses at Temple’s Center City campus.

“We have an excellent relationship with Accesso and we’re very happy with their cooperative, proactive and responsive attitudes,” says Parshall.

Friday, September 2, 2016

Equus Capital Acquires Madison at the Lakes Apts

Connaught Inc. sold the Madison at the Lakes apartments at 3218 W. Cedar St. in Allentown, PA to Equus Capital Partners, Ltd. for $29.05 million, or about $124,000 per unit.

The 457,312-square-foot multifamily complex consists of 235 units across 26 buildings. The unit mix consists of 60 one-bedroom, 102 two-bedroom and 73 three-bedroom units. The pet-friendly property offers central air, dishwashers, eat-in kitchens, fireplaces, hardwood floors and washer-dryers.

Planet Fitness to Open in Pennsville

Planet Fitness signed a lease for 17,500 square feet at Pennsville Marketplace at 709 S. Broadway in Pennsville, NJ with plans to move in Summer 2017.

Built in 1994, the center totals 170,000 square feet on 42 acres. The shopping center is anchored by a Wal-Mart.

Unison Realty Partners Acquires Harrisburg Retail Center, High Pointe Commons

by Steve Lubetkin,
Boston-based Unison Realty Partners acquired High Pointe Commons, a premier 355,000-square-foot regional community center in Harrisburg, PA for $33.8 million.

Built in 2006, the property is anchored by an independent 125,000-square-foot Target and 98,000-square-foot JCPenney, which includes in-store Sephora and Disney Store concept shops. Those properties were not included in the sale.

Unison will be acquiring the remaining 132,000 square feet of the property, which includes a stable and diverse mix of fashion, service and food tenants, including Christmas Tree Shops, Chili’s Bar and Grill, and Petco. Today, High Pointe Commons, located off of Interstate 283, is 99 percent leased.

“High Pointe Commons is the epitome of what we look for in an investment,” says Karim Fadel, founder and principal of Unison Realty Partners. “With a convenient location in a growing market, historically high occupancy and a lineup of national retailers, we’re confident that High Pointe Commons will continue to draw in the local community while we work to improve and develop the center.”

Unison owns and operates a number of shopping centers along the east coast, including its most recent acquisition of Johnston Road Plaza, a grocery-anchored shopping center in Charlotte, NC. Targeting performing properties with value to unlock, Unison Realty Partners is actively seeking new deals throughout the Northeast and Southeast regions.

High Pointe Commons was a joint venture development of High Real Estate Group and CBL & Associates Properties.

“High Pointe Commons represents some of the highest quality construction and aesthetics of a shopping center within all of Central Pennsylvania contributing to capturing a best of class tenancy. Ownership was ahead of their time in 2005 by developing one of the first off-mall JCPenney locations, which has been a major success with the recent addition of Sephora and Disney stores within the store.  High Pointe Commons is well positioned along one of the busiest interstate connectors in all of Central Pennsylvania, fronting Interstate 283. Interstate 283 brings retail customers from Route 322, from Hershey to the east, as well as Interstate 76 to the south and Interstate 83 from Harrisburg CBD.  With high historical occupancy and the recent addition of Petco on one of the last pad sites at the property, the superior location will allow the new ownership to continue with success driven by a high volume Target.”

Thursday, September 1, 2016

Envestnet Moves into Chesterbrook

by Joseph N. DiStefano, Staff Writer Philadelphia Inquirer

Envestnet Inc., a publicly-traded Chicago company that makes software for investment firms, plans rapid expansion at its new software development center in Chesterbrook, Tredyffrin Township, which opened in June.

"I moved here from Chicago with my family" to head the operation, Josh Mayer, Envestnet's chief operating officer, told me. The company has hired over 100, expects to have 153 total staff to qualify for state aid by the end of the year, and has adjoining space to accomodate hundreds more.

Mayer likes the 10-minute commute, Tredyffrin-Easttown schools, and the "vibrant talent pool" of financial software developers and service professionals along U.S. 202 in Philadelphia's western suburbs.

"We did a search," Mayer told me. "I have people in Boston, in Denver, in Silicon Valley. But this area checked all the boxes for us. There are universities nearby. We have proximity to New York (financial clients) and transportation to our Chicago headquarters."

Most important: "I was pleasantly surprised by the significant technology presence here," with competitors including SEI Invesments in Oaks and Lockwood Advisors Inc. in Malvern, software development partners such as Wheelhouse Analytics in West Chester, and clients including Brinker Capital in King of Prussia and investment advisers who manage ETFs from Vanguard Group in Malvern. "We've had a lot of early success finding people with financial services backround who are also software engineers and talent people," Mayer concluded.

Pennsylvania has agreed to pay Envestnet nearly $500,000 in tax credits and grants, in exchange for the company's promise to hire at least 153 fulltime workers. The company has moved into 1000 Chesterbrook Blvd., Suite 135.

According to the state government's corporate-aid proposal, Envestnet planned "to consolidate portions of its operations from Chicago, Boston, Dallas, Denver and New York and other locations in the U.S. to a new leased facility in Chester County."

"Envestnet plans to invest at least $4.9 million in the project and has committed to creating 153 new full-time jobs over the next three years," according to a statement from Pennsylvania Gov. Tom Wolf's office. Envestnet last year earned around $12 million in profits, from sales of $421 million.

In a statement, Envestnet president Bill Crager said the company has already hired 115 workers "since moving into our facility in June," and plans to hire the rest of the 153 "by the end of the year."
The state Department of Community and Economic Development has agreed to give the company $459,000 in tax credits (corrected, not grants) after the new workers are hired, plus $36,000 from the WEDnetPA employee-training fund.

In a statement, State Sen. Andy Dinniman, D-Chester County, credited the recently-completed new lanes speeding traffic on congested US 202 for helping attract new and expanded employers to the aging office corridor.

According to Dinniman, the road helped open the way for Envestnet, as well as recent hiring announcements by health IT tech provider Cerner Corp., which is adding 250 at Great Valley Corporate Center north of Malvern, and biopharma developer Radius Health, which is adding 80 at its Swedesford Rd. location in eastern Tredyffrin Township.

Recent Philadelphia-Area CRE Deals Totaling $7 Million

by Steve Lubetkin,
A number of Philadelphia  sales and leases valued at $7 million have been recently completed.

45 S. Third Street in Old City sold for $800,000. The former home of The Irish Pōl, known for its brews, bourbons, and pub grub, has been purchased by Pioneer Ventures, owners of the pub concept Buffalo Billiards, currently operating in Philadelphia. Pioneer Ventures plans to open a second Buffalo Billiards location/new concept after renovations are complete. The two-story property was built in 1900.

The General Services Administration leased 17,804 square feet at 9300 Ashton Road in Northeast Philadelphia. The Social Security Administration will relocate there from 2373 Welsh Road.

United Refrigeration leased approximately 13,000 square feet at 606 Spring Garden Street to I. Brewster & Company Gallery. Brewster will use the space as a showroom and administrative space for the growing gallery, enabling the 30-year Philadelphia tenant to expand the depth of inventory in masters, contemporary and pop art paintings, drawings, and original prints.

Ameribest Homecare leased 6,000 square feet at 1217-35 Spring Garden Street. The company, which provides comprehensive home health and personal care services, is relocating from 926 Race Street.