Monday, December 17, 2018

Kimco Eyeing Potential to Unlock Embedded Value in Sears/Kmart Locations

Norriton Medical Center Sold

by Steve Lubetkin,
The Norriton Medical Center, a 74,212-square-foot medical center anchored by Einstein Orthopedics and Moss Rehabilitation Hospital, at 160-190 West Germantown Pike in the Philadelphia suburb of East Norriton, PA sold for $12.35 million.

The name of the buyer was not disclosed. The seller is an indirect wholly owned subsidiary of Franklin Realty Development Corporation.

Located in Greater Philadelphia, home to one of the largest concentrations of healthcare institutions, teaching hospitals, R&D facilities, and life sciences hubs in the country, Norriton Medical Center is located near the area’s largest hospitals, Einstein Medical Center Montgomery (1.4 miles) and Suburban Community Hospital (0.8 miles).

The 7.31-acre, four-building complex is currently 92 percent leased and features the area’s only nationally ranked rehabilitation facility that operates under the Einstein Healthcare Network umbrella

Hunter Truck Signs 10-Year, 81K SF Flex Lease in Philadelphia, PA

by Steve Lubetkin,
Hunter Truck, a family owned and operated network of truck dealerships, has signed a ten-year, 81,226 square-foot office/warehouse lease with Charter Road Realty for a property at 2811 Charter Road in Philadelphia, PA.

Hunter plans to operate a full-service International/Navistar heavy- and medium-duty truck dealership and an Idealease heavy- and medium-duty truck leasing company at the location.  The company says it will employe 40–50 people within the first year of operation.

Hunter has been in business for more than 80 years, with locations that span over multiple states in the Northeast (Pennsylvania, New Jersey, New York and West Virginia).

ShopOne Purchases Southampton Shopping Center

by Steve Lubetkin,
ShopOne Centers REIT, a New York-based owner, operator and manager of high-quality grocery-anchored shopping centers, has entered the Philadelphia market with its acquisition of Southampton Shopping Center, a 150,457 square-foot shopping center located in Southampton, PA. ShopOne’s strategy is to own well-located grocery anchored shopping centers in densely populated, fundamentally strong markets across the country.

Southampton Shopping Center is anchored by a market-leading, 59,892-square-foot Giant grocery store. Giant enjoys the highest market share in the Philadelphia metropolitan statistical area with nearly twice the share of its nearest competitor.
Southampton Shopping Center provided us with an excellent opportunity to enter a key market with high barriers to entry,” says Michael Carroll, chief executive officer of ShopOne. “Philadelphia is a target market for ShopOne. I am fortunate to have a long-standing relationship with the Giant team and I am thrilled to partner with them with them to maximize the performance of this property. In a continually evolving retail real estate market, this purchase of this center adds another stable, well-performing asset to our portfolio.”

Located 3.5 miles from the city limits of Northeast Philadelphia, Southampton Shopping Center is supported by strong demographic and economic fundamentals. The 5-mile radius surrounding the shopping center contains a population of over 210,000 with an average household income of over $98,000. Over the last three years, 74% of the in-place shop space at the property has executed lease renewals at rental rates that are on average 9% higher.

Southampton Shopping Center features a unique mix of restaurants and shops including Saladworks, Robin Hood Restaurant,  Tuesday Morning, Pennsylvania Wine & Spirits, and three banks with total deposits in excess of $317 million.

Friday, December 14, 2018

Economic and Commercial Outlook-Investor Sentiment and Sector Outlook (Video)

Industrial: Still a Favored Sector? (Video)

Endurance Real Estate Group Breaks Ground on 125,000-SF Distribution Center in Pittston, Pennsylvania

Endurance Real Estate Group, along with Blue Vista Capital, a Chicago-based investment management firm, broke ground on a 125,125-square-foot build-to-suit facility adjacent to Interstate 81 in Pittston, Pennsylvania.

Plans for the single-story structure at 140 Industrial Drive call for 193 loading docks, two drive-in bays, 54- by 45-foot column spacing and a 40-foot clear ceiling height. Spanning 225 acres, the facility will be less than five miles from Wilkes-Barre/Scranton International Airport.

In addition to the build-to-suit facility, the first phase of the development plan for Interstate Distribution Center includes construction of a 1.08 million-square-foot building, which is currently underway. The second development phase includes a third building on the northern part of the site anticipated to be around 500,000 square feet.

Thursday, December 13, 2018

Hampshire Companies Doubles Down on Philadelphia Self-Storage

by Steve Lubetkin,
The Hampshire Companies continues to grow its self-storage portfolio with the opening of two facilities totaling more than 200,000 square feet of new, state-of-the-art self-storage space. The two locations, a 110,532-square-foot self-storage facility at 1240 Chester Pike in Crum Lynne, PA, and a 93,353-square-foot self-storage facility at 59 Leverington Avenue in the Manayunk neighborhood of Philadelphia, PA, mark Hampshire’s 32nd and 33rd self-storage developments projects completed since 2012 and the fourth and fifth developments in the Philadelphia area.
“With over 20 years of self-storage development, our team has been integral in the successful evolution of the asset class to better meet the needs of today’s customers and communities,” says James E. Hanson II, president and CEO of The Hampshire Companies. “Our extensive experience allows us to successfully deliver these best-in-class, modern self-storage facilities to a wide range of markets and bring an important community amenity to underserved areas while providing our investors, lenders and partners with strong returns.”

The Crum Lynne and Manayunk facilities feature modern architecture, climate-controlled storage units and state-of-the-art security systems. They will be professionally operated by Extra Space Storage, one of the nation’s preeminent self-storage REITs. Located at a lighted interchange in densely populated Ridley Township, the three-story Crum Lynne building features a strong retail orientation and is situated prominently with visibility from I-95.  The Manayunk facility is in one of the most well established, desirable and densely populated neighborhoods in the city of Philadelphia.

“While we have a long history in self-storage, we’ve been particularly bullish on development opportunities for the past few years,” says Don Engels, senior vice president of self-storage acquisitions and development. “We continually look to source deals in under-served, densely populated areas in an effort to deliver these increasingly in-demand assets and deliver them to local markets throughout the northeast. Crum Lynne and Manayunk are both excellent locations with strong demographics that fit extremely well within our self-storage investment strategy and we look forward to continuing to pursue opportunities in this market.”
The two ground-up development projects speak to Hampshire’s time-tested site selection and entitlement capabilities. Built around leveraging their experience in deploying capital into mature markets with high barriers to entry and populations underserved by self-storage, Hampshire has shown a unique ability to successfully deliver institutional quality self-storage projects on time and on budget in a wide variety of markets. As the second largest metropolitan area in the northeast, Philadelphia’s demographics and market fundamentals aligned perfectly with Hampshire’s successful self-storage investment strategy.

Since 2012 alone, Hampshire has built a robust portfolio of self-storage facilities along the eastern United States, having repositioned or developed 33 self-storage facilities with an aggregate value of more than $415 million. Presently, Hampshire has 12 self-storage development projects underway aggregating $217 million of investment across the eastern United States and is targeting another 14 additional projects with an aggregate value of $243 million in the pipeline.

Wednesday, December 12, 2018

Video- REIT Updates for Healthcare, Senior Housing, Affordable Housing, Assisted Living & Lodging

LTC Properties CEO Says Health Care Sector Discussing Affordable Options for Assisted Living Chatham Lodging Trust Focusing on Fast-Growth Markets

Industrial CRE Market Update (Video)

PAG Acquires 294K SF Williamsport, PA, Retail Center, Loyal Plaza

by Steve Lubetkin,
Loyal Plaza, a 293,607-square-foot, value-add shopping center anchored by GIANT Food Stores and Kmart in the northern Pennsylvania community of Williamsport, PA, has been sold to New York-based PAG Investments.

“In addition to a high-performing grocery anchor and value-add opportunities through re-tenanting, Loyal Plaza is positioned on strong fundamental real estate. The sale was a highly competitive process with a good depth of regional and national buyers.”

Blackstone acquired the property in May 2016 from RioCan REIT for $22.6 million. Financial terms of the current transaction were not disclosed.

“We were able to secure a short-term loan that enabled PAG to acquire Loyal Plaza and provide them with the necessary time and funds that will be required to unlock the value of this shopping center."

Anchored by GIANT and Kmart, the 94.1%-leased Loyal Plaza is also home to Dollar Tree, Verizon Wireless, Staples, Great Clips, BB&T Bank, Rite Aid and Red Lobster, among others.  Situated at 1915-1965 East 3rd Street, Loyal Plaza is visible to more than 23,000 vehicles per day.  The center is in Williamsport, the primary economic center of Lycoming County, and is less than one mile off Interstate 180, which provides easy access to Interstate 80.

Tuesday, December 11, 2018

Low Income Urban Areas Hold Untapped Potential, Retailers and Developers Say

Urban areas marked by lower income and higher population density have often been overlooked by retailers, according to executives at Starbucks and Nike, two national chains that are making a push into those markets. They say that beneath the surface, these areas represent an expanding opportunity with untapped and understudied buying power.

The characteristics of these areas require a unique business approach, executives say. U.S. consumer spending has increased 97 percent since 2000, with the highest levels of growth in underserved, minority markets, according to data from the International Council of Shopping Centers, known as ICSC. Hispanic Americans and African Americans held $2.8 trillion in buying power combined in 2018, while the buying power of Native Americas has grown to $115 billion in 2018, almost triple than in 2000.

“Not every retailer sees the spending power of urban environments, many have not figured out how to crack that egg,” Robin Zeigler, chief operating officer of Cedar Realty Trust, a landlord and developer of open-air shopping centers in the U.S. northeast. She made the comments during a panel discussion at the ICSC New York Deal Making conference in New York.

One category of retailer has picked up on the opportunity: the dollar store. Dollar General, Family Dollar and Dollar Tree, and low-price grocers.

"Aldi and Lidl combined will open 3,000 stores next year,” according to Nick A. Egelanian, president of retail real estate consulting firm SiteWorks. “The trend is income disparity and it is very real. It is a vastly growing portion of America that buys goods paycheck to paycheck, about 70 percent. Why do you think Walmart is the largest grocer in 65 percent of states?”

Athletic gear seller Nike and Starbucks, which typically carry higher-priced merchandise, are breaking into these markets in a different manner by developing a retail concept dubbed the community store. These stores hire most of their employees locally and work with nonprofit organizations, with a goal of spurring growth and fostering a deeper connection with their neighborhoods.

“Community stores are part of a special Starbucks initiative to support youth and economic development in diverse, underserved areas of the country. Each community store seeks to hire from the neighborhood and partner with local women- and minority-owned businesses. Community stores also feature classroom space to provide in-store job training for young people ages 16 to 24 who aren’t in school or working,” Starbucks wrote in a blog post about its 12th and newest community store, which opened in Dallas last week.

Rahel Fikre, store development manager for the mid-Atlantic region at Starbucks, said, “One thing we did differently in the last couple of years was start opening community stores. When we launched community stores we focused on areas of lower income in urban neighborhoods that lacked food services."

A similar idea on a smaller scale is furniture retailer Raymour and Flannigan, which hosts in-house community events like fundraisers and concerts in each of its 95 stores in the U.S. Northeast.

Nike and Starbucks are “the best examples of retailers in underserved markets, but they are an anomaly among retailers,” said Cedar Realty Trust's Zeigler.

These urban, low-income markets are underserved even though analysts say the United States as a whole has too much retail space. About 15.3 billion square feet of retail real estate exists within the U.S., of which 7 billion square feet are shopping centers, according to data from CoStar Market Analytics. The U.S. has about 24.5 square feet of retail space per person on average, compared to 4.5 square feet in Europe, Egelanian said.

To tap the opportunity, Nike Real Estate Manager Natalie Hooper said, "When we went into downtown Detroit, which at the time had negative growth, we went into a block with little going on and hired locally to be part of the community and to be authentic.” Its community store employees volunteer for initiatives such as the Boys and Girls Club, she said.

When building in lower-income urban markets, the importance of community engagement is critical, said Zeigler. For instance, when looking for untapped markets, Cedar Realty Trust focuses on “food deserts” or those areas in need of fresh food or close-by grocery stores, she added. As a byproduct of the structure of grocery-anchored shopping centers, they develop space for stores that provide food, sell convenience items and offer retail services.

“When you are a developer deciding to build in an urban community, you are really committing to that neighborhood,” Zeigler said. “To be successful, you have to reach out to key stakeholders in the community, local politicians, community leaders and residents, to hear their needs and wants and make sure the community is invested in what you’re building,” she noted. “You must make sure you are embracing that. That footwork is critical all the way.”

Dealing with a deteriorating state of buildings is also part of the footwork for developers or retailers going into some lower income markets.

“Space and capital is an issue in these markets, but we will put in the capital to make it work. We will invest in creative ways to make it work as a business case,” Hooper said. The Brooklyn community store opened in a former club and had to be gutted and retrofitted, for example.

Cedar Realty is in-development of a 1 million-square-foot, mixed use development in southern Philadelphia called South Quarter Crossing, which will have 800,000 square feet of retail, 27,000 square feet of office space and 210 apartment units. In Washington, D.C., it has built a 150,000-square foot shopping center called East River Park (pictured, above) and in August the company acquired an adjacent 62,000-square-foot retail property to expand the center.

“In our more urban centers where we have grocery-anchored shopping centers, there is protection from any digital divide,” Zeigler added, noting that Cedar Realty Trust’s developments are typically insulated from e-commerce. “This is not the consumer in suburban or wealthy urban markets doing online grocery shopping. In urban markets they don’t shop like that. They go at least once per week to the grocery store, sometimes more. In urban markets, they don’t shop on They take their kids to the shoe store.”

Small Leases Rise to Dominate New Jersey's Office Market

When it comes to office leasing in New Jersey, it's not a big deal anymore.

During the past five years or so, office leases for less than 10,000 square feet, relatively small deals, have increased so much that they now dominate that sector of the Garden State's real estate market.

"New Jersey has become a small deal market. The Incredible Shrinking Deal."

Last year marked a five-year low in the number of large-sized office lease transactions in New Jersey, and leasing through the third quarter in 2018 the number of big leases is pacing to drop even more this year. At the same time, the volume of small leases has been on an upswing since 2013, the report said.

CoStar data supports those findings, as well, with the average space leased declining from 2013 to 2018. In 2013 for New Jersey, there were 3,896 leases signed for an average of 4,375 square feet per lease, according to CoStar Market Analyst Adin Perera. This past year, there were 4,031 leases averaging less square footage, 4,047, he said. Year to date in 2018, the average square footage has dropped all the way down to 3,355 for the 3,142 leases signed so far, according to CoStar, which tracks office rentals as small as under 1,000 square feet, even 50 square feet.

Statistics vary from CoStar's, but support the same trend.

"The growing prominence of small deals can also be seen in the declining average transaction size in the market. The average deal size in the first three-quarters of 2018 was 11,950 square feet, a 37.5 percent drop from the high-point mark set in 2015. While the 2018 year-to-date figure is a slight uptick over 2017, the growing volume of transactions below 10,000 square feet suggests that the average transaction size will remain far below the peak level for the near term."

While New Jersey has enjoyed job growth and declining unemployment, the fundamentals of its office market have stayed the same. The state remains saddled with large outdated suburban office buildings and parks that millennial-seeking companies aren't interested in, leading to fewer large lease transactions of 50,000 square feet or more and less leasing activity, the brokerage said.

Fewer large companies appear to be relocating to the Garden State, in part because of its high cost to do business and its old office parks, according to Perera. Merck's former corporate campus in leafy Readington, New Jersey, remained on the market for years until IT provider Unicom Corp. bought it this year.
“The combined impact of too many large blocks and not enough large-block demand suggests that the market is likely to see the current availability and rent levels persist. Changing the trajectory of the market will require reducing the oversupply of space and realigning available inventory to better meet the demands of current and future tenants in the market.”

There have only been 16 office leases involving 50,000 square feet or more so far this year, according to CoStar. Last year, there were 33 such large deals. That was a drop from 53 large lease deals in 2016, and 65 in 2015, CoStar said.

There was "a mismatch" between supply and demand regarding the size of spaces available in the New Jersey market.

"On the one hand, there is an ample supply of spaces available in the larger size categories ... On the other hand, looking at the smaller space availabilities, there is a potential shortage. Our forecast indicates 194 potential new transactions to take place in the fourth quarter of the year, but only 277 currently available blocks of 10,000 square feet or below to accommodate that demand. Landlords are frequently reluctant to break up larger blocks of space for a variety of reasons and despite an obvious potential solution, small tenants may find themselves facing a dearth of desirable suites in the sizes that they need."

Based on that landscape,  landlords are advised to offer flexible lease terms, consider shared-space alternatives, upgrade properties to better compete for tenants, and to repurpose outdated office properties.

Small leases are not necessarily a bad thing since such tenants are sometimes start-ups or smaller businesses with potential for growth.

Local Investment Company Acquires 228-Room Hotel in Downtown Philadelphia

Pearl Properties, a local full service investment, management and development company, purchased a 288-room hotel in downtown Philadelphia from Pebblebrook Hotel Trust. The Embassy Suites Center City Hotel sold for $67 million, or about $233,000 per room.

Built in 1965, the recently renovated, all-suite hotel at 1776 Benjamin Franklin Parkway comprises 5,000 square feet of meeting space and a 150-space garage. The 28-story structure spans half an acre less than four blocks from the Race Vine subway station.

Reed Slogoff, principal of Pearl, said in a statement, “As the area continues to see significant retail, commercial and residential development, we are confident The Embassy Suites Center City Hotel will benefit from our renewed focus and is perfectly situated to cater to business travelers, conventioneers and tourists.”

Qualified Opportunity Zones: What You Need to Know (Video)

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Mixed-use developments: A look at what’s driving this trend (Video)

Mixed-use developments: A look at what’s driving this trend from Metro Commercial on Vimeo.

Center City District Sees Philadelphia Retail Transforming, Repositioning

by Steve Lubetkin,
From the changing retail mix along Rittenhouse Row to the expanding food and beverage offerings on East Market and Chestnut streets, Center City’s retail landscape is being transformed and repositioned to meet the needs of the growing millennial population in Center City, while continuing to serve Philadelphia workers, residents and visitors.

Center City’s retail market is experiencing the shifting dynamics affecting retailers everywhere but is faring far better: vacancy along prime retail corridors in Center City is just 5.4%. By comparison, Q2 2018 retail vacancies hit 10.2% nationally and 8.4% regionally, according to Center City District’s annual report on the state of downtown retail.
Center City’s 3,195 active storefronts in 2018 consist of 986 retail stores, 1,005 food establishments and 1,204 service providers. And despite the recent additions of well-known national retailers, Center City shopping remains distinct from everywhere else in the region: 743 of those 986 retail stores in the downtown—three out of four—are local businesses.

Center City’s long-established Rittenhouse Row shopping district has grown beyond its previous confines along West Walnut Street as rents have increased, transforming West Chestnut Street and the connecting numbered streets and expanding the boundaries of Philadelphia’s prime retail corridor.

Meanwhile, east of Broad Street in the burgeoning Market East district, strong demand is being driven by national retailers seeking larger floor plates and by local businesses seeking lower rents than what is found west of Broad.
With three major retail-driven developments completed since 2016, two more currently under construction and another in the pipeline, Market East will see the addition of 1.2 million square feet of retail in the next few years, representing a $910 million investment. This critical mass of large-scale mixed-use development will development will create a continuous shopping and dining district from Independence Mall to City Hall.

Affordable Apartments, with Space for Special Needs Adults, Launched in Gibbsboro, NJ

by Steve Lubetkin,
Freedom Village at Gibbsboro is getting underway, a new 72-unit affordable apartment complex for families, which will include 18 units for residents with special needs.

Freedom Village at Gibbsboro is the ninth project for which the New Jersey Housing and Mortgage Finance Agency has provided financing to developer Project Freedom, resulting in the development of over 500 affordable units throughout Mercer, Ocean, Burlington, Camden and Salem counties.
“People with special needs face extraordinary life challenges.  Finding an affordable place to live should not be one of them,” says Lieutenant Governor Sheila Oliver, who also serves as commissioner of the Department of Community Affairs and chair of the NJHMFA board. “This project upholds the administration’s promise to help residents most in need find an affordable, accessible, and permanent home in New Jersey.”

The development, to be built on a seven-acre tract on South Lakeview Drive (County Route 561), will include four L-shaped, three-story buildings and a community center.

Fifty-four apartments are targeted for families with low-to-moderate incomes up to 60% of the area median income. Ten units will be set aside for developmentally disabled residents, and eight apartments are designated for residents who are consumers of mental health services.
The one- to three-bedroom rental units will all be wheelchair accessible and feature wider doors and hallways, an open floor design, accessible kitchens, some bathrooms with bathtubs and some with roll-in showers.

“We are proud of our long partnership with Project Freedom to provide homes that are not only affordable to working families but especially to residents with special needs,” says NJHMFA executive director Charles A. Richman. “Project Freedom’s commitment to barrier-free living enables residents with special needs to fully integrate into the community.”

NJHMFA awarded the $19.1 million development competitive nine percent federal Low Income Housing Tax Credits, which are expected to generate $13.3 million in private equity. Additional funding comes from TD Bank, Federal Home Loan Bank and Investors Bank.

The development will be within walking distance of businesses and amenities and is encircled by the Gibbsboro Greenway. Project Freedom also provides scheduled bus trips to area shopping centers and other nearby amenities, and works with residents to secure transportation via NJ Transit’s Access Link.

Construction is expected to be complete by December 2019, with rents ranging from $681 to $945. Each developmentally disabled resident will have a service provider for necessary support. Service providers are selected by the consumer, and the services are individualized to meet the needs of each resident.  South Jersey Behavioral Health Resources will provide supportive services for residents with mental health disabilities. Project Freedom will be providing educational training and employment opportunities to all tenants at no cost through the Opportunities for All program.

Monday, December 10, 2018

American Equity Partners Acquires Northeast Philadelphia Industrial Properties

by Steve Lubetkin,
Edison, NJ-based American Equity partners has acquired a 195,205 square-foot portfolio of six industrial properties on 29.7 acres in lower Northeast Philadelphia for $17.5 million.

“Given the properties’ locations within minutes from center city Philadelphia as well as their proximity to last mile delivery locations in Pennsylvania and New Jersey, collectively the assets serve as strong additions to our growing portfolio,” says David Elkouby, president, American Equity Partners.
The featured property within the portfolio is a 164-door, 95,000 square-foot truck terminal located on about 14 acres at 3820 N. 2nd Street, which also includes 8,000 square feet of office space. The additional properties are located near The Port of Philadelphia and its airport. The portfolio offers easy access to last mile delivery locations not only to Pennsylvania, but to Southern New Jersey via U.S. Route 1, I-76 and I-95. Its current tenants include H&M, Fresh Direct, Amazon among others.

“Situated off the Betsy Ross Bridge, this unique portfolio served as an exceptional addition to AEP’s portfolio who was looking for a value-add investment in which to reinvest their capital via a 1031 Exchange. As more and more consumers turn to online shopping, fast ecommerce fulfillment expectations are a priority. The ‘last mile’ of delivery from the warehouse to the customer’s doorstep is the final step within the supply chain process. It is also the most vital, expensive and time-consuming part to same-day delivery. Located within Philadelphia’s 1.56 million demographic region, the amount of docks, fenced-in parking and its accessibility to multiple highways have prepared these facilities to be an essential part of that process, which is evident in its current tenant base.”

85K SF Industrial at 500 State Road, PA, Sold for $4.7M

by Steve Lubetkin,
The sale of the 84,953 square-foot 500 State Road, Bensalem Township, Bucks County, PA traded recently. The property, a modern one-story masonry and steel multi-tenant building situated on 4.15 acres was sold to 500 State LLC, a privately held real estate investment firm, on behalf of State Road Associates, the previous owner.

The building is presently divided into three units—Unit A (approx. 24,233 square feet), which is occupied by Easy Heat Wood Pellets, Unit B (approx. 18,710 square feet) and Unit C (approx. 42,010 square feet), which are occupied by Betz Plumbing and Heating Supply.  In addition, a portion of the site is also leased to Omnipoint for the location of a cell tower.
The building is heated and sprinklered throughout and offers ceiling heights from 24-feet to 24-feet, 9 inch clear, twelve tailgate docks, five drive-in doors, 42-foot by 30-foot column spacing, and about 8,600 square feet of office space, with parking for 62 cars.

Strategically situated between the Academy Road and Woodhaven Road Interchange of I-95, the property offers convenient access to the Pennsylvania Turnpike (Exit 351/Bensalem) as well as Route 1 and the Betsy Ross Bridge and Tacony–Palmyra Bridge to New Jersey.  The property is just 20 minutes from metropolitan Philadelphia, 30 minutes from Trenton, NJ and 90 minutes from New York.

Friday, December 7, 2018

Office Video Strategies (Video)

Industrial Sector Market Trends (Video)

Stadium Casino Proposing $150M Casino at Westmoreland Mall in Hempfield Township, PA

by Steve Lubetkin,
Stadium Casino, an affiliate of The Cordish Companies, has presented plans to the Pennsylvania Gaming Control Board for a proposed Category 4 satellite gaming facility to be developed at the Westmoreland Mall in Hempfield Township, PA, located directly off Route 30, approximately 30 miles from downtown Pittsburgh.

The presentation for the new Live! Casino was made during a Public Input Hearing, where Cordish representatives gave an overview of the 100,000-square-foot gaming, dining and entertainment destination, which will take over a space formerly occupied by the Bon-Ton department store. The Live! facility will be part of the popular 1.3-million-square-foot Westmoreland Mall development.
The Live! project, which represents an investment of $150 million, will be a world-class gaming, dining and entertainment destination, featuring 750 slots and electronic table games and approximately 30 live action table games; plus, nationally-recognized restaurants and live entertainment venues.

Live! Casino is projected to generate $200 million in annual economic impact, with an additional $148 million in economic impact from construction, including approximately 960 direct and indirect construction jobs, plus more than 500 permanent new jobs for local and regional residents, Cordish says. In addition, the project will create numerous construction and operations vendor opportunities for local, minority, women-owned, and veteran-owned businesses, along with considerable support for local charities and non-profits.

Project plans are subject to the review and approval of the Pennsylvania Gaming Control Board. Once approved, a construction timeline will be determined.
“We look forward to working with the Gaming Control Board, Hempfield Township and Westmoreland County to create a first-class gaming and entertainment destination that will generate millions of new tax dollars and create hundreds of new jobs for the region,” says Joe Weinberg, partner in Stadium Casino.

Thursday, December 6, 2018

Fidelity Portfolio Manager Anticipates Uptick in REIT Development, Balance Sheet Risk (Video)

Medical Office Fundamentals “Very Viable” (Video)

Ocean Kingdom Acquires Island Avenue Industrial in Philadelphia

by Steve Lubetkin,
Ocean Kingdom, a seafood wholesaler headquarterd in Swedesboro, NJ, has acquired 3601 Island Avenue in Philadelphia, PA, a 84,400-square-foot industry facility. The seller was not identified, but according to Real Capital Analytics, a proprietary research database that tracks commercial real estate transactions, the property last changed hands in March 2015, when Kulp Car Rentals acquired it from Pennock Co., for $3.4 million.

“The industrial market in Philadelphia, and the surrounding region, is very strong and buyers are extremely attracted to acquiring quality facilities with excellent access to the highways like this building on Island Avenue, which is located just off I-95."
Ocean Kingdom will use part of the building and will lease the rest of the property to two existing tenants.

Located on six acres, 3601 Island Avenue is just minutes from Philadelphia International Airport, and offers immediate access to Interstates 95 and 76, as well as the Walt Whitman Bridge. The property is serviced by public transportation and features six-inch reinforced concrete floors, ceiling heights from 15 to 23 feet, six tailgates, 14 covered van-high loading positions and office street parking for over 250 vehicles.

Wednesday, December 5, 2018

Planet Fitness Inks Deal in New Castle, DE

Planet Fitness, franchisor and operator of fitness centers with more than 1,600 clubs, signed a 25,000-square-foot lease at Stat Organization’s Airport Plaza shopping center in New Castle, Delaware.

The single-story structure at 148 Sunset Blvd. was built in 1993. Spanning nearly 30 acres, the Class B center is less than 10 miles from University of Delaware.

CRG Starting Spec Industrial in Lehigh Valley

by Steve Lubetkin,
St. Louis, MO-based CRG has begun construction of The Cubes at Lehigh Valley – Airport Road, a 450,000 square-foot speculative industrial building in the Lehigh Valley. The 40-acre site is 60 miles west of the Port of Newark in East Allen Township, PA.

“CRG has looked for superior sites throughout the region and The Cubes at Lehigh Valley – Airport Road is our first foothold in the Lehigh Valley industrial market. We see significant opportunity along Route 22 and I-78 corridors,” says CRG senior vice president Frank Petkunas. “The Cubes is in a position to capture the future growth for large warehouse distribution and e-commerce fulfillment centers. This is one more step CRG is taking to enhance its industrial portfolio.”
With excellent access to US Route 22, I-78 and I-476, the site is strategically located 60 miles from the Port of Newark and close to FedEx’s largest ground hub in the United States at Lehigh Valley International Airport.

CRG has joint-ventured for the fourth time with USLF 1 for the development of The Cubes at Lehigh Valley – Airport Road. The completed 450,000 square foot warehouse will have high-efficiency LED lighting, generous dock doors and trailer storage as well as car parks associated with state-of-the-art industrial distribution centers seen throughout the country.

Clayco will serve as the design-builder on the project and its subsidiary, BatesForum Studio is the architect on the project.

Tuesday, December 4, 2018

Bold Economic Prediction ↑ or ↓ for 2019 (Video)

JPMorgan CEO's bold economic prediction for 2019 (Video) US economy will weaken in 2019: Dennis Gartman

Aramark Inks 16,000sf Deal at Downtown Philadelphia Office Tower

Aramark, a food service, facilities and uniform services provider, signed a 15,857-square-foot lease at Nightingale Properties’ and Carlton Associates’ Class A office tower in Philadelphia.

The 686,503-square-foot, 29-story structure at 1835 Market St. was built in 1986 and renovated in 1997. The 4-Star property spans nearly an acre less than two blocks from the 19th Street light rail station.

Regency Centers CEO Says Physical Retail Space Remains Critical for Future Success (Video)

MCR Acquires Residence Inn Near Sesame Place in Langhorne, PA

by Steve Lubetkin,
MCR, the sixth-largest hotel owner-operator in the United States, has acquired the 100-suite Residence Inn by Marriott Philadelphia Langhorne less than one mile from the Sesame Place theme park.

The hotel embraces the Sesame Street theme with characters and activities familiar to fans of the famous TV show and theme park.
The Residence Inn by Marriott Philadelphia Langhorne is located at 15 Cabot Boulevard East and features: 100 pet-friendly suites with fully-equipped kitchens , free full American breakfast, free fast Wi-Fi, a convenience store, heated indoor pool and a whirlpool spa, 24-hour fitness center with cardio equipment and free weights, A 24-hour business center, On-site laundry service,

Pearl Properties Acquires Embassy Suites Center City Hotel at 1776 Benjamin Franklin Parkway

by Steve Lubetkin,
Pearl Properties, the Center City-based real estate investment and development firm, has added a second hotel to its portfolio in the heart of Philadelphia with the acquisition of 1776 Benjamin Franklin Parkway, The Embassy Suites Center City Hotel. This recently renovated, all-suite hotel features 288 suites, 5,000 square feet of meeting space and a 150-space garage, all located at the gateway of Center City.

The Embassy Suites Center City Hotel is one block from the newly completed Comcast Technology Center, part of Comcast’s three million square-foot campus, the Pennsylvania Convention Center and numerous tourist attractions along the Parkway, including The Philadelphia Museum of Art, the world-renowned Barnes Foundation, The Rodin Museum and many others.
“In early 2018, Pearl opened the Cambria Hotel Philadelphia Downtown Center City on Broad Street because we saw strong fundamentals in the Center City hotel market for assets in prime locations,” says Reed Slogoff, principal of Pearl Properties. “And, as evidenced by our recent purchase of the former United Way headquarters directly across the Parkway at 1709 Benjamin Franklin Parkway, we’re equally bullish on the Parkway transformation that is well underway. As the area continues to see significant retail, commercial and residential development, we are confident The Embassy Suites Center City Hotel will benefit from our renewed focus and is perfectly situated to cater to business travelers, conventioneers and tourists.”

The Embassy Suites Center City Hotel features numerous enhancements following a recent renovation that included complete renovations of all guest rooms, common space, the lobby and elevators. Pearl says it has plans for additional upgrades that will include new restaurant spaces.

Monday, December 3, 2018

Brandywine Plans 280K SF Trophy-Class Office Property in Plymouth Meeting, PA

by Steve Lubetkin,
Brandywine Realty Trust will construct Metroplex Two, a 280,000 square-foot, trophy-class office building it says will introduce world-class architecture and urban design to the Philadelphia suburbs.

Located in the heart of Plymouth Meeting, Metroplex Two will serve as the signature component of Brandywine’s 23-acre master-planned Metroplex campus, currently home to Metroplex One, a 120,000 square-foot trophy-class office building. Designed to be a workplace of the future, the immersive environment will center around wellness, productivity and creativity, while offering unparalleled amenities, social interactions, collaborative work settings and advanced technology.

“Plymouth Meeting is one of the Greater Philadelphia region’s most sought after suburban markets. Following the success of Metroplex One, we saw significant value in creating a striking and innovative ground-up development that could attract large, forward-thinking brands to the region,” says Jerry Sweeney, president & CEO of Brandywine Realty Trust. “As part of a well-designed, amenity-rich complex adjacent to growing residential areas and transportation hubs, Metroplex Two will be an inspired workplace that fosters innovation and fresh ideas.”

New York -based NBBJ, a globally-renowned architecture firm specializing in driving innovation through the creation of highly productive and sustainable spaces, was selected to bring Brandywine’s vision for Metroplex Two to life. Merging visually arresting design and functional elegance, Metroplex Two will boast the most desired attributes of a creative, modern office, including open and efficient floorplates, loft-style workspaces, floor-to-ceiling windows featuring stunning views and an abundance of natural light.

Metroplex Two’s amenity-rich environment features several gathering spaces and three terraces—including a WiFi-enabled outdoor Sky Terrace, expansive lawn, and a state-of-the-art conference center. The Sky Terrace includes ample seating, fire pits, televisions, and The Lawn, a sprawling courtyard and greenspace, is perfect for both private convening and community-wide activities. Additional amenities include a parking garage, a secure package delivery room, a fitness center, and immediate access to the Cross County Trail which connects to the Schuylkill River Trail. There is a designated spot for food trucks, and outdoor seating areas to eat or collaborate.

Targeting LEED Silver certification and an Energy Star rating, the functional design of tiered metal panels sheathed in 10-foot floor-to-ceiling Low-E glass will enhance Metroplex Two’s visual appeal while respecting the environment.

The Metroplex campus seamlessly blends urban sensibility with daily accessibility. Its location makes it highly desirable and strategically positioned at the convergence of the Pennsylvania Turnpike (I-276), the Blue Route (I-476) and the Northeast Extension of the Pennsylvania Turnpike (I-476). This Mid-County Interchange access makes commuting seamless for employees and acts as a quintessential logistical hub with more than 88 million vehicles per day. The campus is also served by public transportation via Chemical Road and offers an effortless connection for bike commuters by way of the on-site Montgomery County Trail system and nearby Schuylkill River Trail.

The suburb of Plymouth Meeting is home to a wide variety of personal and business conveniences including high-end shopping centers, numerous restaurants, multiple hospitality options, fitness clubs and daycare centers. These additional nearby amenities offer tenants an extraordinary live, work, play lifestyle.

Metroplex Two anticipates seeing the same resounding success as Metroplex One, which is fully leased and home to an array of tenants from prominent law firms to leading healthcare companies.

“Metroplex Two is sensational, as it checks many boxes for tenants between its accessible location, sustainable design, extensive list of amenities, and exceptional tenant branding opportunities. It will offer any corporation the ultimate office environment and one the Philadelphia market has yet to experience. It’s the kind of building that will not only attract talent but make them never want to work anywhere else. The suburban location removes the pains of parking and employees will reap additional benefits from the fitness center, ample outdoor space, and the wide range of retail and restaurant options in the immediate area.”

Multifamily REIT UDR Sees Positive Demand, Decreasing Supply (Video)

Jonathan Gray: Investment Opportunities, Real Estate and Economic Environment (2018) (Video)

Friday, November 30, 2018

PREIT CEO Says Sophisticated Consumer Attracted to Varied Mall Offerings (Video)

Deutsche Bank's Asset Manager Sells 636-Unit Apartment Complex in Philadelphia

Lakewood, New Jersey-based Chelsea Management, a full service investment firm, purchased a 636-unit apartment complex in Philadelphia from DWS Group, Deutsche Bank's asset manager. Lincoln Green sold for $102.6 million, or about $161,000 per unit.

The garden-style complex at 4000-4040 Presidential Blvd. comprises one- and two-bedroom units ranging from 588 to 960 square feet in 30, three-story buildings. Built in 1986, the Class B property spans north of 20 acres less than two miles from the Bala train station.

Chelsea Management secured $91.59 million in financing for the acquisition of Lincoln Green. Dan Sacks of Greystone orginated the Freddie Mac loan, which features a 10-year fixed rate and six years of interest-only payments over a 30-year amortization period with leverage at 80.3 percent of the purchase price.

"The execution all around was stellar, and an absolute homerun for our client. That is truly what being a mortgage banker is all about, and we are grateful to have such close working relationships with our clients and our agency partners," Sacks said in a statement.

Strong Economy Keeping All Asset Classes Riding High

Demand for industrial facilities for distribution of goods to consumers continues to rise and hit historic benchmarks across the board, according to William Hankowsky, CEO of Liberty Property Trust, which is in the midst of a portfolio rotation away from office properties to a singular focus on the industrial sector.

Hankowsky’s message of a strong economic lifting all sectors of commercial real estate was echoed by other speakers at the annual Real Estate Outlook sponsored by the Urban Land Institute Philadelphia Thursday.

“Obviously, it’s the most dramatic, strongest market industrial space has ever seen in its history no matter what statistic you look at,” Hankowsky told more than 500 attendees at the Union League Club. “You’ve had 34 consecutive quarters of positive net absorption in many markets, you’re seeing the highest rents you’ve ever seen, and the converse of that is in many markets you’re seeing the lowest cap rates you’ve ever seen. Properties are trading in Southern California starting with a three, or North Jersey, and even in secondary markets, most of the trade now starts with a five in terms of a cap rate.”

The strong demand is largely a product of an unusually strong economic recovery, but layered on that, Hankowsky says, is the rising need for distribution facilities for e-commerce retailers.

“E-commerce has been a unbelievable structural change element in terms of the industrial space,” he says. “Ten years ago, most of us didn’t know we needed something delivered to our house in two days. Five years ago, you didn’t even know you needed it in a day, and you didn’t know three years ago you needed it today in an hour. That change in the customer consumer expectation about delivery times has had a dramatic fundamental effect on industrial space.”

The design of warehouse buildings has also been affected by the rising demand for rapid delivery, Hankowsky says. Warehouses now tend to accommodate 40-foot heights for more efficient racking of stock, and tenants need more land under the buildings because of the increased need for employee parking at large distribution centers, he says. Another significant change in the market is a greater focus on correlation of location and labor, he says. Warehouses now need to be close to an accessible workforce, so much so that “the HR person is often on the first visit to the location,” he says. “That never happened five years ago.”

In the retail sector, Joseph Coradino, chairman and CEO of PREIT, highlighted changes in the product mix at his firm’s malls, which used to allocate as much as 75% of their space to apparel sales, but are now redeveloping more experiential retail like restaurants, entertainment, and fitness.

Contrary to the constant barrage of obituaries for traditional retail that he faces, even from family and friends, Coradino noted that traffic at PREIT malls so far this holiday season is running above last year. The company issued a press release on traffic—timed to coincide with Coradino’s appearance at the Union League Club gathering—indicating that traffic at its Viewmont Mall in Scranton, PA was up 11 percent, and at the Moorestown, NJ, Mall, traffic rose significantly, even though a large space once occupied by Macy’s has only been partially filled with smaller retailers HomeSense and FiveBelow.

“Those two small stores occupy about 50,000 square feet of that 260,000 square feet,” Coradino says. “Traffic is up 9 percent.”

Many mall retailers now offer a service Coradino described as “BOPUS,” which means “buy online and pickup in store.” The service has the added effect of encouraging additional purchases, too.

“When someone picks up something at one of our properties, there’s a 73 percent chance that they’re going to make an ancillary purchase at the property,” Coradino says.

In the hospitality sector, customers are looking for luxury and willing to pay for it, according to Jay Shah, CEO of Hersha Hospitality Trust.

“We find that lifestyle and luxury today are the two segments where we have the greatest ability to drive rate and pricing power,” he says. “They seem to differentiate themselves in a way away from the commodity hotel products, and that’s what we’re finding that the markets are really seeking and willing to pay for.”

Hersha acquired the Philadelphia Westin about a year ago, Shah noted, and the property is fulfilling its promise, with the third quarter showing especially good performance, he says.

“That was driven primarily by continued strength in Philadelphia’s life science sector and the corporate sector, and leisure visitation to Philadelphia continues to be very strong,” he says.

Expansion of the definition of the modern office is one of the biggest adjustments taking place in the office sector, says Jerry Sweeney, president, CEO and trustee of Brandywine Realty Trust.

“In office, it used to be that you went to a definitive place to work,” Sweeney says. “With technology and other alternatives, the city really has now become the workplace, not one specific location.”

Brandywine’s portfolio today has less square footage but a higher quality overall product today compared with five years ago, Sweeney says.

“Our internal focus in our company right now is on preleasing some of our development pipeline and perfecting all of our approvals, including running all of those developments completely through the design development process,” he says. “Unless we fully price out our deals, it puts us at a real disadvantage in terms of attracting a corporate client, because we need to know—in this environment of rising construction costs and pricing volatility—what we can actually deliver.”

Real estate markets across the country are being driven by the search for talent, according to Lauren Gilchrist, senior vice president of research for Jones Lang LaSalle Philadelphia.

“Unemployment in the US right now is 3.7 percent, unemployment for people with a bachelor’s degree or more is two percent,” she says. “This is far beyond the conditions of full employment at this point in time, which means that competition for people is fierce.”

The talent pool is one of the factors that led to the Amazon decision to locate part of its HQ2 project in Long Island City, NY, she says. New York and Washington, DC are graduating students trained in technology fields at a much higher rate than the Philadelphia market, she says.

“When you look at the fact that New York and DC have graduated 31,000 advanced degree holders in one year, and you think about the fact that this company is looking for 50,000 people in technical occupations, you begin to understand, despite everything else, why our 6,000 STEM degree holders might not cut it,” she says.

The event also serves as the launch every year for the Emerging Trends in Real Estate Report jointly produced by ULI and PricewaterhouseCoopers, now in its 40th year.

Mitch Roschelle, PwC partner and business development leader, says this year’s report ranks Philadelphia in the top five cities for both hotel and industrial investment.

Building on Gilchrist’s remarks about the talent search, Roschelle expressed concern that job openings are going unfilled.

“We have seven million job openings, we have just under six million unemployed,” he says. “So there are a million people that we don’t have, for the job openings that we do have.”

Top trends from this year’s report include:

  • The rise of the “18-Hour Suburb” and that the millennial question is starting to be answered: many are looking for suburbs with urban amenities and good
  • Retail space is not dead, and it is a good time to repurpose space for alternative
  • New office buildings and multifamily assets are going above and beyond to meet a range of tenant needs through “amenities gone wild”.
  • Disruptors ranging from package delivery to autonomous vehicles are forcing redesign and amenity shifts for residential and commercial
  • Environmental, Social and Governance Practices are important to investors. Sensitivity to these issues has increased and funds with these strategies in mind could see an
  • Last mile industrial development is in high demand with the expansion of e-commerce far from over and the need for facilities to accommodate a dense distribution network

“ULI Philadelphia is proud to share this national research and bring together a high-level discussion and projection about the local real estate market led by our industry leaders in hotel, industrial, office, multifamily and retail development,” says Paul Commito, chair of ULI Philadelphia, a senior vice president at Brandywine Realty Trust. “Building on last year’s record-breaking program and attendance, today’s speakers gave our community a lot to think about as we tackle a fascinating year in development. I am proud of the progress we have made the ULI Philadelphia District Council and look forward to continuing to engage with new and established members, growing committees and serving the broader industry through our ULI Philadelphia advisory and impact projects.”

Wednesday, November 28, 2018

Seavest, Trammell Crow Developing Hospital for Allegheny Health Network

by Steve Lubetkin,
Patients of Allegheny Health Network, a subsidiary of Highmark Health, will soon have a new convenient, state-of-the-art care option in Hempfield Township, Westmoreland County, about 30 miles southeast of Pittsburgh.

Real estate investment firm Seavest Healthcare Properties and its development partner, Trammell Crow Company, are building new, class A, 75,000-square-foot care facility for AHN, a leading integrated delivery care system in Western Pennsylvania.

The new Hempfield facility—consisting of an emergency department and 10-bed, small-format hospital; a full-service cancer center; and medical office space—is part of a neighborhood hospital complex the network is building at the intersection of Route 30 (Lincoln Highway) and Agnew Road.

The small-format AHN hospital is a joint venture of AHN and Emerus, the nation’s largest operator of small-format hospitals. Emerus Holdings, a Texas-based company, operates more than 20 neighborhood hospitals across the country, and recently surpassed the one million patients treated milestone.

“With this neighborhood hospital and community cancer center, we are bringing to Westmoreland County an innovative, patient-centered model that will provide the best possible experience, quality and outcomes for those requiring emergency care, short hospital stays, cancer care and other outpatient services,” says Cynthia Hundorfean, AHN president and CEO. “We have taken a number of important steps over the past year to expand access to AHN physicians and programs in Westmoreland County, and this wonderful new facility will further ensure that the people who live here have exceptional choices close to home for their healthcare needs.”

“Seavest is privileged to be a part of this project, helping to bring expanded healthcare services to Westmoreland County,” says Jonathan Winer, senior managing director and chief investment officer of Seavest Healthcare Properties. “Not only will the project bring expanded emergency services, cancer care and medical specialists to the area, there is the potential to add more services in the future.”

“Trammell Crow Company is honored to be a part of making this project a reality for the community,” says Davis Griffin, a principal with Trammell Crow. “Speed to market is essential for this project. Relying upon our top-notch team in place and our long-standing relationship with Seavest, we will be able to accelerate our construction timeline in order for AHN to meet its goals for opening the facility.”

Construction of the Hempfield project commenced in July, with completion of the cancer center anticipated by late summer 2019 and the remainder of the building in November 2019.

Trammell Crow Building 1M SF Spec Industrial in Scranton Opportunity Zone

by Steve Lubetkin,
Trammell Crow Company has purchased a 90-acre site in the Valley View Business Park from the Scranton Lackawanna Industrial Building Company, for construction of Valley View Trade Center, a new, one million-square-foot speculative distribution facility. SLIBCO is the industrial development affiliate of the Greater Scranton Chamber of Commerce.

“We are very pleased that a renowned developer like Trammell Crow Company has chosen to invest in our region—with our quality workforce, prime location and access to major markets— to create jobs and address the demands of the growing e-commerce industry,” says Bob Durkin, president, The Greater Scranton Chamber of Commerce. “We thank Jessup Borough, Valley View School District and Lackawanna County for approving the LERTA tax abatement program in order to make this deal possible.”

The state-of-the-art building is scheduled to be completed in the third quarter of 2019 and will feature 40-foot clear height, 190-foot deep truck court with opposing trailer storage, ESFR fire protection, 311 trailer parking spots, 277 car parking spots, and 159 dock positions, expandable to 209.

The project will also provide economic and tax incentives, qualifying as a Keystone Opportunity Expansion Zone and for the Local Economic Revitalization Tax Assistance program. In addition, the project will serve as a Qualified Opportunity Zone to encourage long-term investment in the area.

“We are pleased to be working on this exciting project in Jessup Borough,” says Andrew Mele, managing director of TCC’s NE Metro Business Unit. “In addition to best-in-class design quality, the project will enjoy proximity to a strong, vibrant labor force and a strategic location with access to over 80 million consumers within an overnight drive.”

Tuesday, November 27, 2018

Banks Put the Brakes on Commercial Real Estate Lending

U.S. banks are reining in their commercial real estate lending across most property types as they get squeezed between rising interest rates and competing nonbank lenders offering low-cost loans.

The overall decline in total mortgage loans made by banks in the third quarter helped slow the buildup of commercial property loan portfolios on their books, according to the Mortgage Bankers Association.

It's the first sign of a slowdown in real estate lending by banks this year following the end of an extended period of ultra-low interest rates as the Federal Reserve has steadily increased borrowing costs and signaled it plans to keep raising rates.

"Borrowing and lending backed by commercial and multifamily properties decreased 3 percent during the third quarter, and was 7 percent lower than a year ago. Rising interest rates took some wind out of the market's sails," said Jamie Woodwell, vice president of commercial real estate research for the Mortgage Bankers Association in a statement accompanying the group's quarterly survey of commercial/multifamily loan originations by its members.

The rising cost of borrowing money is damping some demand for new loans. Investors are also taking advantage of low projected rates of return on commercial real estate and higher prices to sell properties and pay off their loans before rates rise and property price growth softens, banking officials said.

Woodwell said the commercial mortgage-backed securities and bank lending markets were the hardest hit, while lending backed by multifamily properties and government sponsored enterprises Fannie Mae and Freddie Mac grew. Some rating agencies now project commercial mortgage-backed securities loan volume will be lower than in 2017.

Compared to a year earlier, a decline in third-quarter loans for health care and retail properties led the overall decrease in commercial/multifamily borrowing volumes, according to the association.

By property type, there was a 55 percent year-over-year decline in the dollar volume of loans for health care properties; a 28 percent decrease for retail properties; a 19 percent reduction for hotel properties; and a 17 percent drop for office properties.

One of the few bright spots in the quarter for finance companies was that lending for multifamily properties from both banks and the government sponsored enterprises grew, as did lending for industrial properties. Loan originations last quarter increased 19 percent for both multifamily and industrial property loans.

Among investor types, the dollar volume of loans originated during the third quarter increased for life insurance companies, which were up 4 percent, and for Fannie Mae and Freddie Mac, which were up 3 percent.

In contrast, originations for commercial mortgage-backed securities loans slid 53 percent, while commercial bank portfolio lending dropped 22 percent from a year earlier.

The buildup of commercial real estate loan portfolios on bank books also slowed, according to a CoStar analysis of third-quarter bank data released last week by the Federal Deposit Insurance Corp. Those portfolios had been growing at an annual rate of 4.5 percent through the second quarter. That rate slowed to an annualized rate of 3 percent in the third quarter.

The lending slowdown was particularly noticeable among some of the largest banks. Half of the 10 largest U.S. banks by commercial real estate loan holdings actually shrunk their portfolios, including the largest, Wells Fargo, which holds about $134 billion in commercial property loans. Wells Fargo's portfolio value shrunk by $2.7 billion from the previous quarter.

Other banks increased real estate lending, though they too signaled a change in strategy. Signature Bank, which holds the 10th-largest commercial real estate loan portfolio among U.S. banks with $27 billion, grew its portfolio at an annualized clip of 11.2 percent. Notably, however, even Signature signaled in its third-quarter earnings conference call that it intended to slow future real estate lending in favor of a shift to more floating rate lending, which Signature sees as giving it more flexibility as interest rates rise.

In addition to lower originations, part of the decline in commercial real estate mortgage loans at banks and commercial mortgage-backed securities lenders resulted from pay-downs on existing and acquired loans as borrowers take action in anticipation of further boosts to interest rates into 2019, according to Fitch Ratings. Fitch expects loan refinancing volume to slow through 2019 in reaction to additional interest rate increases.

During this shift in interest rates, several banks reported this past quarter that they were priced out of deals with loan terms that would never meet their underwriting guidelines.

"While [overall bank] results this quarter were positive, the extended period of low interest rates and an increasingly competitive lending environment have led some institutions to 'reach for yield,' " said Jelena McWilliams, chairwoman of the Federal Deposit Insurance Corp., noted in announcing third-quarter performance numbers for FDIC-insured banks just before the Thanksgiving break.

"Additionally, the competition to attract loan customers has been strong, and it will remain important for banks to maintain their underwriting discipline and credit standards. These factors have led to heightened exposure to interest-rate risk and credit risk," she said.

Office Market Insights and Opportunities (Video)

Part 1 of 4 Part 2 of 4

ASB Acquires 476K SF Bristol, PA, Industrial Portfolio for $42M

ASB Real Estate Investments  has acquired a 475,910-square-foot industrial portfolio in the Keystone Industrial Park in Bristol, PA for $42 million. Consisting of eight warehouse buildings, the portfolio is 95%-leased to 14 tenants, including international distributors and local service providers serving the Philadelphia metropolitan area and New Jersey.

ASB acquired the assets on behalf of its Allegiance Real Estate Fund, a $7.3 billion core investment vehicle.

“The portfolio is strategically situated adjacent to one of the region’s most important interstate arteries, with direct access to both Philadelphia and New York City, as well as points west,” says Brodie Ruland, ASB senior vice president and Northeast region head. “This acquisition continues the expansion of our nationwide industrial portfolio, which seeks to secure strong, income-oriented returns at this mature stage of the current real estate cycle.”

Located in the southeast corner of Lower Bucks County, the complex is approximately 20 miles northeast of Center City Philadelphia and 70 miles south of New York City, and is within a mile of the new Pennsylvania Turnpike/I-95 Interchange. The interchange provides immediate connections to the primary north-south and east-west interstate corridors in the region, including the heavily trafficked New Jersey Turnpike. Few development sites exist in the submarket providing for high barriers to entry and minimizing new supply.

The portfolio consists of two buildings of 110,000 square feet each, and six other buildings varying in sizes from 30,000 to 60,000 square feet. Combined, they offer an array of functional spaces with clear ceiling heights up to 26 feet and truck court depths typically 95 to 100 feet.

Monday, November 26, 2018

Blue Stone Capital Pays $20 Million for Suburban Philadelphia (Norristown) Office Building

Brooklyn, New York-based Blue Stone Capital, a full service investment firm, purchased a 136,918-square-foot office building in Norristown, Pennsylvania, from Regional Real Estate Investment Corp. for $20 million, or about $146 per square foot.

The three-story structure at 1001 Adams Ave. is fully leased to Optum 360. Built in 2001, the Class A property spans 12 acres less than 20 miles from downtown Philadelphia.

The property offered investors an opportunity to acquire a well-maintained, modern office property with a credit tenant in the highly desirable health care industry.”

Maculogix Signs 17,000-SF Office Lease in Harrisburg

Maculogix, a company that develops tools for early diagnose, monitor and treatment of age-related macular degeneration patients, signed a 17,400-square-foot lease for its new headquarters at Triple Crown Corporation’s office building in Harrisburg, Pennsylvania.

The 145,700-square-foot, three-story structure at 3721 Tecport Drive was built in 1966. The Class B building spans north of 11 acres less than seven miles from Harrisburg International Airport.

Penn Medicine Breaks Ground on $200M Advanced Outpatient Center in Radnor

by Steve Lubetkin,
Penn Medicine, the health system of the University of Pennsylvania, has begun construction of a four-story, 250,000-square-foot multispecialty outpatient facility in Radnor, PA, that will expand options for patients to receive advanced care close to home.

“More than half of our activity comes from outpatient care today, and we’re committed to investing in the very best facilities which can offer our patients more options to get the best possible care close to their homes,” says Ralph W. Muller, CEO of the University of Pennsylvania Health System. “Our mission is to offer Penn Medicine care to patients where it’s most convenient to them and their families, so we’re making more cancer, women’s health, and cardiac services available to patients at Radnor to ensure they can receive a more comprehensive suite of care without having to travel downtown.”

Brandywine Realty Trust has entered into an agreement with University of Pennsylvania Health System to purchase and serve as the designated developer and manager of two premier sites in Radnor where the new outpatient facility will take shape (145 King of Prussia Rd. and 250 King of Prussia Rd.). Brandywine will transform the new buildings into high-quality facilities—including office space and a hotel—and will serve as the development manager of the medical office building, allowing Penn to expand its network and offer even more locations to deliver the level of care for which the health system is renowned.

Set to open in Spring 2020, the site will be home to the new Penn Medicine Radnor, replacing the existing facility in the township, which has operated on King of Prussia Road since 1997.

The new location will provide comprehensive cancer care, including newly available radiation oncology services and chemotherapy provided by the Abramson Cancer Center, as well as primary care, heart and vascular, orthopaedic and neuroscience care. Additional services will include same-day surgery, with six operating rooms and four endoscopy suites, along with full radiology and laboratory services. Patients will also have access to cutting-edge Penn Medicine clinical trials, expanding access to more patients without having to travel into Philadelphia.

“This facility will provide exemplary outpatient care and contains all of the services you would find in a hospital setting with the exception of beds for overnight stays,” said Rob Cottone, president and CEO of IMC Construction. “It is a ground-up building, easily accessible by car or public transportation and highly energy efficient.”

The new LEED Silver certified building will feature natural light throughout, and a building design which wraps around a courtyard will bring nature views to patients, families, and staff inside.

The western section of 145 King of Prussia Road will introduce 150,000 square feet of office space and a hotel component comprising 75,000 square feet, with a projected 100 rooms—which Penn Medicine officials say will help make the new Radnor facility a destination for patients traveling for specialized outpatient services from outside the area. The eastern portion of 145 King of Prussia Road will serve as a medical office parcel. The health center and adjacent 994-car parking garage are located at 145 King of Prussia Road, on the former BioMed site and within walking distance of the Radnor train station. Clad in brick masonry and high-performance glass, the building has abundant natural light and views of nature.

“The University of Pennsylvania has been a long-time, valued partner of ours, and together we have created transformative projects that have helped to shape the city of Philadelphia that we know today, most notably FMC Tower at Cira Centre South,” says Jerry Sweeney, president and CEO of Brandywine Realty Trust. “As Penn Medicine continues to expand its footprint, we are proud to work alongside them to bring new, high-quality offerings to their patients and help fuel the great work that they continue to deliver.”

“We are excited for our partnership with Brandywine, which will develop this area of Radnor into a state-of-the-art mixed-use campus that will build on Penn Medicine’s longstanding support of health and wellness for residents of the Township and beyond,” says Kevin B. Mahoney, executive vice president and chief administrative officer for the University of Pennsylvania Health System.

The new Radnor facility, which is double the square footage of the current Penn Medicine Radnor building, is the latest among a growing list of Penn Medicine multispecialty ambulatory centers. Other sites include the Perelman Center for Advanced Medicine, Penn Medicine University City and Washington Square in Philadelphia, as well as facilities in Bucks County, Valley Forge, Southern Chester County (West Grove) and, in Southern New Jersey, Cherry Hill and Woodbury Heights.

The Penn Medicine at Radnor team includes construction manager IMC Construction; architect Ballinger; site/civil engineer Pennoni; m/e/p engineer Stantec; and structural engineer Tim Haahs.

Tuesday, November 20, 2018

CanAm Enterprises $35M EB-5 Partnership Loan Funds Copper Tubing Plant in Reading, PA

by Steve Lubetkin,
A copper tubing manufacturing facility expanded recently with a $35 million loan funded by a CanAm Enterprises EB-5 partnership loan.

CanAm is one of the leading sponsors of EB-5 investments, which are funded by qualified foreign investors who earn “conditional” or temporary two-year visas in return for investing $500,000 in businesses located in high unemployment areas that create or retain at least ten permanent full-time jobs for US workers.

The manufacturing industry, once the backbone of the American economy, has played an especially important role in Pennsylvania’s history.

“CanAm and DCED, the Commonwealth of Pennsylvania’s economic development agency, were very proud to support retaining and growing an important manufacturing company to the region,” says Tom Rosenfeld, CanAm’s president and CEO.

The EB-5 Immigrant Investor Program is administered by the United States Citizenship and Immigration Services. With three decades of experience promoting immigration-linked investments in the United States and Canada, CanAm has a long and established track record.

CanAm has financed more than 55 project loans and raised more than $2.7 billion in EB-5 investments. The firm exclusively operates seven USCIS-designated regional centers in the city of Philadelphia, the commonwealth of Pennsylvania, the county of Los Angeles, the Metropolitan Region of New York, the states of Hawaii, Florida and Texas.

Global Capital Flows - Deloitte's 2019 CRE Outlook (Video)

Part 1 Part 2

Monday, November 19, 2018

PwC/ULI Emerging Trends in Real Estate 2019 - Top Markets to Watch (Video) Part 5 of 5

Eastern PA Industrial Markets Growing with Positive Absorption

by Steve Lubetkin,
The industrial markets in Central and Northeast Pennsylvania and the Lehigh Valley grew an average of four percent in the first nine months of the year and absorbed 8.5 million square feet of space.

“Eastern PA is on track to see another year of solid market growth. Of note this year is the scale and location of development and occupier activity. In the first three quarters of this year, there were 10 construction starts greater than 500,000 square feet, double the amount seen in 2017.”

Developers are moving to less developed areas in the Central Pennsylvania and Northeastern submarkets, but the appetite for space shows no signs of slowing down.

“The uptick was well-timed with above-average activity among occupiers seeking 800,000 or more square feet. Due to land constraints in the market’s historical core areas, new development has become more dispersed along I-81 & I-78 corridors, filling in the areas between established big-box neighborhoods in Allentown-Bethlehem, Harrisburg-Carlisle, and Hagerstown, MD. Even with the increase in large-format supply, year-end absorption will top last year’s and we’ve yet to see any downward pressure on rents.”

In the third quarter, 2.6 million square feet of new occupier deals were completed, bringing the year-to-date total to just under 10 million square feet. At this time last year, 13.6 million square feet of new deals had completed. Despite a relatively quiet third quarter, year-end transaction volume will top 15.6 million square feet.

In the Lehigh Valley submarket, deliveries and construction starts were notably above average during the third quarter, especially in Berks County. Current development in Berks is more spread out than in Lehigh & Northampton counties and almost exclusively large format, averaging 790,000 square feet in size. Construction commenced on four facilities, all larger than half a million square feet, bringing to ten the number of buildings under construction. About 2.4 million square feet of new speculative product delivered this quarter, including two facilities greater than 800,000 square feet in Berks County.

The two largest deals in the Central Pennsylvania/I-81/I-83 market were build-to-suit projects: Bayer Pharmaceutical’s 681,700 square-foot lease with DHL in Manchester, along the I-83 corridor, and Riviana Foods’ 714,598 square-foot lease with NorthPoint Development in Greencastle, along the southernmost stretch of PA’s I-81 corridor. Both facilities will include additional square footage on a speculative basis, for a total rentable building area greater than one million square feet.

In Northeastern PA, Exeter’s 1.1 million square-foot build-to-suit facility for American Tire Distributors in Blakeslee helped year-to-date absorption reach 1.3 million square feet. Mericle’s one million square-foot Pittston development is the only spec project currently underway, but Colliers says more speculative development will begin before the year is over. Of the 3.5 million square feet of existing or under construction availabilities, 2.4 million is new speculative product.

Friday, November 16, 2018

Multifamily Real Estate Market - Broker and Developer Strategies (Video)

Part 1 Part 2

Retail Real Estate Video Strategies (Video)

NAR Economic and Commercial Real Estate Outlook (Video)

Ivy Realty’s Acquires of 11200 Roosevelt Blvd. in Philadelphia

by Steve Lubetkin,
Ivy Realty’s acquired of 11200 Roosevelt Blvd. in Philadelphia with   $13.1 million in purchase financing. The 452,375-square-foot industrial asset will undergo a full rebranding under its new ownership.

“Ivy Realty capitalized on a value-add opportunity in a thriving submarket. Sustained high demand for industrial product in the Greater Philadelphia/Lower Bucks County region, coupled with our client’s institutional pedigree and track record for successful repositioning projects, led to a competitive marketing process and, ultimately, an excellent execution by RGA.”

The fully leased, multi-tenant 11200 Roosevelt Blvd. currently serves as home to the Philadelphia Charter School and a mix of industrial users. Ivy Realty will infuse $3 million in capital improvements to address deferred maintenance issues – including site work, roofing, painting, and system upgrades – and roll out general enhancements as part of the property’s rebranding as Roosevelt Industrial Center.

“11200 Roosevelt is located in a great area—just off Route 1 and adjacent to a shopping center. Ivy Realty will take advantage of existing North and South entrances to distinguish the campus’ educational and industrial components. In the firm’s signature style, new signage, landscaping and other improvements will serve to elevate this property’s image and competitive positioning.”

Lack of Quality Supply, Pent-Up Demand Driving Industrial Construction in Suburban PA

by Steve Lubetkin,
Speculative development of industrial properties is beginning to ramp up in response to a lack of quality supply in the construction pipeline.

Build-to-suit projects for Solar Manufacturing in Souderton and Global Packaging in Oaks began. Jacquet Mid-Atlantic and Force America have buildings planned in the Linfield Corporate Center.

Herring Properties’ 80,000-square-foot spec building in Bristol Commerce Center was leased to Hughes Enterprises prior to completion. The developer will be breaking ground in the fourth quarter on a 36-40’ clear +/- 300,000-square-foot spec building. Construction has commenced on the first 100,000-square-foot-plus buildings at Pennridge Airport Business Park and Park 309 in upper Bucks County. A 57,600-square-foot bulding is underway in Bristol Industrial Park and a 53,040-square-foot building in Valley View in Coatesville. Multiple other sites are in various stages of the development process in Quakertown, Hatfield, Chalfont, Blue Bell, Souderton, Harleysville, Chichester and Bensalem. There is the potential for 1.2 million of speculative development completions in 2019, the highest level since 2002.

“We are really seeing a lack of quality supply and pent up demand driving new development – and it’s expanding beyond the traditional distribution corridors. In Southern New Jersey, there has been consistent absorption of new product. Developers such as Whitesell, Dermody and Liberty are moving forward with spec projects.  In Philadelphia and suburban PA, there is potential for 1.2 million square feet of speculative construction in the coming year. Prospects seem good—there’s been strong interest in a proposed 300,000 square-foot spec building in Bristol by local developer Herring Properties.”  -

Key Market Trends – Suburban Pennsylvania

  • The vacancy rate remained at 5.2 percent in the third quarter.
  • Year-do-date absorption totaled just over 215,000 square feet, significantly behind last year’s third quarter level of 2.5 million.
  • The weighted average asking rent increased by 1.3% to $6.21 per square foot, triple net. Pro forma rents for new construction have topped $7.00 per square foot.
  • Investment activity was boosted by a large portfolio sale in Bucks County.

Key Market Trends – Southern New Jersey

  • The Southern New Jersey industrial vacancy rate increased slightly during the third quarter from 3.8 to 4.1%.
  • Year-to-date absorption is down year over year, but still strong at 2.5 million square feet.
  • Of the 2.3 million square feet of construction that is scheduled to be completed in the fourth quarter, two-thirds is still available.

Wednesday, November 14, 2018

Friedkin Realty Group Pays $53 Million for 156-Unit Philadelphia Apartment Building

The acquisition of The Isle, a 156-unit apartment building in Philadelphia's Manayunk submarket by San Francisco-based Friedkin Realty Group last month, represents a significant milestone as the highest price per unit ever paid for a major apartment property in Northwest Philadelphia.

The deal, for just over $53 million or about $340,000 per unit, was also the first sale of a large-scale apartment development completed in the Northwest Philadelphia area following the most recent recession. The sellers, Realen and Barings, wrapped up construction on The Isle in early 2017 and brought the property's occupancy to more than 85 percent.

The Isle’s $340,000 per unit sale price trounced the previous record of $223,000 per unit set by the 2015 sale of Madison Hill House, which was built in Chestnut Hill during the 1960s. And, more recently, Goldman Sachs Asset Management paid $170 million this past summer when it purchased two other Chestnut Hill properties, Chestnut Hill Village and Blossom Row, which totaled a combined 821 units and traded at approximately $207,000 per unit.

Philadelphia’s apartment development activity has continued to expand out from Center City into submarkets long devoid of new, large-scale developments. Other multifamily developers considering projects in Northwest Philadelphia are likely eyeing The Isle’s sale as a barometer for the level of pricing that newly-built apartment properties in the area can command following a initial lease-up period.

One such project, Grasso Holdings’ 142-unit Ridge Flats development at 4300 Ridge Ave. in Philadelphia's East Falls submarket, is less than two miles from The Isle. After recent design revisions the project completed Philadelphia’s Civic Design Review process in October and Grasso is aiming to break ground before the end of the first quarter of 2019.

Commercial Real Estate Under Pressure? (Video)

Monthly Economic Outlook — November 2018 (Video)

Clarifi Leasing at 1635 Market in Center City Philadelphia

by Steve Lubetkin,
Financial literacy nonprofit Clarifi has relocated its office to 1635 Market Street in Philadelphia, occupying 7,165 square feet on the fifth floor. Clarifi relocated from 1608 Walnut Street.

Clarifi provides counseling, education and coaching to help individuals and families achieve financial stability. For 52 years Clarifi has helped over 750,000 people improve their credit, reduce debt, prepare for homeownership and save money.
The building’s owner is Nightingale Properties.

1635 Market Street is a 19-story class A office and retail building in the middle of Philadelphia’s Central Business District. It is located between The Comcast Center and Liberty Place at the northeast corner of 17th and Market Streets. The property offers immediate access to Suburban Station’s concourse level, a major transportation hub, with connection to Amtrak’s Northeast Corridor rail and direct access to SEPTA Regional Rail, Subway Surface Line and Subway system.

Clarifi joins tenants Spector, Gadon & Rosen, MakeOffices and Magna Legal Services, among others.

ULI & Southwest CDC Get Grant for Grays Ferry Jumpstart Program

by Steve Lubetkin
Urban Land Institute Philadelphia and the Southwest Community Development Corporation received an implementation grant from the Urban Land Institute’s Building Healthy Places Initiative to support further expansion of the Jumpstart program in the Grays Ferry neighborhood.

The implementation grant builds on the work of a Grays Ferry Healthy Corridor Study completed in December 2017 and a 2018 grant from LISC Philadelphia that broadened the Jumpstart program from Germantown to include Southwest Philadelphia.
The Urban Land Institute’s National Health Corridor Project works with communities to develop and implement healthy corridor strategies to advance a new, healthier vision for urban and suburban corridors.

In 2017, Grays Ferry Avenue (from Washington Avenue to Woodland Avenue and including the Grays Ferry Bridge) was selected as a “Demonstration Corridor” by the ULI national organization and ULI Philadelphia received funding to host a study of the corridor and surrounding neighborhoods.

The project brought together a group of local stakeholders and a panel of national experts, who, after completing an intensive three-day research and stakeholder interview process, presented their recommendations for including health within future planning processes for the Grays Ferry corridor.
A key recommendation of the 2017 study was the creation of a housing assistance program offering training and access to capital for novice developers. In January of 2018, LISC Philadelphia awarded SWCDC a $5,000 grant to expand the Jumpstart program to Southwest Philadelphia.

Jumpstart, a new model for community development originating in Germantown, provides training, mentoring, networking, and financing options for aspiring local developers.

“Chairing the Grays Ferry Corridor initiative through ULI was a meaningful project in bringing together stakeholders and connecting two communities through the lens of health,” says Julie Donofrio, managing director of PennPraxis and ULI Chair for the Healthy Corridor Project. “The ULI study incited many great ideas, forged new partnerships, and created momentum for smart and inclusive planning in Grays Ferry and Southwest. It’s wonderful that ULI is continuing to show support for these recommendations and partners through this investment.”

Jumpstart program participants, referred to as Mentees, include Southwest community residents who are interested in learning about residential real estate development and are dedicated to making a positive difference in their community. Whether they are interested in renovating a house they want to move into or starting a career as a real estate developer, the program aims to connect Mentees to the training and financing they need to complete their projects.

“SWCDC is grateful to Urban Land Institute for supporting our Jumpstart Southwest program and we are excited to be able to continue to offer this program over the next year,” says Steve Kuzmicki, economic development program manager at SWCDC.  “We have learned that there is incredible demand for this kind of training in the community, and we look forward to reaching out to and working with the residents in the Gray’s Ferry Healthy Corridor target area”.

The overall objectives of Jumpstart are:

  • Create opportunities for residents to invest in and develop neighborhood residential development projects.
  • Build wealth locally.
  • Support scattered-site rehabilitation (as opposed to urban renewal).
  • Encourage a healthy mix of affordable and market-rate housing that lessens neighborhood gentrification.
  • Improve neighborhood safety and raise property values through blight reduction.
  • Help first-time investors become more attractive to traditional lenders.

The additional Healthy Corridors Implementation Grant will allow Southwest CDC to continue implementing this program. As part of their community efforts, Southwest CDC will make a concerted effort to reach out and recruit participants specifically from within the Grays Ferry study area.

PREIT Completes Sale of Land Parcel at Exton Square

by Steve Lubetkin,
PREIT completed the sale of a four-acre parcel at Exton Square to Hanover Company, generating gross proceeds of $10.3 million.

The sale will enable development of more than 300 luxury apartments on the site of Exton Square Mall, where a new Whole Foods opened earlier this year as a preliminary step in reimagining the property.
“We are pleased to have completed this transaction as part of our densification program, which serves to improve the value of our assets and our liquidity position to strengthen our balance sheet,” says Joseph F. Coradino, CEO of PREIT. “We will continue to redeploy the capital we raise into our successful anchor replacement program to drive traffic, sales and NOI and create value for shareholders.”

The transaction marks a critical step in PREIT’s high-priority densification program, designed to transform its properties into remarkable and innovative environments, with retail at the core. As previously reported by, PREIT has been working feverishly to reposition its mall properties, including its flagship assets in the South Jersey and Philadelphia markets, to relieve some of the occupancy pressures malls face as weaker retailers retrench. This has included an increase in the number of experiential tenants, restaurants, and even coworking space planned for the Cherry Hill Mall.

In May, the company announced that it would be looking for opportunities to develop residential components throughout its portfolio of well-located, mostly mall-style retail properties in high barrier-to-entry markets. PREIT said at the time it would seek to develop 5,000-7,000 residential units in the Philadelphia and Washington, DC, markets and 1,500-3,000 hotel units across a dozen properties. PREIT says it is in active discussions on three additional multifamily opportunities and three hotel opportunities.