Monday, October 30, 2017

Providence Place breaks ground on assisted living facility at former Collegeville Inn

by Gary Puleo, Times Hearld
The Collegeville Inn’s new lease on life may not be the culinary comeback many folks were anticipating, but as a senior living facility, much of its legendary history will live on.

Providence Place Senior Living at the Collegeville Inn, which underwent a groundbreaking on the 20-acre site recently, even embraces the long gone smorgasbord’s legend in its name — a first for the company, noted Ashley Uhler, vice president of marketing, whose collection of postcards and prints showcase the restaurant’s heyday in the 1950s and ’60s.

“We usually use the name of the town in the name,” Uhler said, referring to a string of Providence Place Senior Living locations throughout the state. “But because the Collegeville Inn was so well known we thought it would be a nice tie-in. Providence Place is proud to be the company that is resurrecting the nostalgic Collegeville Inn.”

Debuting sometime in the post-World War II years, The Collegeville Inn had been shuttered for years when it was purchased in 1994 by Nutrition Services Management Co. of Kimberton. It reopened in 1997 as the Marketplace Restaurant, which closed in the early 2000s, ultimately landing the property under the ownership of M&T Bank.

Although the restored Inn building overlooking Perkiomen Creek will serve as a private dining room for the 113 units’ residents and their guests, the public will be welcome to attend certain functions, said David Leader, president of Providence Place.

“We’ll certainly have occasional public events where we’ll open our doors to the public with hor d’ouevres and things like that,” noted Leader, who said he is pleased to be retaining so much of the building’s character, which is partly attributable to its “Swiss chalet” beginnings decades ago and partly to its 1990s mountain lodge-style makeover as a food court and training center.

“I had heard of the Collegeville Inn but was not familiar with it. As we explored the project we talked to a lot of people and almost everyone in the area had a story about the Collegeville Inn,” he said. “That’s what captivated us to preserve the integrity, the look, the feel and as much of their memories as we could. We’re keeping some of the most memorable aspects … the cathedral ceiling lobby, the pub barroom with the beautiful woodwork. It really has some exquisite wood carvings.”

Providence Place will provide a continuum of care, ranging from minor assistance to significant daily aid, with a separate memory support component.

“Our philosophy is to try and offer seniors options that are a little more affordable than some that are out there today. We’re excited to be coming to the Collegeville area with our unique philosophy of aging in place. The whole building will be licensed by the state of Pennsylvania as assisted living, but some of the people won’t need much assistance besides meals and transportation, while some will need greater amounts of assistance. If you don’t need assistance, great, you pay less. As you need assistance you can take on more. We’ll have people that will stay five or 10 years, and others who come in active and maybe still driving and will stay until the end of their days,” explained Leader. “This will not be a skilled nursing facility but we will have nurses around the clock. Most people now don’t stay in nursing homes very long anymore. They go for a week or two and then they come home. If I were a resident who had an injury I might recuperate for a few weeks in a nursing home and then return here. So that’s how we will function.”

Leader’s father, George Leader, who served as Governor of Pennsylvania from 1955 to 1959, founded the forerunner to Providence Place, Leader Nursing Centers, back in the 1960s, his son allowed.

“Leader Nursing Centers was a public company that was acquired by another company in the 1980s. My family then decided that in the future we would no longer have companies that could be acquired by someone else, so Providence Place is a private company. We have five other Providence Place Senior Living facilities and also run Country Meadows Retirement Communities. Between the two we have properties across the state.”

Leader noted that the relevance of his company’s name to Lower Providence Township was purely coincidental.

“I often joke that who would have guessed we’d be calling ourselves Providence Place in a township where everything is called ‘providence something’?” he said, laughing.

Before Horst Construction begins erecting the building that will house 113 apartments of varying sizes adjacent to the Inn, a wall will be built to address the property’s longstanding flooding issues.

Full story:

Emerging Commercial Real Estate Trends 2018: Best Bets (Video)

Checkpoint Extends So. Jersey HQ Lease 10 Years

by Steve Lubetkin,
With a $10 million capital improvement commitment from Sky Management Services, inventory control and security firm Checkpoint Systems has extended the lease on its global headquarters for another ten years. Located at 101 Wolf Drive in Thorofare, NJ, the asset is located a few miles from the Philadelphia CBD.

Through its affiliate company, Sky Power, the company will also be installing a renewable solar energy system to help Checkpoint reduce its carbon footprint and produce nearly all its own electric power from non-polluting solar energy.

“This project allows us to create a State of the Art Technology Development Center for Intelligent Retail Solutions,” says John Dargan, president of Checkpoint. “It also allows us to significantly reduce our carbon footprint through the installation of a solar energy system.”

Checkpoint’s global headquarters, which facilitates its North American distribution, research and development, and office operations, was designed and built for the company in 1994.

According to Alex Dembitzer, Sky’s founder and CEO, renovations are scheduled for completion in 2018.

“The renovations at Checkpoint will modernize the facility, and the renewable energy solar project will reduce the carbon footprint while converting the property into a sustainable facility,” says Dembitzer.

Dembitzer has made reducing the environmental impact of Sky’s buildings an increasing priority as part of what he calls his personal social mission.

At New Jersey’s Wedgewood Waterford US corporate headquarters, for instance, Sky installed a 1.5 MW solar energy system which is expected to provide 90 percent of the facility’s electricity.

Additionally, Sky Management made the proactive decision to purchase an adjacent land parcel, making it possible for Checkpoint to expand in the future if needed or for Sky Management to pursue additional development opportunities.

The long-term extension and modernization will preserve more than 150 jobs in Southern NJ and create an estimated 100 construction jobs, supporting Sky’s core values of creating and providing a substantial positive social and environmental impact in the communities in which it is active.

Industrial Vacancies Falling In Philadelphia, Spec Builds Up In Lehigh Valley

by Steve Lubetkin,

The market for industrial property tightened in the third quarter as industrial real estate vacancy declined in Philadelphia, but the continued frenzy of speculative construction along the PA I-81 and I-78 Corridor in the Lehigh Valley region led to an increase in vacancies there.

In the Lehigh Valley, 1.5 million square feet of speculative construction added during the third quarter remained largely vacant.

“Both the Philadelphia Metropolitan Area and the industrial, warehouse and manufacturing markets along the major Interstates of I-81 and I-78 continue to benefit from job creation in the Pennsylvania economy,” Statewide unemployment rate declined by 60 basis points over the past year to 4.9 percent.

“Philadelphia’s manufacturing index has been positive for 14 consecutive months and rose 4.9 points to 23.8 in September,” he says.

Overall vacancy for industrial property in the Philadelphia Market ended the third quarter at 3.4 percent, down 150 basis points from a year ago. The market includes six Pennsylvania counties as well as Philadelphia, three southern New Jersey counties and northern Delaware. Overall asking rental rates declined slightly, 1.3 percent, in the past year to $4.59 per square foot for all industrial property types. “Strong activity in class A facilities is leaving more class B and C product available for lease, which is dragging the overall rental rate average down. Still, the Philadelphia market absorbed 4.6 million square feet year-to-date in 2017, even with 2.7 million square feet of new construction this year.”

The southern New Jersey market, with both Burlington and Gloucester counties already topping one million square feet in total year-to-date leasing, led the region in both leasing and new construction. Major Philadelphia Market transactions in the third quarter included:

Amazon signed the largest lease, taking 652,411 square feet being built at 240 Mantua Grove Rd. in West Deptford, Gloucester County, for fall 2018 delivery.

In Burlington County, PFG Customized Distribution renewed for 127,340 square feet at 500 Highland Drive in Westhampton.

National Powersport Auctions leased 112,000 square feet at 2578 Pearl Buck Rd. in Bristol for the Lower Bucks County submarket’s largest deal in the third quarter.

Prologis executed the largest investment sale of the quarter with its sale of the 936,000-square-foot warehouse and distribution center at 3000 AM Drive, in Quakertown, to WPT Industrial REIT for $74.3 million or $79 per square foot.

Two-thirds of the 7.1 million square feet of speculative industrial space delivered to the PA I-81 and I-78 corridor this year remained vacant at the end of September, including much of the 1.5 million square feet that came onto the market during the third quarter. “The vacancy in that new space is the primary reason that year-over-year overall vacancy has increased 140 basis points to 5.3 percent. Still, rent growth remains strong in the PA I-81 and I-78 industrial market, increasing by 5.5 percent year-over-year to $4.76 per square foot. Lehigh Valley produced the largest increase with asking rents, up 11.8 percent, to an average rate of $5.31 per square foot for warehouse and distribution space.”

The Lehigh Valley submarket leads in construction, with nearly 5.8 million square feet. Leasing activity has been strong in all three PA I-81 and I-78 submarkets this year.

Central PA leads the region with nearly 6.3 million square feet of new leasing activity this year, including the largest lease of the third quarter when Syncreon signed for the one million square-foot building under construction at 100 Goodman Drive in Carlisle.

The Northeastern PA submarket’s year-to-date leasing activity of 4.5 million square feet already surpassed 2016 totals and is on pace to top the previous annual high of 4.6 million square feet in 2007. American Tire leased 1 million square feet under construction in the Northeast Logistics Center in Tobyhanna for the quarter’s largest lease.

XPO Logistics signed the Lehigh Valley submarket’s largest lease of the third quarter for 628,475 square feet at 1611 Van Buren Rd. in Easton.

The largest investment sale of the third quarter took place when Northpoint Development acquired Endurance Real Estate Group’s portfolio of 544,975 square feet of warehouse-distribution space in Northeastern PA for nearly $30.1 million, or $55 per square foot.

Asking rental rate annual average growth are forecast to 1.7 percent for the next five years in the Philadelphia industrial market. In the short-term, however, the delivery of more than 1.1 million square feet of speculative space probably will cause overall vacancy to rise for the next six to nine months. Meanwhile, the researchers also forecast healthy construction activity continuing throughout the PA I-81 and I-78 market with 14.3 million square feet under construction set to deliver over the next year.

Wednesday, October 25, 2017

Tracking STEM jobs to invest in commercial real estate #STEMdex

Post Brothers Complete Largest Residential Redev in Philadelphia

by Steve Lubetkin,

Post Brothers has completed the largest residential redevelopment project in Philadelphia, the $100-million redesign and renovation of Presidential City, the iconic, four-building apartment community located at the foot of City Avenue. Post Brothers began full gut renovations to Presidential City in 2014, transforming each of the complex’s 1,000 apartments into luxurious, high-efficiency residences. The redevelopment of Presidential City culminated with the completion of The Adams, the fourth and final building to be redeveloped at the complex. Post Brothers tapped internationally renowned architect Philippe Maidenberg for his first US project.

Tuesday, October 24, 2017

Demand For Workforce Housing Drives Camden, NJ, MF Trade For $35M

by Steve Lubetkin,
As Camden, the poorest city in New Jersey, experiences a business transformation, demand for workforce housing is driving attractive pricing for multifamily properties.

With the relocation of Subaru’s North America Headquarters here from nearby Cherry Hill, a $1 billion Brandywine Property Trust office complex under development on the waterfront, and more companies expanding through state tax incentives, the Crestbury Apartments, a 392-unit multifamily property in Camden, NJ, has been sold for $34.45 million, just under $88,000 per unit.

The seller was Brick, NJ-based Tryko Partners. The asset was purchased free and clear of debt by an affiliate of New York-based Lincoln Avenue Capital, owner and developer of low-income housing properties nationwide.

“The property was part of the RAD (Rental Assistance Demonstration) program and received a new 20-year subsidy contract. The seller recently upgraded the flooring, windows, roofs, and boilers throughout the property, which made the asset attractive and a great long-term investment.”

After purchasing Crestbury Apartments in 2013, Tryko Partners invested $3.6 million in capital improvements. This included the incorporation of an innovative, high-tech security initiative in conjunction with the Camden Police Department; a playground; updated lighting, landscaping and sidewalks.

“We are seeing a tremendous amount of interest in well-maintained, workforce housing both market-rate and affordable in South Jersey due to solid economic drivers and its proximity to Philadelphia."

The apartments are a mixture of one- and two-bedroom units. The Crestbury is situated on over 18 acres at 2552 South 8th Street in Camden. The property is minutes from the Walt Whitman and Ben Franklin bridges, Cooper Hospital, Campbell’s Soup headquarters, and the Camden Waterfront.

Tuesday, October 17, 2017

Medical Office Investments (Video)

Workspace Property Trust Files for IPO to Raise $100 Million

A year after acquiring a nearly $1 billion portfolio of suburban office properties, Horsham, PA-based Workspace Property Trust on Monday filed to raise up to $100 million through an initial public offering.

Workspace Property, which first filed a confidential S-11 registration statement on June 30, plans to list on the New York Stock Exchange under the symbol WSPT, selling an undisclosed number of common shares in the IPO at a to-be-determined price. Goldman Sachs, J.P. Morgan and BofA Merrill Lynch are the joint book runners on the deal.

The company, led by former Mack-Cali Realty executives Tom Rizk as CEO and Roger Thomas as president, will use the IPO proceeds to purchase common units in its operating partnership, Workspace Property Trust, L.P., from Safanad Suburban Office Partnership, LP, an affiliate of Safanad Ltd.

The operating partnership will in turn use a portion of the net proceeds to repay the company's existing loan with KeyBank NA, repay a senior mortgage loan and three mezzanine loans in relation to the purchase of its second portfolio, and pay about $63.9 million in cash to redeem the preferred equity issued by the operating partnership as part of the second portfolio acquisition.

The operating partnership expects to use any remaining proceeds for general corporate purposes, including capital expenditures and future acquisitions.

Workspace Property hopes to capitalize on the outperformance of suburban office properties relative to CBD properties in recent years, with company executives telling CoStar in October 2016 "the prediction of the death of the suburbs is greatly exaggerated."

A year ago this month, the company acquired 108 office and flex buildings and 26.7 acres of land in five markets from Liberty Property Trust (NYSE: LPT). The $969 million purchase with partners Safanad, a Dubai-based global principal investment firm; and affiliates of diversified investment firm Square Mile Capital Management LLC, was the company's second major transaction with Liberty Property and expanded Workspace's holdings to 149 properties totaling 10 million square feet.

In the first half of 2017, 72% of U.S office leasing activity was concentrated in suburban markets, despite suburban markets representing only 69% of inventory.

The spread between average suburban office and CBD vacancy rates is at its lowest point since 1999. Construction as a percentage of inventory continues to increase in the CBD, even though suburban office vacancy rates have declined significantly faster than CBDs since 2011.

Meanwhile, construction has been constrained in the suburban office markets relative to the CBD, while downtown asking rents have been more volatile than suburban rents. Demand for suburban properties has ramped up recently as investors have begun to recognize the widening spread between suburban and CBD valuations, driven in part by investors' willingness earlier in the recovery to pay more for CBD trophy buildings and other assets with a perceived lower risk.

As the largest landlord in the Horsham/Willow Grove, PA submarket, Workspace has 536,994 square feet of flex and tech-flex space and 1.8 million square feet of low-rise office space in 40 properties, with retail development and other amenities providing opportunity for growth near several Workspace assets.

Workspace Properties is further positioned to benefit from continued demand and rent increases for its properties in the King of Prussia/Valley Force submarket, where the company owns 30 properties totaling about 2 million square feet of office and flex space.

The company also owns assets in South Florida, Tampa, Minneapolis and Phoenix.

Thursday, October 12, 2017

Faster Growth of Amazon Fashion Could Rock Retail Real Estate

Lost in the coverage of Amazon's very public search for a second, multi-billion dollar national headquarters, was the barely-noticed lease the company signed in New York City last month. Yet that lease could signal billions of dollars in losses coming for retail commercial real estate across the country.

Amazon signed a 15-year office lease for 360,000 square feet at Brookfield Properties' recently-renovated 5 Manhattan West building. Amazon will take the entire sixth and seventh floors of the 2.15 million-square-foot tower as well as part of the eighth and 10th floors in a move that is expected to bring 2,000 jobs to the Penn Plaza / Garment District submarket of Manhattan.

Amazon Fashion has also previously invested $9 million in a 40,000-square-foot fashion photo studio in Brooklyn (pictured).

"We're excited to expand our presence in New York - we have always found great talent here," said Paul Kotas, Amazon's senior vice president of worldwide advertising.

Those jobs will be coming primarily in the Amazon Fashion and advertising divisions, and that signals the online retail behemoth is getting more serious about advancing its fashion and apparel sales. In the past year alone, it has introduced seven private apparel brands to its Prime members, including Goodthreads, Amazon Essentials, Paris Sunday, Mae, Ella Moon, Buttoned Down and Lark & Ro.

A hypothetical rapid rise in Amazon's U.S. apparel market share could have significant credit implications for existing retailers, REITs and CMBS transactions, according to Fitch Ratings in a 'shock scenario report' published last month.

Worst-Case Scenario
Sharp declines in retailer revenue and margins, along with accelerated store closings, would likely drive significant cash flow erosion and weaken credit profiles for apparel-focused retailers, mall REITs and retail-heavy CMBS deals in such a scenario.

This shock would likely fan out broadly across much of the retail real estate sector, with large credit profile effects on mall REITs and retail-heavy CMBS transactions. Large-scale store closures, going well beyond previously announced cuts, would likely follow, Fitch projected.

"REITs owning regional malls with high exposure to troubled anchor stores and a less diverse tenant base would face heavy cash flow pressure," Fitch analysts said. "We estimate that as many as 400 of approximately 1,200 U.S. malls could close or be repurposed as a result of retailer liquidations and square footage reductions."

The Fitch shock scenario assumes an accelerated three-year apparel market share shift to as a price-competitive and convenient alternative to traditional in-store purchases. The hypothetical rapid growth in Amazon's apparel market share to 25% by 2020 could cut apparel retailer margins by around 300 basis points, pushing several retailers toward financial distress.

In addition to weaker cash flow, many mall owners would face reduced access to capital due to negative lender and investor sentiment. Attempts to re-tenant or repurpose underperforming malls with high vacancy rates would likely take considerable time and capital. Efforts by REITs to reposition mall properties in this scenario would be difficult given constraints on capital spending and liquidity in a tight financing environment.

"Widespread defaults on loans backed by malls would have a significant impact on credit quality for Fitch-rated CMBS transactions," the rating agency said. "Given the accelerated timeframe of this retail shock scenario, special servicers would be forced to sell lower tier malls at significantly distressed values rather than undertaking normal stabilizing efforts."

Assuming Amazon's share gains are concentrated in lower price points, low- to mid-tier apparel retailers, including JC Penney, Kohl's and Dillard's, would face intense competitive pressure in such a scenario, Fitch said.

Amazon's Road into Fashion Isn't Assured
The Fitch stress test does not explicitly factor in retailers' responses to a more challenging operating and financing environment. Many of these responses, including cost reduction initiatives, asset sales and secured debt issuance, could mitigate the impact of such a severe competitive shock, particularly for companies that have ample liquidity to respond to accelerated competitive threats.

And let's face it, fashion and apparel margins and sales are thin and thinning out, and could present a tough market for Amazon to break into. Competitive pressures on in-line apparel retailers have been building for at least a decade. Younger apparel consumers have demonstrated less interest in traditional department store fashion offerings, and shifted more toward 'fast fashion' and off-price retailers.

Retail real estate brokers operate in dual worlds when it comes to shopping. They are both consumers of merchandise online and brick and mortar sales people. As such, their take on Amazon is interesting.

Going into fashion is nothing new to Amazon, said Soozan Baxter, principal of Soozan Baxter Consulting, a New York-based, landlord-focused retail advisory firm. "They own Shopbop and Zappos. Shopbop is a phenomenal collection of contemporary brands with a loyal customer, while Zappos is a favorite for anyone who likes to buy shoes online."

However, shopping on Amazon is like being in an online market place without a point of view, she said. The chaotic experience doesn't resonate.

"If they can execute a bricks-and-mortar experience that is more like Shopbop and perhaps even use that name, they will be very successful," Baxter said. "If they execute more retail stores under the name Amazon, do customers get confused: is it the bookstore? Is it a Macy's? Is it an Intermix? Is it a car showroom? Is it a grocery store? The point of view gets confusing."

"The bottom line is that the margins in retail are challenging. As they want to delve further into bricks and mortar, can they create a different experience? Furthermore, Amazon has been richly rewarded by Wall Street without making a 'real profit.' As Amazon morphs into more of an omni-channel player, how will Wall Street respond to them?" Baxter asks.

Jason Polley, managing leasing director of StoneCrest Investments in Germantown, TN, says Amazon clearly has retailers scrambling to evolve and better integrate their brick and mortar stores with their online presence.

"Apparel has always seemed to be an area of retail that requires a brick and mortar presence for the customer to see, touch and try on merchandise before a purchase, as on-line purchases of apparel have a much higher return rate compared to other products sold online," Polley said.

But the problem is not all Amazon.

"Despite Amazon's clear impact, I do believe some apparel retailers have lost touch with their customer base and their core mission to deliver what their customer wants to buy," he added.

Paul Schloss, an associate broker at NAI Horizon in Tucson, also says the onus is on traditional retailers.

"Conventional apparel retailer's inventory models demand velocity of inventory turn-over to generate absolute gross margin/profit to recover fixed occupancy costs," Schloss said. "As traffic migrates to the internet, and those logistical efficiencies drive down competitive prices and margins, we are witnessing the implosion of mall retailing: reduced consumer traffic and turns, obsolete structural inventory models. How these retailers re-construct, narrow and innovate their inventory profiles, merchandise offerings, and tactical offerings will define site base retailer's demise or survival."

Warehouse boon fueled by Amazon's expanding need for space (Video)

Warehouse boon fueled by Amazon's expanding need for space: Black Creek Group president from CNBC.

Equus Capital Partners Sells 22-Property PA MF Portfolio In $467M Deal

by Steve Lubetkin,
Equus Capital Partners sold a 22-property, value-add multi-housing portfolio totaling 3,426 units in various Pennsylvania locations for $467 million. Holliday Fenoglio Fowler marketed the properties in six sub-portfolios on behalf of Equus.

“We are very pleased that we were able to successfully market and close all 22 properties within a year of launching the first sub-portfolio. The properties offered diversity of size, ranging from 50 units to 400 units; vintage, ranging from the early 1960s through the mid-2000s; and locations throughout the eastern half of Pennsylvania, from Harrisburg through suburban Philadelphia and into the Lehigh Valley.”

The properties sold in phases to different buyers throughout 2017, with the most recent closing at the end of September. Property locations include suburban Philadelphia, Lancaster, Harrisburg, Wyomissing, Lehigh Valley and northeastern Pennsylvania.

“Each of the 22 properties within the portfolio generated significant interest and attracted a variety of investors, from small private groups to large institutions. We conducted 113 tours, which resulted in 68 offers throughout the process.”

Wednesday, October 11, 2017

Matrix Development Group Sells Industrial Building

Hartz Mountain Industries, Inc. has purchased the distribution warehouse at 35 Dauphin Dr. in Mechanicsburg, PA for $24.8 million, or about $80 per square foot, from Matrix Development Group.

The industrial facility delivered in 2008 and totals 310,050 square feet. Tenants in the building include UniPart, Hafele America and WEG Electric Corp. The building boasts 42 dock-height doors with levelators and two drive-in doors.

DDR Corp Sells West Valley Marketplace

Slate Retail REIT purchased the shopping center at 1091 Mill Creek Rd. in Allentown, PA for an undisclosed amount from DDR Corp.

The Walmart-anchored shopping center, known as West Valley Marketplace, totals 259,163 square feet. JDN Realty Group developed the retail center in 2001. Other tenants include Sprint, Pet Valu and Great Clips.

Prologis Sells Quakertown Facility for $74.3M

WPT Industrial REIT purchased the Prologis Quakertown industrial building at 3000 AM Dr. in Quakertown, PA for $74.3 million, or about $79 per square foot, from Prologis.

The 935,540-square-foot distribution center delivered in 2006 in Bucks County. The property features 90 dock doors with levelators, two drive-in doors and parking for 150 trailers.

20 Multi-Family Properties Sell in Powelton Village Philadelphia

A total of 83 units and 20 properties sold for $14 million in the city’s University City submarket. The seller was West Village UCA, and procured the buyer, a private investor, in the transaction. The properties are all located in Powelton Village, in the heart of the neighborhood’s world‐renowned education, medicine and technology hub. Situated on the 3200 block of Powelton Avenue, 11 of the properties (3201-3027) are on the odd side of the street while two are even-numbered (3214 and 3220). The 3214-3218 Pearl St., properties feature three two-unit townhomes with patios and garages as well as an additional loft in two of the units. Across the street at 311-313 N. 33rd St., is a 24-unit building with an adjacent parking lot. In total, the portfolio is comprised of a mix of studio and one-, two-, three- and four-bedroom layouts for a total of 144 beds.

Monday, October 9, 2017

City Line Capital has completed its 11th Acquisition

City Line Capital has completed its eleventh self-storage property acquisition in the past six months. The company’s portfolio now totals over 700,000 rentable square feet across eight different states including Colorado, Michigan, Florida, Texas, Pennsylvania, Louisiana, North Carolina and South Carolina. The properties have been rebranded and are being managed by industry-leading third-party management firms. City Line Capital continues to aggressively seek self-storage properties nationwide, and currently has six additional properties under agreement, totaling approximately 350,000 rentable square feet.

Friday, October 6, 2017

1760 Market St. put up for sale

By Natalie Kostelni  –  Reporter, Philadelphia Business Journal

A partnership that owns 1760 Market St. in Philadelphia has decided that it wants to sell the boutique office building just two years after buying it for $20 million.

The property joins two other Center City office towers to come on the market. Gemini Rosemont Realty is looking to unload 2000 Market St., a 29-story, 665,649-square-foot office building, while Equity Commonwealth is seeking to sell 1600 Market, a 39-story, 760,000-square-foot office structure.

Stockton Real Estate Advisors and Alterra Property Group bought 1760 Market, a 15-story, 126,689-square-foot building, in September 2015. At the time, it was 65 percent occupied and the partnership was attracted to the building’s location between Comcast Center and the Comcast Innovation Center, which is under construction, and Rittenhouse Square.

With those buildings and the neighborhood serving as significant anchors that bookend a portion of the city, "18th Street has become a pedestrian super highway,” said James Paterno of Stockton. As a result, 1760 Market had a front-row seat to that heightened activity and Stockton thought the building could take advantage of it.

Since the acquisition, the partnership has spent $4 million on various renovations, including upgrading the lobby and elevators as well as installing a communal café area with seating and a conference room shared by tenants. A new lighted canopy was installed at the entrance to give it more of an identity. The goal of the renovations was to give a 1980s vintage building a contemporary look.

Full story:

Rodman Properties buys 1,000-unit apartment portfolio

By Natalie Kostelni  –  Reporter, Philadelphia Business Journal
Rodman Properties Inc. has, through a $103.4 million loan, bought a portfolio of seven apartment properties with nearly 1,000 units in a deal that stands as the company’s largest acquisition to date.

The Wynnewood real estate company bought the multifamily communities from Madison Apartment Group, which is a division of Equus Capital Partners, a Philadelphia-based real estate fund. They were part of a portfolio of 22 properties in the suburbs, the Lehigh Valley and central Pennsylvania comprising 3,426 Class B apartments Equus began selling off in August 2016.

The apartments Rodman bought in the deal were in Harrisburg and Allentown. Earlier this year, it had bought two other apartment properties in Berks County that had also been part of the same portfolio Equus was unloading.

Though based just outside of Philadelphia, RP Management has since its founding in 1992 concentrated on making buys in central Pennsylvania and the Lehigh Valley. It prefers those tertiary areas because they are less competitive in terms of buyers and are solid markets for Class B rentals, said Michael Cohen, who founded Rodman and serves as its president.

The areas have something else going for them that appeals to Cohen. “A lot of these market also don’t have a lot of new construction,” Cohen said.
Full story:

Alterra buys 1401 Arch St., plans conversion

Natalie Kostelni Reporter Philadelphia Business Journal

Alterra Property Group has acquired 1401 Arch St. in Philadelphia and has plans to convert the building into apartments.

The 177,000-square-foot office building called One City Place was sold by AFIAA, an investment adviser for pension funds in Switzerland that bought it in 2005 for $22.5 million. It couldn’t be determined how much Alterra paid for the property or any other details about the project. Leo Addimando, managing partner at Alterra, said he didn’t have any comment at this time.

As a result of the pending conversion, the building is being vacated. The First Judicial District of Pennsylvania’s Probation and Pretrial Departments signed a new lease on 120,000 square feet at 714 Market St. and will move in by the end of 2018.

Full story:

Philly's Suburban Office Market Outperformed Downtown In Q3

by Matthew Rothstein, Bisnow Philadelphia
Philadelphia's downtown and suburban office markets trended in opposite directions in the third quarter. Asking rents and net absorption declined both quarterly and year-over-year in Q3, while vacancies rose in the central business district. The current vacancy at 10.9 to 13.1% estimates vacancy among downtown office buildings.

 The negative trends are due to consolidations from major players like PNC, Wells Fargo, Verizon and IBX, which the small number of entrants has failed to offset. The combination of large blocks of availability in existing buildings with the incoming delivery of 700K SF of new office space has both slowed leasing and decreased rents as landlords struggle to differentiate themselves for tenants. The CBD's vacancy rate is at its highest point since 2014. “The number of tenants relocating from the suburbs to downtown has dwindled. Also, a decline in leasing activity by co-working firms and Comcast has failed to move space off of the market so far this year.”

The slowdown could be a natural ebb ahead of the delivery of the Comcast Technology Center, which will coincide with other office buildings, 2,600 apartments and 1M SF of retail opening in 2018. Meanwhile, a lack of new construction is helping to drive pricing upward in suburban markets like Conshohocken and Radnor, while the relative value of King of Prussia and its emerging live-work-play scene is increasing leasing activity there. Overall there are estimates 314K SF of positive net absorption in the suburbs so far this year, while other estimates 716K SF. With certain office complexes renovating and repositioning to keep up with modern trends without competition from new construction, the suburban market looks poised to keep its momentum into 2018.

Read more at:

Wednesday, October 4, 2017

Burlington Signs 40,000-SF Lease at Centerton Square

Burlington Coat Factory signed a 10-year lease for 40,000 square feet in the Centerton Square shopping center at 50-70 Centerton Rd. in Mount Laurel, NJ.

Burlington Coat Factory will join DSW Shoe Warehouse, Five Below, Wendy’s, TJ Maxx and PetSmart in the 681,299-square-foot shopping center.

Office Investment Forecast (Video)

Tuesday, October 3, 2017

Billionaire investor Sam Zell: Retail landscape looks like a 'falling knife (Video)


Retail REIT chief says his mall properties are 'detoxing,' adding Experiential Stores (Video)

Gorman/Abrams JV Acquires Whiteland Town Center In Exton, PA

by Steve Lubetkin,
A joint venture between Gorman & Company and Abrams Realty & Development has acquired Whiteland Towne Center, a 359,673-square foot shopping center located at 229 West Lincoln Highway in Exton, PA, from Equus Capital Partners.

No purchase price was disclosed.

Built in 1988, Whiteland Towne Center is positioned at one of the major retail intersections serving all of Chester County, Route 30 and Route 100. Whiteland Towne Center is shadow-anchored by Kohl’s Department Store and Hobby Lobby, which opened in November 2016 following the departure of Acme Markets in 2012. The remaining shopping center is anchored by national retailers including Party City, Big Lots, Total Hockey, Famous Footwear, Petco and a new CVS Pharmacy is under construction as a freestanding store on a newly created pad site within Whiteland Towne Center at the main entrance off of Route 100.

“The recent leasing activity along with Whiteland Towne Center’s current occupancy of 79 percent provided investors a value-add opportunity to take advantage of the evolving retail market in Exton in an attractive demographic market with average household incomes exceeding $126,000. With very few sizable opportunities to come to market with superior positioning and comparable demos as Whiteland, investors were attracted to the prospect to build upon the 26,000 square feet of recent leasing and continue to transform the asset in one of the best retail submarkets serving the suburbs of Philadelphia. A perfect marriage existed in the end with the selected purchaser. Abrams Realty and Development brings over 20 years of retail expertise in developing and operating over 2.5 million square feet within the MSA coupled with Gorman & Company, the original developers of the largest office park within the Exton submarket, Oaklands Corporate Center, at over 2 million square feet.”

The principals of Gorman & Company, Jim Gorman and Chris Knauer, in a partnership with Jefferson Apartment Group, are also about to break ground on a 291-unit mid rise luxury apartment complex called Parkview located just a mile down the road from Whiteland Towne Center.

“We are obviously bullish on Exton,” says Gorman. “Whiteland Towne Center represents an opportunity to reposition an asset we know well, in a great township with an increasing demand for more services. Abrams is the perfect partner to help us execute this.”

Whiteland Towne Center is located on Routes 30 and 100 across from the Exton Square Mall. The property shares an intersection with a new Whole Foods scheduled to open in 2018.

Abrams Realty & Development will be managing and leasing the center on behalf of the partnership.

Monday, October 2, 2017

DICK’s Sporting Goods Replaces Sears at Capital City Mall in Harrisburg, PA

PREIT announced the opening of DICK’s Sporting Goods as the replacement for Sears at Capital City Mall in Harrisburg, PA, just six months after the department store closed. PREIT proactively recaptured the department store and attracted the high performing replacement to further strengthen its portfolio and enhance shopper experience, as part of its multi-property anchor repositioning effort. Fine Wine and Good Spirits will follow with a planned November opening.

DICK’s Sporting Goods occupies 61,000 square feet of the recaptured space, with Fine Wine & Good Spirits filling an additional 11,500 square feet. The tenants join the only DSW, Forever 21 and Field & Stream stores in the region, reinforcing Capital City Mall’s lead positioning in the market. Recent additions to the property include top-tier retailers: H&M, Pandora and a new prototype Victoria’s Secret store. As part of PREIT’s commitment to curating a diverse mix of concepts, including experiential tenants, to adjust to a shifting retail landscape, Dave & Buster’s will also open at the property in 2018.

The Verrichia Company has Acquired the Final 3 Horsham Parcels

The Verrichia Company has acquired the final three parcels necessary to begin development of Horsham Village Plaza; a mixed use retail center that will include a Wawa convenience store with six fuel pumps, a CVS pharmacy with a drive-thru and three additional pad sites available for lease that will include a sit-down restaurants or specialty retailers.

The 5,585 square foot “super” Wawa and 12,900 square foot CVS Pharmayc are expected to open in fall 2018. The three pad sites available for lease total 17,200 square feet and are represented by Metro Commercial. Located at the intersection of Route 611 (Easton Road) and Blair Mill Road, Horsham Village Plaza is located in front of the Pennsylvania Business Campus, home to some of the region’s largest employers, including United Healthcare Services Inc. and a satellite office division of Comcast.