Thursday, May 28, 2020

Covid Causing Bifurcation in Commercial Real Estate, Terra Capital CEO Says (Video)

Fed’s View of Commercial Real Estate – Corona Time (Video)

AAMCO Plans to Expand Throughout the US

Car-repair giant AAMCO Transmissions and Total Car Care has  new push to expand its network of AAMCO franchises in the US.

AAMCO, based in Philadelphia, has more than 600 franchises in the US and Canada. AAMCO’s chief strategy officer, Brian O’Donnell, said the company aims to “accelerate growth in targeted US markets.” 

AAMCO is targeting suburban locations with between 3,000 and 5,500 square feet of space. It added that the optimal site for a new AAMCO location would be 4,500 square feet in either a stand-alone store or as the “end-cap” store at the far end of a shopping center or strip center—and in a high-traffic location with parking for more than 10 cars and with easy access to major roads.

“The current market conditions have demonstrated the essential nature of automotive service companies such as AAMCO, making them a highly attractive tenant for property owners in challenging economic times." 

Is This The End of Office Space As We Know It? (Video)

Wednesday, May 27, 2020

Wells Fargo Monthly Economic Outlook — May 2020 (Video)

Local Company Buys Philadelphia Industrial Complex to Expand Business

A local private company has purchased a 330,000-square-foot industrial complex at 700 Ramona Ave. in Philadelphia for $8.5 million, or about $26 per square foot.

The buyer purchased the property to utilize the site as an expansion of their existing business.

The property consists of two large industrial buildings on approximately 14.5 acres and provides access to Route 1 Roosevelt Expressway and I-95.

Commercial Real Estate Firms Beginning to Implement Lessons from COVID-19 Crisis (Podcast)

Tuesday, May 19, 2020

Rearranging Your Office Space in Preparation for Reopening (Video)

Duke Realty To Build 615,600 SF Build-to-Suit Warehouse in Lehigh Valley

By Natalie Dolce

The Pennsylvania office of Duke Realty Corp., the leading domestic only, pure-play logistics property REIT is progressing on the 615,600-square-foot, build-to-suit warehouse for Max Finkelstein Inc., one of the nation’s largest independent, family-owned wholesale distributors of passenger and light truck tires. The building is being constructed on part of a 132-acre parcel less than 10 miles east of the split between I-81 and I-78 in Berks County, PA, at the western edge of the Lehigh Valley submarket.

“Max Finkelstein has been in business for more than 100 years and has operations throughout the Northeast and Mid-Atlantic States. We are excited to deliver a new, custom-designed, state-of-the-art facility that will be a core component in their supply chain,” says Art Makris, SVP for Duke Realty in the Northeast region of the US, in a prepared statement. “This new facility incorporates modern features, including increased clear heights, enhanced lighting and a state-of-the-art fire protection system, which will provide them with enhanced storage and warehouse capabilities, along with a safe operating environment.”
The new building, which will be known as Central Logistics Park 100, is located at 100 Fort Motel Dr. in Myerstown. Max Finkelstein’s new building includes 7,000 square feet of office space and incorporates 45′ clear height and LED lighting. The remaining acreage on the site can accommodate additional development of up to 584,820 square feet.

“Designing a state-of-the-art, purpose-built warehouse to serve as the hub of our distribution center network, meeting all of our specific requirements, is critical to our growth.” says Sean Franciscus, COO with Max Finkelstein. “We selected Duke Realty due to their ability to deliver a facility with all of the features we need and in the ideal location for efficiently serving our 16 regional distributions centers via its proximity to I-81, I-78 and I-83. The site was pad-ready which expedited the building’s delivery.”

Friday, May 15, 2020

Black Creek Buys South Jersey Warehouse Site

Black Creek Group has acquired a site in Southern New Jersey for $14.75 million that has local approvals for construction of a 300,700-square-foot warehouse-distribution facility.

The Denver-based real estate developer purchased the nearly 31-acre site, which includes two parcels, at 837 Railroad Ave. in Florence from Foxdale Properties of Pasadena, California. At the time of sale, the site was fully approved with entitlements for the industrial building.

In an emailed statement to CoStar, Black Creek said it's seeking bids to begin construction during the summer with expected completion of the shell next spring.

"The site’s premier, infill location combined with its immediate development potential attracted every major institutional developer on the East Coast. The outcome was an extremely competitive marketing process where we were able to drive pricing to the highest achievable level."

The site is in Burlington County, which had over 30.6 million square feet of inventory as of the first quarter. With its position along the Northeast corridor, the county has quick access to New York City and Philadelphia.

The industrial vacancy rate in Burlington County has been at or below 5% over the past three years, even with more than 5 million square feet of new construction completed throughout that time period.

Wednesday, May 6, 2020

King of Prussia Mall will eventually reopen, but the shopping mecca may never be the same

Natalie Kostelni Reporter Philadelphia Business Journal
When the King of Prussia Mall eventually reopens, there will be a series of safety protocols that its employees will be required to follow while its retailers and shoppers will be encouraged to voluntarily adhere to similar measures to help keep the coronavirus from spreading.

No date has yet been set by owner Simon Property Group (NYSE: SPG) to reopen the King of Prussia Mall and its other Philadelphia-area retail properties, including Philadelphia Mills and the Philadelphia Premium Outlets. When shoppers do return to King of Prussia, they will be arriving at a mall that will be on the cusp of a transition as a result of the pandemic and its effect on the retail industry, as well as forces already impacting it.

“This will accelerate a bunch of trends that we have been talking about when it comes to retail,” said Shawn Howton, a professor of finance and real estate at Villanova University and director of its Daniel M. DiLella Center for Real Estate.

From an increase in online shopping to the survival of restaurants, all types of retailers are being tested at this time, Howton said. Some questions that will arise from the changes underway include whether restaurants need to provide more space for social distancing and if a landlord will adjust rents downward to reflect that. When some retailers go dark, how will malls and property owners backfill the space since demand for traditional retail is expected to remain sluggish?

“This will provide an opportunity for property owners to rethink uses, and there will be capital on the sidelines to take advantage of this,” Howton said.

The biggest difference between the Great Recession and the Covid-19 crisis is that the pandemic isn't just an economic issue but also a health issue, which brings a whole series of challenges. "Even when a municipality says you're good to open, what does that even look like?" said David Putro, senior vice president at investment research firm Morningstar.

When some states allowed malls to open this weekend, only about 20% of their stores reopened and most of the shoppers who ventured to those malls were ordering online and picking up items in the store, Putro said. That raises other questions for retailers, such as what staffing levels should be.

"It's layer after layer," he said. "It's a really interesting time."

At this point, it's too soon to predict how consumer behavior will change, he said. Will people feel comfortable trying on clothes after someone else has tried them on? With high unemployment, will consumers feel like spending on a new pair of jeans or will they be more thrifty?

J. Crew’s parent company, Chino Holdings, filed for Chapter 11 bankruptcy Monday, and other stores that are marquee tenants at King of Prussia are expected to seek similar financial protections as they struggle. Some of those retailers with unknown fates include large department stores that have been mainstays at the mall for decades and take up large anchor spaces at the property.

Neiman Marcus is one of those with a precarious future and is reportedly nearing a bankruptcy filing. Others that are in flux include Nordstrom, Lord & Taylor, Sears, Macy’s and Bloomingdales. The latter four are already retrenching and closing stores.

Smaller retailers such as J. Crew, which also has the Madewell brand, aren’t the only ones on the brink, according to various published and analyst reports. Gap Inc., which also has Banana Republic, Athleta, Old Navy and other brands, said in a Securities and Exchange Commission filing that it has drawn down most of a $500 million line of credit, doesn’t intend to pay rent until its stores reopen, and has taken other cost-cutting measures.
Fully story:

Retail Reopening - What Comes Next? (Video)