Thursday, December 29, 2016

Gladstone Buys GSI Commerce Bldg in King of Prussia

Gladstone Commercial Corporation purchased the GSI Commerce Building at 935 1st Ave. in King of Prussia, PA from a private investor for $26 million.

The four-story, 104,000-square-foot office building was constructed in 2001 in Montgomery County, within the First Avenue Corporate Center.

The existing tenant in the building, Radial, will continue to occupy the building. The buyer plans to renovate the property at an estimated cost of $4 million.

Equus Capital Partners Closes Fund X at $361 Million for VF Outlet Center in Philadelphia

Equus Capital Partners Ltd., a Philadelphia-based private equity real estate fund, recently held final close of its 12th discretionary, co-mingled value-added real estate fund, Equus Investment Partnership X. (Fund X), at $361 million, just exceeding its target of $300 million.

Some investors in the fund include the San Joaquin County Employees Retirement Association, Municipal Fire and Police Retirement System of Iowa and the West Virginia Investment Management Board.

Equus Capital said its Fund X is currently about 50% invested across 11 properties in the office, multifamily, and lab/R&D sectors located in the East, Midwest, Southwest and Western regions of the U.S. Equus said many of the assets in the fund are being repositioned via a combination of physical renovations, lease-up or raising property rent rolls.

This month, Equus acquired the VF Outlet Center at 801 Hill Ave. in the suburbs of Philadelphia. Following the acquisition, Equus announced a $70 million redevelopment plan to transform the more than 1 million-square-foot site into a walkable mixed-use campus featuring office, retail and restaurants. Jerome Kranzel, a senior vice president with CBRE's Capital Markets Group, marketed the property on behalf of the seller.

As part of that plan, Equus executed a 150,000-square-foot lease with UGI Energy Services (UGI) to consolidate the firm’s regional offices into an adaptive reuse of one of the site’s original buildings. The property was 35% leased at the time of acquisition.

“As we sought buyers for the VF Outlet Center, it was important to find one committed to redeveloping this historic property in a way that enhanced the Reading community - and we found that in Equus,” said Rick Ott, General Manager of VF Outlet, the seller. “We are excited to be part of the redevelopment as we continue to operate the VF Outlet store at the center.”

Thursday, December 22, 2016

Invesco Sells 215,000-SF Hartford Corners in NJ for $35M

Invesco Advisors, Inc. sold the Hartford Corners shopping center at 1310-1361 Fairview Blvd. in Delran, NJ to Principal Real Estate Investors LLC and Levin Management Corporation for $35.1 million, or roughly $163 per square foot.

The 214,841-square-foot, grocery-anchored retail property was constructed in 2003 on 9.9 acres in the North Burlington County submarket of Philadelphia. The center is anchored by Shop-Rite, Planet Fitness and Staples.

New 780,000-SF Facility Breaks Ground in York, PA

 A brand new 780,000-square-foot warehouse that broke ground this month on-spec is up for lease. Orchard Business Park II - Bldg. A is expected to deliver on E. Canal Rd. in York, PA by year-end 2017.

The 5-Star industrial building will be LERTA-designated with modern amenities including several hundred car parking spaces and 161 trailer stalls, up to 82 loading docks and two drive-ins, potential 75-foot clear heights and 1,600-amp heavy power.

Conshohocken’s Tower Bridge Office Complex Developer Plans New Office Tower in Center City

By: Lance Knickerbocker at Montco.Today

Don Pulver is proposing to build a 38-story office tower at 13th and Market Streets in Philadelphia. He has already put the site under agreement with the Estate of Sam Rappaport, who, together with Richard Basciano, owned some of the city’s prime real estate properties.

The location has languished for years without any development plans. However, thanks to the recent interest in the city’s East Market area and over $1 billion in development planned or already underway, the value of the property has increased significantly.

This is prompting the Oliver Tyrone Pulver Corp to seize on the favorable market conditions and enter the Center City development.

The proposed new tower development would total 840,000 square feet and will cost several hundreds of millions of dollars. The majority of the space would be used for offices with some of the space set aside for retail and other related amenities.

Friday, December 16, 2016

Cohen Equities Acquires CBD Asset

Cohen Equities purchased the top seven floors of 801 Market St. in the heart of Philadelphia's CBD. The 382,801-square-foot office condo is currently anchored by Health and Human Services.

According to Cohen, the acquistions was driven by the strong market fundamentals and the quantifiable demand for high quality, low cost office space. The East Market and Fashion Outlets of Philadelphia mixed use projects are a major catalysts in this submarket as well as other recent leases. 801 Market has strong in place cash flow with a large capitalization. Cohen also said that there are not a lot of assets with value-add options in the marketplace. Cohen Equities' recent purchases are reflective of their institutional-grade focus on the office sector.

Kessler Rehab Institute Trades in $63.6M Sale Leaseback

Carter Validus Mission Critical REIT II, Inc. purchased the Kessler Institute for Rehabilitation at 92 Brick Rd. in Marlton, NJ from Kessler Institute for Rehabilitation, an affiliate of Select Medical Holdings Corporation, for $63.6 million, or about $714 per square foot. 

The seller, formerly known as Marlton Rehab Hospital, immediately leased back the facility from the new owner on a triple-net basis. The facility houses in-patient physical, occupational, speech and recreational therapy, outpatient aquatic therapy, prosthetic training, lymphedema management, balance rehab and vestibular therapy. 

The three-story, 89,000-square-foot medical office building was constructed in 1995 on 20.5 acres in the South Burlington County submarket. 

"We believe the Select Medical Rehabilitation Facility is a great addition to our growing portfolio. The facility benefits from its on-campus location and is directly connected to one of its primary referral sources, Virtua Marlton Hospital. We are pleased to align ourselves with Kessler and Select Medical on this transaction and anticipate it will bring additional value to CVMC REIT II," said Michael A. Seton, president of CVMC REIT II, which acquires mission critical real estate assets located throughout the U.S.

Merrill Lynch Leases 27,000 SF at Four Penn Center

Merrill Lynch & Co. has signed a lease for 26,696 square feet at 1600 John Kennedy Blvd. in Philadelphia, PA.

The 20-story, 522,600-square-foot Four Penn Center office building was built in 1964 and renovated in 2001. The building features on-site concierge, conferencing facilities, courtyard, restaurant and convenience center. It is located within close proximity to public transportation, within the Market Street West submarket.

Wednesday, December 14, 2016

LPT Breaks Ground $1B Improvement of Camden Waterfront's

Liberty Property Trust has broken ground on a new five-story, 222,376-square-foot office building at 1 Water St. in Gloucester City, NJ. Delivery is expected in late 2018.

The facility will be the new headquarters for American Water Works Co. located on the Camden waterfront. American Water, a publicly-traded water and wastewater utility, joins a growing list of corporations that have announced plans to move to Camden using incentives awarded through the Grow New Jersey program, which rewards employers that invest in struggling cities as part of the 2013 Economic Opportunity Act championed by U.S. Representative Donald Norcross (D-NJ) to boost struggling cities in South Jersey.

During the last 15 months of due diligence, Liberty assembled the land, sought and received approvals from and negotiated agreements with the New Jersey Economic Development Authority, the New Jersey Department of Environmental Protection, Camden County, the Camden County Municipal Utility Authority, the City of Camden and the Delaware River Port Authority. Liberty has also reached agreement with Dranoff Properties in connection with the removal of an impeeding view easement restriction.

"Today marks the beginning of what will become an energetic high performance community, anchored by world-class office buildings and a spacious waterfront park easily accessed by walking, biking, driving and public transportation; one which will build upon and greatly contribute to the revitalization efforts already underway in Camden," said John Gattuso, Liberty Property Trust regional director and senior vice president, urban region. "As we shift into the development of The Camden Waterfront, our focus shifts too, from that of a vision to that of a reality, and that is a very exciting thing."

One Water Street has been designed by Robert A. M. Stern Architects, and will pursue LEED Platinum - Core and Shell certification. The Camden Waterfront, master planned by Robert A. M. Stern Architects, represents a unique opportunity to develop a project of this scale in the center of a major metropolitan area.

Liberty is commencing development of the $1 billion project with its focus on three initial areas: infrastructure to support the overall development, an 806-car parking garage and One Water Street.

Liberty envisions a mixed-use development that will attract corporations, employment and significant inward investment. In addition to the anticipated 1.45 million square feet of build-to-suit projects for corporations, the development will include a proposed 180 room Hilton Garden Inn to be developed by Ensemble Real Estate Solutions and a 188-unit residential component, for which an agreement is pending with The Michaels Organization. Substantial investment is planned for the reconstruction and enhancement of the existing waterfront park, creating more than 2.5 additional acres of parkland, offering diverse opportunities for recreation, exploration, respite, and engagement with nature.

"I am thrilled that The Camden Waterfront project continues to move forward and this billion dollar project will soon break ground," said Mayor Dana L. Redd. "This great project goes beyond just the brick and mortar development of the waterfront. Liberty Property Trust has been a great partner throughout this process by ensuring that Camden residents have an opportunity for employment and local sourcing."

Tuesday, December 13, 2016

Montgomery McCracken Signs Long Term Leases in Philadelphia

Full-service law firm Montgomery McCracken has signed two long-term lease agreements in Philadelphia and New York City.

The firm signed a new 16-year lease at 1735 Market St. in Philadelphia. After more than 20 years at the nearby 123 S. Broad St., the firm will relocate its Philadelphia office to Market Street in June 2018. The new space consists of roughly 75,000 square feet across three floors.

"We believe 1735 Market will afford us greater space efficiencies and will allow us to enhance our collaborative work environment. 1735 Market also offers us a modern work space with accessibility to state-of-the-art technology," said Louis A. Petroni, chairman of Montgomery McCracken. "Staying in the central business district is a priority for us and the new building matched what we were looking for in terms of location, convenience and space."

1735 Market is a 54-story, 1.33 million-square-foot, 5-Star office tower built in 1990 by PREIT and architect Kohn Pedersen Fox Associates on one acre in the Market Street West submarket.

Friday, December 9, 2016

Abundant School Corp. Leases 19,000 SF at Two Greentree Center

Abundant School Corp. has leased 19,487 square feet in the Two Greentree Center office building at 9000 Lincoln Dr. E in Marlton, NJ.

The three-story, 56,075-square-foot office building was built in 1983 in the South Burlington County submarket. The tenant will occupy portions of the first and second floors in early 2017.

KGP Telecommunications Renews 121,000-SF Lease in Allentown

KGP Telecommunications renewed its lease for 121,064 square feet in the industrial facility at 7542 Morris Ct. in Allentown, PA.

The 168,967-square-foot building was constructed in 1997. Allentown is about 60 miles northwest of Philadelphia.

Acme Leases 54,000 SF in Snyder Plaza

Acme Markets, a mid-Atlantic grocery store, has signed a lease for 54,415 sqaure feet in the Snyder Plaza shopping center at 29 Snyder Ave. in Philadelphia, PA.

The center totals 324,102 square feet and was built in 1990. It is currently owned and managed by The Goldenberg Group, Inc. Other tenants include Target, Rite Aid and Dollar Tree.

Thursday, December 8, 2016

WeWork Leases 55,000 SF at 1900 Market Street

WeWork has signed a five-year lease for 55,238 square feet in the office building at 1900 Market St. in Philadelphia, PA.

WeWork will occupy the top floor of the eight-story, 457,000-square-foot office building. This will be WeWork’s fourth Philadelphia location.

Richard LeFrak: State of real estate under Trump (Video)

Wednesday, December 7, 2016

Center City District reports $1 billion in city retail demand

by Suzette Parmley, Staff Writer at
A slew of planned investments and appealing demographics are fueling $1 billion in retail demand for downtown space, according to a 24-page report released this week by the Center City District.

The high demand is being “driven by the downtown core and its surrounding neighborhoods” and $8.5 billion in planned developments for Center City before 2019.

In late October it was reported that Philadelphia’s average prime retail rents stabilized after an 87.5 percent increase over the last five years. The report cites only one other major U.S. city - Miami - as growing faster than Philly’s.

The growth, according to the CCD report, is supported by almost 300,000 downtown workers, a historic number of tourists, and residents of the “core Center City” area — Vine to Pine, Schuylkill to the Delaware — who have average household incomes of more than $111,000.

This is complemented by a transit network that deposits a couple hundred thousand people into Center Cit y every weekday and the general walk-ability of downtown, which makes shopping and dining easy.

“The report affirms with statistics what we all know and feel with our gut: that increases in those that live, work and play in Center City is fueling a seven-day per week retail and restaurant explosion."

The CCD report states that high-end retail, especially along Walnut Street, has skyrocketed over the last five years — and that demand is spreading to Chestnut Street and surrounding numbered streets.

A few notable projects: the $325 million renovation of the Gallery Mall into Fashion Outlets of Philadelphia due to be completed in spring 2018, and the $600 million, multi-phased East Market project are creating buzz for the former neglected part of downtown, said the report. It describes Market Street as east of City Hall and the blocks to the south.

Tourism was another factor fueling the retail demand. The CCD reported that 41 million domestic tourists visited the Philadelphia region last year and that the city was second only to New York in its Saturday hotel occupancy rate (89.6 percent). There are currently six hotels under construction and four planned for Center City.

Said Paul Levy of the Center City District: “This is not just a report on trends. This is a powerful magnet for retailers who want to be in the middle of surging demand. Two of our staff have just spent the last two days at the International Council of Shopping Centers conference in New York City talking to retailers who are looking for locations and this report shows clearly that Philadelphia has what they want.”

More on the ICSC New York Dealmaking Conference and its impact on the city’s retail scene in Sunday Inquirer’s Business Section.
Full story:

Tuesday, December 6, 2016

Trading Nation: Real estate & REITs lags badly (Video)

ECHO Realty Acquires Philadelphia-Area Grocery-Anchored Centers

by Steve Lubetkin,
ECHO Realty has purchased a portfolio of three grocery-anchored shopping centers in metropolitan Philadelphia. The centers include GIANT Marketplace at Bensalem, Media Shopping Center, and Lionville Station.

“We began to work with the Shooster family several years ago and are very pleased that we are finally acquiring these centers,” says Drew Gorman, Echo’s senior vice president of acquisitions and development. “The centers are well located, time-tested properties that also provide an opportunity for enhanced value.”

GIANT Marketplace at Bensalem is an 88,500 square foot GIANT-anchored center located at the intersection of Street Road and Mechanicsville Road in Bensalem, PA.

Media Shopping Center is a 71,000 Acme-anchored center located at the intersection of East Baltimore Pike and North Providence Road in Media, PA.

The third center, Lionville Station, is a 79,000 square-foot property located along East Uwchlan Avenue in Lionville, PA.

“We are very excited to be able to achieve a greater critical mass of high-quality grocery-anchored shopping centers in the greater Philadelphia market which has been one of our targeted growth areas for many years,” says Thomas Karet, CEO of ECHO Realty.

The acquisition adds nearly 250,000 square feet to ECHO’s expanding shopping center portfolio.  Last month, ECHO acquired two Harris Teeter-anchored properties in Charlotte, NC.  The company also purchased 15 acres in Dunkirk, MD where construction will commence on a 100,000 square foot, Harris Teeter-anchored shopping center set to open in the Spring of 2018.

Monday, December 5, 2016

Middle Market CRE Digest Northeast

by Steve Lubetkin,

Urban Land Institute Philadelphia, Mitchell Roschelle of PriceWaterhouseCoopers unveiled his annual industry outlook, with 82 percent of his survey respondents expecting a good or excellent year for profits in 2016, and just over 81 percent feeling that way for next year. Small developers are now facing a beauty pageant as global investors seek access to previously less-well noticed markets, Roschelle says.

 Industrial properties continue to froth and bubble as retailers, e-commerce companies, and others press for close-in access to the New York metroplex and its tens of millions of impatient consumers who want what they want and want it now. The feverish activity in the eight New Jersey Turnpike core submarkets has accounted for 82.8 percent of the state’s leasing velocity thus far in 2016. “We’ve witnessed positive industrial absorption in 22 of the past 24 months, which speaks directly to the sustained demand from tenants and their need to service the vast surrounding consumer base. As consumers increasingly gravitate towards making purchases online, the demand for industrial space in specific New Jersey locations will continue to grow.”

Building Blocks
Wawa has opened its newest Philadelphia store at 1900 Market Street. At approximately 7,000 square-feet, it’s Wawa’s largest street store to date, and its fifth Center City location. It is situated on the ground floor of Brandywine Realty Trust’s recently renovated 456,922 square-foot office building in the booming Market Street West corridor.

ACME Markets and real estate development firm, The Goldenberg Group, have signed a lease to construct a new supermarket in Philadelphia.  The new full-line grocery market will be located in the Snyder Plaza Shopping Center, 29 Snyder Avenue, and will serve the Pennsport and Whitman neighborhoods as well as the greater Center City area.  The new ACME, which opens in Summer 2017, will include Starbucks Coffee and a beer and wine shop.

Money Moves
Holliday Fenoglio Fowler arranged $6.061 million in financing for a 178,600-square-foot, vacant industrial warehouse at 4500 Westport Drive in Mechanicsburg, PA. HFF worked on behalf of the borrower, a joint venture between Foxfield Ventures and Novaya Real Estate Ventures, to secure the floating-rate loan. The financing facilitated both the acquisition and future funding needs to implement a light capital improvement program.