Wednesday, November 13, 2019

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

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

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

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

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

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

The Fellowship Business Center NJ Trades for Nearly $10.7M

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

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

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

Stuffed Puffs Manufacturing Firm Expands Operations in PA

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

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

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

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

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

Monday, November 11, 2019

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

Opportunity Zone: Update (Video)

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

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

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

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

Friday, November 8, 2019

PA Approves Funding for Four Expansion Projects

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

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

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

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

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

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

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

Wednesday, November 6, 2019

South Jersey Hospice Organization Inks Deal for New Headquarters

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

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

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

Owning & Operating Commercial Real Estate (Video)

Tuesday, November 5, 2019

New Lehigh Valley Apartment Development Slated to Open in 2021

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

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

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

The project is slated to be completed in 2021.

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

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

Monday, November 4, 2019

Vanguard Expands Presence in Philadelphia Suburb

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

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

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

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

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

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

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

Keystone sells Blue Bell office buildings

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

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

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

Full story:

REIT Market Minute - November 2019 (Video)

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

Part 1 Part 2

Friday, November 1, 2019

Multifamily Update with the National Apartment Association (Video)

Victory Brewing Co. Expands Footprint to Downtown Philadelphia

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Primark Signs Lease Deal at Fashion District Philadelphia

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

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

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

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

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