Tuesday, December 31, 2019

Dermody Properties Completes Construction on LogistiCenter at Midway South

National private equity firm Dermody Properties has completed construction on LogistiCenter at Midway South, a 304,000-square-foot industrial facility under construction in Bethel Township, Pennsylvania.

The property at 9024 Old Route 22 is suited for manufacturing, warehouse/distribution and e-commerce companies. The facility includes a 36-foot clear ceiling height, 44 dock doors, a 54- by 60-foot loading bay, 89 trailer stalls and 151 parking spaces.

Dermody Properties East Region Partner Gene Preston said in a statement, "This facility offers well-designed, efficient space for manufacturing, warehouse, distribution and ecommerce companies. The property’s proximity to I-78 offers outstanding access to all of eastern Pennsylvania and the greater New York consumer population bases."

Dermody Properties has invested in more than 83 million square feet of industrial space since its launch in 1960, according to its website.

Monday, December 30, 2019

Impulse Dynamics Inks Deal for Headquarters Near Philadelphia

Medical device company Impulse Dynamics has leased 18,000 square feet of office space for its headquarters at Gateway Business Park in Mount Laurel, New Jersey.

The 78,599-square-foot building at 523 Fellowship Road was built in 1986. Spanning 5.8 acres, the single-story facility is less than 12 miles from downtown Philadelphia.

Chewy to Bring 1,000 New Jobs, 1M SF Fulfillment Center to Northeastern PA

by John Jordan Globest.com
State officials announced earlier this week that the growing online pet merchandise company Chewy will be expanding its operations in Lackawanna County that will create at least 1,000 new jobs in the state.

The firm, which is co-headquartered in Dania Beach, FL and Boston, has committed to spend approximately $35 million in its expansion in Lackawanna County with a 1-million-square-foot build to suit location in Archbald Borough.
The new fulfillment center will be Chewy’s third Pennsylvania location. The company maintains customer service centers in Hollywood, FL and Dallas; pharmacy operations in Louisville, KY and nine fulfillment centers across the country

Chewy will be located in a facility in the Valley View Business Park, a mixed-use business park, part of a 1,300-acre development project, developed by The Greater Scranton Chamber of Commerce, using several funding sources, including support from the Commonwealth of Pennsylvania through various loan and grant programs.

Chewy received a funding proposal from the Pennsylvania Department of Community and Economic Development for the project. The proposal includes a $582,000 workforce development grant. In addition to the 1,000 new jobs, the company has committed to retain 2,401 existing jobs throughout the state over the next three years.

“We’re thrilled to continue our growth in Pennsylvania with the opening of Chewy’s third fulfillment center in the state and tenth in the country,” said Pete Krilles, VP, corporate real estate and facilities for Chewy. “The launch of this new location will create 1,000 new, full-time jobs, deepening our economic investment in the northeast Pennsylvania region. In addition, it will further extend our delivery network across the Northeast and Midwest, enhancing the customer experience by providing even faster order delivery times.”

Monday, December 23, 2019

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PA Apartment Complex Trades for $5.7 Million

by John Jordan Globest.com
The 96-unit Meadowbrook Lane Apartments community here has traded for $5.7 million.

The 96-unit development at 881 Meadowbrook Lane was built in 1987 and is situated on 4.25 acres. The complex features 96 one-bedroom units in two-story row apartments. Each unit includes a washer and dryer, individual entrances and a balcony or patio with one parking space.
The buyer of the property was not identified.

“This was an excellent opportunity for the purchaser to acquire a value-add property and enter a new market. The purchaser plans to complete renovations on units as they turn over.”
The property is located in south central Pennsylvania in the Cumberland Valley region. Chambersburg is surrounded by large Amish and Mennonite farm communities. While the cost of living is low in the region, the economy is mainly agriculturally-based with manufacturing being the largest sector in terms of payroll.

Major employers in and near the town include Summit Health Services/Chambersburg Hospital, Chambersburg Area School District, Franklin County government, Ventura Foods, Wilson College and Letter Kenny Army Depot and Camp David nearby.


The Canopy Philadelphia Center City to Open in Spring 2020

by John Jordan Globest.com
National Real Estate Development LLC reports that it will be adding a new 236-room Hilton-branded hotel to its East Market development in Center City here.

The Washington, DC-based firm, which is the development arm of National Real Estate Advisors, has announced the addition of Canopy Philadelphia Center City, which will be part of the Hilton portfolio. The hotel is scheduled to open in the spring of 2020 at 1180 Ludlow St.
Designed by BLT Architects and being developed as an adaptive reuse of the historic Stephen Girard Building, Canopy Philadelphia will feature a signature restaurant and bar program, which will include an American brasserie with French influence. Additionally, amenities and services will include the Canopy Bike Program, a complimentary evening tasting of wine, spirits and beer, and approximately 3,600 square feet of indoor and outdoor meeting space.

“Canopy is thrilled to be joining the East Market neighborhood in Center City Philadelphia,” says Gary Steffen, global head, Canopy by Hilton. “Our hotels are located in the most desirable neighborhoods across the globe, so when it came time to determine a location for our new property here in Philadelphia, the choice was easy. East Market has everything visitors look for, including immediate access to world class shopping, restaurants, popular tourist destinations and public transportation.”
Launched in 2014, there are currently 12 Canopy properties open around the globe and more than 40 under development across 13 countries and territories.

Bounded by Market, Chestnut, and 11th and 12th streets, the East Market project has transformed the city’s primary east-west corridor into a full block of stores, popular restaurants, creative office spaces, including Design Center Philadelphia, MOM’s Organic Market, Wawa, Iron Hill Brewery, City Fitness, District Taco and WeWork. The project also includes two brand new luxury apartment towers—The Ludlow and The Girard.

The East Market project is owned on behalf of a client by National Real Estate Advisors, LLC; Joss Realty Partners, a New York-based private real estate investment firm; Young Capital LLC, a Philadelphia-based real estate investment firm affiliated with Classic Management, Inc.

Thursday, December 19, 2019

Nine Building Medical Office Portfolio in Four States Changes Hands

By John Jordan Globest.com
A nine-building medical office portfolio of properties located in Pennsylvania, Illinois, Minnesota and Virginia was traded.

The portfolio totals approximately 470,000 square feet. The buyer or seller or financial terms of the transaction were not disclosed.  The unidentified buyer purchased the property in a sale that closed Dec. 13.

“This portfolio offered the opportunity to buy a critical mass of medical assets with exposure to some of the top health systems in the country, including Advocate Aurora Health, Einstein Health and INOVA Health System."
The nine-building portfolio included the 95,043-square-foot Advocate Sherman Medical Building in Elgin, IL; the 36,413-square-foot Oak Lawn Medical Building in Oak Lawn, IL; the 60,558-square-foot High Pointe Health Campus in Lake Elmo, MN; the 71,685-square-foot Einstein Medical Building in East Norriton, PA; the 35,405-square-foot Sterling Medical Building in Sterling, VA;, 118,081 square feet across Pavilion I & II in Duluth, MN and 52,105 square feet across CentreMed I & II in Centreville, VA. The portfolio featured more than five years of weighted average lease term.

Solomiany marketed the debt to various life insurance companies, banks and debt funds. The buyer ultimately decided to bifurcate the portfolio into two separate portfolio loans to achieve the best terms.

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TF Cornerstone Enters Philadelphia Market with Macy’s Retail Space Buy

by John Jordan Globest.com
TF Cornerstone of New York City has entered the commercial market here with the purchase of the retail space at the storied Wanamaker Building here.

The retail component of the historic property at 1300 Market St. totals 435,000 square feet across three floors that is occupied by Macy’s.
TF Cornerstone’s acquisition covers the ground, second, and third floors of the 12-story building. The space has ground-floor frontages on all four sides of the building, including Market and Chestnut streets.

“At TF Cornerstone, we are always looking for unique opportunities in key and growing markets to expand our diverse portfolio,” says Jake Elghanayan, principal of TF Cornerstone. “The Wanamaker Building, and in particular its Grand Court, serves as a historic and cultural landmark in the center of Philadelphia and we are excited to be associated with its past and a part of its future.”

No financial terms of the transaction were disclosed. The Wanamaker Building is owned by Rubenstein Partners and Amerimar Enterprises Inc.

TF Cornerstone’s portfolio throughout the Northeast now totals more than 12 million square feet in New York City, the Washington, D.C. region, and most recently in Philadelphia.

Elsewhere, Globest.com reported that TF Cornerstone and Trinity Place Holdings had  entered a joint venture to acquire 250 North 10th St., a 234-unit apartment building in Williamsburg, Brooklyn.

Monday, December 16, 2019

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Counter Capital Management Buys Apartment Building in Philadelphia’s Old City Neighborhood

Counter Capital Management, an out-of-state joint venture between real estate industry veterans Christian Dalzell and Mukang Cho, has purchased Shirt Corner Apartments in Philadelphia’s Old City neighborhood from local investment shop Alterra Property Group for $22 million, or about $355,000 per unit.

The four-story building at 251-259 Market St. includes 62 apartments and one commercial space leased to Snap Kitchen, a national health food chain. Completed in 2015, the four-star property includes a mix of studio, one- and two-bedroom floorplans ranging from 423 to 1,395 square feet.

Amenities include bicycle storage, a fitness center, a package room and off-street parking.

"Old City has been one of the strongest markets in Philadelphia over the last 18 months in terms of rental growth. We believe this neighborhood will have the most upside in rent growth over the next five years," Wellar said in a statement.

Friday, December 13, 2019

Smead Capital Management Picks West Conshohocken for East Coast hub

Jeff Blumenthal Reporter Philadelphia Business Journal
A Seattle-based investment adviser has selected the Philadelphia region for its East Coast expansion.

Smead Capital Management in January will open an office in West Conshohocken, saying it will serve as an East Coast sales hub to provide better service to clients across the eastern seaboard. By planting a flag in the northeast, Smead said it is also reducing the time needed for travel to serve clients in the region.

With just over $2.2 billion in assets under management, Smead is ranked No. 16 in the Puget Sound Business Journal’s latest List of the largest asset managers. In Philadelphia, that would be good enough for No. 23.

Smead’s decision to open an office in the Philadelphia suburbs is due to its attractive cost of living and housing, tax assessment in the region and accessibility to Smead’s client base via planes, trains and automobiles.

The office will be located at Four Tower Bridge — at 200 Barr Harbor Drive near the intersection of River Road and Matsonford Road. A spokesman for the firm declined to share the size of the office or length of the lease but said they plan to stay in the building "for the long haul."

Scott Herdemian, a 2011 graduate of Villanova University who has led East Coast sales for Smead since 2014, will oversee the office and receive a promotion to senior vice president. He will be joined by two other employees in building an East Coast team.
Full story: https://tinyurl.com/vx9efb6

Wednesday, December 11, 2019

Geodis Signs Large Industrial Lease in Allentown, Pennsylvania

Transport and logistics company Geodis has leased a 223,507-square-foot distribution building at Prologis Lehigh Valley West in Allentown, Pennsylvania.

The single-tenant facility at 7189 Ambassador Road includes 42 loading docks, two drive-in bays, 52- by 50-foot column spacing and a 32-foot clear ceiling height. Built by the landlord, Prologis, in 2018, the four-star property spans 25.3 acres less than 12 miles from Lehigh Valley International Airport.

Philly Office Tower Secures $388M Refinancing

by John Jordan Globest.com
The joint venture of Nightingale Properties and Wafra Capital Partners has secured a $388-million in refinancing deal for its 1500 Market St. office tower from JP Morgan.

Sources closed to the deal say the loan includes a large component for leasing costs and other property improvements.
1500 Market St. is a 1,759,410 square-foot, Class A office and retail asset in the Market Street West submarket.

1500 Market is located in the heart of Philadelphia’s CBD, and is the only office complex in Philadelphia CBD that features its own on-site subterranean parking garage, as well as underground access to Philadelphia’s best-in-class transportation network (SEPTA). The complex’s Centre Square offers numerous food options, retail offerings, conference facilities and a fitness center.
1500 Market consists of two towers, rising 36 floors in the East Tower, and 43 floors in the West Tower, which are connected by a three-story atrium and a 450-spot parking garage that offers direct access to Philadelphia’s regional rail and subway lines.

The property also is known for the Claus Oldenburg “Clothespin” sculpture that stands at its front plaza and, as a result, it is often referred to as the Clothespin building.

“The Philadelphia office market has seen immense momentum and rent growth over the past few years and the well capitalized Nightingale and Wafra partnership is in ideal position to capitalize on the favorable market dynamics,’ says Walker & Dunlop’s Rosenberg.

The Nightingale/WCP JV is currently the second-largest office landlord in Philadelphia, the largest privately-owned office landlord in Philadelphia, controlling approximately a quarter of the office inventory in the CBD. Wafra is heavily invested in Philadelphia as Nightingale’s capital partner at 1500 Market, 1635 Market, 1835 Market and 1500 Spring Garden. Outside of their joint venture with Wafra, affiliates of Nightingale hold JV interests in The Bellevue and 1418 Walnut in Philadelphia, where it also serves as the property manager.

Tuesday, December 10, 2019

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$70M Gift Will Lead to New Biomedical Research Facility at Thomas Jefferson University

by John Jordan Globest.com
Thomas Jefferson University reports it has received a $70-million gift from philanthropists Sidney and Caroline Kimmel that will facilitate the construction of a new biomedical research building on the campus here.

“This gift will have a profound and lasting impact on Jefferson’s ability to further pursue scientific discovery,” said Mark Tykocinski MD, provost and EVP for academic affairs and the Anthony F. and Gertrude M. DePalma dean, Sidney Kimmel Medical College at Thomas Jefferson University. “The Caroline Kimmel Biomedical Research Building will serve as a magnet for scientific talent and will bolster our status as an R2 National Research University.”
The new facility will expand Thomas Jefferson University’s research capacity and, along with the Bluemle Life Sciences Building and Jefferson Alumni Hall, will create a “research corridor” along Locust Street.

Being physically connected with Bluemle will foster connections with researchers in the Sidney Kimmel Cancer Center, where Caroline Kimmel serves as a member of the Advisory Council, and the larger Jefferson research community.
The Kimmels have given more than $200 million over the years including: providing cornerstone funding to establish the Sidney Kimmel Cancer Center in 1995, as well as transformational support for research into the prevention of cardiovascular disease, and Jefferson’s largest-ever gift of $110 million to name the Sidney Kimmel Medical College at Thomas Jefferson University in 2014.

Sidney Kimmel established apparel company Jones New York, and during the 1970s and 1980s became one of the major players in the women’s apparel industry. Jones went public in 1991, adding many notable brands to its line including Anne Klein, Nine West, Gloria Vanderbilt and Stuart Weitzman. Kimmel served as CEO until 2003 and as chairman until 2014, when The Jones Group was sold for $2.2 billion.

Thomas Jefferson University is also home of the Kanbar College of Design, Engineering and Commerce, and delivers 160 undergraduate and graduate programs to 8,400 students in architecture, business, design, engineering, fashion and textiles, health, science andn social science.

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Part 1 Part 2 www.omegare.com

Friday, December 6, 2019

Black Friday, Thanksgiving Weekend Sales Bolster PREIT’s Strategy

by John Jordan Globest.com
PREIT reports robust sales at its recently opened redeveloped properties during Black Friday and the Thanksgiving weekend.

The locally-based REIT states that sales during that prime selling period set up their recently opened redevelopments—Fashion District Philadelphia, Woodland Mall and Plymouth Meeting Mall—for a strong holiday season.
In just over two months since opening, Fashion District in Philadelphia has welcomed more than 2 million visitors, an achievement for a property marching toward stabilization. Upcoming openings of key destination tenants, including Round 1, Wonderspaces, Primark and Sephora are likely to bolster these results, PREIT officials state.

The opening of the highly-anticipated Woodland Mall expansion wing has been a success. Traffic for the Black Friday weekend was up 29% at the Grand Rapids, MI complex over the same period last year with many retailers reporting sales in excess of their goals.

Recent openings at the Woodland Mall include high-impact tenants, many of which are exclusive and new-to-market such as Von Maur, Urban Outfitters, The Cheesecake Factory, Tricho Salon and Black Rock Bar & Grill.

As part of its ongoing anchor repositioning effort, PREIT welcomed new retail, dining and experiential concepts for consumers at its Plymouth Meeting Mall. Most recently, Dick’s Sporting Goods, Burlington, Miller’s Ale House and Edge Fitness have opened their doors in the former Macy’s space. Benefitting from a strategic location in the Philadelphia suburbs, traffic was up 24% over last year’s Black Friday weekend at the shopping center in Plymouth Meeting, PA.

“The work we have done in strengthening our portfolio continues to deliver exceptional results,” said Joseph F. Coradino, CEO of PREIT. To experience this notable upswing in traffic at the properties where we’ve made significant investments is a testament to the strength of our strategy and the potential for a sustained, long-term impact on sales productivity and shareholder value.”

Wednesday, December 4, 2019

CAPREIT Adds Suburban Philadelphia Apartment Complex to Growing Portfolio

CAPREIT has purchased the 220-unit Vinings at Christiana apartment complex in Newark, Delaware, from Denver-based Alden Torch Financial for $24.7 million, or about $112,000 per unit.

The garden-style complex at 200 Vinings Way includes a mix of one-, two- and three-bedroom units ranging from 717 to 1,097 square feet in 10, three-story buildings. Completed in 2001, the property spans 15.4 acres less than four miles from University of Delaware.

Amenities at the complex include a business center, clubhouse, fitness center, laundry facilities and storage space.

Headquartered in North Bethesda, Maryland, CAPREIT has closed approximately $5 billion in real estate transactions to date, according to its website.

Astoban Investments Buys Freeman's Former Headquarters for $14.3 Million

Local full service development firm Astoban Investments has purchased the former headquarters of Freeman’s auction house in Philadelphia’s Center City from a private family trust for $14.3 million, or about $330 per square foot.

The 43,284-square-foot, six-story building at 1808-1810 Chestnut St. was completed for the auction house in 1924.

Astoban Investments said in a June application to the Philadelphia Historical Commission that it wanted to convert the property into condos.

Freeman's plans to move to an office building anchored by Aramark at 2400 Market St. on the Schuylkill waterfront.

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Sunday, December 1, 2019

Vastgood, RW Partnership Spends $127M for Giant Supermarket-Anchored Portfolio in PA

by John Jordan Globest.com
A partnership of Vastgood Properties, LLC of Port Washington, NY and RW Partners, Inc. of Conshohocken, PA has acquired a portfolio of seven Giant supermarket-anchored shopping centers in mid-to-eastern Pennsylvania for $127 million.

The deal was announced by New York City-based Meridian Capital Group, which arranged $97 million in acquisition financing for the new ownership. The 10-year CMBS loan features a rate of 3.87% and five years of interest-only payments with the balance on a 30-year amortization schedule. The transaction was negotiated by Meridian VPs Bryan Kallenberg and Meyer Ovadia, who are both based in the company’s New York City headquarters.
The portfolio consists of Giant supermarket-anchored shopping centers spanning a total of 548,482 square feet. The properties include Aston Center in Aston, PA; AYR Town Center in McConnellsburg, PA; Creekside Marketplace in Hellertown, PA; Parkway Plaza in Mechanicsburg, PA; Scott Town Center in Bloomsburg, PA; Spring Meadow Shopping Center in Wyomismesing, PA and Stonehedge Square in Carlisle, PA.

The Giant stores represent approximately 75% of the portfolio’s total gross leasable area and generate 80% of the portfolio’s revenue. Giant Food Stores, LLC is a wholly-owned affiliate of Ahold Delhaize N.V., the fourth largest retail grocery company in the world. All the properties feature long-term leases for the Giant stores and renewal options extending decades.

Tuesday, November 26, 2019

SORA West Conshohocken Financed by CanAm with $40M in EB-5 Money

by John Jordan Globest.com
CanAm Enterprises reports it has closed a $39.5-million EB-5 investment to help finance the construction of a new office tower at SORA West, a large-scale multi-faceted development here.

The office tower will be fully leased by global pharmaceutical and healthcare products distribution firm AmerisourceBergen. The office complex will serve as the global headquarters for the company.
The 11-story, approximately 430,000-square-foot office tower is the first phase of SORA West, which will also include a world-class hotel facility with significant restaurant space and a rooftop lounge.

The property is being developed by Keystone Property Group, which broke ground on the project in April of this year.
The EB-5 Immigrant Investor Program is administered by the United States Citizenship and Immigration Services. The EB-5 Program provides qualified foreign investors with the opportunity to earn a conditional, or temporary, two-year green card in return for investing $900,000 in projects located in high unemployment areas that create at least 10 permanent full-time jobs for US workers.

New York City-based CanAm Enterprises has financed 60 projects and raised nearly $2.9 billion in EB-5 investments. More than $1.3 billion in EB-5 capital from more than 2,600 families has been repaid by CanAm’s 40 projects to date.

CanAm exclusively operates seven USCIS-designated regional centers that are located in the City of Philadelphia, the Commonwealth of Pennsylvania, the metropolitan regions of New York and New Jersey, the states of California, Hawaii, Florida and Texas.

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Friday, November 22, 2019

Construction Starts on New Office Tower in Philly Suburb

by John Jordan Globest.com
Seven Tower Bridge. Photo courtesy of Skidmore, Owings & Merrill
Partners American Real Estate Partners, Oliver Tyrone Pulver Corp. and global investment management firm Partners Group have broken ground on the 14-story, 260,000-square-foot Seven Tower Bridge office tower here.

The project, which is scheduled to be completed in November 2020, has already secured a 130,000-square-foot lease with global private market asset management firm Hamilton Lane, which will begin occupancy of its space at the property in 2021.
This groundbreaking marks not only the next step in our partnership with Oliver Tyrone Pulver and Partners Group, but also another opportunity to further support the economic vitality of this region,” says Doug Fleit, CEO of American Real Estate Partners. “Seven Tower Bridge captures the tenant demand for expansion and relocation attracting major financial and technology businesses to Conshohocken, one of Philadelphia’s fastest growing suburbs.”

The Class A office tower designed by Skidmore, Owings & Merrill features a travertine marble lobby with floor-to-ceiling glass walls, river view collaboration space and an outdoor patio. Over four levels of underground parking, the first office floor is 50 feet above grade, offering unobstructed views and natural light. Other amenities include riverfront walking paths, a 30-mile bike trail, fitness center, bike room and two nearby Marriott hotels.
The building is projected for early 2021 tenant occupancy, and Oliver Tyrone Pulver will lease 4,000 square feet of space in the new building, providing an onsite owner-manager presence at the property. Shoemaker Construction, the building’s general contractor, will also lease 5,000 square feet at Seven Bridge Tower.

Located along the Schuylkill River and at the intersection of I-76, I-476 and the Fayette Street Bridge, the building is located one block from the SEPTA regional rail station and adjacent to Philadelphia’s Main Line suburbs.

Construction financing is provided by Mesa West Capital, LLC, a unit of Morgan Stanley Investment Management.

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Thursday, November 21, 2019

Lidl Signs Lease to Open New Store in Reading PA

German global discount supermarket chain Lidl has leased a 38,298-square-foot former Food Lion at Spring Market Shopping Center in Reading, Pennsylvania.

The 69,478-square-foot center at 3564 Penn Ave. is less than five miles from Reading Area Community College.

Lidl, which operates more than 10,000 stores across Europe and the United States, plans to move in to its new space in March 2020.

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Wednesday, November 20, 2019

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Acts Retirement-Life Communities moving HQ to Fort Washington

Natalie Kostelni Reporter Philadelphia Business Journal
Acts Retirement-Life Communities, which has maintained its headquarters at 375 Morris Road in West Point for the last three decades, has paid $11.9 million for a building in Fort Washington for its new headquarters.

Acts purchased 420 Delaware Drive, an 80,000-square-foot office building originally built in 2006 by Liberty Property Trust and subsequently sold by the real estate investment trust in 2013 as part of a portfolio sale to Somerset Properties. Acts bought the building from an entity affiliated with Somerset.

The company will occupy the entire building and consolidate three locations and a total of 150 employees into the new space. Acts expects to complete its move in December. As a result of buying the Fort Washington building, Acts has put up for sale 375 Morris, a 51,170-square-foot building, and 812 N. Bethlehem Pike, a 27,347-square-foot building in Ambler. It will retain another 16,800-square-foot building it owns at 1936 West Point Pike in West point.
Full story: https://tinyurl.com/wwmlblb

Nutella & Tic Tac maker opens large distribution center in Central Pa.

By Natalie Kostelni  – Reporter, Philadelphia Business Journal
First Industrial Realty Trust will officially opened on Monday a new 739,000-square-foot warehouse-distribution center in Central Pennsylvania that is fully leased to Ferrero Inc., an Italian global confectionery company that owns such brands as Ferrero Rocher, Nutella, Tic Tac and Kinder.

The new facility at 112 Bordnersville Road in Jonestown will be used to distribute brands Ferrero USA acquired from NestlĂ© including Butterfinger, Baby Ruth, 100Grand and Crunch. Through the NestlĂ© acquisition, the company is now the third largest maker of candy and other sweets in the country. The facility is key to Ferrero USA’s growth, giving it ample capacity to distribute its brands throughout North America, the company said.

Central Pennsylvania and the Lehigh Valley are among the country’s top industrial markets. As a result of their highway networks and other characteristics, within a one-day truck drive, or 10 hours, a company can cover 500 to 600 miles and reach about 40% of the population of the United States and half of its purchasing power.
Full story: https://tinyurl.com/u6hpjrq

Tuesday, November 19, 2019

Limelight Bio Signs Large Lease in Philly's University City

Across the globe, Philadelphia is known more for its homegrown hip hop giants and boxing greats than for its long history of health sciences innovation. But as the home of the United States' first teaching hospital, surgical amphitheater and medical library, Philadelphia continues to build on its legacy as a healthcare powerhouse.

Since late 2018, Philadelphia has seen a surge of expansions by companies using innovative gene therapy techniques to treat cancer and rare diseases. If momentum continues at its current pace, the city even stands a fighting chance at surpassing biotechnology hubs like the San Francisco Bay Area and Boston/Cambridge as the U.S.’ center for healthcare innovation over the next decade.

In October, Limelight Bio joined the list of life sciences firms, including Iovance Biotherapeutics, Spark Therapeutics and Amicus Therapeutics, which have all committed to major Philly-area growth plans over the past 13 months.

Limelight Bio has leased 25,000 square feet, taking the entire 16th floor at Healthpeak Properties’ Science Center at 3535 Market. The firm plans to move into its new space by the second quarter of 2020.

Among the recent batch of life sciences expansions, this deal is unique for at least two reasons:

Limelight Bio Is a Product of the University of Pennsylvania’s Pennovation Center

Unlike Iovance and Amicus, which are headquartered out-of-state but have announced recent Philadelphia expansions to enhance their collaboration with Philly’s wealth of healthcare research institutions, Limelight Bio is strictly a product of hometown innovation.

When it takes occupancy at 3535 Market, the venture capital-backed firm will be moving out of its birthplace, the Pennovation Center on Gray’s Ferry Avenue. Owned and operated by the University of Pennsylvania, Pennovation Center is a business incubator which offers startups a mix of coworking space, lab facilities and an auditorium/event space.

Limelight Bio’s growth is an early sign that the work at Pennovation Center, which opened in 2016, is bearing fruits for Philadelphia’s economy and real estate markets. It also foreshadows future expansions that will come from the Cambridge Innovation Center, which opened a 125,000-square-foot incubator at 3675 Market less than one year ago.

This Lease Involves a 1970s-Built Property, Rather Than a New Development

Due to their advanced technological needs, most recent leases by gene therapy firms including Iovance and Amicus have gone to newly developed properties. While these expansions provide a huge boost to Philadelphia’s economy, and to developers’ profits, they do little to help owners of already existing properties who are trying to fill their space.

3535 Market was built in 1973, but since losing Children’s Hospital of Philadelphia (CHOP) as an anchor tenant in 2017, the building’s owner, Healthpeak Properties, completed a $40 million renovation. Healthpeak added a new lobby and facade, while replacing its windows, roof and cooling tower.

These renovations have brought revitalized office space to market in University City at a critical time. With leasing improving and no new office projects likely to deliver before 2021, 2.0 University Place and 3600 Market are the only other modern office properties west of 32nd Street near the heart of Penn’s Campus with more than 20,000 square feet available for immediate occupancy.

The recent upgrades at 3535 Market even convinced CHOP to return to some of its former space within the property. With CHOP continuing to grow and the office market tightening, the healthcare giant recently agreed to move back into a full floor at 3535 Market during the first quarter of 2020.

In higher rent, university-oriented office submarkets like Cambridge’s Kendall Square and Silicon Valley’s Palo Alto, tenant demand is strong enough that tech firms clamor for space, not just in high end new developments, but also existing properties. Limelight Bio’s lease at 3535 Market helps push University City further in that direction as the submarket enters a new decade with plenty of cause for optimism.

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Monday, November 18, 2019

Last-Mile Warehouses Within Philly City Limits Are No Sure Thing

Matthew Rothstein, Bisnow East Coast

The same issues that have long sent businesses and developers to the suburbs — high real estate taxes, strong unions and slow-moving or complex land entitlement processes — remain.  But demand has been so strong for last-mile distribution centers close to Center City that suburban rents have risen to narrow the gap. Now, Philly has a 4M SF pipeline of industrial development. "Historically, [Philadelphia] was just not in favor at all, but just in the last two to three years there has been new investor interest, new ground-up development," Cohen said. "It’s the first time it’s made economic sense in a long time, which is consistent with the last-mile trend."

 Since Philly's dense population core is such a small portion of its total size, it stands to reason that the massive area that is Northeast Philadelphia would be targeted for industrial development, and to a degree that has been happening. The first speculative warehouse in over 30 years is under construction in that area — the Philadelphia Logistics Center. But one of the chief advantages the logistics center has is close access to two major interstate highways: Interstate 95, which provides direct access to Center City, and I-276, a quick way to get either to New Jersey or to the western suburbs. As vast as Northeast Philly is, a small percentage of it has access to those crucial thoroughfares.

“If you’re in Northeast Philly and have to work your way back a couple of miles to I-95, it may take you 10 minutes to go through those streets," NFI Industries Chief Development Officer Michael Landsburg said. "In Bucks County, it may just take three minutes.” The urban street grid makes proximity to highways even more important than it is in the suburbs or rural distribution hubs like the Lehigh Valley for any facility that uses trucks to bring in or ship out goods. Complicating matters further is that truly undeveloped land suitable for industrial construction simply doesn't exist within city limits. What land is there has a history of some sort. The Philadelphia Industrial Development Corp. has been the primary source of warehouse-suitable land coming to market, but it has all but run out of space to offer, Maister said.  PIDC is also leading the charge in making land contaminated by previous manufacturing suitable for new development. The process of environmental remediation, whether PIDC or a private company carries it out, can add years to a project's development timeline, hampering the quasi-public organization's ability to replenish its supply. These difficulties have not been enough to deter investors from aggressively seeking deals, all interviewees for this article agreed. Because rent isn't a large portion of warehouse occupants' bottom lines, capital sources feel that if their development partners can turn a site into a finished product and lease it up, their deal is a slam dunk. Those on the ground are less certain. “The dynamics of the markets, the prices being paid and the rents required to be in those locations, that’s surprising to us," Landsburg said. "It will be interesting to see if [landlords] can hit their pro formas ... It remains to be seen what kind of rents these developments are going to get, because a lot of them haven’t leased up."

NFI, a third-party logistics operator based in Camden that owns and leases warehouse space across the country, does not hold any space within Philadelphia. One of the main reasons for that, Landsburg said, is that inner-ring suburban areas like Bucks County and South Jersey take about the same amount of time to access Center City as the expansive Northeast. "You could probably serve the same consumers more cost-effectively in South Jersey," Landsburg said. For last-mile distribution, many retailers and logistics companies have been trying to figure out how close is close enough. That question was spurred on by Amazon's transformational two-day shipping, which the entire retail market has scrambled to match. With Amazon looking to move the goal posts again to one-day delivery, some may wonder if that will play more into Philadelphia's hand. But the e-commerce giant's ballooning costs in the past two quarters may lead others to believe two days is enough — and two-day shipping doesn't require logistics networks to be as close. "Everybody who's been doing store fulfillment and e-commerce fulfillment out of one facility is trying to get to two days," Maister said. "The drive for one-day and same-day shipping is coming from one major player, and everyone has to decide if they want to or can catch up."


Ensemble Real Estate Buying Four Office Buildings at Philly Navy Yard

by John Jordan Globest.com
Ensemble Real Estate Solutions and Investments has closed on the purchase of two Navy Yard office buildings totaling 156,000 square feet and expects to close on another two office properties at the South Philadelphia complex in the next month.

The Phoenix-based firm reports it has acquired One Crescent Drive, which totals more than 76,000 square feet and the 80,050-square-foot 201 Rouse Boulevard office building from Liberty Property Trust. Ensemble says it has a deal to acquire 150 Rouse Blvd., a 56,412-square-foot office building and 1200 Intrepid Ave., a 91,971-square-foot office property at the Navy Yard from Liberty Property Trust. That deal is expected to close in the next 30 days.
No financial terms of the transaction were disclosed. Liberty Property Trust reported as part of its third quarter financial results in late October that it had sold two office buildings at the Philadelphia Navy Yard totaling 156,000 square feet for $60.7 million.

Ensemble owns the Courtyard Marriott at the Navy Yard and has several other projects in development there: the Iovance Biotherapeutics building in partnership with Gattuso Development, the conversion of the Marine Barracks building to a historic high-end hotel, and an additional mixed-use and extended stay facility.
“We’re incredibly excited to continue our investment in Philadelphia’s historic Navy Yard, which has emerged as the leading area in the city for innovation and collaboration,” says Kam Babaoff, chairman of Ensemble. “The transformation the Navy Yard has seen over the past decade has been staggering, and we look forward to deepening our presence and remaining in good company with the many other great businesses there.”

Ensemble will provide property management services for the portfolio from its regional office, soon to be established at the Navy Yard.

The firm also owns and is developing a new Hilton Garden Inn in Camden, NJ—the first new hotel the City of Camden has seen in more than 50 years.

Friday, November 15, 2019

New York Investor Expands Philadelphia Area Retail Presence With $29 Million Acquisition

New York-based Katz Properties Retail has purchased the Shops at Blue Bell in Blue Bell, Pennsylvania, from Clarion Partners for $29 million, or about $280 per square foot.

The 103,580-square-foot center at 1750 DeKalb Pike was built in 1995. The 98% leased property is anchored by a Giant grocery store.

 Headquartered in New York, Clarion Partners originally purchased the property in December 2010.

With this acquisition, Katz Properties Retail now owns four retail properties in the Philadelphia metropolitan area including: Plaza at Bensalem in Bensalem; Red Lion Plaza in Philadelphia; and Richland Marketplace in Quakertown.

Monthly Economic Outlook — November 2019 (Video)


New Jersey EDA Awards Opportunity Zone Grants to Four Towns, One County

The New Jersey Economic Development Authority has awarded four Garden State municipalities and one county $100,000 each, based on their strategies to attract federal Opportunity Zone investment, which in many cases involves real estate development.

Gov. Phil Murphy earlier this year announced the Opportunity Zone Challenge Program, which he described as a "competitive grant process" that would give a total of $500,000 to towns or jurisdictions that "come up with the best game plan for how they would tackle their opportunity zones."

The EDA, based in Trenton, New Jersey, administered the program and has chosen Cumberland County, Hackensack, the borough of Flemington, Paterson and Jersey City as grant winners.

"The five plans that will receive funding through this round of the challenge represent the kind of proactive thinking we need to not only address the challenges we face today but also to lay the groundwork for long-term, sustainable economic growth," EDA Chief Executive Tim Sullivan said in a statement.

Championed by U.S. Sen. Cory Booker, the federal Opportunity Zone program was created as part of the Tax Cuts and Jobs Act of 2017. The goal is to drive long-term private capital into designated low-income urban and rural communities. The lure is providing investors, including real estate developers, tax breaks on capital gains. The Garden State has 169 opportunity zones in 75 municipalities.

The EDA is trying to help what it described as "strained local governments" in New Jersey to actively draw investment within their borders by encouraging them to draft specific plans to compete for capital. There are over 8,700 Opportunity Zones in the 50 states, Puerto Rico, Washington, D.C., and the U.S. territories.

Jersey City will do a financial feasibility study leading to an investment prospectus regarding its two Opportunity Zones in the Journal Square area, which is envisioned as the future site of a cultural arts district, according to the EDA.

Paterson plans to create a user-friendly catalog of zoning codes and regulations in each of the city’s eight Opportunity Zones to guide investors on their projects.

Hackensack's game plan is to do a Life Science Zone Assessment Report, building on a prior report that found that specific areas within the city's Opportunity Zones "would serve as a feasible location for the construction of a life science park," according to the EDA.

The municipality of Flemington's strategy is to hold a series of in-depth stakeholder meetings to help create community participation in Opportunity Zone strategic planning; conduct a borough-wide examination of zoning to reduce regulatory hurdles and encourage development; and craft new marketing plans to showcase the borough's potential Opportunity Zone investment projects.

Flemington, completely covered by one opportunity-zone tract, in July held a conference for investors where it discussed shovel-ready projects in town.

Douglas Development Corp. Enters Delaware Market With Acquisition of PNC Bank Center

Washington, D.C.-based Douglas Development Corp. has purchased PNC Bank Center in Wilmington, Delaware, from AIG Global Asset Management for $24 million, or about $83 per square foot.

The transaction marks Douglas Development Corp.’s first acquisition in Delaware.

Designed by Vlastimil Koubek, the 289,303-square-foot building at 222 Delaware Ave. was completed in 1987. Major law firm tenants in the 18-story tower include Eckert Seamans, Fish & Richardson, Drinker Biddle & Reath and Duane Morris, among others.

The building is in close proximity to the I-95 corridor and located in an area where there is a lot of activity and redevelopment occurring, namely the redevelopment of the DuPont Building which includes DECO, a contemporary food hall.

The seller, which originally purchased the property in December 2017 when the facility was 63% occupied.

"New ownership has plans for capital improvements that include a state-of-the-art fitness center, a new conference center and upgrades to the main lobby, common areas and restrooms."

According to its website, Douglas Development Corp.’s portfolio includes more than 10 million leaseable square feet and over 5 million square feet of developable real estate in the pipeline.

Edge Fitness Signs Retail Lease Near Philadelphia

Edge Fitness has leased 48,776 square feet at Echelon Village Plaza in Voorhees, New Jersey.

The gym chain plans to move in summer 2020.

The shopping center at 1120 White Horse Road spans 21.2 acres less than 16 miles from downtown Philadelphia.

Retail Sector Forecast from Moody's Analytics Reis (Video)


Wednesday, November 13, 2019

Strategic Funding Alternatives Buys Cherry Hill Office Portfolio for $33M

by John Jordan Globest.com
The three-building Woodland Falls office complex here has changed hands in a $33-million deal.

Moorestown, NJ-based Strategic Funding Alternatives acquired the 217,986-square-foot complex from Crown Properties.  SFA secured a 10-year, $24.75-million fixed-rate acquisition loan for the portfolio that is located near Center City Philadelphia.

The Woodland Falls corporate park currently has an occupancy rate of approximately 97% and is home to tenants that include PNC Bank, Corcentric LLC, Ballard Spahr LLP, 1st Colonial Community Bank and M&T Bank.

SFA managing principal, Jeffery Schneider states, “With its convenient location and parklike setting, Woodland Falls has been a long sought-after corporate park and we look forward to further strengthening its appeal.”

SFA reports it has plans for common area and landscaping improvements to Class A office complex. The deal is largest acquisition to date for the privately-held eal estate investment firm that was founded in 2016.

The Fellowship Business Center NJ Trades for Nearly $10.7M

by John Jordan Globest.com
The Bloom Organization has sold the five-building Fellowship Business Center here to a private investor for $10.675 million.

The deal for the 96,000-square-foot complex within the East Gate Business Park was reported by Ian Richman and Marc Isdaner of Colliers International’s Mount Laurel office, which represented the seller in the deal. The complex was 96% occupied at the time of the sale.

The multi-tenanted complex of office/flex properties benefits from its location that offers access to the New Jersey Turnpike, I-295, Route 73 and Route 38 and is within a half-hour from Philadelphia.

Stuffed Puffs Manufacturing Firm Expands Operations in PA

by John Jordan Globest.com
Chocolate marshmallow manufacturer Stuffed Puffs is expanding its operations in Pennsylvania to a 150,000-square-foot building here in the Lehigh Valley.

The food processor will create 134 new full-time jobs in connection with the expansion, according to state officials. The firm secured approximately $1.1 million in incentives in the form of grants and tax credits from the commonwealth.
The confectionary manufacturer will be located at the former Guardian Life property, owned by JG Petrucci, to manufacture chocolate stuffed marshmallows and plans to make significant improvements to the property. Stuffed Puffs will begin manufacturing operations in May 2020 and has committed to investing $31.5 million in capital funding toward the project.

“Food processing is one of Pennsylvania’s most robust and vibrant industries, supporting thousands of jobs and generating more than $5 billion in sales annually,” says Pennsylvania Gov. Tom Wolf. “It is only fitting that a new, innovative food company would make the commonwealth its new home, and we are proud to make the investment that will turn that plan into reality.”
Stuffed Puffs received a funding proposal from the Department of Community and Economic Development for a $670,000 Pennsylvania First grant, $268,000 in Job Creation Tax Credits, and $140,400 in grants for workforce training and development.

“Stuffed Puffs is the easy new way to make a good old-fashioned American favorite S’mores, even better and it’s delicious also to eat right out of the bag,” says Richard Thompson, managing partner at Factory LLC the parent company of Stuffed Puffs. “At Factory LLC we seek innovation and we know Stuffed Puffs is a big winner and the new plant will support our continued growth, because we can’t make it fast enough.”

Stuffed Puffs initially launched its product exclusively at Walmart stores and will be expanding to other retailers in 2020.

Monday, November 11, 2019

REIT Investing 101: Real Estate + High Yields (Video)


Opportunity Zone: Update (Video)


Skanska Completes 465,000SF Inspira Medical Center in Mullica Hill NJ

by John Jordan Globest.com
A grand opening ceremony was held on Friday celebrating the completion of the new five-story, 465,000 square-foot Inspira Medical Center Mullica Hill here.

The project is the first hospital to open in 45 years in Gloucester County, NJ. Skanska USA constructed the new hospital with partners Array Architects and Leach Wallace Associates using the Integrated Project Delivery approach, which is Skanska’s largest IPD project to date in North America. The approach, which brings together the client, designer and builder to align stakeholders and streamline project execution, created approximately 400 local full-time jobs to the construction site.
The new hospital will provide inpatient hospital care with 210 private rooms, state-of-the-art surgical suites, a modern emergency department with dedicated pediatric and senior ERs, and a maternity center. The project also includes a new central utility plant and solar field, which provides electrical power, heating/hot water and chilled water to the facility.

In addition to the new hospital, Skanska is also building Inspira Health’s new Leading-Edge Cancer Center, which is scheduled to open in early 2020. An attached addition to the main hospital building, the new cancer center spans 120,000 square feet and will provided comprehensive cancer services all under one roof. The addition will also be home to several suites devoted to non-cancer-related clinical and office functions.
This is the third major hospital project for Skanska USA in the Delaware Valley in the last year. Skanska is also building the Women and Children’s Health Building for ChristianaCare in Newark, DE which is slated for completion in 2020, and a new inpatient hospital for Children’s Hospital of Philadelphia in King of Prussia, PA.

Friday, November 8, 2019

PA Approves Funding for Four Expansion Projects

by John Jordan Globest.com
Pennsylvania Gov. Tom Wolf announced on Wednesday new low-interest loan approvals through the Pennsylvania Industrial Development Authority for four business expansion projects in four counties.

State officials note the loans will enable the purchase, construction and renovation of facilities and will help create and retain hundreds of jobs across the commonwealth.
The state approved a $1.25-million loan to tool manufacturer Channellock, Inc. The 15-year PIDA real estate loan at a 1.75% reset interest rate and a $1 million 10-year PIDA machinery and equipment loan at a 2.75% fixed interest rate through the Economic Progress Alliance of Crawford County will allow Channellock to build a 35,000-square-foot addition to the company’s existing 64,427-square-foot manufacturing facility in Meadville.

The new space will be used for the packaging, warehousing, and shipping of finished goods, a portion of which is currently outsourced to a New York-based firm. The construction of the new addition will allow all outsourced operations to be relocated to the Meadville location and be completed by Pennsylvania employees.
This project, coordinated by the Governor’s Action Team, also involves the purchase and installation of new machinery and equipment, which will allow an increase in manufacturing speed and production capacity. The total project cost is more than $10 million. As a result of this project, 360 full-time jobs will be retained within three years, state officials note.

Equipment Reuse International LLC, a construction equipment manufacturer, was approved for a $399,999, 15-year PIDA loan at a 1.75% reset rate through Northwest Pennsylvania Regional Planning & Development Commission for the acquisition of a 50,085-square-foot building in Lake City Borough. Equipment Reuse International has outgrown its current facility and this relocation will provide the company with the additional space needed for current and future growth. The manufacturing space is divided into three 11,900-square-foot bays with overhead doors, and the company has entered into a lease agreement to lease one bay back to the seller. The total project cost is $900,000. The company is expected to retain three full-time jobs and create eight full-time jobs as a result of this project.

Steel pipe manufacturer Piling Solutions, Inc. was approved for a $1.25-million, five-year PIDA machinery and equipment loan at a 2.75% fixed rate through Northeastern PA Alliance to move operations into a larger 225,000-square-foot manufacturing space in Hanover Township, and acquire both used and new steel pipe manufacturing equipment to keep up with customer demand.
A new pipe mill machine will be custom built to allow the company to roll, weld, ultrasonic test, and clean the steel pipe in one seamless process. The company will retain all 37 existing full-time jobs at the new facility and will create 50 new full-time jobs within three years. This project, totaling more than $3.5 million, is part of a larger project coordinated by the Governor’s Action Team, with a total cost of more than $10 million.

The fourth state financing deal involve es Product Evaluation Systems, Inc., an industrial testing company, which was approved for a $601,352,10-year PIDA loan at a 2.75% fixed rate through Economic Growth Connection of Westmoreland to purchase specialized testing equipment that will increase the company’s capacity to test specifically for the aerospace, additive 3D printing, defense and power generation industries. The new equipment will be used in connection with a recent PIDA real estate loan approval that will fund the construction of a 12,150-square-foot pre-engineered steel building with a connecting corridor to the company’s existing 18,000-square-foot facility in Unity Township. The total project cost is $1,594,331. This project will support the retention of 42 full-time jobs and the creation of 8 full-time jobs within three years.

This year, PIDA has approved approximately $45.6 million in low interest loans that have resulted in ab out $94.2 million in private investment and supported 1,443 created and retained full-time jobs.

Wednesday, November 6, 2019

South Jersey Hospice Organization Inks Deal for New Headquarters

Samaritan Healthcare & Hospice signed a 27,600-square-foot lease for its new headquarters in Mount Laurel, New Jersey.

The hospice organization plans to relocate its corporate offices from Evesham, New Jersey, to the single-tenant building at 3906 Church Road in early 2020 upon completion of a complete interior and exterior renovation of the site.

Built in 1977, the single-story facility spans nearly four acres less than 12 miles from downtown Philadelphia.

Owning & Operating Commercial Real Estate (Video)


Tuesday, November 5, 2019

New Lehigh Valley Apartment Development Slated to Open in 2021

DLP Capital Partners, under its parent company DLP Real Estate Capital, secured $23 million in financing for the development of Dream Lehigh Valley, a proposed apartment complex in Wind Gap, Pennsylvania.

Plans for the 200-unit complex include a mix of one-, two- and three-bedroom units averaging 1,210 square feet in nine garden-style buildings. The property will also include a two-story clubhouse with lounge, game room, fitness center and pool, as well as a nature trail and pond.

The site spans 23 acres along East West Street within one mile of PA Route 33, a roadway that directly connects with Interstates 80, 78 and PA Route 22.

The project is slated to be completed in 2021.

DLP Real Estate Capital has more than $800 million in assets under management and has closed over 12,000 real estate transactions totaling more than $2 billion, according to its website.

Real Estate Refinance Pros and Cons - What You Should Know (Video)


Monday, November 4, 2019

Vanguard Expands Presence in Philadelphia Suburb

New York-based Turner Construction Co. completed a 225,000-square-foot facility that will house 1,350 members of Vanguard’s retail investor group on the firm’s 87-acre Malvern West campus in Frazer, Pennsylvania.

The four-story office building at 1300 Brennan Blvd. features an energy-efficient LED lighting system, enhanced energy commissioning and sections of green roof access.

Amenities include a variety of collaborative working spaces, a spacious outdoor terrace, health and wellness facilities and multiple dining options.

Philadelphia-based Erdy McHenry Architecture served as the project's architect.

Vanguard purchased the Malvern West property in 2012 along with two buildings dubbed Orion and Defence. The site is near the company’s main headquarters, comprised of approximately 115 acres and seven buildings.

Vanguard Head of Corporate Real Estate and Facilities Management Paul Begin said in a statement, “After nearly two years of construction, we're pleased to welcome our crew to the Neptune building. Designed to offer improved access to natural light and exterior views, the new office space provides crew with an exceptional environment that enables collaboration and enhances productivity.”

Vanguard, one of the world’s largest investment management companies, has managed $5.7 in global assets as of September, according to its website. In total, Vanguard comprises 56 offices located across 19 cities worldwide, employing approximately 15,600 people in Pennsylvania and more than 22,400 globally.

Keystone sells Blue Bell office buildings

Natalie Kostelni Reporter Philadelphia Business Journal
Keystone Property Group sold for $34 million Four and Five Sentry Park, a three-building office complex in Blue Bell, that totals 196,273 square feet.

Hudson Equities, a Jersey City, N.J., real estate company, bought the properties that were combined 93% occupied by 23 tenants at the time of sale. Four Sentry involves one building while Five Sentry consists of two buildings noted as Five Sentry East and Five Sentry West.

Keystone bought Four and Five Sentry in 2013 as part of a larger acquisition of Mack-Cali Corp.’s Philadelphia suburban office portfolio. The Conshohocken real estate company invested $5 million on improvements to the complex including adding amenities such as a fitness center, conference rooms, lounge and patio area. Other upgrades included a roof deck, facade work and new landscaping. The buildings were put up for sale in July 2018.

Full story: https://tinyurl.com/y5uhfzp7

REIT Market Minute - November 2019 (Video)


The Fed's View on Commercial Real Estate 2020 Part 1 & Part 2 (Video)

Part 1 Part 2 www.omegare.com

Friday, November 1, 2019

Multifamily Update with the National Apartment Association (Video)


Victory Brewing Co. Expands Footprint to Downtown Philadelphia

Victory Brewing Co. signed a lease in downtown Philadelphia for a new, 14,000-square-foot state-of-the-art brewery and taproom in Center City's Logan Square.

The taproom at 1776 Benjamin Franklin Parkway will feature a production brewing system, scratch kitchen, three bars, street level outdoor seating and a rooftop patio.

Victory Co-Founder Bill Covaleski said in a statement, "Victory's leadership position in craft beer since 1996 affords us a long perspective on the evolution of this movement and encourages us that now is the time to roll up our sleeves and start brewing in Philadelphia."

Victory rebranded its entire lineup in 2019, and launched new brands like Twisted Monkey and Cloud Walker. (Victory Brewing Co.)
The new two-level facility adds to Victory's other Pennsylvania locations in Parkesburg, Downingtown and Kennett Square. A collaboration between Victory and architecture firm Gerner Kronick + Valcarcel designed the Center City taproom.

The property is owned by local investment and development firm Pearl Properties.

"Victory is one of the iconic brands born out of eastern Pennsylvania. We are so excited to partner with Victory to bring new energy to this building and to the entire Center City area," Reed Slogoff, principal of Pearl Properties, said in statement.

The facility, which will have two indoor bars and one outside bars, is slated to open in the fourth quarter of 2020.

Lancaster Retail Market Remains One of Pennsylvania’s Strongest, Thanks to the Amish

The Amish, an ultra-traditional orthodox community of farmers, eschew nearly all the trappings of modern-day life and materialism. Ironically, they are the reason Lancaster, Pennsylvania, sports one of the state’s healthiest retail markets.

The county estimates that between six and eight million people have visited Lancaster County every year for decades, drawn by the peculiar Amish way of life, and these visitors spend about $2.2 billion annually. They support around 25,000 jobs, providing the firm base of demand needed to create a dynamic retail market.

That stands out in central Pennsylvania, which is largely a slow-growth, rural area where manufacturing still plays a key role in many local economies. Metro areas like Harrisburg, Reading and York certainly support retail markets that are dynamic in their own way, but many remain dominated by value-based chains, catering to a consumer base on operating on a budget.

This isn’t the case in Lancaster, and outsiders can be surprised by the area’s strong retail options. The city itself is vibrant, filled with boutique shops, hotels and restaurants, giving it an eclectic feel that is uncommon anywhere in Pennsylvania outside of trendy districts in Philadelphia and Pittsburgh. Demand is strong outside the city as well. The Tanger Outlets and The Shoppes at Belmont are anchored by chains like Whole Foods, which companion markets across central Pennsylvania cannot yet land.

What makes Lancaster retail all the more peculiar is beyond the horse and buggies, it’s not much different than its neighbors. Year-over-year employment gains slightly outpace nearby markets, but are below the national average. And while there are some large regional employers here, annual income levels of $68,000 are on par with figures in neighboring York, and not much higher than those in Reading or Harrisburg.

Around 550,000 people call the Lancaster metro area home – 35,000 of whom are strictly forbidden from supporting modern retail – and the latest census figures show population growth is below the national average.

But while the Amish are likely not shopping at Whole Foods, they bring in tourists who do.
Lancaster metro area’s occupancies are some of the country’s highest, even though construction here has outpaced all nearby markets over the past three years. The level of construction over the past decade is remarkable for a small Pennsylvania market, especially considering the struggles of the retail industry, which have limited construction and gains across the country.

"Lancaster isn’t immune to fallout of the industry’s revolution. The difference with Lancaster is demand is very high and fills the vacated spaces quickly."

"There’s been enough pent-up demand to quickly backfill vacant boxes, even large ones like former Kmart, with tenants like Aldi, At Home, Hobby Lobby, as well as fitness concepts, like Crunch Fitness and Planet Fitness. The majority of our new construction projects, like Shoppes at Belmont, Lime Springs Square and The Crossings are typically 100% leased, or very close before the projects are completed and ready for delivery."

Lancaster has been somewhat dormant for new retail development for many years, but Rohrbaugh believes the arrival of high-profile tenants like Whole Foods and Wegman’s boosted Lancaster’s profile.

"We have received attention from other national chains that would not have considered our market in the past, like PF Chang’s for example. Projects like these have placed us on the radar screen for all national retailers. We now have more tenants looking, than space available."

Delaware River Waterfront Corp. Issues RFP for 11-Acre Philly Waterfront Parcel

by John Jordan Globest.com
The Delaware River Waterfront Corp. announced on Thursday the release of a Request for Proposal seeking teams to develop 11 acres on the central Delaware River waterfront.

The development opportunity features two parcels currently used as parking lots: the nearly eight-acre Market Street Site and the nearly four-acre Marina Basin Site. Both are zoned for high-density, mixed-use development and feature views of the river and Philadelphia skyline.

The chosen developer will design, build, and maintain a sustainable, mixed-use development consistent with DRWC guidelines. Teams are invited to respond to the RFP to develop one or both sites by Feb. 7, 2020.
Upon selection of one or more of the respondents, DRWC will execute a sublease with the chosen respondent(s). The sublease will provide for a term ending no earlier than 2075, with the potential for two 50-year options in favor of the developer, the RFP states.

According to the RFP, The Marina Basin Site is bounded by Spruce Street, Lombard Street, Columbus Boulevard, and the Penn’s Landing Marina Basin. It has approximately 875 feet of frontage along Columbus Boulevard, a major city arterial road, and 850 feet of frontage along the Penn’s Landing Marina Basin. The site is used as a surface parking lot and contains a building owned and used by DRWC for operations and maintenance. The sublease will require the developer to demolish the building as part of the redevelopment of the site.

The Market Street Site is bounded by Market Street, Chestnut Street, Columbus Boulevard, and the Delaware River. It has approximately 750 feet of frontage along Columbus Boulevard and 680 feet of frontage along the river. The site is used as a surface parking lot and for DRWC’s seasonal attractions, Blue Cross RiverRink Summerfest and Winterfest. The Blue Cross RiverRink and some of the associated amenities will be incorporated into the new park that is part of the Park at Penn’s Landing project, according to the RFP. The site is bisected by a viaduct road that connects Chestnut Street to Market Street. There is also an existing large concrete tram tower on the site, which DRWC intends to demolish within the next two years.
“The waterfront has become a top destination for residents and visitors of all backgrounds, and an increasingly attractive site for private development. Now with the new Park at Penn’s Landing moving into final design, the time is right to focus on redevelopment opportunities around it in order to maximize the synergy between these significant investments,” says Joe Forkin, president of the Delaware River Waterfront Corporation.

Over the past decade, DRWC has improved the waterfront by building public parks and attractions, streetscapes and trails. A new 12-acre, $225-million public park adjacent to Penn’s Landing will open in 2024.

Primark Signs Lease Deal at Fashion District Philadelphia

by John Jordan Globest.com
International fashion retailer Primark has signed a major lease at the recently opened Fashion District Philadelphia here.

Multiple published reports state that Primark has signed a lease deal for just over 34,000 square feet at Fashion District Philadelphia, which is owned by a joint venture of PREIT an Macerich.
Primark will anchor the west end of the project with a high-profile location at the corner of 11th and Market streets along with cosmetic and beauty supply retailer Sephora and designer apparel company Kate Spade New York Outlet.

The Fashion District Philadelphia store will be Primark’s only location in Downtown Philadelphia. The retailer also has nearby locations at the King of Prussia Mall and the Willow Grove Park Mall. The Fashion District Philadelphia store will be Sephora’s second Center City location.
Primark joins fellow fast-fashion tenants Forever 21 and H&M to round out an array of apparel options at Fashion District Philadelphia.

The Fashion District Philadelphia launched on Sept. 19, 2019. Most recently, the District welcomed a new Forever 21 and will soon welcome RECPhilly and new-to-market tenants – AMC Theatres in November 2019 and Wonderspaces and Round One in December.

Earlier this month, flexible workspace firm Industrious reported it will be opening an approximately 47,000-square-foot location at the Fashion District Philadelphia.

Thursday, October 31, 2019

Philly Office's Game Of 'Musical Chairs' Is About To Start Up Again

by Matthew Rothstein Bisnow
In both Downtown Philly and the suburbs, more new office space is on the horizon than has been in years. With some deep-pocketed tenants eyeing trophy-class space, some large blocks are due to open up in older Class-A buildings in the next couple of years, and the class of tenants that would replace them is growing, according to multiple Q3 research reports from real estate services firms.

 For years, construction costs similar to those in New York have combined with far cheaper rental rates to make new construction an unrealistic proposition for the vast majority of office occupiers. But that lack of new construction has gradually applied pressure to the top of the market, and the upcoming run of expiring leases may finally be enough to burst it open.

 “The aging office stock and a flight to quality from occupiers, in order to attract the best talent, are kind of coming together. So there’s a limited availability of this type of product in the region, which is driving rents to the point where some are considering new construction.”

 A handful of large tenants have leases due to expire between 2021 and 2024, and at least some of them appear to be willing to pay the rent premium that comes from anchoring new construction. 

Among those reportedly in the market for new construction are law firm Morgan Lewis & Bockius and insurance giant Chubb, each of which has been linked with one of the two new office buildings Parkway Corp. is planning in Market West. 

Brandywine Realty Trust, whose FMC Tower is the most recent ground-up, multi-tenant office development, is also reportedly courting Chubb to anchor a 34-story office tower as the first new construction of its Schuylkill Yards megaproject. Farther west, One uCity Square could accommodate office as well as lab space.

 In suburban submarkets like Conshohocken and King of Prussia, a similar dynamic is at play. Trophy-class office space is so scarce that tenants like AmeriHealth Caritas and AmerisourceBergen opted to lease an entire build-to-suit each.

AmeriHealth will take a five-story, 378K SF building in Equus Capital Partners' Ellis Preserve in Newtown Square, while AmerisourceBergen will have its 11-story, 429K SF corporate headquarters at Keystone Property Group's SORA West in Conshohocken. 

One new construction opportunity remains: Brandywine Realty Trust's 100K SF building at 650 Park Ave. in King of Prussia, for which it has already demolished the older model that stood on the site.

 None of the proposed downtown buildings seem likely to get underway until they secure a commitment for at least 50% of their office space, but in order to be ready for some of the major expiring leases, those commitments would need to solidify by the end of next year. Alternately, those tenants could negotiate short-term extensions with their current digs if a new home isn't ready.

 Whenever those occupiers vacate for new digs, they will be leaving behind large blocks of space in Class-A buildings. But in recent years, those not-quite-trophy buildings have had few problems backfilling behind their major departures and densifying tenants with multiple smaller leases. FMC left behind 1735 Market St. in 2016 to anchor its own tower across the Schuylkill, and while the 1.3M SF tower could be considered trophy-class, it only has one 57K SF block of space still vacant today. 

Across the street, 1700 Market St. has backfilled space Deloitte gave back in short order. “Not being trophy-class does not mean that these buildings are undesirable; they’re still Class-A and you’ll see companies looking to move into high-quality buildings. That really has been the story of Philly since 2000, with lower-quality office buildings being converted to multifamily or hospitality." Developers removing obsolete office stock by converting it has shortened the list of available blocks of space, kept vacancy rates healthy and helped to grow the residential population of vibrant Center City. What office space remains on the market has had good enough bones and location to remain Class-A properties through renovations and updates over the years.

"What has happened in the past 20 years is that the office stock has been improved. So it’s a bit of musical chairs when somebody leaves behind a space, but Philadelphia has proven to have strong demand long-term, and backfill the space left behind.” Among the most frequent occupiers to move into Class-A and not trophy buildings at the moment are the "Eds and Meds," Philly's economic engine. As research and medical space are such a precious commodity in University City, Drexel University and the University of Pennsylvania have moved some back-office functions to Center City.

 Jefferson's voracious expansion included taking over the 1101 Market St. building Aramark left behind for 2400 Market St. Another likely backfill candidate in the next few years is coworking, multiple reports said. Though WeWork may no longer be in expansion mode overall, it recently took an additional floor at its under-construction location in East Market's 1100 Ludlow. Even without any further locations for the embattled industry leader, there are around 270K SF of coworking requirements in Philly. 

Though some macroeconomic factors may be worrying for global markets, Philly looks like it is still playing to its slow-and-steady nature. In the past two years, job growth in the Philly metropolitan area has outpaced the rest of the top 25 cities in the U.S., Center City District reports — a reversal of decade-plus trends. The fact that new construction is even being realistically discussed at all in Philadelphia is a sign that its business community believes in its ability to expand and attract talent. Philly has been patiently setting itself up for new construction, and it seems ready. “Even though we’ve already seen significant densification, the fact that it hasn’t really affected vacancy speaks to the strength of the market,” Dominguez said.

Commercial Real Estate Depreciation Explained (Video)


Wednesday, October 30, 2019

Friedman Signs Office Lease at Four Greentree Centre

Accounting, tax and business consulting firm Friedman LLP signed a 12-year lease for 20,985 square feet at Four Greentre Centre in Marlton, New Jersey.

The 62,069-square-foot, four-story building at 601 Route 73 North was completed in 1985. The Class A facility spans nearly four acres less than 14 miles from downtown Philadelphia.

Friedman’s lease includes the entire fourth floor and about 3,275 square feet on the third floor.

Logistics and Manufacturing Demand Fuels Harrisburg's Hot Industrial Market

Harrisburg's industrial market remained healthy through the third quarter, as sustained demand for logistics and manufacturing space kept vacancies tight, even as heavy levels of new supply arrived in market.

Occupancies are right at historic norms, even though over 2 million square feet of new supply arrived over the past 12 months. Harrisburg's prime location offers distributors easy access to major ports in Philadelphia and New York, and produces exceptionally strong demand for logistics space.

Smucker’s filled the most space in the third quarter, occupying close to 1.2 million square feet of space at 801 Centerville Road, a speculative facility completed earlier this year.
The market’s tight occupancies have enabled owners to see strong rent growth for several years in a row. Historically, the market has supported an annual increase of about 2%, but this figure has been surpassed for four years running, and year-over-year gains were over 4.5% at the end of third quarter.

Logistics properties are the market’s strongest performers. These assets have seen growth of over 5.5% in the past 12 months, and during the past four years, routinely eclipse all other industrial property types.

The strong growth continues to attract investor attention. Year-over-year volume at the end of the third quarter was close to $315 million, nearly double historic expectations. Several major deals finalized during this time, the most notable being the acquisition of 5500 Linglestown Road. The 88,000-square-foot facility sold in August to a private buyer for $4.8 million, or nearly $55 per square foot.

The fourth quarter is off to a strong start as well, thanks to the acquisition of a 55,000-square-foot warehouse on Fisher Street in Halifax, which closed in mid-October.

"Harrisburg is very attractive to industrial users in the logistics/distribution industries largely because of the infrastructure, which offers access to approximately 40% of the U.S population and 45% of the Canadian population in a day’s 11- hour truck drive."

"These factors are advantageous to users in manufacturing and specialized industries as well, who further benefit from the long-standing history of manufacturing in the area, availability of skilled labor and existing heavy-industrial properties that offer economical price points."

"We have a friendly tax structure, and within an hour can be on I-80, I-99, I-81, or the turnpike. A lot of demand is for the million-square-foot logistics centers, but we have more than enough demand for smaller specialized facilities, too. So much so that we are hard pressed to find space for tenants."

 Harrisburg shows very little space available in specialized industrial assets, and with most construction accommodating the logistics sector, this will likely remain an owner’s market for the next few years.

PhilaPort Opens First Terminal in More Than 45 Years

by John Jordan Globest.com
Officials at PhilaPort officially opened the $110-million 155-acre Southport Auto Terminal and Vehicle Processing Center on Tuesday, the first new terminal at PhilaPort in more than 45 years.

Pennsylvania Gov. Tom Wolf along with the facilities operator Glovis America’s CEO and head of Americas of Hyundai Glovis JinWoo Jeong cut the ribbon marking completion of construction and the opening of the state-of-the-art facility on Tuesday.
Glovis America will process more than 200,000 Hyundai, Kia and other original equipment manufacturer vehicles this year at the processing center. “Pennsylvania needs a top tier Port facility to compete in global markets,” said Jeff Theobald, PhilaPort executive director and CEO. “This new facility the best of its kind on the East Coast.”

The new VPC at Southport is equipped with a state-of-the-art body shop including two car washes with two double prep stations and two joined double paint booths. The VPC at Southport is capable of servicing 200 cars per hour and fully processing more than 1,000 cars daily.
Many of the unique features of this site are not found in other Ports. Southport was built as one continuous facility, located directly adjacent to PhilaPort’s Pier 122—a dedicated auto berth. The layout allows autos to be discharged from the vessel and driven straight to the first point of rest, located on the same terminal, PhilaPort officials state. The facility is also the only one of its kind on the East Coast built above the 100-year floodplain. Southport is located at a unique nexus of deep-water and highways and is serviced by two class I railroads—CSX and NS—with additional service by CN.

Gov. Wolf said the terminal is projected to stimulate an estimated $124 million in economic activity, as well as create as many as 2,500 jobs.

Tuesday, October 29, 2019

Preleasing Kicks Off at The Station at Willow Grove Apartments

J.G. Petrucci Co. has revealed preleasing has begun for The Station at Willow Grove, a 275-unit luxury apartment complex in Willow Grove, Pennsylvania.

Move-ins for the mid-rise property at 91 York Road are slated to begin in December. The four-star complex includes a mix of studio, one- and two-bedroom units ranging from 544 to 1,224 square feet.

Named for the adjacent train station, The Station at Willow Grove aims to bring new life and energy to an urban area that is in need of high-end housing to support the recent influx of new business. The property, which was assembled with 11 properties to create a six-acre parcel, will also feature retail and office space for lease.

J.G. Petrucci Principal Greg Rogerson said in a statement, "At this point the covered parking garage is complete along with the pool, two courtyards and over half of the apartment homes. Our leasing team has seen incredible activity thus far and we look forward to moving residents into the community."

Founded in 1987, J.G. Petrucci has completed more than 600 design/build projects for a diverse group of local, regional and national corporations, according to its website.

Philadelphia's Horsham/Willow Grove Suburb Readies for Wave of New Apartment Units

Philadelphia's Horsham/Willow Grove suburb has hosted very little new apartment construction over the past two decades.

Developers have generally focused their attention in and around Center City, as well as in Philadelphia’s western suburbs, which include the metropolitan area’s largest center of suburban white collar employment.

While corporate expansions are much more common along Philadelphia’s Main Line suburbs to the west of the city than they are in the northern suburbs, Horsham/Willow Grove still has a large base of high-paying employers including Prudential, Toll Brothers and Penn Mutual Life Insurance.

Solid apartment demand drivers combined with minimal new construction has produced rent growth averaging 3.9% annually over the past 36 months, which has given developers the confidence to build.

There were nearly 1,000 apartment units under construction at the start of the fourth quarter. Most new construction is contained in the Promenade at Upper Dublin, a highly amenitized property that will contain 400 units and more than 100,000 square feet of planned retail space. While this is the submarket’s largest supply wave in a generation, there are reasons to believe demand is strong enough to quickly absorb the new units.

In total, the submarket contains about 12 million square feet of occupied office space, which based on a simple usage factor of 200 square feet per worker, holds about 60,000 office workers.

The submarket also supports its own respectable live/work/play scene.

Horsham and Willow Grove also have grocery stores, shopping malls and a strong road network with the turnpike and Route 309 nearby.

The new supply is also well positioned to capitalize on the submarket’s strengths. The Promenade at Upper Dublin is rising just one block from the Horsham Gate Shopping Center, which contains a Fresh Market grocer, and is adjacent to a Walmart, Sam’s Club, Petsmart and a range of restaurants.

The Station at Willow Grove is set to begin move-ins during December, and lists one-bedroom rents ranging from $1,300 per month for studio apartments to $2,150 per month for 969-square-foot units. The 175-unit project is across the street from the Willow Grove station on the SEPTA Warminster Line and less than a mile from the Willow Grove Mall.

Vacancies and free rent discounts are likely to rise temporarily among the area’s existing stock of amenitized apartment properties, as long-time owners compete with these new projects for tenants. The Station at Willow Grove is offering to waive December rent for tenants moving in during the first month of the project’s opening.

Nonetheless Horsham/Willow Grove is long overdue for more high end rental options and if the project’s lease up successfully, institutional investors who previously had not considered this submarket will likely begin eyeing the opportunity to add some of these new properties to their portfolios.