Wednesday, November 30, 2016

Ross Leases 26,000-SF Retail Space at Imperial Plaza

Ross Dress for Less, a discount clothing retailer, has signed a lease for 25,832 square feet in the Imperial Plaza shopping center at 3400 Aramingo Ave. in Philadelphia, PA.

The retail center totals 119,883 square feet. Kode Development Associates developed the property in 1995 on seven acres in the Northeast Philadelphia submarket. Other tenants in the plaza include Ihop, Modell’s Sporting Goods and Rainbow.

Dalian on the Park Goes on the Market

Dalian on the Park, part of the Rodin Square development overlooking the Benjamin Franklin Parkway in Philadelphia, has been placed on the market.

It is the newly-constructed, 293-unit, 5-Star multifamily property at 501 N. 22nd St.

The property, which just opened to renters in recent months, is currently approximately 30 percent leased. The 10-story building, which features a 55,000-square-foot Whole Foods in the ground-floor retail portion, was built by Dalian Development. It is estimated that the property, which sits on three acres behind the Rodin Museum, could go for as much as $180 million.

Connell Foley Leases 71,000 SF at Roseland II

New Jersey law firm Connell Foley has leased 71,000 square feet in the Roseland II office building at 56 Livingston Ave. in Roseland, NJ.

The tenant will relocate its New Jersey headquarters from its nearby location in Roseland after 30 years there, taking space on the first and second floors of the building in spring 2017 when it joins Lowenstein Sandler LLP, Brown & Brown, ME Safris and Magone & Company in the property. Additional space on the second floor and 51,000 square feet on the fourth are still available for lease.

"Our previous location served as the foundation for the growth of our firm," said Philip F. McGovern, Jr., managing partner of Connell Foley. "In continuing to build our platform for the future, we were attracted to 56 at Roseland as it is a tremendous fit from the standpoint of location, building amenities, services and technological capability."

New York-based Gensler will handle Connell Foley's build-out, with 58,000 square feet on the first floor featuring main conference rooms, attorney offices and support operations with its second-floor space housing the firm's working cafe, additional offices for the legal team and administrative workspaces.

Built in 1982, the four-story, 433,945-square-foot, 4-Star office building sits on 55.8 acres in the Suburban Essex / Rt. 280 submarket of Essex County, within the Prudential Business Park. Mountain Development Corp. (MDC) and Square Mile Capital Management paid Merck & Co., Inc. $18.1 million, or about $42 per square foot, for the asset back in December 2011.

MDC and Square Mile have invested nearly $50 million in upgrades and capital improvements to the property, which now features new furniture and flooring, upscale fitness center, cardio/yoga studio, lockers and shower area, a green roof and a professional, 56-acre campus with hiking trails, volleyball, walking paths and an outdoor fire pit and lounge area.

Lowenstein Sandler, another area law firm, recently leased 170,000 square feet in the building and its space is currently undergoing build-out by Manhattan-based Marner & Associates, with a 2017 move-in.

Lowenstein Sandler’s managing partner, Gary Wingens, said, "Our firm is excited to be joined by our colleagues from the Connell Foley firm at 56 Livingston. The building offers first class amenities, such as a new high-end gym and dining and catering facilities designed for professional service firms."

Monday, November 28, 2016

Burlington Leases 42,000 SF in New Castle

Burlington Coat Factory signed a lease for 42,443 square feet in the Brandywine Commons II shopping center at 1000 Rocky Run Pky in Wilmington, DE.

The 165,792-square-foot shopping center was built in 1993. Burlington’s lease includes the anchor space.

Whirlpool Breaks Ground on New 1M Sqft Warehouse in Silver Spring Twp

Whirlpool, a leading global appliance manufacturerwith approximately $21 billion in sales, has broken ground on a 1.1 million-square-foot industrial facility at 100 Fry Dr. in Mechanicsburg, PA.

The warehouse will replace the current building on the site, adding another 300,000 square feet in addition to rail access. It is expected to deliver in the third quarter of 2017 in the Harrisburg Area West Industrial submarket of Cumberland County.

Penntex Construction Center is building the warehouse and Exeter Property Group is in charge of property development. Both are Montgomery County-based companies.

Tuesday, November 22, 2016

Giant Food Leases 50,000 SF in Feasterville Trevose

Giant Food, a retail grocery chain with locations across the Mid-Atlantic States, signed a lease to occupy 49,672 square feet at 176 W. Street Rd. in Feasterville Trevose. PA.

The 99,648-square-foot former Big K-Mart center was built in 1973 on 12.3 acres in the Lower Bucks County submarket of Philadelphia.

Griffin Subsidiary Secures $26.7M Loan

Two subsidiaries of Griffin Industrial Realty, Inc. have secured a non-recourse mortgage loan totaling $26.7 million from Webster Bank for two properties known as Lehigh Valley Trade Port II.

Lehigh Valley Trade Port includes 5210 Jaindl Blvd. totaling 252,000 square feet and the 280,000-square-foot warehouse located at 5220 Jaindl Blvd. in Bethlehem, PA. Both properties were constructed in 2015 on more than 20 acres in Northampton County.

One of the properties had an existing mortgage with Webster Bank with a balance of $13.7 million. This was refinanced into the new mortgage loan.

Dranoff, Breaking Ground For Luxury Apartment Tower, Calls Newark ‘Undiscovered’

by Steve Lubetkin,
A long track record of building successful boutique multifamily properties in Philadelphia and its distressed neighbor across the Delaware, Camden, NJ, helped developer Carl Dranoff win the bid to develop One Theater Square, Newark’s first ground-up luxury multifamily construction in more than half a century.

“It’s a carefully calculated risk,” says Dranoff. “It’s just a bullseye location, you just can’t get a better location.”

Dranoff Properties, the New Jersey Performing Arts Center, and city officials broke ground last week on Newark’s first luxury living address, One Theater Square. The building is expected to top out next fall, with the first tenants moving into apartments in June 2018, Dranoff says.

The 22-story skyscraper, with a signature curved glass tower, will contain 245 apartments, 12,000 square feet of ground level retail, 285 parking spots and amenities that include:  24-hour concierge service, a state-of-the-art fitness center, club rooms, and an outdoor entertainment space outfitted with soft seating, TV’s and fire pits.

Apartments in the tower will rent for significantly less than comparable properties in the very hot multifamily markets of Hoboken and Jersey City, but with similar amenities and urban access, Dranoff says. The project includes 24 affordable housing units that will be marketed as artist residences, although they will be available to anyone who meets the financial criteria.

“Our rents will be one-third less than Hoboken and Jersey City,” he says. “You’ll be able to rent a two-bedroom for what a one-bedroom costs. Anybody who wants more space will be able to come to One Theater Square and get basically the same walkable location, the same access, everything.”

In an exclusive interview with at Philadelphia’s Union League Club, Dranoff explained that his successful redevelopment of the Victor Lofts in Camden, formerly the home of RCA Victor’s record plant, and properties like One Riverside and Symphony House in Philadelphia, gave his firm the credibility necessary to get the nod for the Newark project.

“We’ve constantly been looking for areas to expand into and bring our playbook into,” he says.  “We’ve diversified our company, we’ve gone from historic reconstruction to ground-up construction, from midrise to high-rise, from apartments to condominiums.”

Carl Dranoff, CEO of Dranoff Properties, at ALM Real Estate Media’s RealShare Philadelphia 2016 Conference (Bill Neumann Photo. Used by permission.)
Dranoff heard about the RFP for the property adjacent to the NJPAC in 2008, and realized it was similar to the Symphony House project, which was also connected with a nearby arts and culture venue, Philadelphia’s Kimmel Center.

“South Broad Street was not a residential street at all, but we thought we could develop the site, and do a major anchor project, and people will want to live there because they are interested in walkability, arts and culture, it’s lively,” he says.

Located a block from the Kimmel Center, which has some 300 days of performances a year, Dranoff’s Symphony House sold out its condominiums even during the recession, he says.

“So when I saw Newark, NJPAC, and this site, right across the street, not even down the street, I thought, why can’t I do what I did at Symphony House, in Newark?” Dranoff says. “Frankly, that’s why we were selected as the developer.”

Of 20 responses to the RFP, the selection committee narrowed down the list to four, including Dranoff, and when the team visited Philadelphia and saw Symphony House, “they got it right away,” Dranoff says. “They said, ‘This is the guy, he’s got the playbook, he knows how to do this.’”

Certain fundamentals of Newark help ensure the project’s ultimate success, Dranoff believes. The site is a short walk or light-rail ride from Newark Penn Station, which itself is just a 20-minute train ride into Manhattan. Trains from the station also serve the Amtrak Northeast Corridor to Boston and Washington, with Newark Liberty International Airport just 12 minutes from Newark’s central business district.

“Start with the big picture. Fifty thousand people are working downtown every day,” Dranoff says. “You don’t think we can fill up 250 apartments just with people who would like to walk to work?”

The project fits well with the redevelopment of the Military Park area adjacent to the NJPAC, the former Hahne’s Department Store building is being redeveloped into a Whole Foods, with connected retail shops and multifamily developments, and Prudential Financial recently completed a second office tower in the area.

The $116 million project has been realized through a unique public private partnership, which includes contributions from the city of Newark; the state of New Jersey; Prudential Financial; Fifth Third Bank; the developer and NJPAC.

“One Theater Square embodies a vision of downtown Newark more than a quarter century in the making,” says John Schreiber, president and CEO, NJPAC. “This is a transformative moment in a great city’s advance toward an even greater future.”

Plans for the ground floor include 12,000 square feet of retail space. Apartment rents are expected to start at $1,250 for a studio, $2,000 for 1-bedroom, $3,150 for a 2-bedroom and $4,500 for a 3-bedroom.

“One Theater Square is an important step forward for Newark,” says Newark Mayor Ras Baraka. “The pace of change downtown continues to accelerate as our central business district becomes more of a residential, artistic, and retail hub in addition to its strength as a regional business center.”

Dranoff expects to look for other opportunities for development in Newark.

“We think Newark is an undiscovered destination,” says Dranoff. “I see Newark as like Philly was ten years ago.”

Sunday, November 20, 2016

Potential new prison site sold to recycling firm

by Tricia L. Nadolny and Julia Terruso, Staff writers Philadelphia Inquirer
When the city last year considered buying land along the Delaware River as the site for a new prison, the backlash was swift and the plan was shelved. But the door remained open, as Mayor Kenney, then the Democratic Party nominee, said the land could be ideal for an educational facility for inmates.

That opportunity seems to have passed.

A purchase agreement is in place for the 58-acre property, which Morris Iron & Steel hopes to use to expand its adjacent scrap-metal recycling facility. Councilman Bobby Henon, who was in favor of purchasing the property last year in light of the poor conditions at the city's House of Correction, on Thursday introduced a resolution to rezone the property for the new use.

"This new administration is committed to ensuring the [inmate] population is decreased. And if they can decrease it enough, maybe there's not a need for the House of Correction," said Henon, whose district includes the land.

The proposed purchase was among the most contentious issues on Council last year, when the debate became intertwined with a conversation about providing more funding to the School District. Kenney has since focused on reducing the city's prison population, in part through a grant from the MacArthur Foundation.

His spokeswoman, Lauren Hitt, on Thursday said the mayor remains interested in a new facility only if it has "a heavy focus on rehabilitation and skills training for reentry."

Ron Greller, president of Morris Iron, said the company plans to maintain a walking path that runs along one side of the property and create a small community park along the Delaware River.

"It's a win-win for the community," Henon said.

Also Thursday, Council President Darrell L. Clarke introduced a bill that would make it harder for businesses that do not meet diversity workforce requirements to get city contracts. It would require such businesses to provide proof they sought minority participation, or risk being blocked from city contracts.

Clarke also introduced an ordinance approving the financing of a $60 million bond to pay for a backlogged home-repair program. The money would fund repairs in about 5,500 homes owned by low-income residents.

Friday, November 18, 2016

Aldi Signs 22,000-SF Sublease at Limerick Crossing

Aldi has subleased 21,702 square feet in the Limerick Crossing Shopping Center at 1 - 51 W. Ridge Pike in Limerick, PA.

The 120,775-square-foot shopping center was constructed in 2007. The lease is scheduled to commence in the spring of 2017. Aldi will join other national tenants such as Sleepy's and Hair Cuttery in the center, which is owned and managed by Brandolini Companies in Berwyn, PA.

Delta-T Group Renews Lease at 950 Haverford

Delta-T Group, a health, social work, education and behavioral health staffing firm, signed a renewal for its 18,146-square-foot location at 950 Haverford Rd. in Bryn Mawr, PA.

The three-story, 55,000-square-foot office building was constructed in 1972 and renovated in 2002.The property is located in the Main Line submarket in Delaware County.

Food Basics Leases 48,000 SF at Shelly Plaza

Food Basics, a discount supermarket chain, signed a lease for 48,131 square feet in the Shelly Plaza shopping center at 8914-8944 Frankford Ave. in Philadelphia, PA.

The 145,074-square-foot shopping center was constructed in 1997 in Northeast Philadelphia.

Thursday, November 17, 2016

Trouble Brewing in Commercial Real Estate

by Peter Grant, Wall Street Journal

Defaults are rising in a key corner of the commercial real-estate debt market just as borrowing
costs are set to jump, raising the likelihood of a slowdown of the $11 trillion U.S. commercial
property sector in 2017.

A financial crisis-era regulation is about to take effect that is expected to make some commercial
real-estate borrowing more expensive and complicated, analysts said.

At the same time, interest rates have increased since the election of Donald Trump as the
nation’s 45th president last week and seem poised for a sustained rise from recent historic lows,
which would further squeeze an industry built on borrowed money.

“I can paint a picture that it could be disastrous, with runaway inflation and high interest rates,”
said Charlie Bendit, co-chief executive of Taconic Investment Partners LLC, at a New York
industry luncheon last week.

The worries raise fresh concerns for the commercial property market as it enters its eighth year
of expansion.

Already, landlords are battling a slowdown in sales and rising vacancy rates of multifamily
housing units across the U.S. and of office space in Houston, Washington, D.C., and other big
markets. Commercial property sales volume was down 8.6% in the first nine months of 2016 to
$345.4 billion, according to Real Capital Analytics.

Now defaults are on the rise as well. More than 5.6% of some $390 billion worth of commercial
property mortgages that have been packaged into securities was more than 60 days late in
payment in September, according to Moody’s Investors Service. That was up from a 4.6%
delinquency rate earlier this year.

The culprit: loose lending before the financial crisis. Ten-year loans issued in 2006 and 2007 are
now coming due, and many borrowers aren’t able to pay them off despite rising property values.
In all, Morningstar Credit Ratings LLC predicts borrowers won’t be able to pay off roughly 40%
of the commercial mortgage-backed securities loans coming due next year. Suburban office
properties and shopping centers are being hit particularly hard, saidEdward Dittmer, a
Morningstar vice president.

“We’re seeing a lot of stress,” Mr. Dittmer said

Consider the Skyline office complex in Fairfax, Va. Vornado Realty Trust financed the property
in 2007 with a $678 million mortgage that was converted into bonds.
Vornado was forced to restructure the loan in 2012 after the portfolio ran into trouble. Earlier
this year, Vornado for a second time notified the loan servicer that “cash flow will be insufficient
to service the debt,” according to a regulatory filing. A Vornado spokesman declined to

Similarly, a venture including New York investor Jacob Chetrit that owns a 1.2-million-squarefoot
office property on Seventh Avenue in Manhattan is negotiating an extension of a $136.9
million loan made in 2006. The space is about 15% vacant.

Victor Gerstein, a lawyer working for the venture, stressed that it is current in its monthly debt
service and that there hasn’t been a default. The owners are moving to increase the building’s
occupancy and “will be very well positioned to get a very attractive loan in the near future,” Mr.
Gerstein said.
Adding to the market’s worries are new rules that go into effect on Christmas Eve under the
Dodd-Frank regulatory overhaul requiring issuers of commercial mortgage-backed securities to
keep at least 5% of the securities they create.
The so-called risk-retention rules likely will make borrowing more costly and complicated,
raising the chances that some property owners won’t be able to refinance loans from the boom
‘I can paint a picture that it could be disastrous, with runaway inflation and high interest rates.’
—Charlie Bendit
“You couldn’t have planned worse timing,” said Tad Philipp, director of commercial real-estate
research at Moody’s.
Mr. Trump promised during his campaign to repeal Dodd-Frank, but analysts said that could take
a long time and that certain provisions might remain on the books, including risk retention.
To be sure, banks, insurance companies and other finance firms have picked up some of the slack
from the shrinking commercial mortgage securities business. More than half of the bonds issued
in 2005 and 2006 for New York properties were refinanced by such lenders, according to a
report earlier this year by CrediFi, a real-estate data and analysis firm.
But there are other problems flaring up as well. Regulators earlier this year warned that vacancy
has been growing in the rental apartment market, and that higher interest rates in the next two
years could damp price growth there.
“They’re flashing a yellow light over the market,” said Ely Razin, CEO of CrediFi.

Transwestern Acquiring 160 Acres for 2.2-Million-SF Spec Warehouse Project

The industrial development arm of Transwestern will acquire 160 acres in Penn Township, PA, for the development and construction of a 2.2 million-square-foot warehouse project.

The speculative project dubbed Penn Commerce Logistics Center in Penn Township, located about 23 miles northwest of Pittsburgh, launches the first operations in the Northwest by Ridge Development, the industrial development division of Transwestern Development Co.

Ridge, under contract for the purchase of the site at Exit 37 on Interstate 81, will begin construction of a 1.4 million-square-foot building when the transaction closes in September 2017. The building is expected to deliver in 2018, with build-out of the project targeted for 2020.

Ridge has hired Senior Vice President Paul Pontius to lead the operation, based at the new Ridge office in Harrisburg.

In a statement, Ridge Executive Vice President Steve Kros said Central Pennsylvania is "severely underserved" by industrial product, making Penn Township in ideal entry point for the company's Northeast expansion.

The numbers would support Kros's contention. The Newville submarket where Penn Commerce Logistics Center will be located had just 2.57 million square feet of existing warehouse space at mid-year 2016, fully occupied, the company said. Nearby Carlisle, by contrast, had 18.2 million square feet of existing warehouse inventory with 7% vacancy and 2.35 million square feet under construction.

Ridge officials said the project will feature the largest floor plate, at nearly 1.5 million square feet, of any development within 30 miles of Harrisburg. The cross dock buildings will range from 36- to 40-foot clear heights.

Wednesday, November 16, 2016

Coretrust Closes on Two Liberty Place

Coretrust Capital Partners LLC, a real estate investment firm, has closed on its previously announced acquisition of the office portion of Two Liberty Place at 50 S. 16th St. in Philadelphia, PA.

Cousins Properties, Inc. and Teacher Retirement System of Texas sold the condo asset for $219 million, or about $233 per square foot.

The property consists of office space and residential condos. The buyer purchased the lower 36floors, which make up a 938,753-square-foot office portion of the 57-story, 1.2 million-square-foot, mixed-use property.

The building was constructed in 1990 by Rouse & Associates on three-quarters of an acre in the Market Street West submarket, between Market and Chestnut Streets. The office portion is occupied by a mix of notable tenants including CIGNA Health Management, Conner Strong, Eckert Seamans Cherin & Mellott, US Bank and more.

Pottsville Distribution Center Completes Addition, Bringing Total Bldg Size to 1.3M SF

The Pottsville Distribution Center at 25 Keystone Blvd. in Pottsville, PA has completed construction on a new addition that added 650,000 square feet of industrial space on-spec to the existing 617,500-square-foot facility.

The building now totals almost 1.27 million square feet of class A warehouse space on 88.8 acres in the I-81 Corridor Industrial submarket of Schuylkill County.

The property, originally constructed in 2000, now features 142 loading docks and three drive-in bays, a 125-foot truck court, 36-foot clear heights, seven-inch floors, 3,000-amp heavy power, 50-foot column spacing and a fenced lot, all in an abatement zone.

There is currently 650,000 square feet available for lease. The space is divisible to 200,000 square feet and is located in the newly-constructed portion, with access to 65 loading docks and two drive-ins.

Sam Zell: Upside to normalized rates (Video)

Kairos Leases Suburban Philly Office Campus to 91%

Kairos Real Estate Partners has successfully repositioned the 400,000-square-foot Apex office campus in Fort Washington, Pa. Since acquiring the three-building property in December 2014, Kairos has leased 190,000 square feet of space, having attracted notable anchor tenants such as Citizens Bank, Allstate Insurance, Lincoln Investments and Impax Labs.

Three new tenants have signed eight-year leases totaling more than 60,000 square feet in September and October. The agreements include:

Citizens Bank’s 38,000-square-foot lease; the company will relocate its suburban offices from Plymouth Meeting to Apex in July 2017

Office Practicum’s 18,000-square-foot lease; the company, a leading provider of electronic health record (EHR) and practice management software solutions for use in pediatric clinical settings, will relocate its headquarters from Horsham to Apex in March 2017

Compassus’ 7,400-square-foot lease; the Nashville-based company is a nationwide network of community-based, post-acute care services that operates more than 165 hospice, palliative and home health programs in 30 states across the U.S.

Over its ownership period, Kairos has also increased the property’s occupancy with three new anchor tenants, including Lincoln Investments (53,000 square feet), Allstate Insurance (25,000 square feet) and Impax Labs (47,000 square feet).

Big corporate names are drawn to Apex because of its attractive campus setting and the newly constructed Hub, a glass box at the center of the campus that connects the three buildings. Brand new amenity spaces include the Apex Café, the Apex fitness center and a 7,000-square-foot conference and training center. Outdoor grounds feature seating for functions, casual gatherings with fire pits and a lawn for outdoor events. Apex also provides abundant electrical power fed from two separate PECO substations, 9-foot finished ceiling heights, efficient floor plates, as well as on-site surface and structured parking at a ratio of 5.3 spaces per 1,000 square feet of rentable area.

The campus sits on 40 acres, just 16 miles northwest of Philadelphia’s CBD, offering easy access to the area’s two major roadways. Located just 1 mile from the interchange of PA Route 309 and the Pennsylvania Turnpike, the property also provides direct access to the Virginia Drive slip ramp of the Pennsylvania Turnpike.

Tuesday, November 15, 2016

Monthly Economic Outlook – November 2016

Endurance Signs 3 New leases & tenant expansion at Naaman’s Creek

Endurance is pleased to announce the signing of three new leases and an expansion totaling 61,384 SF at Naaman’s Creek Business Center, a five (5) building flex portfolio totaling 190,729 SF in Upper Chichester Township, Delaware County (“Portfolio”). With these leases, occupancy of the Portfolio is now 84% up from 30% at the time of acquisition in early 2015.

The recent expansion was by an undisclosed healthcare company that previously leased 17,378 SF within the Park. This tenant has expanded their operations by 17,200 SF and now fully occupies 9 Creek Parkway on a long-term lease. Diplomat leased two suites (700-701) that equal approximately 11,400 SF at 7 Creek Parkway. Diplomat serves patients and physicians in all 50 states. Headquartered in Flint, Michigan, the company focuses on medication management programs for people with complex chronic diseases, including oncology, immunology, hepatitis, multiple
sclerosis, specialized infusion therapy and many other serious or long-term conditions. Diplomat opened its doors in 1975 as a neighborhood pharmacy with one essential tenet: "Take good care of patients and the rest falls into place." Today, that tradition continues—always focused on improving patient care and clinical adherence.

SharpLink HVAC, LLC, leased 7,784 SF at Suite 200 in 23 Creek Circle. SharpLink was founded in January 2016 as a partnership between the principals of Hall Components and Mary Corey Client Services. With over 40 years of combined experience in the industry, this new company will take HVAC resale distribution and ecommerce into the future. Products currently offered on our exclusive wholesale distribution website include ACME/Miami, Beckett, Flanders, Magic Aire and UEi Test.

Zenith Freight Lines, LLC leased all 25,000 SF at 25 Creek Circle. Zenith Freight Lines was purchased in February 2015 by Bassett Furniture Industries, Inc. and is now their primary logistical arm. In addition to its trucking services, Zenith operates distribution centers in at least eight states and manages home delivery services for Bassett Home Furnishings retail stores and other retailers in local markets throughout the country. Primarily through organic growth and partially due to the Zenith acquisition, Bassett’s revenues have increased almost $200 million over the past five years.

“The leasing velocity we have experienced at Naaman’s Creek over the last 18 months is pretty
astonishing. Since acquisition we have completed ten leasing transactions including new deals and
renewals. The attractive nature of this well-located, functional flex product is desirable to many different tenants serving the immediate Delaware County market” said Albert J. Corr, Senior Vice President of Asset Management at Endurance.

Naaman’s Creek Business Park was constructed from the late 1990’s through the early 2000’s and
features all-masonry facades, 19’ clear ceiling heights, and multiple configurations to accommodate a
diversity of tenant requirements. The Portfolio fronts Route 322, providing easy access to Interstate 95 and the Philadelphia International Airport to the east (15 minutes) as well as Interstate 476, which
presents a direct connection from Interstate 95 to the Pennsylvania Turnpike.

Endurance Real Estate Group, LLC (, founded in 2002, is a Bala Cynwyd, Pennsylvania-based real estate owner/developer focused on income and value creation opportunities located in the Mid-Atlantic region. Since its formation, the company has acquired approximately $400 million of assets totaling over 8 MSF and currently owns and operates a portfolio totaling 3.4 MSF. For additional information on Endurance, please visit
Affiliates of EREG have closed on six separate transactions in the last year totaling almost 1.4 MSF of office, warehouse, distribution and flex space, including among other assets, 550 Glen Ave & 600 Glen Ct, two bulk industrial buildings in Moorestown, NJ, and 3747 Hecktown Road, a 307,000 SF bulk industrial building in Pennsylvania’s Lehigh Valley market.

Friday, November 11, 2016

Teva Scraps 137 Acre Development Site in Philadelphia

Teva Pharmaceuticals, the owner of 137 acres of land on Red Lion Rd. and Sandmeyer Ln. in Northeast Philadelphia, PA has retained Colliers International to market the site for sale.

Teva Pharaceuticals originally purchased the land for $40.59 million, with plans for a $300 million distribution center which have since been scrapped.

Thursday, November 10, 2016

Maguire Automotive Signs 19,000-SF Retail Lease

Maguire Automotive signed an 18,500-square-foot lease for the car dealership at 135 S. Chester Pike in Glenolden, PA as part of a lease-purchase agreement with the current owner.

Maguire is not expected to take occupancy until December of the single-story, 18,500-square-foot retail building in the Delaware County submarket. It was constructed in the mid-1950s on three-quarters of an acre.

Wednesday, November 9, 2016

Commercial real estate outperforming S&P 500 (Video)

Vertex Leases 168,000 SF in King of Prussia

Tax technology solutions provider Vertex, Inc. has leased 168,000 square feet of office space at 2301 Renaissance Blvd. in King of Prussia, PA.

The five-story office building was constructed in 2002 within the Renaissance Park in Montgomery County. The tenant will relocate from 1041 Old Cassatt Rd. in Berwyn, PA.

Monday, November 7, 2016

Thousands of New Jobs Coming to KOP as 3 Companies Move Headquarters to Montgomery County

By: Ken Knickerbocker at Montco.Today
The new energy and momentum in King of Prussia continues to attract the interest of corporate headquarters in 2016.

Within the last six months, three significant leases were announced in KOP including:

  • The Judge Group (151 South Warner Road)
  • HTH Worldwide (955 First Avenue)
  • Vertex, Inc. (2301 Renaissance Boulevard)

Combined, these companies will bring more than 1,000 new, high-paying jobs to KOP.

“King of Prussia is experiencing a surge in Class A office leasing activity,” said Eric Goldstein, King of Prussia District Executive Director. “Corporations seems to be attracted to the exciting amenities, low taxes, great schools, and business-friendly township.”

Vertex, a corporate tax solutions provider currently headquartered in neighboring Berwyn in Chester County, will consolidate its operations in multiple locations to one central location in KOP. The company’s new 180,000-square-foot national headquarters will bring 225 new, high-paying jobs to KOP over the next five years. That is in addition to the 560 existing employees who will now be located in KOP.

“The decision to move was the result of a thorough, multi-year process that included research, employee focus groups, and careful consideration of our progressive culture and strategic vision,” said Lainie Sitko, Vertex Director of Workplace Strategy. “This move will enable us to grow and evolve as we continue providing exceptional value to our expanding client base.”

In October 2016, The Judge Group – a leading global provider of professional services specializing in technology, talent, and learning solutions – opened its 90,000-square-foot corporate headquarters on South Warner Road. The new location allows for future growth and better access to amenities for its 235 employees.

Brandywine Realty Trust is currently constructing a build-to-suite, 110,00-square-foot office building for HTH Worldwide, in the newly rezoned King of Prussia business park.

Friday, November 4, 2016

Prologis plans rare two-story warehouse project in South Seattle

by Marc Stiles Staff Writer Puget Sound Business Journal

It's hard to find empty warehouse space near downtown Seattle, so a global company is going to build a lot more. The end result will be something the Puget Sound region has hardly seen before.

Prologis (NYSE: PLD) has applied for city permits to build two, two-story warehouses at 6050 East Marginal Way S., where northbound traffic on the First Avenue South Bridge spills out onto a busy crossroads. One building will have 331,200 square feet of space, and there will be 209,350 square feet in the other. The project also will have parking for 330 vehicles.

While the size of the project is impressive, the two-story configuration is more intriguing. Prologis' involvement also is noteworthy because the company is upping its game in South Seattle, where it recently paid $63.25 million for two existing warehouses.

Chris Corr, an industrial broker with commercial real estate company Kidder Mathews, said the new Amazon (Nasdaq: AMZN) building in Kent is the only large two-story distribution center in the region. In Asian and European markets, where the supply of land is constrained, two-story warehouses are more common, according to Corr.

He said Prologis has to build a two-story project in South Seattle because of the price they're paying for the property. Real estate values are climbing in South Seattle, where demand for warehouse and distribution space is high because freight and other companies that deliver to businesses in downtown Seattle want to be nearby.

Currently, only 2 percent of the warehouse space in the submarket is available for lease, according to a new Kidder Mathews report.

The $63.25 million that Prologis paid for two warehouses works out to $158 per square foot for the buildings. People in the industry believe that is the highest price paid for a South Seattle industrial property. The old mark of $120 a foot was set with a sale at the end of 2013.

Prologis has not yet bought the property where it's planning the two-story warehouses. A limited liability company controlled by the Mohseni family owns the land. A Seattle commercial real estate broker, Wilma Warshak of Washington Real Estate Advisors, represents the Mohsenis. She declined to comment Wednesday as did a spokesperson for Prologis, which has $52.8 billion in assets under management.

Consolidated Freightways operated a facility on the site until 2002, when it filed for bankruptcy. The Mohsenis paid $9.9 million for the property, and the old Consolidated facility has been demolished.

REITs and the state of real estate (Video)

NorthPoint Dev Breaks Ground on Hanover Ridge Trade Ctr Bldg 2

NorthPoint Development broke ground Hanover Ridge Trade Center - Building 2, a 620,800-square-foot industrial building rising on 60.8 acres at 600 New Commerce Blvd. in Wilkes Barre, PA.

Slated for delivery in August 2017, the asset will feature ESFR sprinkler, 56 loading docks and four drive-ins, 36-foot clear heights, seven-inch floors, 52-foot column spacing, 400-amp power and a 195-foot truck court.

Initial plans for the three-building park call for up to 1.2 million square feet of class A industrial space in the I-81 Corridor Industrial submarket.

Wednesday, November 2, 2016

Linde Engineering Renews 60,000-SF Lease in Blue Bell

Linde Engineering, a leading technology partner for plant engineering and construction, has renewed its 60,103-square-foot lease at the 5 Sentry Parkway East office building at 325 Sentry Pky E. in Blue Bell, PA.

The three-story, 91,600-square-foot office building was constructed in 1984 and renovated in 2007. It sits on 10.5 acres in the Plymouth Meeting / Blue Bell submarket of Montgomery County, roughly 20 miles northwest of downtown Philadelphia.

Tuesday, November 1, 2016

The Galman Group Sells The Edge at Greentree Apts in Claymont

Real estate investment and development firm Spruce Capital Partners acquired the 286-unit The Edge at Greentree apartments at 1000 Cedartree Ln. in Claymont, DE from The Galman Group for $31.1 million, or about $109,000 per unit. 

The 241,480-square-foot multifamily complex consists of 26 buildings housing one-, two- and three-bedroom units. It was built in 1968

Sales of 'Zombie' Office Buildings Hit 10-Year High

They’re out there. Thousands of them milling about in markets like Detroit, Northern New Jersey, Dallas/Fort Worth, Chicago and Washington DC.

Zombie buildings that is -- empty or nearly lifeless office buildings that are still standing, creating dead zones that drain the vitality out of otherwise commercially viable areas. And just like in movies, TV shows and video games, these zombies are being hunted; not by apocalypse survivors but by real estate investors.

Nationally, CoStar data counts 1,814 office buildings that are larger than 25,000 square feet and 90% or more empty. Office buildings delivered in 2015 and 2016, those which are still lease-up stage, were excluded.

The remaining horde of mostly vacant office buildings total about 162 million square feet and account for 2.09% of the nation’s total office inventory. On average, they account for 18.7% of the vacant office space in the U.S.

Although some of these mostly empty buildings are victims of derred maintenance, many are in perfectly good shape but may have recently lost a major or full-building tenant.

George A. Romero, the director of the groundbreaking "Living Dead" films that popularized the notion of zombies (lifeless but living creatures) referred to his creatures blue-collar monsters. The same could be said of zombie office buildings. More than 84% of the empty office buildings in the U.S. are Class B or lower.

At the local market level, empty office buildings are more prevalent in certain markets than in others. In Detroit, they account for nearly one-third of the office vacancy and account for about 4.3% of total office inventory. In Northern New Jersey, they make up more than 28% of vacant office space 4.4% of total inventory.

You don’t see many of them in New York and San Francisco. In those two markets they make up less than three-tenths of a percent of total inventory and account for just 4% or less of total vacant office space.

Far from instilling fear, these mostly empty office buildings have been attracting investors in droves. More than $2.5 billion of these properties have sold so far this year. That is more than the amount sold in the two previous years combined -and much more by a wide margin than any of the past 10 years, according to CoStar data.

The average sale price per square foot has skyrocketed in the last two years, increasing from an average of about $79 per square foot in the third quarter of 2014, to more than $163 per square foot in the third quarter of this year.

The sale prices these office buildings are commanding in today's market is about 75% of what investors are paying on average for all office properties nationally.

That, of course remains the source of the strong appeal these empty buildings hold for risk-tolerant investors who see opportunity picking up these properties at a 25% discouunt from the going market value and building up their value through lease up and/or re-use and redevelopment.

Empty buildings have been included in some notable deals recently, oftentimes they are bundled into portfolios.

4550 S. 44th Place, Bldg 17, in Phoenix was included in Workspace Property Trust’s purchase of 108 buildings in five markets from Liberty Property Trust for $969 million. The Dubai-based global investment firm partnered with Safanad Ltd. and Square Mile Capital on the purchase.

With about 6.4 million square feet of empty office buildings located outside major markets, Workspace is comfortable taking on close-in suburban vacancy.

“The type of product we’re looking for are well-located properties close-in to the city, in communities with a 24/7 lifestyle (with) lots of food and retail options, and good public and highway transportation infrastructure,” Roger Thomas, president and COO of Workspace told CoStar. “What we’re not looking for are those one-off assets, the corporate headquarters white elephants that are far flung out in the middle of nowhere, where you have to drive 10 minutes just to find lunch.”

Last month, Rubenstein Partners picked up Stonebridge II, a 143,705-square-foot empty office building as part of its $265 million purchase of Sanctuary Park in suburban Atlanta.

"The Class-A property is generally regarded as the top office park in North Fulton and we are thrilled to complete the acquisition of this asset. We believe Verizon’s departure created an opportunity for the joint venture to acquire an asset with a strong historical performance as well as control the best large block of available Class-A space in a submarket that is lacking in the same," said Taylor Smith of Rubenstein Partners.

Smith added that the firm also plans to carry out renovations at the park to reposition the asset as a leading destination for prospective tenants.

A consortium of developers led by Akridge and Western Development paid $50 million for the vacant 609,265-square-foot building at 2100 2nd St. in Southwest Washington, DC, that once housed the U.S. Coast Guard. They plan to redevelop the site into an expansive mixed-use project dubbed Riverpoint.

In August, Onyx Equities LLC and PCCP LLC have acquired the 387,000-square-foot Kemble Plaza I office building at 340 Mount Kemble Ave. in Morristown, NJ for $7.6 million.

"Both PCCP and Onyx have a strong record when it comes to executing on value-add transactions in New Jersey," noted John Randall, managing director with PCCP, a real estate finance firm focused on commercial debt and equity investments. "We are acquiring a high quality asset at essentially land cost and we will ultimately offer prospective tenants the highest quality product and a Morristown address at very competitive rental rates."

And more zombie office buildings are likely to be hunted down. About 43.3 million square feet of empty office buildings are listed for sale - the highest total in 10 years.