Monday, September 30, 2019

Comcast Spectacor, Cordish Begin Construction on $50M Fusion Arena in Downtown Philadelphia

by John Jordan
Comcast Spectacor and development partner The Cordish Companies have broken ground on the largest esports arena in the Western Hemisphere.

Construction has commenced on the $50-million project that will be home to the Philadelphia Fusion esports franchise, one of 20 international teams competing in the Overwatch League. The development team was joined by Philadelphia Mayor Jim Kenney, members of Philadelphia City Council, and community and business leaders from across the region at last week’s groundbreaking ceremony. Fusion Arena is scheduled to open its doors at the Wells Fargo Center in early 2021.
“We’re proud to break ground on this ambitious project that will usher in a new generation of fans and events to the Philadelphia Sports Complex,” says Dave Scott, chairman and CEO, Comcast Spectacor. “Fusion Arena is a stunning addition to our development plan and partnership with The Cordish Companies, and exemplifies a strong belief in the future of esports.”

“It is incredibly exciting for The Cordish Companies to celebrate the groundbreaking of Fusion Arena with our partners, Comcast Spectacor,” says Blake Cordish, principal of The Cordish Companies. “Today’s celebration marks an important milestone for our partnership as the next phase of development commences adjacent to Xfinity Live! in the heart of the Philadelphia Sports Complex. Fusion Arena will debut as a state-of-the-art, world-class venue in an unparalleled location amid Philadelphia’s beloved professional sports teams.”
In addition to serving as a destination for competitive gaming events, Fusion Arena, designed by global sports and event architecture firm Populous, will also host a live entertainment programming and experiences. Guests will be welcomed by a 6,000-square-foot public entry featuring 2,000 square feet of interactive media surface hovering 30 feet. The venue will boast 60,000 square feet of new construction, featuring a stunning and futuristic design throughout, including seating for up to 3,500 guests, as well as 10,000 square feet of dedicated space for the Xfinity Training Center, broadcast studio and team offices.

The training facility offers development opportunities for players. The technologically-advanced arena will offer unique seating experiences including two balcony bars, club seats with USB ports, flexible loge boxes and exclusive suites.

Friday, September 27, 2019

PIDC seeks new development partner for 109 acres at Navy Yard

Natalie Kostelni Reporter Philadelphia Business Journal
Philadelphia Industrial Development Corp. is looking for a new partner in what will be the next, formative phase in the ongoing redevelopment of the Philadelphia Navy Yard.

The public-private economic development organization is issuing a request for qualifications as it seeks to move forward with the development of two main areas that total 109 acres and provide two vastly different opportunities to further reshape the Navy Yard. The move by PIDC comes after Liberty Property Trust (NYSE: LPT) decided to focus solely on industrial real estate and step away from further work at the Navy Yard.

PIDC is the master planner of the Navy Yard. Liberty had served as PIDC’s development partner since 2004, which is when a master plan for the 1,200-acre site was unveiled. In that time, the Navy Yard has become a thriving hub of activity. In its role, Liberty was at the forefront of those efforts to establish the Navy Yard as a place where companies would feel comfortable locating their headquarters and used architectural design, creating a sense of place and other elements to further that goal.

At this point, the Navy Yard now has a blend of new and historic buildings totaling 7.5 million square feet in use. A mix of 170 companies call it home — including the offices of GlaxoSmithKline, FS Investments and Urban Outfitters as well as a series of manufacturers such as Tasty Baking Co. There are currently 15,000 people working at the Navy Yard, far exceeding the number jobs that were lost when the shipyard closed. 

Full story:

Equus Sells Fully Leased Office Building in Berwyn, Pennsylvania

Equus Capital Partners has sold a fully leased office building in Berwyn, Pennsylvania, to Birmingham, Alabama-based M&H Properties for $56 million, or about $325 per square foot.

The three-story, 172,327-square-foot building at 1000 Chesterbrook Blvd. was built in 1999. The four-star property spans 12.7 acres just five miles south of the confluence of I-76, US Route 202, The Pennsylvania Turnpike and US Route 422.

Since acquiring the property in 2016 on behalf of its fully discretionary $361 million value-add equity fund, Equus Investment Partnership X, LP, Equus embarked on a $2.5 million renovation of the property, according to the company's press release.

Upgrades included new landscaping, lobby improvements, the installation of a tenant lounge, full service cafeteria, and fitness center with full locker rooms and a yoga studio.

Equus Asset Manager Keith Hontz said in a statement, "With a targeted and thoughtful capital deployment program aimed at amenities to attract and retain the region’s top talent, we successfully repositioned both the physical nature of the asset as well as its financial profile, thereby creating long term value for our investors."

Thursday, September 26, 2019

Infrastructure REITs Are Helping to Build Digitally Connected Communities (Video)

Manufacturer Expands Presence at Eddystone PA Industrial Building to 395,000 SF

by John Jordan
Barry Callebaut, a chocolate and cocoa manufacturer, has signed on for an additional 186,000 square feet of space at 1001 Industrial Highway here.

The lease expansion was announced by building owner Novaya Foxfield Industrial LLC (Foxfield), the Mid-Atlantic arm of Novaya Real Estate Ventures of Boston. With the new deal, Barry Callebaut now leases 395,000 square feet of space at the 465,680-square-foot building.
Novaya Foxfield Industrial secured more than $23 million in financing for its purchase of the four-building warehouse complex in December 2018. The buildings are located on 43.7 acres, just off Interstates I-95 and I-476, one exit south of the Philadelphia Airport.

“We are excited to announce our expanded relationship with Barry Callebaut, and thankful for the collaborative process that led to filling this vacancy for the first time in five years. Foxfield will be spending significant capital upgrading the facility to meet their specifications and increase their efficiency from production to distribution,” says Foxfield principal Jeff Harper.
Hugo van der Goes, Barry Callebaut’s VP, Cocoa, North America, says, “Doubling our Eddystone, PA factory footprint is an important step in our cocoa growth journey. The additional space will enable us to add manufacturing lines for cocoa products and to grow our domestically-produced line of powder & butter.”

Novaya Real Estate Ventures has been very active this month. The firm and Wheelock Street Capital sold 1 Technology Drive, a 100,000-square-foot office building in Andover, MA to Sunset Rock, LLC.
Earlier this month, Novaya Real Estate Ventures acquired nine flex/industrial buildings from Wakefield Investments consisting of 700,000 square feet in Wilmington, MA, Billerica, MA, and Londonderry, NH.

In another deal in Andover, International MedTech company Dräger Medical Systems signed a 128,000-square-foot lease renewal for its North American headquarters at 6 Tech Drive in Andover. Dräger plans to complete a full refurbishment of the facility over the next 18 months.

JV Sells 485 Distribution Center for $42.5 Million

by John Jordan
A joint venture between Endurance Real Estate Group and CenterSquare Investment Management has sold 485 DC in Shiremanstown, Pennsylvania, to Denver-based Black Creek Group for $42.5 million, or $93 per square foot.

The 457,000-square-foot distribution center at 485 St. Johns Church Road was built in 1955 and redeveloped in 2018. Spanning nearly 27 acres placed off of the Capital Beltway, the facility includes 72 loading docks with 48 levelators, two drive-in bays, LED lights, ESFR sprinkler system and a 32-foot clear ceiling height.

At the time of the sale, the building was 100% leased to XPO Logistics and Dayton Parts with a weighted average remaining term of over eight years.

Endurance SVP of Development David Erlbaum said in a statement, "This was a long project in the making, two years of being under contract working through a de-leasing effort of a partially occupied obsolete manufacturing and office building, procuring entitlements, followed by another two years working on the demolition and successful redevelopment and lease up of the project."

Headquartered in Radnor, Pennsylvania, Endurance has acquired and developed more than $700 million of assets totaling 13.5 million square feet and sold over 7.5 million square feet with a combined value of $475 million since its launch in 2002, according to its website.

Wednesday, September 25, 2019

PTC Therapeutics Signs 185,000 SF Lease at Bristol-Myers Squibb Campus

by John Jordan
PTC Therapeutics of South Plainfield, NJ has signed a long-term lease for 185,000 square feet with Bristol-Myers Squibb for multiple buildings at its 433-acre Princeton West R&D campus here.

The global biopharmaceutical company will occupy an existing state-of-the-art biologics production facility at 311 Pennington-Rocky Hill Road, as well as house research and operations there.

PTC Therapeutics will occupy Buildings 9, 10, 12, 13 and a portion of Building 18 at the Princeton West campus. PTC plans to further develop the biologics facility to support gene therapy production, and foster innovation and employment in the community. In addition, the firm plans to move its research operations to a newly renovated building on the same campus. These facilities will complement and enhance existing operations at PTC Therapeutics’ global headquarters in South Plainfield.

“Bristol-Myers Squibb’s Hopewell campus is a state-of-the-art, move-in ready research, innovation and manufacturing space that is located in a region with a highly skilled workforce. Repositioning a corporate campus to accommodate multiple users is challenging and complex.

PTC Therapeutics announced in August when releasing its second quarter financials that it had has signed a long-term lease agreement securing a state-of-the-art biologics facility to support the company’s expansion into multiple gene therapy programs. The company stated that the facility was currently operating under cGMP standards by its current tenant, Bristol-Myers Squibb, and will be fully transitioned to PTC by mid-2020. PTC intends to consolidate its discovery and research operations in the same campus.

The 433-acre, 1.1 million-square-foot property features 33 buildings, including chemistry, biology and biotechnology research and development facilities; a biological clinical supply manufacturing facility; warehouse space; and corporate offices. A full-service café, substantial fitness center and multiple conference spaces are available for tenants’ use.
Bristol-Myers Squibb had been exploring a variety of approaches including leasing large portions of the complex to like-kind users while simultaneously pursuing a sale to a single investor. Additional space for lease includes 500,000 square feet of research and development space, a portion of which contains two recently renovated state-of-the-art biology R&D modules.

The property also features a 106,000-square-foot global data center and 330,000 square feet of office space for lease. The campus is supported by a central utility complex, including an N-4 waste water treatment plant that can facilitate future development. The site is expandable by 1.8 million square feet, with local zoning recently changed to allow for the production and assembly uses related to the fields of medicine, pharmacology and biologics.

Tower Health-Drexel University to Pay $50M for St. Christopher’s Hospital for Children

by John Jordan
The proposed $50-million sale of the St. Christopher’s Hospital for Children here by Tower Health and Drexel University was approved earlier this week by the U.S. Bankruptcy Court.

U.S. Bankruptcy Court Judge Kevin Gross said at a hearing on Monday that he would approve the sale subject to final documentation being submitted to the U.S. Bankruptcy Court in Wilmington, DE, according to a report in the Wall Street Journal.
Last week, Tower Health and Drexel University announced they had entered into an agreement to acquire St. Christopher’s Hospital for Children for $50 million in a deal they said would ensure that the health care provider would “continue its role as a vital resource for families in North Philadelphia and the region.”

“Tower Health and Drexel are committed to the North Philadelphia community—including the more than 30,000 children who depend on the hospital for their primary care and the 70,000 children served annually by the hospital’s emergency department—as well as its growing network of primary and specialty care locations throughout the Philadelphia suburbs and New Jersey,” said Clint Matthews, president and CEO of Tower Health.
The sale of St. Christopher’s to Tower and Drexel is part of the process to resolve the Chapter 11 bankruptcy filed by American Academic Health Systems LLC, of which Center City Healthcare—the owner and operator of St. Christopher’s—is a subsidiary, on June 30, 2019.

Tower and Drexel affirmed their commitment to keeping the hospital intact, while providing operational expertise and financial security to strengthen the venerable institution that has been a fixture in North Philadelphia for 144 years.

Tower Health says it will take the lead operationally and work to preserve St. Christopher’s legacy of providing quality health care for families and nationally recognized programs for children.
In addition to serving as a critical resource for the care of children in underserved neighborhoods, St. Christopher’s is also an important part of medical student education for the Drexel University College of Medicine.

“St. Christopher’s and Drexel’s College of Medicine have had a long-standing and successful academic affiliation for pediatric clinical education,” said Drexel President John Fry. “It has served as an important training site for more than 20 years for Drexel’s third- and fourth-year medical students and their hospital-based clinical rotations in pediatrics.”

Tower Health and Drexel will assume operations of St. Christopher’s Hospital prior to the end of the year. The new owners vowed a seamless transition with St. Christopher’s existing partners.

Tower Health consists of Reading Hospital in West Reading; Brandywine Hospital in Coatesville; Chestnut Hill Hospital in Philadelphia; Jennersville Hospital in West Grove; Phoenixville Hospital in Phoenixville; and Pottstown Hospital in Pottstown. It also includes Reading Hospital Rehabilitation at Wyomissing; Reading Hospital School of Health Sciences in West Reading; home healthcare services provided by Tower Health at Home; and a network of 22 urgent care facilities across the Tower Health service area.

The Drexel University College of Medicine currently educates more than 2,000 future physicians, biomedical scientists and health professionals. It offers some of the most innovative and rigorous academic programs available, incorporating the Drexel’s expertise in engineering and technology into patient-centered medical training. The college is home to one of the nation’s leading centers for spinal cord research; one of the foremost centers for malaria study; and a highly regarded HIV/AIDS program with extensive NIH-funded research in prevention and therapeutic interventions.

Tuesday, September 24, 2019

Loan Amortization, Loan Term, and Balloon Payments in Commercial Real Estate Explained (Video)

Office-Flex Space Growing in Philadelphia

by John Jordan
While still a small component of the overall office market here and in Pittsburgh, a newly released report by CBRE states that the office-flex inventory in both cities has grown significantly in the past year.

Philadelphia’s office flexible-space inventory grew to 1.1 million square feet by the end of the second quarter of 2019, an increase of 308,000 sq. ft., or approximately 38%, from a year earlier.

Flexible space now accounts for 1% of Philadelphia’s total office inventory, up from 0.7% a year ago. Still, that ratio comes in below the U.S. average of 1.8%, indicating that there is room for the sector to grow in Philadelphia.

“When co-working operators began expanding in Philadelphia a few years ago, startups drove the demand. However, many operators have shifted their focus and are now targeting larger corporate users. So far in 2019, the co-working footprint in Philadelphia has already grown at a higher rate than each of the previous two years and we anticipate that trend will continue.”
Flexible space is heavily concentrated in Philadelphia’s Market West submarket, which accounts for 47.5% of the market’s flexible space inventory.

In the City of Pittsburgh, new inventory of office-flex space has come to market of late. The report on the Pittsburgh office-flex market notes that Pittsburgh’s flexible office space inventory grew to 616,000 square feet by the end of the second quarter of this year, an increase of 121,000 square feet or approximately 24%, from a year earlier. The office-flex market has grown by more than 250% since 2014, according to the report.

Flexible space currently accounts for 0.8% of Pittsburgh’s total office inventory, up from 0.6 %a year ago.
“Pittsburgh’s universities and growing technology industry have helped accelerate the demand for flexible office space. Currently, there are 18 different flexible office space operators in Pittsburgh offering lease term flexibility and highly appealing workplace environments.”

Flexible space is heavily concentrated in Pittsburgh’s Downtown submarket, which accounts for 34.4% of the market’s flexible space inventory.

National Office-Flex Market Trends

Nationally, the flexible office space sector currently occupies a cumulative 71 million square feet, or 1.8% of the office space in 40 U.S. markets.

Forecasts the national flexible office space will expand to approximately 13% of office space by 2030, reaching up to 600 million square feet. Even in a low-growth scenario, has flexible office space claiming up to 6.5% of the market by 2030.

Fueling that growth is demand from small businesses and enterprise users alike that favor the flexibility of office accommodations on relatively short-term leases, allowing them to expand or contract their space according to the needs of their business. Additionally, the flexible office space category has room to grow in every U.S. market. Even markets where flexible office space is well established—such as San Francisco at 4% of its office market and Manhattan at 3.6%—aren’t as penetrated as major international markets like London and Shanghai, both at 6%.

“We’re seeing a fundamental change in the expectations that organizations and their employees have for the workplace. This change is spurring an increasing number of companies to engage with flexible office solutions that provide the physical environment and business terms they prefer. This shift is ongoing. There are some very bold predictions in the marketplace – with some calling for flexible space accounting for as much as 30% of office space in the future. There is simply not enough available office space to support this supply without even more drastic changes in tenant behavior.”

Monday, September 23, 2019

Korean Cosmetics Manufacturer to Build North American HQ in Lackawanna County

Pennsylvania Gov. Tom Wolf reported on Friday that a Korean cosmetics manufacturer has plans to expand its operations here and create 280 new jobs.

Seokoh, Inc., owned by Kolmar Korea, currently owns a 70,000-square-foot facility and leases three other facilities. The company will purchase two adjoining sites next to its current manufacturing facility in the Scott Technology Park to construct a new 200,000-square-foot facility, state officials said.
The company will also renovate its current manufacturing facility and purchase new equipment to provide for streamlined operations and future growth. The firm will invest $27.9 million into the project, and has committed to create at least 280 new, full-time jobs and retain 290 existing jobs over the next three years.

“This expansion project is planned to be the location of the company’s North American headquarters, adding ‘beyond continents’ to ‘beyond science, beyond inside, beyond Kolmar… for an ever changing and evolving Kolmar Korea’,” said Jason Lee, director, North American Business Division of Kolmar Korea.
Seokoh is a contract manufacturer and filler of premium cosmetics and personal care products. Seokoh and its affiliates/subsidiaries offer full concept-to-shelf services including product formulation and development, color matching, manufacturing, filling and ingredient and packaging sourcing.

Seokoh received a funding proposal from the Pennsylvania Department of Community and Economic Development for a $126,000 workforce development grant to help the company train its existing workers and $480,000 in Job Creation Tax Credits to be distributed upon creation of the new jobs.

The company was also encouraged to apply for a $7.25-million loan from the Pennsylvania Industrial Development Authority (PIDA). The project was coordinated by the Governor’s Action Team.

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Are flexible co-working spaces a threat to larger economy? from CNBC.

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Novaya Foxfield Industrial Buys 29-Acre Site in Conshohocken, Penn

Novaya Foxfield Industrial, the Mid-Atlantic arm of Novaya Real Estate Ventures, purchased a 29-acre site in Conshohocken, Pennsylvania, from a private local developer. The acquisition represents Novaya Foxfield Industrial’s 14th acquisition in the Mid-Atlantic region.

Foxfield Industrial plans to demolish the existing chemical processing plant at 900 River Road and build King of Prussia Logistics Hub in its place. The 350,000-square-foot distribution center is expected to have a 36-foot clear ceiling height.

Foxfield Principal Jeff Harper said in a statement, "KOP Logistics Hub is a bullseye for any company interested in servicing the western suburbs of Philadelphia and beyond, with its proximity to interstate access, close by labor pools and densely populated neighborhoods."

To date, Novaya has transacted on more than 9 million square feet of industrial, flex, office, residential and urban retail product with gross asset value in excess of $1 billion in partnership with several of the premier institutional and family office investors worldwide, according to its website.

Sandkris Properties Buys 250,000 SF Industrial Building for $32M

by John Jordan
Sandkris Properties, Inc. of Haverford, PA has purchased the 249,405-square-foot industrial building at 2621 Van Buren Ave. for $32 million.

 The seller was Bailard Inc’s Real Estate Fund & Elm Street Real Estate Investors, LLC.
The property consists of Class A, multi-use space and boasts such amenities as multiple outdoor seating and collaboration areas, grab and go food service, an Internet café and a new multi-purpose meeting room with the latest AV capabilities.

Over the past several years, the previous ownership invested significant capital and executed an extensive improvement plan to upgrade the property to a best-in-class facility. In addition to the new amenities, capital improvements also included new common areas, lobbies, restrooms, HVAC units, windows and a partial roof replacement. On the exterior, a new façade, irrigation system and landscaping were installed and improvements to the parking lots were completed, Beach notes.
The Van Buren property is located off the Route 422 corridor in Montgomery County and is in proximity to primary roadways, such as the Pennsylvania Turnpike, Interchange 76 and Route 202.

“With its extensive renovations, attractive amenities and close proximity to the rapidly expanding King of Prussia market, the Van Buren property represented an excellent opportunity to acquire a quality Industrial asset with a diverse tenant base, stable cash flow and promising future prospects. Given the highly competitive market for Industrial acquisitions and the limited product available, we are quite pleased with the purchase."

The building is currently 93% occupied. Its tenant base includes Comcast, PJM, Paychex, CertaPro, Megger, Merkle and Monitorying Analytics.
The remaining available space in the building is limited to two corner office suites consisting of approximately 11,400 square feet and 6,700 square feet.

Sandkris Properties is also in the midst of a significant industrial build-to-suit development in the Warminster area. Fully approved, the project calls for a 249,600-square-foot state-of-the-art building.

Thursday, September 19, 2019

Destination Maternity in NJ Weighs Possible Sale & Impact on 500+ Stores

Potentially adding to national retail properties' turnover this year, Destination Maternity, the largest U.S. chain of maternity apparel specialty shops, is weighing options for its nearly 500 brick-and-mortar stores, including a possible sale.

The retailer, based in Moorestown, New Jersey, said it is reviewing potential strategic and financial alternatives. Those include a sale or merger, "continuing to pursue value-enhancing initiatives as a standalone company, along with capital structure optimization that may involve potential financings and/or the sale or other disposition of certain businesses or assets," according to the company.

It has retained Greenhill & Co. as financial adviser to assist with its strategic alternatives review.

“While we continue to believe we have a compelling business and remain focused on delivering long-term profitable growth, challenges persist and more needs to be done," Destination Maternity Chief Financial Officer Dave Helkey said in a statement. "We believe that it is in the best interests of our shareholders to conduct a thorough evaluation of all options reasonably available to the company to position the business for success.”

The domestic retail landscape this year is littered with closed stores and bankruptcy filings, and more are looming, with a number of them involving apparel sellers. Kids clothing chain Gymboree Group filed for Chapter 11 protection, as did Charlotte Russe, Charming Charlie and Payless ShoeSource.

Destination Maternity sells its apparel at nearly 1,000 brick-and-mortar destinations. It operates 446 stores in the United States, Canada and Puerto Rico under the Motherhood Maternity, A Pea in the Pod and Destination Maternity brands. In addition, it leases space and sells goods within 491 department stores and baby specialty stores, including Macy’s, Buy Buy Baby and Boscov’s.

"Generally, we are the exclusive maternity apparel provider in our leased department locations," the company said.

Destination Maternity's net sales for the second quarter ending Aug. 3 dropped almost 12% to $84.9 million from $96.4 million in the year-ago period.

"Sales were negatively impacted by the net closure of six-owned locations and 55 leased lease locations as well as a decrease in comparable sales," the retailer said.

Comparable sales for the second quarter of fiscal 2019 decreased nearly 11% from a year ago, a drop attributable to a roughly 12% slide in comparable store sales and a 6.4% decrease in e-commerce sales. Destination Maternity has websites including, and, as well as through some of its retail partners, including Amazon and Macy’s.

“Our results this quarter illustrate the ongoing headwinds facing our business," Helkey said. "While cost-savings initiatives drove reductions in [selling, general and administrative] expense and a pullback in promotional cadence helped to hold margins in line with the prior year, sales declines of 11.9% year-over-year more than offset the benefits to our bottom line."

In late June, Destination Maternity announced it was doing a workforce reduction that would generate cost savings of $4 million to $4.5 million on an annual basis in an "effort to become a more efficient and profitable organization." The retailer didn't disclose how many employees it let go.

During a second quarter analyst call, Lisa Gavales, described as chair of Destination Maternity's interim office of the chief executive, said there is no definitive timetable for completing the strategic review. Marla Ryan stepped down as CEO in June.

"During the review process, we will be focused on stabilizing our financial performance while the company also continues to search for a permanent CEO," Gavales said.

There's no assurance its review process "will result in the approval or completion of any particular strategic alternative or transaction in the future," according to Destination Maternity.

The retailer added it doesn't intend to disclose developments or provide updates on the progress of its review of strategic alternatives "unless and until required or when the company determines appropriate."

Wednesday, September 18, 2019

Invest in REITs or real estate? (Video)

KC Conway CCIM on #Tariffs, #CRE, and the Cycle (Video)

Wharton Industrial-Walton St. Capital Buy Philly Industrial Building

by John Jordan
Wharton Industrial Partners of New York City and Chicago-based Walton Street Capital have acquired a 283,500-square-foot industrial property at 2400 Weccacoe Ave. located three miles outside of Center City here.

The 13.5-acre site was sold by a Zurich-based individual investor who purchased the property in 2006.  No financial terms of the transaction were disclosed.
Wharton Industrial and Walton Street plan to invest upwards of $10 million to completely transform the site, which it will rebrand as “SoPhi (pronounced, Sōfee) Logistics Center.”

“We are very excited to have acquired 2400 Weccacoe Avenue as it provides a unique opportunity to create a true ‘last mile’ warehouse in the middle of the fifth largest MSA in the United States,” says Peter C. Lewis, president of Wharton Industrial. “We are planning a carefully curated extensive renovation to meet the needs of today’s users."

Improvements will include installing a new roof, leveling the interior floors, adding new lights, expanding and upgrading the loading docks, repaving the entire site, painting the interior and exterior of the building, adding new modern tailgate doors and fresh landscaping, among other upgrades. The new facility is expected to be delivered in early 2020.

“The buyer was attracted to the location of this facility being adjacent to the Packer Avenue Marine Terminal and its close proximity to Center City and University City.  Once completed, this property will truly connect Philadelphia’s people, ports and roads.”

Originally built in 1970, the facility has been retrofitted and converted for many different uses over the last few decades, most recently serving as the home to Hyundai Rotem, a South Korean company that vacated the property in 2018.
The SoPhi Logistics Center is located near the Port of Philadelphia, Philadelphia International Airport, Interstates 95, 295 and 76 and three miles from Philadelphia City Hall.

Tuesday, September 17, 2019

Three Philly-Area Multifamily Properties Trade for $26M

by John Jordan
In a clear sign of the strength of workforce housing in the Delaware Valley, three area multifamily assets in the region sold in a four-week time span.

The deals involved properties in Pennsylvania, Delaware and New Jersey and totaled $25.9 million.
The three properties closed within four weeks of each other.

The properties that changed hands were: Farrand Village, 165 units, Wilmington, DE for $11 million; Northridge Townhomes, 87 townhouse-style units, Pleasantville, NJ for $8.3 million and 135-137 North 3rd St., 16 apartments and two retail spaces, Philadelphia for $6.6 million.
No further terms of the transaction were disclosed, including the identity of the buyer(s) or seller(s).

“We are seeing a high level of buyer demand for workforce housing Class B and C assets, as well as urban trophy multifamily and mixed-use properties. Both product types are performing very well in the Philadelphia MSA due to the diverse and tight job market. Market conditions make this a terrific time for sellers and the depressed level of inventory, continued low interest rates, strong fundamentals, and increased buyer pool ensure the market for apartment assets will remain extremely competitive.”

 3Q19 Philadelphia Local Apartment Report, multifamily is outperforming expectations due to extremely low unemployment and job growth in the Philadelphia MSA. Job growth is also fueling absorption of new product, primarily in Center City and King of Prussia. Vacancy is forecast to drop below 4% this year for the first time since 2006, which is notable given the continued delivery of new units. It is anticipated that 2019 will see the completion of 6,100 new units across the Philadelphia MSA—a 20-year high, the brokerage firm states.
“Multifamily investments in the Delaware Valley typically provide investors with an attractive yield and better regulatory environments than New York or Washington, D.C. We are seeing an abundance of new, out-of-area capital coming into the Philadelphia market, which has created a new buyer pool. A number of our transactions this year were purchased by buyers that are new to this market.”

Monday, September 16, 2019

JV Buys Former Hyundai Rotem Property for $16.8 Million

A joint venture between Wharton Industrial Partners and Walton Street Capital purchased a 283,500-square-foot industrial facility in Philadelphia from Rimas Properties for $16.75 million, or $59 per square foot.

The vacant building at 2400 South Weccacoe Ave. was previously occupied by Hyundai Rotem, a South Korean company that made train cars for SEPTA that vacated the property in 2018. Built in 1970, the property spans 13.5 acres near the Port of Philadelphia, Philadelphia International Airport, Interstates 95, 295 and 76 and just three miles from Philadelphia City Hall. 

The new ownership plans on making improvements to the property upwards of $10 million. Once completed in early 2020, the building will be rebranded as SoPhi Logistics Center.

"The buyer was attracted to the location of this facility being adjacent to the Packer Avenue Marine Terminal and its close proximity to Center City and University City."

Experts Predict Industrial #CRE Markets Will Weather Tariff Headwinds

by John Jordan
Real estate developers and investors at a recent two-day industrial real estate summit concluded that the market’s continued decade long-run of strong growth will continue with lower vacancy and higher rental rates in top markets despite some economic headwinds.

“The industrial sector has experienced significant growth over the past 10 years as ecommerce and supply chain realignment have reshaped the way businesses utilize industrial space and deliver goods to businesses and consumers. While there is concern regarding the long-term impact of tariffs and the potential for an economic downturn, we expect the industrial sector to weather any storm and maintain positive momentum.”
The top markets are land-constrained and port-centric. The top industrial markets expected to continue to perform well into 2020 will be: California’s Inland Empire, Dallas, New Jersey/New York City, Seattle, Chicago, and Miami, among others.

“Industrial remains one of the top investment classes, buoyed by corporate supply chain expansion and the ability to generate stable returns without the volatility seen in other market sectors. As we head toward 2020, we’re seeing investors focus on reducing risk and returning to core investments that can provide steady income growth.”
In addition to economic instability and tariffs on Chinese imports as potential headwinds that could limit investment growth, summit participants say other negative influences could be overbuilding and rental rate stagnation in some markets.

Chicago-based CenterPoint Properties, pointed to Seattle, Los Angeles, Miami, Oakland and New Jersey as markets that have seen record growth and markets that will offer long-term stability even if an economic downturn takes place.

“We are looking for rental growth that doesn’t have a lot of volatility. Markets with low vacancy rates, strong rental rates and proximity to ports should continue to fare well into 2020.”
Most U.S. industrial markets tracked are reporting single digit vacancy rates, despite the influx of new product. The strong demand and tight supply are also putting upward pressure on rents in many markets.

Rent growth is a key indicator driving investment decisions, said Jojo Yap, chief investment officer and co-founder of First Industrial Realty Trust of Chicago, which has 63 million square feet of industrial assets in its portfolio and another 5 million square feet under development.

“A driving force for making profitable investments and avoiding capital and value destruction is increasing net operating income. We are very focused on investing in submarkets where we can achieve above average rent growth. Last quarter we boasted the highest rent growth of all national industrial REITs at 13.4% cash on cash on new and renewal leasing. That was the highest in our 25-year history.”

The firm has shifted its portfolio in recent years to increase its holdings in coastal markets, given the potential for higher rental rates. “Twenty percent of our portfolio income is in Southern California—and growing—and overall the coastal, high barrier markets now represent more than 40% of our portfolio income."

“Rental rates are increasing at higher rates in coastal markets.  We have seen increases of 40% or more on some rollovers in the South Bay area of Los Angeles and north of 25% in Miami,” he added.

Market Monitor: Jeung Hyun REIT Picks (Video)

Thursday, September 12, 2019

Hospitality Performance Update from Baird (Video)

T.J. Maxx Inks Deal at West Sadsbury Commons

National department store company T.J. Maxx leased 20,043 square feet at West Sadsbury Commons in Parkesburg, Pennsylvania.

The 84,026-square-foot building at 200-400 Commons Drive was completed in 2002. Spanning north of 136 acres, the power center is less than 20 miles from Lancaster.

Wednesday, September 11, 2019

Comcast Technology Center wins global ULI award

Natalie Kostelni Reporter Philadelphia Business Journal

Comcast Technology Center was a recipient of this year’s Urban Land Institute’s annual Global Awards for Excellence, which is considered one of the development industry’s most prestigious awards programs.

The building at 1800 Arch St. in Philadelphia was among 11 projects from across the globe to be recognized this year. The competition consisted of seven developments in the United States, three in Asia and one in Europe. A diverse international panel from different disciplines judged the nominations. Locally, Antonio Fiol-Silva, founding principal, SITIO Architecture and Urbanism, a Philadelphia firm, served as a judge.

 Each of the winners “demonstrates a comprehensive level of quality and a forward-looking approach to development and design,” according to ULI.

Comcast Technology Center also wont the local ULI Philadelphia Rouse Award. The building was developed by Liberty Property Trust (NYSE: LPT) and designed by Foster and Partners for Comcast Corp. (NASDAQ: CMCSA) The $1.5 billion mixed-use projects totals 1.2 million square feet and stands 60 stories. Comcast houses 4,000 employees in the tower. In addition to the office space, the building has a Four Seasons Hotel with 219 rooms and 15,000 square feet of meeting space as well as two restaurants: Vernick Fish and Jean-Georges.
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How Private Equity Real Estate Companies Make Money (Video)

Sunday, September 8, 2019

Impact of CECL on Commercial Lending (Video)

CA Student Living to Open Doors to $550M in New Projects in Six States

by John Jordan
CA Student Living reports that it is about to open six new student housing developments in six states that are valued at more than $550 million.

The firm, the student housing investment and development division of Chicago-based CA Ventures, will open the student housing communities that total more than 3,000 beds in Florida, Indiana, Illinois, Iowa, Ohio and Pennsylvania.
“CA Student Living is doing what we’ve always done, delivering exceptional yet differentiated, pedestrian-oriented communities with thoughtfully designed amenities and modern accoutrements in university markets,” says JJ Smith, president of CA Student Living. “With investor interest at an all-time high, our team of seasoned professionals are sourcing some of the best campus-adjacent opportunities in the country.”

The six new properties are:

The Link University City (252 beds) – Drexel University; Philadelphia

Offering a walkable, near-transit location in University City—home to Drexel University, the University of Pennsylvania, the University of the Sciences and the Restaurant School at Walnut Hill College – The Link University City is a renovation of a historic three-story building, coupled with a new five-story addition, at 3600 Lancaster Ave. and directly adjacent to University City Square. Available residences range in size from one to three bedrooms, including six two-level townhomes along Lancaster. Amenities include a 24-hour, two-story fitness and wellness center; private study rooms; co-working and research lounges; cyber lounge with free printing and scanning; a lobby lounge with breakfast and coffee bar; sky lounge with pool table, darts and TVs and community kitchen.

CA Management Services, the firm’s property management arm, will manage leasing and operations for the 2019 portfolio.

Identity Miami (621 beds) – Florida International University; Miami

Located at 400 SW 107th Ave., Identity Miami is just three blocks from FIU’s main campus and around the corner from the university’s College of Public Health, College of Nursing & Health Sciences, College of Medicine and Department of Biostatistics. The 15-story building offers one- through four-bedroom floor plans, including upgraded penthouses. Amenities include a shuttle to campus, 24-hour fitness and wellness center, yoga room with Peloton bikes, lobby lounge with coffee bar, cyber lounge with free printing and scanning, private study rooms, communal study lounge, sky lounge with balcony, and clubroom with TVs, a pool table and demo kitchen. Outdoor amenities include a sun deck with resort-style pool and cabanas, as well the first-ever vintage Volkswagen Bus retrofitted as a DJ booth on the pool deck.

Rise on Chauncey (675 beds) – Purdue University; West Lafayette, IN
Situated steps from the Purdue University campus and popular shopping, dining and nightlife destinations along State Street and Chauncey Avenue, Rise on Chauncey is a 16-story high-rise at 100 S. Chauncey Ave. that offers studio through four-bedroom residences, including penthouse units with upgraded finishes. Spanning nearly 20,000 square feet across four floors, amenities include a 24-hour fitness center with yoga room and Fitness On Demand; research room with conference seating and study bar; cyber lounge with free printing and scanning; private study rooms; penthouse club lounge; and arcade room with pool table. Outdoor amenities include a rooftop pool and hot tub; adjacent sky terrace with an outdoor TV, hammocks, a fire pit and grills; and a gaming courtyard. The development’s lower-level retail space will house The Tap, a craft brewpub that originated in Bloomington.

The Link Evanston (411 beds) – Northwestern University; Evanston, IL

Located at 811 Emerson St. in the heart of downtown Evanston just one block from the Foster Purple Line stop and a short walk to the Davis Street/Evanston Metra stop, The Link Evanston features 411 beds in a mix of studio, one-, two- and three-bedroom floor plans. Amenities include a 24-hour fitness center with CrossFit equipment and Fitness On Demand, club/game room, meeting lounge and well-appointed workrooms. Outdoor amenities include a resort-style pool and entertainment deck with grilling stations, a fire pit and cabanas. The nine-story building also offers indoor bike storage and garage parking.

Latitude at River Landing (665 beds) – University of Iowa; Coralville, IA

Located in the fast-growing Iowa River Landing District of Coralville, Latitude at River Landing is a five-story community less than a mile from the University of Iowa campus. The development at 104 E. 7th St. features studio through four-bedroom apartments steps from nearby restaurants and retail, including a Trader Joe’s. On-site amenities include a dedicated resident shuttle, 24-hour fitness and wellness center, yoga room with Fitness On Demand, clubroom with TVs and a fireplace, rooftop and sky lounges with balconies, co-working and research room, cyber lounge with free printing and scanning, private study rooms and an arcade room with pool and air hockey tables. Outdoor amenities include a resort-style pool, hot tub and sun deck; adjacent courtyard with a Jumbotron, fire pit, hammocks and grilling stations; full-size basketball court and dog run.

Latitude at Kent (384 beds) – Kent State University; Kent, OH

Located at 1450 E. Summit St., across from the heart of the Kent State University campus, Latitude at Kent is a five-story community with a mix of studio, one-, two-, three- and four-bedroom residences. Amenities include a 24-hour fitness suite, yoga room with Peloton bike and Fitness On Demand, clubroom with coffee bar, study lounges with balconies, cyber lounge with free printing and scanning, private study rooms, and game room with TVs and a pool table. Outdoors, residents have access to a resort-style pool, hot tub and sun deck with adjacent grilling stations, as well as a separate courtyard with study deck, fit pit and bocce court.

Since 2008, CA Student Living has delivered more than $5 billion in near-campus housing across the US encompassing more than 40,000 beds. The firm has already begun construction on an additional nine communities, featuring nearly 4,000 beds, to be delivered in fall 2020. Together with another 24 communities in the predevelopment phase, which would deliver between 2021 and 2023, it represents a five-year tally of more than $3 billion in executable development.

Tuesday, September 3, 2019

Momentum Dynamics finds new HQ, goes on a hiring spree

Natalie Kostelni Reporter Philadelphia Business Journal
Momentum Dynamics Corp., a maker of wireless chargers for electric vehicles, has leased 89,430 square feet in Malvern for a new headquarters and, in growth mode, is looking to hire 60 new employees.

In addition to its headquarters, the building at 15-25 Great Valley Parkway will serve as the company’s research and development center.

“This is going to be an R&D playground for the best engineers in the world,” said Andrew Daga, Momentum’s CEO. “We have been able to find, attract and hold some of the best engineers. That’s pretty difficult but we’re very fortunate. It’s not just about salary, bonus and benefits but the work environment and freedom to try new things and make mistakes.”

Founded 10 years ago, Momentum Dynamics is in growth mode. While its new headquarters underscores that, it's moving out of 15,000 square feet in Malvern, it has also been raising money.
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