Friday, May 31, 2019

WinnDevelopment Makes QOZ Investment in Atlantic City

WinnDevelopment has acquired a scattered site complex of 153 units of affordable housing as a qualified opportunity zone investment and plans an extensive rehabilitation of the properties it now calls Sencit Liberty.

The development arm of national multifamily property developer and manager WinnCompanies of Boston, WinnDevelopment has purchased three historic properties— Liberty, 67 apartments at 1519 Baltic Ave., formerly the Liberty Hotel originally built in 1924; Schoolhouse, 66 apartments at 61 North Martin Luther King Blvd., formerly the Illinois Avenue School originally built in 1906; and, Disston, 20 apartments at 1711 Arctic Ave., formerly the Northside YMCA originally built in 1927.

“With the community’s support, we are happy to take a big step toward what we hope will be a brighter future for the neighborhood,” says WinnDevelopment SVP Brett Meringoff, who led the acquisition team. “We believe the successful rehabilitation of these three properties would not only improve the quality of life for the residents, but also positively impact the entire community and signal major investment in this area of Atlantic City.”
“In the spirit of the local and state policy objective to drive more investment in Qualified Opportunity Zones, we were fortunate to be able to structure our equity investment through our own Qualified Opportunity Fund and take advantage of the benefits that this new program offers,” he adds.

The $17.3-million purchase was financed by BlueHub Capital, formerly known as Boston Community Capital, using Capital Magnet Funds from the U.S. Department of Treasury, and by Citi Community Capital, using a combination of Affordable Housing Catalyst funds and acquisition bridge debt financing. The broker for the transaction was Dane PCG.

WinnCompanies says it is committed to keeping Sencit Liberty affordable for the next 30 years while upgrading the complex as part of a substantial occupied rehabilitation. WinnDevelopment hopes to rehabilitate the properties through a variety of funding sources, including developer loans, private equity investment, private lender sources, and local and state resources.
The Sencit Liberty properties will be managed by WinnResidential. The company manages 2,310 apartments and 19,500 square feet of commercial space at 17 multifamily properties in New Jersey.

“Affordable Housing is a right not a privilege. We are excited that WinnDevelopment will be rehabbing affordable homes in Atlantic City,” said Atlantic City Mayor Frank Gilliam. “Improving the quality of life for all of our residents is a high priority for my administration.”

The City of Atlantic City, including the City Council and the Planning & Development Department, the New Jersey Housing and Mortgage Finance Agency, the U.S. Department of Housing and Urban Development, and the Casino Reinvestment Development Authority provided planning and financial support for the acquisition. WinnDevelopment hopes to have assembled all the financing needed for the rehabilitation project by later this summer, at which time the exact details of the work will be announced, the company states.

WinnCompanies owns more than 100 multifamily housing properties in 11 states and Washington, DC, totaling more than 13,000 apartments.

In New Jersey, WinnCompanies owns City Crossing, a 131-unit scattered site property in Jersey City, and Bridgeton Villas, a 156-unit property in Bridgeton – both of which have undergone extensive rehabilitations in the past three years. The City Crossing project won a 2017 Green Building Award from the New Jersey Apartment Association.

Since July 2014, WinnCompanies has overseen the completion of more than 17 occupied rehabilitation projects—totaling approximately 3,000 units—at its owned properties in six states and the District of Columbia, with total development costs of $335 million. The company currently has more than 500 units under rehabilitation in five states, with an additional 1,000 units set to undergo upgrades through 2020.

Stockton University OKs Atlantic City Student Housing Partnership

Stockton University has decided to move ahead with plans to expand student housing for its Atlantic City, New Jersey, campus, but it says it can't proceed unless it gets financial help from the state of New Jersey.

At a special meeting Wednesday, the school's board of trustees authorized the administration to negotiate a public/private partnership with Atlantic City Development Corp., known as AC Devco, for the second phase of its student housing project. AC Devco, a nonprofit redevelopment company, is proposing to build a $62 million, 405-bed residential complex on property adjacent to Stockton's campus on Atlantic Avenue in Atlantic City.

However, the trustees’ approval is contingent on the state appropriating at least an additional $5 million in annual aid to the university to support the ongoing academic and operating costs associated with the project and the university's Atlantic City operations, Stockton said in a statement.

Gov. Phil Murphy's office didn't respond to a request for comment.

The university, based in Galloway, New Jersey, has created a $178.3 million campus on Atlantic City's well-known boardwalk. Diversifying the seaside city's economy beyond gambling, with newcomers like Stockton, is considered a linchpin in the gaming mecca’s successful future and ongoing economic recovery.

Last fall, Stockton and AC Devco opened a roughly 56,000-square-foot academic center at 3711 Atlantic Ave.; a 535-bed, nearly 220,000-square-foot student residential complex that faces the beach at 3701 Boardwalk; and a seven-story, 875-space parking garage at 3800 Atlantic Ave.
The additional student housing would be built on the site of the Eldridge Building at 3532 Atlantic Ave. , a university spokeswoman said in an email. The building is vacant and would be torn down and replaced by the student housing, according to the spokeswoman.

Currently, the university has housing for 3,484 students at both the Galloway and Atlantic City campuses. In fall 2018, the occupancy rate was 98%, Stockton said. The residential complex in Atlantic City is projected to be at capacity for fall this year, according to the university. Based on current and projected enrollment, Stockton said it will need additional housing in the 2021-2022 academic year.

In testimony before the state General Assembly budget committee in May, Stockton President Harvey Kesselman requested a $5 million increase in its annual appropriation in recognition of the university’s investment in Atlantic City and New Jersey’s students. This funding would be in addition to any money the state deems appropriate to promote funding equity among the four-year public comprehensive and research universities, according to Stockton.

Stockton and Montclair State University currently receive the lowest funding from the state per full-time student among the four-year public comprehensive and research universities, Kesselman said. Stockton received $18.4 million in direct operating funds from the state last year, according to the university spokeswoman.

“We are hopeful that the state will continue its investment in Atlantic City towards establishing an ‘eds and meds’ corridor critical for the city’s future, while stemming the outmigration of New Jersey students,” Kesselman said in a statement. “We are proud to play a role in this initiative but cannot proceed without corresponding state funding. The Legislature’s and the governor’s support are critical for this project to proceed.”

The Legislature hasn't presented its budget yet, and it won't be finalized until June 30.

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Zarwin Baum Devito Kaplan Schaer Toddy P.C. Inks Deal at One Commerce Square

Law firm Zarwin Baum Devito Kaplan Schaer Toddy P.C. subleased 29,724 square feet at One Commerce Square in downtown Philadelphia.

The 1.02 million-square-foot tower at 2005 Market St. was built in 1987 and renovated in 2013. The 41-story, 4-Star building spans 1.4 acres one block from the 22nd Street trolley station.

The new tenant plans to occupy the tower in October 2019.

The landlord, Brandywine Realty Trust, originally purchased One Commerce Square in December 2013, CoStar data shows.

CarbonLITE Preleases Manufacturing Facility in Reading, Pennsylvania

CarbonLITE, a company that specializes in processing used plastic bottles into bottle-grade PET resin flakes and pellets, preleased Endurance Real Estate Group's Berks61, a 270,000-square-foot manufacturing facility in Reading, Pennsylvania.

Plans for the facility at 4030 Pottsville Pike call for a TPO roof, ESFR sprinkler, LED lighting with motion sensors, 42 dock positions, three drive-in doors, available rail access and a 3,000 amp, 3-phase electric system. The 18.4-acre site is less than five miles from Reading Regional Airport.

The development has been approved for a LERTA tax abatement.

"Reading was right for CarbonLITE, access to one of the densest concentrations of blue-collar workers in Eastern PA with very few competitive big-box employers of similar scale will serve them well."

Founded by plastics entrepreneur Leon Farahnik, CarbonLITE currently operates two, 220,000-square-foot bottle-to-bottle PET recycling plants in Riverside, California, and Dallas, Texas, which, combined, process more than four billion plastic bottles annually, according to its website.

Berks61 is slated to be completed in the fourth quarter of 2019.

Iovance Biotherapeutics Inks 136K Lease at Philadelphia Navy Yard

by John Jordan
 Iovance Biotherapeutics, Inc. has reached a lease agreement to build a new 136,000-square-foot production facility at the Philadelphia Navy Yard here.

The San Carlos, CA-based firm, a late-stage biotechnology company developing cancer immunotherapies based on tumor-infiltrating lymphocyte technology, states that the new production facility at 300 Rouse Blvd. at the Philadelphia Navy Yard will be used for the commercial and clinical production of autologous TIL products, including its candidate lifileucel. The facility will allow production, according to U.S. Food and Drug Administration guidelines and is designed to provide scalability using modular processes, the company reports.

Iovance expects to invest approximately $75 million over three years for equipment and construction of the manufacturing suites. The company expects the new facility at the Philadelphia Navy Yard will be completed in approximately two years.
“We are very excited to initiate building our commercial manufacturing facility in Philadelphia. The 22-day Iovance Gen 2 TIL therapy process is robust and scalable, and has led to impressive responses in melanoma, cervical and head and neck indications,” says Maria Fardis, Ph.D., M.B.A., president and CEO of Iovance. “Building our own internal production capabilities will help us reduce the cost of operations which is necessary for offering broad access to TIL therapy.

She adds that the company expects to begin construction in the next few weeks.

“Today’s announcement is great news for the commonwealth as hundreds of new, high-paying jobs will ultimately be created in the biotechnology sector,” says Pennsylvania Gov. Tom Wolf. “I want to thank Iovance for choosing Pennsylvania as the best place to do this important and life changing work.”
“Iovance’s decision to expand to Philadelphia is further evidence that our city’s reputation as a leading location for technology, innovation, and life sciences is growing,” says Philadelphia Mayor Jim Kenney. “Companies from around the country and the world are seeing Philadelphia as the place they need to be in order to attract talent and grow their business.”

The Iovance facility is being developed and built by Gattuso Development Partners, LLC and the design and construction management firm CRB. Financial incentives were provided by the Commonwealth of Pennsylvania, the City of Philadelphia, and PIDC, including the site’s designation as a Keystone Opportunity Improvement Zone, which allows incentives for business development.

Wednesday, May 29, 2019

Complete Liquidators Signs Industrial Lease in Bristol PA

Wholesale distribution company Complete Liquidators leased 142,443 square feet at River Group Equities' manufacturing facility in Bristol, Pennsylvania.

The 600,661-square-foot, single-story structure at 2207 Radcliffe St. comprises approxmately 20 tailboard doors and 12- to 24-foot clear ceiling heights. Built in 1935, the property spans 23.2 acres less than 12 miles from Northeast Philadelphia Airport.

The company will use the property to consolidate its additional locations throughout the metropolitan area.

The company is scheduled to take occupancy at the facility in June 2019.

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Hairbuzz Leased 27,000SF at One & Olney Square

Hairbuzz, a cosmetics and beauty supply store, leased 27,516 square feet at Wharton Realty Group's One & Olney Square shopping center in Philadelphia.

The 255,776-square-foot building at 101 E. Olney Ave. was developed in 1988. The Class B center spans 25.7 acres less than a mile from the Olney train station.

Three New Leases Bring NJ Medical Office Building to Full Occupancy

by John Jordan
A newly developed medical-office building here has secured three new lease deals that bring the 40,000-square-foot building to full occupancy.
Property owners and developers Atkins Companies and Woodmont Properties report that they have secured three lease deals totaling 20,000 square feet at the Rothman Medical Building that opened at 243 Hurffville-Cross Keys Road in late 2018.

The property in Gloucester County was developed in a joint venture partnership between Atkins, Woodmont and the Rothman Orthopaedic Institute, one of the region’s largest independent orthopaedic practices. Rothman occupies the entire 20,000 square foot second floor of the building.
The new leases, include the Heart House taking 9,450 square feet, Jefferson Health securing 7,700 square feet and AdvoCare committing to 3,100 square feet, which collectively bring the property to full occupancy.

The Rothman Medical Building anchors the 35-acre Washington Square Town Center project being developed by Atkins and Woodmont.  Nearing construction completion, the project will also feature 330 residential apartments, 100 townhomes, 30,000 square feet of retail space, and an assisted living facility.

“When we initially embarked on this project with our development partners many years ago, we saw a tremendous opportunity in the local market for a state-of-the-art medical office facility geared towards growing healthcare systems,” said Bob Atkins, managing partner of Atkins Companies. “Rothman recognized our expertise in the medical office asset class and through our partnership, we were able to create a space tailor-made for their long-term needs to help them continue to establish a larger presence in New Jersey.”
He adds, “For us, this type of partnership represents a win-win for all parties, and we’d like to thank their senior leadership team for their cooperation and vision in bringing this project to completion.”

The Heart House is one of the region’s most experienced cardiovascular practices. Heart House is utilizing its space at the Rothman Medical Building to consolidate smaller local offices into a centrally located facility to increase the overall patient experience.

Based in Philadelphia, Jefferson Health will create the Jefferson Outpatient Imaging Center, a state-of-the-art imaging and radiology center at the property to support their Washington Township hospital, located less than a mile away at 435 Hurffville-Cross Keys Road.

Advocare of Marlton, NJ is an integrated physician-owned multi-specialty organization in New Jersey and Pennsylvania offering a wide range of specialties. The firm’s lease at the Rothman Medical Building will allow them to expand its Ob/Gyn services in a strategically located, modern medical office space.

Tuesday, May 28, 2019

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Industrious Expands Philadelphia Footprint

Flexible workspace provider Industrious signed a 55,000-square-foot lease at the Two Liberty Place office tower in Philadelphia.

Joyce Oh, Mid-Atlantic area manager of Industrious, said in a statement, "Industrious first entered Philadelphia in 2015 and we have continued to witness strong demand for our product. As we were looking to expand across the market, our existing relationship with Coretrust opened the door to one of the city’s top Class A buildings."

Industrious plans to open at Two Liberty Place in the first quarter of 2020. The company will occupy two full floors, and the deal brings the tower to over 90% occupied.

The 57-story tower at 50 S. 16th St. was built in 1990 and renovated in 2018. The 5-Star property spans 0.76 acres less than two blocks from the Suburban train station.

Industrious' first existing Philadelphia location is at Industrious Avenue of the Arts in Center City.

Coretrust acquired Two Liberty Place in October 2016 via its Coretrust Value Fund I for $219 million, or about $233 per square foot, CoStar data shows.

"Industrious is the ideal partner for us at Two Liberty Place as it is the premier provider of flexible workspace," Spike Whitney, vice president of Coretrust, said in a statement.

South Korea Bank Sets Up US Logistics Property Fund

Korea Investment & Securities, a South Korea-based investment bank, has reportedly raised the equivalent of about $68 million in U.S. dollars to set up a new fund to invest in warehouse properties in Washington, D.C., and Philadelphia.

The bank, which raised funds from its own promissory notes sold to investors, eventually plans to list the fund on South Korea's stock exchange, according to local news reports. That move would give other South Korean investors a chance to participate in the hot U.S. industrial property market as well as raise additional investment funds.

Demand for industrial property has shown remarkable strength driven by e-commerce and last-mile logistics as retailers seek further supply-chain efficiencies.

U.S. investment volume climbed to $54.9 billion in the 12 months ending in the first quarter of 2019, with demand for product surging and many new entrants trying to get a foothold in the asset class.

"Sale prices rose 15% year over year on a price-per-square-foot basis and, interestingly, we saw investors shift to secondary U.S. markets to take advantage of lower land and labor costs. Nearly all industrial markets remain supply-constrained and, in spite of added construction, e-commerce and other growth factors will keep industrial vacancy in the single digits over the next 12 months."

News of the Korea Investment & Securities fundraising was reported by multiple South Korean news outlets, which identified their reports as coming from a company announcement.

Korea Investment & Securities officials in Seoul and the United States did not respond to requests for additional information.

"We plan to lead the retail public offering real estate market by sourcing additional public offering real estate funds that provide stable dividends," Sung-Hwan Kim, vice president of Korea Investment & Securities, was quoted as saying.

According to Korean news reports translated using Google Translate, the fund will indirectly invest in two private equity funds with six logistics centers in two major U.S. markets: Washington, D.C., and Philadelphia. It intends to invest alongside Vereit, a U.S. publicly traded real estate investment trust.

Vereit officials declined to comment.

The two private equity funds own logistics centers that are 100% leased by global companies including e-commerce giant Amazon, home improvement retailer Home Depot, food and beverage maker Nestle, delivery services firm FedEx and discount apparel seller T.J. Maxx, according to the reports.

Crozer-Keystone at Broomall Sells to Joint Venture

Capital Solutions, a locally-based real estate investment and private equity firm, sold the Crozer-Keystone at Broomall facility to a joint venture between Anchor Health Properties and The Carlyle Group for $25.35 million, or about $442 per square foot. According to CoStar information, the two companies have teamed up on the acquisition of more than a dozen medical office properties throughout the U.S. in the past three years.

Located at 30 Lawrence Road, the 57,320-square-foot building has been occupied by Crozer-Keystone Health System since 2016. The medical office building is located just six miles from Philadelphia and is within a five-mile radius of eight hospitals. The facility operates as a cancer center in addition to providing various outpatient services.

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NJ Looks to Redevelop Former Prison Site in Camden

by John Jordan
The New Jersey Economic Development Authority has released a Request for Qualifications for the purchase and development of the former Riverfront Prison site on the Camden Waterfront.
The riverfront property boasts views of the Philadelphia skyline and approximately 8.75 acres of prime developable land as well as close proximity to a newly-established public park. The former prison site is a prime location for new commercial or mixed-use development, state officials note.

Submissions will be publicly opened on Sept. 18, 2019 at the 36 West State St. at 2 p.m.
The RFQ states that to ensure the new development benefits the local community, redevelopment proposals must preserve the public park and include a description of how the proposed use will be consistent with the North Camden Waterfront Study Area Redevelopment Plan that calls for the creation of a vibrant, mixed-use district. The plan’s vision also looks for new projects to provide new opportunities for riverfront recreation, attract sustainable development, while connecting existing residential neighborhoods to the waterfront.

“Gov. Murphy’s economic development strategy is focused on making investments in New Jersey’s communities, particularly our cities, where investment is needed most,” NJEDA CEO Tim Sullivan says. “Redevelopment of the former prison site in Camden is a critical step in realizing the vision articulated in the North Camden Waterfront Study Area Redevelopment Plan and we are excited to be advancing this project via a process that will prioritize local input and stakeholder engagement.”

NJEDA states that once the RFAs are opened in September, the EDA will establish a shortlist of eligible respondents and then issue a bid package to eligible respondents and accept sealed bids.
If necessary, the EDA will issue and accept best and final offers. The final sale and development will be subject to various approvals, including the New Jersey Department of the Treasury, the EDA Board, and the State House Commission.

According to the RFQ documents, the NJEDA has scheduled to issue a first round sealed bid package for the Riverfront Prison site on Nov. 1, 2019. A final sale of the property is scheduled for April 2020.

Thursday, May 23, 2019

Counter Capital Management Acquires Another Philadelphia Mixed-Use Property

by John Jordan
Real estate investment management firm Counter Capital Management LLC, a strategic joint venture between Dalzell Capital Partners LLC and Morning Calm Management, has acquired 1501 Locust St., here, a mixed-use property in the Rittenhouse Square neighborhood in Center City, for $19.1 million.
Originally constructed in 1947 as a 10-story office building, 1501 Locust St. was expanded and repurposed into a luxury boutique building in 2010 featuring 29 large apartment units averaging 1,009 square feet and three commercial units totaling approximately 5,000 square feet.

The residential units feature hardwood floors, 10.5-foot to 18-foot coffered ceilings, modern kitchens with granite countertops, stainless steel appliances and European cabinetry, high-end finishes and in-unit washers and dryers. Located on the northwest corner of 15th and Locust streets directly above a PATCO transit line station, the property is surrounded by Philadelphia’s trendiest retailers, restaurants, and arts and entertainment venues, making it one of the most coveted residential buildings in the market, Counter Capital officials note.
The new ownership states that 1501 Locust St. will undergo capital and operational improvements to “unlock embedded value and to enhance residents’ lives.” Planned upgrades include introducing dynamic paint patterns and lighting fixtures to create a more contemporary and sophisticated interior. Each residential unit will benefit from fresh paint and the addition of state-of-the-art keyless entries and Nest thermostats.

“Completing this strategic acquisition further demonstrates our commitment to growing our footprint in Center City,” said Christian Dalzell, managing partner at Counter Capital. “Over the past two years, we’ve amassed a sizable portfolio of high-quality, well-located properties, and we aim to replicate this strategy in select urban centers across the country. We believe our focus on delivering highly curated properties that reflect the communities they serve is a key differentiator that will serve us well as we scale nationwide.”

With the acquisition of the property, Counter Capital now owns and operates eight multifamily and mixed-use properties in Philadelphia. Counter Capital’s portfolio is tightly clustered in Center City, due to its high concentration of employers in the education, health and life science industries.
Across its portfolio, Counter Capital says it is exploring ways to activate traditionally underutilized space within its properties to maximize and expand their productivity.

In late March of this year, real estate veterans and entrepreneurs Dalzell and Cho launched Counter Capital Management LLC, which is co-headquartered in Boca Raton, FL and Philadelphia. Dalzell runs operations based in Philadelphia, while Cho runs Counter Capital operations in Boca Raton.

The strategic joint venture between Dalzell Capital Management of Westport, CT and Cho’s Morning Calm Management of Boca Raton collectively, through their affiliates, collectively own and operate more than 4 million square feet of commercial real estate and approximately 900 residential units across the United States.

New King of Prussia Senior Project Underway

by John Jordan
CA Senior Living, LLC, the senior housing investment and development division of Chicago-based CA Ventures, has commenced construction on the Anthology of King of Prussia senior housing community here.
The 192-unit senior living community is located approximately 17 miles northwest of Philadelphia at 350 Guthrie Road.

The 11-story building is scheduled to be delivered in late 2020 and will be the first senior living community in The Village at Valley Forge, a 122-acre mixed-use lifestyle village. No development cost for the project was released. CA Senior Living’s operational arm, Anthology Senior Living, will manage the community. Lancaster, PA.-based Wohlsen Construction Co. is serving as general contractor on the Anthology of King of Prussia project.
“We are proud to be the first company to bring senior living to The Village at Valley Forge,” says Ben Burke, president of CA Senior Living. “The community’s location within a dynamic mixed-use development means residents can have everything they need and want within walking distance, from specialty dining and entertainment destinations to medical offices.”

Designed by the Chicago office of New York-based Perkins Eastman, Anthology of King of Prussia will offer a total of 97 independent living, 63 assisted living and 32 memory care residences, with the latter located in a secure wing on the property’s third level, where residents will enjoy a private courtyard.

The independent and assisted living apartments range from 410-square-foot studios to 1,200-square-foot, two-bedroom/two-bath units, all featuring high-end finishes such as modern kitchens with quartz countertops, tile backsplashes and stainless-steel appliances; nine-foot ceilings and oversized windows; washers and dryers; walk-in closets in select units; and accessible private baths.
The property will also include 20,000 square feet of amenity space. For independent and assisted living residents, these feature numerous dining options, including a formal dining room, café/bistro and private dining room for special events; a theater with a high-definition projection screen; library; reservable family suite with private outdoor deck; game room; and various activity rooms.

Wellness amenities include a fitness center, indoor pool, physical therapy room and spa with salon services. All dining, community, fitness and wellness venues are located on the 11th floor, along with two sky decks, all of which offer sweeping views of the surrounding area.

Outdoors, at the ground level, there will be landscaped courtyards, resident-maintained gardens, walking paths, outdoor dining tables and open-air fireplaces, along with numerous seating areas for social engagement or quiet reflection.

Memory care residents will be offered their own suite of amenities, including a family lounge, salon, library, activity rooms and a four-season room adjacent to an interior courtyard.

“The senior housing market in the greater Philadelphia area is very strong, with occupancy rates higher than the national average, and we’re confident that the demand for new communities will make Anthology of King of Prussia a big success,” said Burke. “This project offers all the amenities of a luxury condominium building or hotel – with care if and when you need it.”

When complete, The Village at Valley Forge will include up to 2,500 residential units, 500,000 square feet of retail space, two hotels and 1 million square feet of mid-rise office and healthcare space. The community is located a quarter-mile from the King of Prussia Mall offers access to four major highways.

CA Senior Living currently has 33 communities operating or under construction throughout the US. The firm’s pipeline includes Atria McCandless, a community in McCandless, PA that is scheduled to open in the fall of 2019.

Wednesday, May 22, 2019

Viking Partners Expands Philadelphia Presence With Acquisition of Valley Square

Cincinnati, Ohio-based investment firm Viking Partners purchased the Valley Square office complex in Blue Bell, Pennsylvania, from Corvest Realty Group for $19.75 million, or about $67 per square foot.

The five buildings at 512 Township Line Road total 293,870 square feet. The Class B, two- and three-story structures span 22.1 acres less than four miles from the Norristown Transportation Center.

In October 2018, Viking Parnters acquired Bucks Town Corporate Campus, a five-building office complex totaling approximately 142,000 square feet, near Philadelphia for $10.5 million.

The seller, which originally purchased the buildings in October 2013.

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Juniper Acquires Philadelphia Senior Housing Complex

by John Jordan
Juniper Communities, LLC has added The Terrace at Chestnut Hill to its Pennsylvania portfolio of managed and owned seniors housing communities.
The Bloomfield, NJ-based firm reports it acquired the property, which consists of 70 personal care units and 33 memory care units, on May 14.

The Terrace at Chestnut Hill, located in the northwest section of Chestnut Hill in Philadelphia, includes a stone mansion, built in 1865. The campus at 495 E. Abington Ave. in Philadelphia features expansive grounds, walking paths and glorious chestnut trees.
“The Terrace at Chestnut Hill becomes our 12th seniors housing building in Pennsylvania. We are very excited to extend our signature programs to benefit residents and their families, the team of associates, and the professional health care community,” says Lynne S. Katzmann, CEO and founder of Juniper Communities.

She continues, “For example, our Connect4Life program, which has been recognized as an innovative model for integrating service enriched housing and management of chronic health issues, will bring the convenience of onsite primary care to the community while facilitating coordination between the community and other health providers that service our residents.”

Juniper says it will work to retain the 95 employees at the community. No financial terms of the transaction were released.
“Expanding our presence in the Pennsylvania market enables Juniper to consolidate market share and pilot additional ancillary services within a concentrated hub,”  Katzmann states.

The property will benefit from Juniper’s signature programming that includes the award-winning dementia care program Wellspring Memory Care, a comprehensive electronic health records system, a fully coordinated healthcare delivery model Connect4Life and an integrated connections and activities program referred to as Alive in All Seasons.

The community will now operate under the name The Terrace at Chestnut Hill, a Juniper-managed community.

Properties owned and managed by Juniper Communities in Pennsylvania: include: the Juniper Village at Meadville, Juniper Village at Forest Hills , Juniper Village at Lebanon, Juniper Village at Mount Joy, Juniper Village at Brookline – Rehabilitation and Skilled Care,  Juniper Village at Brookline – Inn and Pines Personal Care, Juniper Village at Brookline – The Willows Independent Living, Juniper Village at Brookline – Wellspring, Juniper Village at Bucks County – Rehabilitation and Skilled Care, Juniper Village at Bucks County – Independent Living, Juniper Village at Bucks County – Personal Care and most recently The Terrace at Chestnut Hill.

Co-Working Space Provider Industrious Expands Presence in Philadelphia

by John Jordan
Industrious has reached an agreement to add a prestigious address in Center City in early 2020 to its offerings here.
The New York City-based co-working space firm has entered into a partnership with building owner Coretrust Capital Partners to take two full floors totaling 55,000 square feet of space at the Two Liberty Place office tower.

Industrious’ Two Liberty Place will offer shared workplaces for teams of various sizes as well as large-team suites, dedicated private offices that are customizable for teams of 20 to 100 people. The Industrious space is expected to be open for business in the first quarter of 2020.
“Two Liberty Place is an iconic part of the Philadelphia skyline and we are thrilled to be able to provide our members an elevated workplace experience in a trophy asset like this,” says Joyce Oh, Mid-Atlantic area manager, Industrious.  “Industrious first entered Philadelphia in 2015 and we have continued to witness strong demand for our product. As we were looking to expand across the market, our existing relationship with Coretrust opened the door to one of the city’s top Class A buildings.”

This is the second Philadelphia location for Industrious; its existing location, Industrious Avenue of the Arts, is also in Center City. The partnership at Two Liberty Place is also the second time Industrious has partnered with Coretrust Capital Partners; earlier this year the two announced Industrious Los Angeles – Financial District at FourFortyFour South Flower.

“Industrious is the ideal partner for us at Two Liberty Place as it is the premier provider of flexible workspace,” says Spike Whitney, VP, Coretrust Capital Partners.
Los Angeles-based Coretrust acquired Two Liberty Place in late 2016 via its Coretrust Value Fund I. The firm has since undertaken a massive capital improvement program to restore materials and design details by original project architect Helmut Jahn and to upgrade the building entries, lobbies, elevators and mechanical systems. With the Industrious partnership, Two Liberty Place will be more than 90% occupied when the Industrious space is operational.

Industrious currently operates shared workspace in more than 75 locations in more than 40 U.S. cities.

Monday, May 20, 2019

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Brixmor Buys Plymouth Square for $56 Million

New York-based real estate investment trust Brixmor Property Group purchased a shopping center in Conshohocken, Pennsylvania, from Signature Financial Corp. for $56 million, or about $210 per square foot.

The 266,113-square-foot center, dubbed Plymouth Square, is 70% leased to major tenants including Weis, REI, Rite Aid and Marshalls. Spanning 16.5 acres, the Class B property at 108-200 W. Ridge Pike and 1920 Butler Pike is less than 15 miles from downtown Philadelphia.

Apex Financial Snaps Up Lippincott Centre for $32 Million

Yardley, Pennsylvania-based Apex Financial Advisors purchased two office buildings in Marlton, New Jersey, from Grandview Property Partners for $32 million, or about $193 per square foot.

The Class B buildings, dubbed Lippincott Centre, at 301-303 Lippincott Drive total 165,742 square feet. Built in 1988, the four-story structures span north of 14 acres less than 15 miles from downtown Philadelphia.

The fully leased buildings house Virtua Health Inc.'s headquarters. Additional tenants include accounting firm Friedman and Morgan Stanley.

AutoZone Signs Large Lease in Tamaqua, PA

AutoZone, a retailer of aftermarket automotive parts and accessories, leased 86,000 square feet at MJF Realty’s Class B warehouse in Tamaqua, Pennsylvania.

The 102,739-square-foot facility at 25 Liberty St. comprises nine loading docks and levelators, four drive-in bays and a 21-foot clear ceiling height. Built in 1967, the property spans 31.9 acres near Interstate 81.

Headquartered in Nesquehoning, Pennsylvania, the landlord originally purchased the warehouse in January 2013, CoStar data shows.

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Dollar General Expands; Manufacturer Establishes HQ in PA

by John Jordan
Pennsylvania Gov. Tom Wolf announced on Friday that retailer Discount General Corp. has established a new cold storage facility in Schuylkill County that at full capacity will create 100 new jobs.
Dollar General’s expansion in Schuylkill County is part of the company’s new initiative toward a strategic shift to the self-distribution of perishable goods sold in its stores. The cold storage facility is currently distributing to approximately 300 stores in the Northeast. The project includes the company’s purchase of a 148,000-square-foot building in Pottsville, which is expected to create 100 new, full-time jobs over the next three years.

“Dollar General is excited to expand in Pennsylvania through the collaboration with Governor Wolf and the Pennsylvania Department of Community and Economic Development,” says Mike Kindy, Dollar General’s EVP of global supply chain. “As Dollar General embarks on our DG Fresh initiative, we sincerely appreciate the partnership from state and local leaders on this project and look forward to a longstanding presence throughout Pennsylvania.”
Dollar General received a funding proposal from the Department of Community and Economic Development, which included $200,000 in job creation tax credits to be distributed upon the creation of new jobs and a $45,000 workforce development grant to help the company train employees. The project was coordinated by the Governor’s Action Team, with additional coordination was provided by Schuylkill County Economic Development Corporation (SEDCO).

No further financial details regarding Dollar General’s purchase of the property were disclosed.

“We are pleased that Dollar General, as a nationally-recognized retailer, has acquired this cold storage facility at the Highridge Business Park joining Wegmans, Wal-Mart, and Tyson Foods in putting food on the table of families in the Northeast marketplace,” said David Snyder, chairman of SEDCO.
Dollar General operates a distribution center in Berks County and approximately 745 stores in Pennsylvania, employing more than 6,500 individuals throughout the Keystone State.

A day earlier, the governor announced that Cardbox Packaging, Inc., a multi-national manufacturer of paper/carton-based packaging products, had selected Pennsylvania as the location for its first headquarters and manufacturing operation in the United States.

Cardbox Packaging selected a 27,500-square-foot facility located in CenterPoint Commerce & Trade Park West Industrial Park in Pittston Township, Luzerne County. The company has committed to investing at least $5.3 million into the project, which is expected to create 35 new, full-time jobs over the next three years.

“Cardbox Packaging is very excited about landing in Pennsylvania and taking the first steps in establishing our presence in the U.S. packaging market,” said Michael Schaid, general manager at Cardbox Packaging, Inc. “We look forward to expanding our U.S. relationships which will result in Cardbox being able to produce innovative products. We appreciate the Governor’s Action Team guidance and support through this process.”

Cardbox received a funding proposal from the Department of Community and Economic Development for a $75,000 Pennsylvania First grant, $70,000 in Job Creation Tax Credits to be distributed upon the creation of new jobs, and a $15,300 workforce development grant to help the company train its workers.

Cardbox Packaging is an international producer of high-quality and sophisticated packaging with locations in Austria and Czech Republic. It specializes in offset printing, flatbed die-cutting, and folding gluing to convert raw materials into products for the food, cosmetic and medical industries.

Agree Realty Buys Wawa’s Flagship Philly Store

by John Jordan,
Agree Realty Corp., which is headquartered in Bloomfield Hills, MI, has acquired Wawa’s flagship store in Philadelphia located on the ground floor of the Public Ledger Building here.
The firm purchased the Wawa store, which first opened its doors on Dec. 14, 2018 for approximately $15 million. The 11,500-square-foot store is the largest in Wawa’s chain and includes a bakery, merchandise, and an expanded selection of Wawa’s Reserve coffee line.

The Public Ledger building is located at the corner of 6th and Chestnut streets in Center City and near several notable historic sites, including the Liberty Bell, Independence Hall and Congress Hall.
“We are extremely pleased to announce the addition of Wawa’s flagship store to our expanding portfolio,” says Joey Agree, president and CEO of  Agree Realty Corp. “This acquisition demonstrates our differentiated capabilities to identify unique opportunities that further solidify our best-in-class net lease portfolio.”

In the first quarter financial announcement on April 22, Agree said that the company was increasing its full year acquisition guidance to a range of $450 million to $500 million.

“While increasing our acquisition guidance, we remain intently focused on further solidifying the highest quality retail net lease portfolio in the country,” he said.
As of March 31, 2019, the company’s portfolio consisted of 694 properties located in 46 states totaled 11.9 million square feet of gross leasable space.

The portfolio was approximately 99.7% leased, had a weighted-average remaining lease term of approximately 10.2 years, and generated approximately 52.4% of annualized base rents from investment grade retail tenants or parent entities.

Thursday, May 16, 2019

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3 Montgomery County apartment sites up for sale

Natalie Kostelni Reporter Philadelphia Business Journal
Three development sites approved for multifamily development have been put up for sale in Bala Cynwyd and Conshohocken.

Those two Montgomery County communities have seen new apartment construction over the last decade that was generally well-received by the market. That these properties didn’t get developed speaks more to transitions with the ownership of the parcels rather than market conditions. 

Mack-Cali Realty Corp. is selling two multifamily development sites as part of an effort to exit from the Philadelphia region.

The company put up for sale 51 Washington Ave. in Conshohocken and 150 Monument Rd. in Bala Cynwyd. Roseland, an affiliate of Mack-Cali, bought the 3.24-acre Conshohocken property in December 2014 for $14.1 million, according to Montgomery County property records, and had anticipated breaking ground in the first quarter of 2015 but never did. At one point, the company projected it would move ahead with the proposed $70 million, 298-unit apartment project at the end of 2016. Again, it never didn't move forward.

Beginning in 2014, Roseland was also involved with a proposed $48.9 million multifamily project on 5.24 acres at 150 Monument Rd. in Bala Cynwyd that would have had 207 apartments. That project also never came to fruition.
Full story:

Wednesday, May 15, 2019

CHOP Now Leases More Than 300,000 SF at Wanamaker Office Building

by John Jordan
The ownership of the Wanamaker Office Building here reports that it has completed a 54,000-square-foot lease expansion with Children’s Hospital of Philadelphia at the 1.4-million-square-foot mixed-use property in the Market East section of the city.
Rubenstein Partners, L.P. and partner Amerimar Enterprises Inc. state that with the latest lease expansion, Children’s Hospital of Philadelphia now occupies more than 300,000 square feet across six floors at the Wanamaker building at 100 Penn Square East.

In addition to the CHOP lease expansion, British-based online gaming firm Kambi recently leased approximately 7,000 square feet of office space in the building.
“CHOP’s recommitment and Kambi’s decision to locate their regional headquarters at Wanamaker affirms that the repositioning strategy is working. Also, our interest level from prospective tenants has dramatically increased with the completion of most of the renovations."

Built in 1911, the office portion of the building is approximately 95% occupied and the retail space is 100% occupied by Macy’s. In addition to the office and retail space, the property includes an approximately 660-space, subterranean parking garage.

The building ownership says it is on the verge of completing the final phase of their current modernization plans for the historic building that will deliver new two-floor amenity space connecting an updated grand atrium with a brand-new fitness center.
“We’re pleased that our strategy for Wanamaker appears to be resonating with existing tenants and major users seeking modern space in Center City,” says Stephen Card, regional director of the Mid-Atlantic and principal at Rubenstein.  “From the beginning, we have sought to preserve the building’s best architectural and historical elements while modernizing it with thoughtful improvements.

He adds, “As we deliver the second phase of improvements—primarily the new two-floor amenity space that revitalizes the existing Grand Atrium and connects it to a new state-of-the-art fitness center—I think that both existing users in the building and the broader market will understand exactly how special Wanamaker can be.”

Phase one of the improvement plan, now complete, focused on rethinking the lobby and security check-in areas in order to make the experience flow better for tenants and visitors.  Rubenstein and Amerimar installed all new materials, including flooring, feature walls, and finishes on both the ground floor and mezzanine level, in a modern but timeless style.  Lighting was replaced and improved throughout.  New North and South lobby entrances are now complete, incorporating a 350-square-foot media wall in the South Lobby. The North lobby saw renovations to the retail and amenity areas, along with a new seating area. New twinned escalators will carry tenants and visitors to a new mezzanine-level main desk and centralized security check-in, the building ownership states.

Additionally, a connected two-floor tenant amenity space on the building’s eighth and ninth floors, consisting of an updated grand atrium on the ninth floor and fitness center on the eighth floor, linked by a new internal staircase was completed. The four-story atrium has always been one of Wanamaker’s significant features, but the soaring space has been underutilized for many years. By redesigning the atrium with new furniture and installed features like a mini-amphitheater, along with all new finishes and fixtures throughout, Rubenstein and Amerimar are activating this common space. The renovated atrium will connect directly to the new state-of-the-art fitness center on the eighth floor via an internal staircase.

“We believe that our new amenity center demonstrates incredibly well the kind of environment that Wanamaker tenants want,” says Jerry Marshall, co-chairman and CEO of Amerimar.  “In particular we feel that Wanamaker, as improved, will be even better positioned to inspire visionary companies and enable them to attract and retain the creative-class and tech employees currently driving redevelopment in the Market East submarket.”

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Monday, May 13, 2019

Need for modern workspaces driving suburban office boom

Natalie Kostelni Reporter Philadelphia Business Journal
Multiple new office projects, totaling nearly 1 million square feet, are in various stages of planning in Philadelphia's suburbs as developers seize on a lack of available space and rising rents that can financially support new construction.

This points to a potential wave of new development later this year and into next year.

At least one developer, Equus Capital Partners Ltd., is trying to get ahead of the competition by building on speculation, or without any tenants lined up. The company is finalizing approvals on a 145,000-square-foot building at 675 E. Swedesford Rd., in Wayne. “We plan to start construction in September,” said Steve Spaeder of Equus.

It's considering another spec project. “We’re taking a serious look at 400 Barr Harbor [Drive] in Conshohocken,” Spaeder said. That proposed 218,000-square-foot building is going through the approval process and Equus will “take a hard look” at breaking ground on it next spring, Spaeder said. 

Other projects in the works but not on spec include: Seven Tower Bridge, a 250,000-square-foot building in Conshohocken that may have Hamilton Lane as an anchor; Metroplex Two, a 280,000-square-foot structure in Plymouth Meeting; and 650 Park Ave., a 100,000-square-foot building in King of Prussia.

Two projects are underway that have substantial pre-leasing. Keystone Property Group broke ground on Sora West, a 429,000-square-foot complex in Conshohocken, and Brandywine Realty Trust is developing 145 King of Prussia Rd., a 150,000-square-foot structure in Radnor as part of Penn Health's new campus.

It's not often a combination of factors conspire to support new office construction. However, higher rents, low vacancies, a lack of large blocks of space — particularly for trophy space — and tenants desiring fresh, new space are driving developers to queue up these projects.
Full Story:

Improving Multifamily Tenant Demand (Video)

Thursday, May 9, 2019

Lending Shoots Up in Opportunity Zones

In the latest sign of investor interest in federal opportunity zones, the Federal Home Loan Mortgage Corp., known as Freddie Mac, had a nearly 180% increase in the amount of multifamily loan origination in these areas designated as economically distressed in 2018, the first year that new tax breaks kicked in under the program.

Of the 630,000 conventional multifamily units. including apartments, mobile homes, senior and student housing, that Freddie Mac financed last year, 71,000, or 11.3%, were located in areas that are now designated as opportunity zones, according to a new Freddie Mac analysis.

The increase escalates a trend that surfaced in 2015, the year Freddie Mac launched a small-balance loan program. Prior to 2015, there were very few small-balance loan properties in Freddie Mac's lending portfolio. Following the creation of this program, financing activity in this market segment increased tremendously, and the effect was seen acutely in opportunity zones.

"The research shows that Freddie Mac financing for affordable housing in economically distressed areas predated the creation of opportunity zones," said Steve Guggenmos, vice president of research and modeling for Freddie Mac Multifamily, in a statement. "Our financing in these areas has far outpaced our work elsewhere, consistent with our mission to seek out the areas most in need of affordable housing."

Census tracts identified as opportunity zones are found in each state and are characterized by high poverty and subpar employment opportunities. Tax provisions enacted in December 2017 allow for the preferential tax treatment of capital gains if these gains are placed into opportunity funds that are invested in these zones.

While Guggenmos said the ultimate impact of additional and tax-advantaged investments remains to be seen, other research shows that investors are clearly targeting multifamily investments in opportunity zones.

Multifamily rental housing is expected to be a key target for opportunity funds.

[See latest list of all the Opportunity Zones funds that have been created.]

Of the funds identified by the National Council of State Housing Agencies, 70 have an investment focus of multifamily residential development, with estimated funds totaling between $14.9 billion to $15.2 billion.

Funds range in size from $1 million to $3 billion, with an average fund size of $215 million, James Tassos, deputy director of tax policy and strategic initiatives of NCSHA, reported this week.

Commercial real estate is a strong focus of opportunity funds, with 91% reporting investment in multifamily residential, student housing, mixed-use, hospitality, or other development.

The number of funds planning to invest in community revitalization, affordable housing, or workforce housing make up about 58%, Tassos said.

Freddie Mac's research found that affordable rental housing for very low-income households is more than twice as common in opportunity zones, where median incomes are lower and poverty rates are higher than the national average.

Freddie Mac found that opportunity zones have historically contained a large number of multifamily rental units that are affordable to very low-income households. These areas often have a higher proportion of small- to medium-sized multifamily properties, which tend to cater more to lower-income renters.

"Investor interest in this initiative is already high and will likely continue to grow as more investors become aware of the opportunities for financial gain and social impact. If success is measured by the effectiveness of bringing new capital to these neighborhoods, then this initiative appears to be moving in that direction," Freddie Mac concluded.

Penn State Board Approves Architect for New $71M Art Museum Project

By John Jordan
The Penn State University Board of Trustees has proposed the construction of a new freestanding art museum on the University Park campus that would be located in The Arboretum at Penn State.
The plan for the new museum building would encompass approximately 68,000 square feet to 73,000 square feet, with a total project budget of $71.1 million. The project would be funded by Penn State’s five-year capital plan that runs through 2023. The cost of the new art museum could increase to as much as $85 million with philanthropic support. Final project plans and costs are subject to approval by the Board of Trustees.

The design phase of the project will commence immediately, with construction—pending board approval—expected to begin in late 2020 for a planned opening in the fall of 2022, coinciding with the 50th anniversary of an art museum at Penn State.
The Penn State Board of Trustees approved the selection of Allied Works as the architect to design the new University Art Museum at its meeting on Friday, May 3. Allied Works was selected based on its extensive experience in the design of arts and educational facilities and for its interdisciplinary, research based, and collaborative approach to architecture, the board stated.

The firm, founded by Brad Cloepfil in 1994 in Portland, OR, is internationally recognized for its innovative arts, cultural and civic buildings, including academic art museums and art schools at higher-education institutions. Examples of the firm’s work include the Contemporary Art Museum St. Louis, the Seattle Art Museum, the Museum of Arts and Design in New York City, the Clyfford Still Museum in Denver, and the University of Michigan Museum of Art.

The proposed University Art Museum would replace the existing Palmer Museum of Art and include expanded gallery and exhibition space, providing greater access to its 9,300-object collection; enhanced learning, creative and social opportunities for students; and areas for events and community gatherings, while continuing and expanding the Palmer Museum’s role as a cultural, educational and scholarly resource for the Penn State community and visitors.
Under the plan, the existing Palmer Museum of Art building on Curtin Road and the signature bronze lion’s paws that flank its front steps would remain, as a student-focused space. A task force has been assembled to determine exactly how the student space could be utilized.

“The new art museum would allow us to advance Penn State’s teaching and research mission while serving as the cultural gateway to the University,” says Erin M. Coe, director of the Palmer Museum of Art. “The new facility would greatly expand public access to our growing collections in an exceptional setting while offering innovative and engaging experiences for our students, the community, and visitors from around the world.”

The proposed location of the museum is along Bigler Road near the entrance to the Arboretum, across from the Lewis Katz Building and adjacent to the H.O. Smith Botanic Gardens, with the exact site to be determined in consultation with the selected design firm.

“This project would fulfill our long-standing vision of the Arboretum as a venue for the arts as well as a place of beauty and education about the natural world,” says Kim Steiner, professor of forest biology and director of The Arboretum at Penn State. “The Arboretum is already one of the most popular destinations for visitors to the area. With this inspired partnership, I expect us to develop into a regional and national destination.”

Wednesday, May 8, 2019

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AXA Advisors Inks Deal at The GSB Building

Multinational insurance firm AXA Advisors leased 39,382 square feet at Keystone Property Group's Class A GSB Building in Bala Cynwyd, Pennsylvania.

The 12-story structure at 1 Belmont Ave. totals 245,000 square feet. Built in 1959 and renovated in 2017, the 4-Star property spans eight acres less than 15 miles from Philadelphia International Airport.

The landlord  originally purchased the building in December 2015 for $46 million, or about $188 per square foot.

ShipBob Inks Deal at Lehigh Valley Trade Center

ShipBob, a logistics services company, leased 123,140 square feet at Trammell Crow Company's Class B warehouse in Bethlehem, Pennsylvania.

The 297,650-square-foot, single-story structure at 4779 Hanoverville Road comprises 20 loading docks and levelators, one drive-in bay, 52- by 54-foot column spacing and a 32-foot clear ceiling height. Completed by the owner in 2016, the 4-Star property at Lehigh Valley Trade Center is less than six miles from Lehigh Valley International Airport.

Tuesday, May 7, 2019

Old Navy Inks Deal in Saint Davids, Pennsylvania

Clothing and accessories retailer Old Navy leased 21,526 square feet at St. David's Square Shopping Center in Saint Davids, Pennsylvania.

The 157,041-square-foot building at 550 E Lancaster Ave. was built in 1992. The center spans 77.8 acres less than 14 miles from downtown Philadelphia.

Old Navy plans to take occupancy at the property by the third quarter of 2019.

Endurance/CenterSquare Announce the Development of an Infill, Last Mile Industrial Warehouse in Philadelphia

An affiliate of Endurance Real Estate Group, LLC (“Endurance”) and Center Square Investment Management is pleased to announce the acquisition of 205 Schoolhouse Road, a 16.4 acre land site located in Souderton, Pennsylvania (“Project”). The partnership acquired the property from Franconia Technology Associates.

“We are excited about our latest industrial project in Montgomery County, 205 Commerce Center (“205 CC”)”, stated Albert J. Corr, Senior Vice President of Endurance.  Corr added, “Site work will be commencing in June with completion of construction by year end.”  The building will contain 176,700 RSF with concrete tilt wall construction, 32’ clear height, a TPO roof, ESFR sprinkler, LED lighting with motion sensors, up to 29 dock positions, 1 drive-in door, and a 1,000 amp, 3-phase electric system.

205 Commerce Center is in an excellent infill location within 20 miles of CBD Philadelphia, located at the recently improved and expanded Lansdale Interchange of the PA Turnpike - Exit 31 - 476 Northeast Extension.

The Montgomery County industrial market features high barriers to entry with limited land available for new industrial development. Vacancy rates in the Philadelphia Metro reached an all-time low at 4.8% in the first quarter of 2019. Tenants from industries in logistics and e-commerce, such as Amazon, made up a predominant portion of demand growth in Q1 2019. Retailers’ need to optimize their supply chains, plus Philadelphia’s convenient location, sets up the area’s industrial market for a promising 2019 and beyond.

“205 CC represents a great infill development opportunity with immediate access to the Philadelphia MSA due to the recently expanded Northeast extension of 476 from Mid-County up to Lansdale. This development will provide prospective tenants the modern attributes of a new warehouse that have been lacking in suburban Philadelphia given the shortage of new industrial product delivered over the last decade.” stated Jared Newman, Vice President of Acquisitions for Endurance Real Estate.

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Monday, May 6, 2019

Distribution Management Signs Large Industrial Lease in Carlisle, Pennsylvania

Distribution Management signed a 419,344-square-foot lease at the Class A Trade Center 44 distribution building in Carlisle, Pennsylvania.

The 621,241-square-foot, single-story facility at 1495 Dennison Circle comprises 69 loading docks and levelators, one drive-in bay, 50- by 52-foot column spacing and a 32-foot clear ceiling height. Built in 2016, the 5-Star property spans 50.4 acres less than 25 miles from downtown Harrisburg.

Elite Flower Services Renews Lease at Burlington Bus Campus

Elite Flower Services, a floret delivery service, renewed its 75,011-square-foot lease at Dolan Contractors' warehouse at Burlington Bus Campus in Burlington, New Jersey.

The single-tenant facility at 9 Campus Drive comprises 28 loading docks, one drive-in bay, 40- by 40-foot column spacing and a 24-foot clear ceiling height. Built in 1994, the property spans 5.7 acres less than 13 miles from Northeast Philadelphia Airport.

Ferrero USA Takes Class A Distribution Building at First Logistics Center @ I-78/81

Ferrero USA, the U.S. arm of the third-largest confectionery company in the world, leased First Industrial Realty Trust's Class A distribution building at First Logistics Center @ I-78/81 in Jonestown, Pennsylvania.

The 738,720-square-foot, single-story structure at 112 Bordnersville Road comprises 135 loading docks, four drive-in bays, 56- by 54-foot column spacing and a 40-foot clear ceiling height. Completed by the owner in 2018, the 4-Star property spans 84.5 acres adjacent to Interstate 81.

First Industrial Realty Trust (NYSE: FR), a Chicago-based owner, operator and developer of industrial real estate, recently reported its first-quarter 2019 results, which included signing 1.8 million square feet of new leases for development and value-add acquisitions year-to-date.

First Industrial's President and Chief Executive Officer Peter Baccile said in a statement, "We continue to see broad-based demand for industrial real estate, reflected in our recent leasing wins at our developments and value-add acquisitions, as well as our portfolio performance. Given low national vacancy levels and supply and demand near equilibrium, the environment for rental rate growth in the sector remains favorable."

Historic Walnut Street Theatre Unveils $39M Expansion Project

by John Jordan,
America’s oldest theater—the Walnut Street Theatre—unveiled a $39-million expansion plan during its annual Gala Concert on Friday evening.
The expansion plan, which will provide more than 35,000 square feet of new space, will also include a fully renovated lobby and box office, additional space for its growing educational programs, two state-of-the-art rehearsal halls, a 400-seat theatre-in-the-round and a public restaurant.

The capital expansion project will allow for the conversion of former rehearsal halls into the first dedicated education spaces in the history of the theatre. When completed, the theatre will offer three new dedicated classrooms that will enhance the capabilities of its Theatre School.
“For over two centuries the Walnut has adapted to the needs of the community,” says Walnut Street Theatre president and producing artistic director Bernard Harvard. “This is the latest reinvention of the theatre that so many in the Greater Philadelphia area call home, and guarantees that generations to come will also be able to make the Walnut their theatre home.”

The theatre has launched a capital campaign for the project that it hopes to break ground on in the spring of 2020. The Walnut Street Theatre is looking to complete the expansion project sometime in 2022. The theatre is seeking contributions from public resources as well as from private philanthropy. Specifically, the theatre is seeking donations from its 50,000 season ticket subscribers, individual ticket buyers, corporations and foundations, as well as from the Commonwealth of Pennsylvania.

The Walnut Street Theatre was founded in 1809 and is the Official State Theatre of Pennsylvania and a National Historic Landmark.
“The expansion will allow us to strengthen our role as an incubator for theatre arts in Philadelphia, while at the same time preserving our history and strengthening our legacy,” says Walnut Street Theatre board chair Richard A. Mitchell. “Our mission statement says in part that we are a non-profit theatre whose purpose is to sustain the tradition of professional theatre, contributing to its future and vitality. Our project does just that.”:

In addition to five main-stage productions, the Walnut Street Theatre for Kids Series and Independent Studio on 3 Series, the Walnut Theatre’s education and outreach programs bring live theatre to more than 150,000 students, teachers, parents and children each year.

Mixed-Use Building on Jeweler’s Row Fetches Nearly $6M

by Steve Lubetkin,
Galman Group, a private investor with interests in more than 30 properties worth more than $930 million, has sold Jewelers’ Row Apartments, 802 Sansom Street (122-124 South 8th Street) in Philadelphia, PA.
The mixed-use property contains 12 apartments and 4 street-level commercial/retail spaces. The five-story building was originally constructed in 1900 and renovated in 2017.

The residential units were recently updated and feature hardwood flooring, designer kitchens with stainless steel appliances and custom cabinets, and stackable washers and dryers. Large windows within the units provide plenty of sunlight and great views of the surrounding neighborhood and Jeweler’s Row.
802 Sansom Street is situated in Washington Square West, with easy access to Interstates 95, 76 and 676 as well as Broad Street and Columbus Boulevard. With a great variety of nearby popular restaurants, shops and entertainment, the property is also convenient to SEPTA’s Regional Rail and the PATCO High Speed Line to New Jersey.

The property attracted considerable attention from investors but was ultimately purchased by an international buyer who was not identified.

“We continue to see foreign capital buying core deals in Center City, Philadelphia. 802 Sansom’s desirability comes from its great location on Jeweler’s Row, close to major employers Jefferson Hospital and Pennsylvania Hospital.”

Ubiquity Global Services Leases 30K SF Call Center in Wilkes-Barre, PA

by Steve Lubetkin,
Ubiquity Global Services, a multinational business process and call center outsourcing organization, has selected a 30,000 square foot call center at at 1061 Hanover Street in Wilkes-Barre, PA for its eighth location worldwide. The move is expected to bring more than 400 jobs to the region in the next few years.
Ubiquity offers live customer experience management services, interactive voice response solutions, and a comprehensive risk and compliance solution that includes fraud investigations, and dispute and chargeback management.

The facility is owned by Mericle Development.
“Northeastern Pennsylvania is the perfect location to help us continue our extraordinary growth and expansion in the United States,” says Matt Nyren, Ubiquity president and CEO. “The local talent pool, proximity to our New York City headquarters and support from state and local economic development groups made Wilkes-Barre an easy choice. We’re excited to grow our global footprint and contribute to the region’s renewal as a hub of commerce.”

Thursday, May 2, 2019

Multifamily Sector Outlook (Video)

The Irvine Apartments Open in Redeveloped West Philadelphia Warehouse

by Steve Lubetkin
Post Brothers has launched leasing at its newest project, The Irvine Apartments, in a century-old former warehousing facility at 780 South 52nd Street at the terminus of the Baltimore Avenue corridor.
The Irvine incorporates floor plans ranging from studios through three-bedroom units, complete with large living spaces, expansive windows and deluxe-sized closets.

“This isn’t one of your cookie-cutter, ground-up luxury high-rise buildings. The Irvine has history and roots in industrial Philly. Our mission was to honor its history and character while creating an elevated, yet practical living experience,” says Michael Pestronk, CEO and co-founder of Post Brothers. “We’re keeping in line with the ever-growing cultural renaissance of West Philly, where we’re seeing an influx of new residents who really care about health, sustainability, and the concept of community, so we wanted to create an experience that echoes those values.”
The Irvine’s interiors include roller shades for apartment windows and customizable mill work for closets, along with full-size stainless steel appliances, antimicrobial quartz countertops, and tile backsplash in the kitchen. Bathrooms feature matte black fixtures, artisanal tile surface, glass shower doors, rain-style shower heads and high-pressure body jets.

The property includes a variety of both indoor and outdoor amenities, including:

  • A fitness center equipped with top-of-the-line cardio and exercise equipment such as Peloton bikes, Precor treadmills, stair-masters, HIIT options, and a variety of selectorized, plate-loaded and free weight stations.
  • A community garden where residents can plant and grow their own flora and produce
  • Fully-equipped outdoor kitchen with grills, dining tables and lounge areas
  • A K9 turf lawn and pet park
  • A co-working space that features a large open area with ample seating, natural sunlight and custom artwork
  • Concierge services including dry cleaning, package storage and online services

“Times are changing, and the modern professional values access to an alternative workspace, ideally with a coffee shop component, and great WiFi that’s close to home,” Pestronk says. “The community garden at The Irvine is also a reflection of our renters’ gravitation toward locally sourced, healthier food access.”
Like all of Post Brothers’ properties, The Irvine incorporates environmental responsibility in its design, from wind power electricity and efficient fixtures to complimentary resident bike storage on the first floor and easy access to public transportation. The Irvine is just three blocks from bus and light rail stations along Baltimore Avenue and is a twenty-minute drive to downtown Philadelphia along I-76 or I-676.

Wednesday, May 1, 2019

Office Performance and Trends (Video)

True North Management Group Sells DoubleTree Philadelphia-Valley Forge for $32 Million

True North Management Group, a New York-based investment firm, sold the 327-room DoubleTree Philadelphia-Valley Forge in King of Prussia, Pennsylvania, to a joint venture between Whitman Peterson and Concord Hospitality for $32 million, or about $98,000 per room.

The seven-story hotel at 301 W. Dekalb Pike was built in 1970 and renovated in 2012.

Steve Nunez, principal of Whitman Peterson, said in a statement, "We were attracted to the asset due to the strong  base of corporate demand within the King of Prussia business park in addition to a limited supply within the submarket and prime location of the hotel."

The firm plans to execute a full-scale property renovation which will include updates to the common areas, rooms and meeting space. Upon completion, which is slated for the second quarter of 2020, the hotel will be elevated to a DoubleTree Hotel & Suites.

Concord Hospitality will handle property management responsibilities in-house.

Mericle to Construct Six Spec Industrials in Scranton/Wilkes-Barre Region in 2019

by Steve Lubetkin
Mericle Commercial Real Estate Services, the developer and owner of CenterPoint Commerce & Trade Park in Jenkins Township and Pittston Township, PA, will construct six spec buildings in the park in 2019, just minutes from Scranton and Wilkes-Barre.
The brisk economy, coupled with the types of space requests his firm has been receiving, led to the decision to construct the six buildings, says Mericle president Robert Mericle.

“For the past several years, there has been strong interest from distribution and manufacturing firms needing bulk industrial space in excess of 200,000 square feet,” Mericle says. “However, lately we have seen a noticeable increase in requests for smaller spaces ranging from 6,000 square feet to 60,000 square feet. Most of our small spaces in CenterPoint are occupied so our 2019 projects will help us meet the needs of a wider variety of businesses.”
The new industrial and flex buildings will range in size from 42,000 square feet to 310,000 square feet.  Site work is underway on the parcels and steel will begin arriving early this summer.

Upon completion of the buildings in late 2019, there will be 43 buildings in CenterPoint totaling approximately 10.7 million square feet.

The six new buildings will total 802,000 square feet and will complement four large industrial buildings recently constructed by Mericle in CenterPoint that can accommodate tenants needing from 200,000 square feet to 1,000,000 square feet.
Mericle says all the new buildings can be divided into smaller spaces. Several will be flex buildings making them suitable for manufacturing, distribution, office, and medical firms.

“There are many companies that lease space in outdated buildings,” Mericle says.  “They are hampered by low ceilings, narrow column spacing, tight truck courts, and lighting and heating systems that are not energy efficient.  Some are even located in buildings in residential neighborhoods that are located a considerable distance from the nearest highway. Our new CenterPoint buildings will give them the opportunity to move into much better, energy-efficient space, immediately adjacent to two interstates, at a lower overall operating cost.”

CenterPoint Commerce & Trade Park is located less than one mile from I-81 and I-476 and is just 10 minutes from Scranton and Wilkes-Barre.  The 51 tenants in CenterPoint employ approximately 5,500 people. Mericle says he expects park employment to rise to about 7,500 upon full occupancy of the 10.7 million square feet.

Greater Philadelphia Office Market Poised for Strong Remainder of 2019

by Steve Lubetkin,
The Greater Philadelphia office market has benefited from another quarter of positive economic indicators marked by low unemployment, an expanding employment base and rising wages.
“Continued job growth within the economy seems to be the main ingredient shaping the office landscape in the metro area.”

According to the Bureau of Labor Statistics, the current pace of job growth in the metro area is about 1.2% year-over-year, which is about two-thirds the pace of US employment growth. Healthcare, technology, and distribution are the three sectors largely driving the job growth in Philadelphia.
“We’re additionally seeing other recent and continuing trends throughout the Center City and Suburban office markets stemming from the increasing demand by tenants for newer, amenity-rich office space that is also well-located with primary access to public transportation.”

Looking ahead, Philadelphia is poised for a strong second quarter, the report noted. With very little construction in the pipeline mixed with low availability rates, vacancies will gradually drop, thus resulting in an increase in rental rates. A combination of these factors suggests the market will remain tight.

Among the other findings of the report:
In Center City, the central and non-central business districts are comprised of more than 62 million square feet of office space at an 8% vacancy rate. Spanning less than five square miles of space, the Center City market is a highly concentrated and competitive market.

In University City, a part of the non-CBD, health and educational institutions drives the market. In the heart of this area, Amicus Therapeutics, a global biotechnology company, signed a 75,000 square-foot lease at Wexford Science and Technology’s class A lab and office building. The facility will be home to 200 employees and will serve as the company’s global research and gene therapy of excellence. Other major tenants providing ongoing demand in the University City submarket include the University of Pennsylvania, the University of the Sciences of Philadelphia and the Children’s Hospital of Philadelphia.

On the other hand, the central business district of Philadelphia, which includes Market Street East, Market Street West and Independence Hall, account for 184 office buildings and holds more than 54 million square feet of space. Class A asking rates continue to increase, but that has not stopped tenants from occupying newly renovated space in the submarket. In Market Street East, a local architecture firm, Ballinger, renewed its 78,951-square-foot lease at 833 Chestnut Street during the first quarter of 2019. Additionally, other large tenants host their headquarters in this submarket such as Five Below, Comcast, and Aramark.

Suburban Philadelphia consists of 18 submarkets, including Southern New Jersey. A majority of the suburban Philadelphia office submarkets enjoy convenient location, good accessibility to the city and lower asking rental rates compared to space in Center City. Rental rates throughout the suburban market range from a high of more than $36.00 per square foot to just over $18.00 per square foot. Factors that tend to influence rates in the suburban submarkets include the age of the building, accessibility, and surrounding amenities.

Conshohocken holds the highest average asking rental rate at $36.63 per square foot as well as the highest average asking rental rate for class A space at $36.77. AmerisourceBergen signed a 400,000-square-foot office lease at SORA West in Conshohocken during the first quarter of 2019. The class A space is located steps from the SEPTA Regional Rail line, giving it excellent accessibility and easy transportation to and from Center City Philadelphia. Furthermore, another submarket to watch is the King of Prussia / Wayne submarket, as CSL Behring just signed a lease for 100,820 square feet and SEL also signed a new 27,000 square-foot lease.

“Conshohocken and Radnor have always been strong,” Fahey says. “Currently, there is new construction occurring in both submarkets, and I think that these submarkets will remain strong and rental rates will strengthen as well. Additionally, I believe we will see a ‘spill over’ effect (from Conshohocken and Radnor) that will strengthen nearby submarkets such as King of Prussia.”