Monday, February 21, 2022

Wegmans-Anchored Shopping Center Outside Philadelphia Trades for $161 Million

By Linda Moss CoStar News

A shopping center in the Philadelphia suburbs has sold for $162 million as investors continue to prize retail sites that are anchored by grocery stores.

Finmarc Management, based in Bethesda, Maryland, and KPR Centers of New York City have acquired Providence Town Center, a 759,945-square-foot, open-air shopping center in Collegeville, Pennsylvania. The property, anchored by a Wegmans grocery store, is the No. 4 most-visited retail center in Pennsylvania. Wegmans has operated at the site since it was developed between 2008 and 2009.

The seller was Brandolini Cos. of Berwyn, Pennsylvania, and the deal marks the second-largest open-air retail transaction by square footage in the Philadelphia market behind East Gate Square, which sold in 2015 for $188 million. That property spans Moorestown and Mount Laurel in New Jersey.

Investors continue to snap up shopping centers with grocery stores as anchors, because that type of tenant sparks repeat visits and generates foot traffic at a property — attributes that have become all the more valuable during the pandemic.

A diverse group of private, institutional and real estate investment trust investors expressed interest in Providence Town Center.

“Throughout the process, it became evident from the abundance of new, unique capital showing up to participate that demand for grocery-anchored product and large-format shopping centers in general is steadily on the rise. With the current lack of supply of like-kind inventory available to market, we anticipate this product to continue to price at a premium.”

Providence Town Center, which is 92% leased, has a tenant roster that includes Best Buy, Old Navy, Dick’s Sporting Goods, HomeGoods, Michaels, LA Fitness and Movie Tavern.

Thursday, February 17, 2022

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Conshohocken building leased to Amazon sells for $97M, smashes record for price per square foot

 Natalie Kostelni Reporter Philadelphia Business Journal

An institutional buyer has paid $97 million for a 120,000-square-foot building leased to Amazon in Conshohocken, setting yet another high-water market on a per-square-foot basis for an industrial sale in the region, according to multiple market sources.

An undisclosed Korean pension fund bought the building at 1113 W. Ridge Pike for what amounts to just over $808 a square foot. E. Kahn Development Co. was the seller.

The new sale price threshold comes on the heels of a 331,525-square-foot building leased to Target Corp. 900 River Road trading for around $116 million, or roughly $350 a square foot. That exceeded a $240 a square foot high water mark set last year when a 1.1-million-square-foot warehouse-distribution center leased to Target Corp. in Logan, New Jersey, sold for $265 million.

E. Kahn Development paid $6.85 million for the property at 1113 W. Ridge in 2020. The developer razed a building that had been constructed in 1959 for Stroehmann Bakeries, secured Amazon as a tenant and developed the online retailer the building for last-mile distribution. It is located at the confluence of several major arteries including I-476.

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Mega Amazon Warehouse in Delaware Trades for $392 Million

By Linda Moss CoStar News

 An Australian company has expanded its U.S. industrial portfolio with a $392 million purchase of a mega Amazon distribution center in Wilmington, Delaware, the second sale of a nearly 4 million-square-foot warehouse leased by the e-commerce giant in almost four months. The deal ranks among the largest industrial sales of 2021.

Macquarie Asset Management Real Estate on Tuesday said it had finalized its acquisition of a multistory fulfillment facility at 1025 Boxwood Road from Dermody Properties of Reno, Nevada. The purchase is the largest to date made on behalf of a U.S. investment account managed by Macquarie’s U.S. core/core-plus real estate team. The warehouse, which incorporates Amazon’s robotics technology, opened in September and has 3.8 million square feet.

Demand has outpaced supply for industrial space across the United States as online purchasing has risen, growth that was propelled by the COVID-19 pandemic. In response, Seattle-based e-commerce giant Amazon has vastly expanded its distribution network, in part by opening dozens of warehouses 2 million square feet and larger across the nation. And the properties they are leasing have drawn big offers from buyers.

“This is a highly efficient fulfillment center format in a strategic location which provides access to more than 17 million people within a two-hour drive,” Christopher Quiett, head of U.S. core/core-plus real estate at Macquarie, said of the Wilmington center.

The Wilmington transaction took place in October, but Macquarie didn’t announce it until this week. And earlier this month, a 2.68 million-square-foot distribution center that Amazon leases at 500 32nd St. in Bondurant, Iowa, sold for $326.2 million. That’s the biggest industrial deal so far this year, and one of the nation’s biggest real estate transactions overall thus far in 2022.

In March 2020, Macquarie’s U.S. real estate team acquired Brandon Woods III, a logistics portfolio in Baltimore’s Anne Arundel County, in the town of Glen Burnie, with two warehouse buildings totaling 840,000 square feet and 50 acres of developable land. The sale price for 7550 Perryman Court, with 500,000 square feet, and 7659 Solley Road, with 340,000 square feet, was $90 million.

At the time of the acquisition, the Perryman Court building was leased to Best Buy and the other was still under construction on a speculative basis, with no tenant signed up. That building was leased to Amazon within six months of the acquisition.

In the past 90 days, Macquarie Asset Management’s U.S. core real estate team has also acquired 375 Broadway, a fully leased mixed-use building in New York City’s SoHo neighborhood for $130 million,  as well as fully leased creative office buildings in Phoenix and Seattle.

Macquarie Asset Management’s real estate division is a global real estate investment business with an extensive network and capability across real estate investment management, asset management and direct investment.

Tuesday, February 8, 2022

Cescaphe's Joe Volpe buys building on Fairmount Avenue, fills it with events-related tenants

 By Natalie Kostelni  –  Reporter, Philadelphia Business Journal

Cescaphe founder and CEO Joe Volpe has purchased a warehouse at Fairmount Avenue and 10th Street in Philadelphia and is converting it into an extension of his event business.

Volpe paid $7 million for 920-942 Fairmount Ave., which consists of four connected warehouse buildings totaling about 35,000 square feet. The seller was an entity affiliated with Tracey Furniture.

When marketing the property, they initially targeted developers since the parcel totals about 50,000 square feet and is steps away from the Rail Park. When the reception from developers was tepid, they switched gears and began to focus on businesses that could use the existing structure.

“It’s a crazy, funny story as to how I got to that property,” Volpe said. “When we opened up Vie on Broad Street and moved our offices there, I bought 50 desks from the building.”

Volpe recalled thinking at the time, which was nearly 10 years ago, about how big the building was, what good condition it was in and made a mental note. When the property came up for sale, Volpe seized on the opportunity to buy it, attracted to its size, unobstructed floors and gated parking.

Three tenants in the events business are moving into the space. They are: Beautiful Blooms, a floral design company that did more than 800 weddings last year; Papertini, a boutique event design studio; and Delaware Valley School of Floral Design, which was established by Carl Schwartz of Carl Alan Floral Artistry.

The idea is essentially a one-stop shop for those planning a wedding or event. “A couple will be able to go there and pick out all of their needs. It will be really convenient,” Volpe said. “It’s going to be an awesome space.”

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Friday, February 4, 2022

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Philadelphia Apartment Tower Trades for Market High of $233 Million

 By Linda Moss CoStar News

An apartment high-rise in Philadelphia has sold for $233 million in what's being touted as the largest single-building sale in the history of the city's multifamily market.

In its first acquisition in Philadelphia, private equity fund Fairstead of New York purchased 1500 Locust St., a 612-unit property, from Barings Real Estate Advisers, which is based in Hartford, Connecticut, according to the broker on the deal. The 45-story mixed-use building is located in the Rittenhouse Square area.

The transaction marks a new high for a multifamily sale of its kind in the City of Brotherly Love. It tops one in 2015, when 2116 Chestnut St. sold for $156.6 million, according to CoStar data.

In its most recent report on multifamily in Philadelphia, CoStar said investment volume remains about half of 2018-19 levels. But there's a silver lining.

"The most recent deals still show intense investor demand for large apartment properties and no significant decline in pricing as a result of the coronavirus crisis. In fact, most deals are showing significant gains in pricing compared to pre-pandemic levels. As was the case prior to the pandemic, New York and Lakewood, New Jersey-based buyers remain a leading source of investment into Philadelphia's apartment market."

Sales volume for U.S. multifamily properties totaled $78.7 billion during the third quarter, the largest quarterly sales figure on record as demand for multifamily properties continued to surge. The third-quarter volume marked a 31.4% increase from the prior quarter and a 192.1% year-over-year increase. For the 12 months ending with the third quarter, the greater Philadelphia area totaled $2.2 billion in multifamily sales volume.

The Locust Street property has 828,679 gross square feet, with 7,770 square feet of street-level retail and a 398-space parking garage. The tower features a mix of studio, one-, two- and three-bedroom units with an average unit size of 852 square feet. Its amenities include a resident lounge with a catering kitchen, a fitness center, a 10-seat theater room, a glass-enclosed heated rooftop swimming pool with retractable windows and a roof deck with private cabanas and grilling areas. The street-level retail is occupied by two full-service restaurants, Blume and Fado Irish Pub.

The high-rise, on the corner of 15th and Locust streets, is at the junction of three Center City neighborhoods — Rittenhouse Square, the Avenue of the Arts and the West Market Street office corridor.

Tuesday, February 1, 2022

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Equus Capital Partners closes nearly $1B industrial transaction

 Natalie Kostelni Reporter Philadelphia Business Journal

Equus Capital Partners Ltd. has closed on a nearly $1 billion acquisition of a portfolio of 75 buildings totaling 5.4 million square feet across several key industrial markets.

The Newtown Square real estate firm bought the buildings from Prologis Inc., and most of the properties – about 80% — were once owned by Liberty Property Trust, according to those familiar with the transaction. Prologis bought Liberty, which had been based in Malvern, in early 2020.

The Equus-Prologis deal, inked at a little more than $900 million, is the third billion-dollar deal Equus has completed in less than a year.

In October, it closed on the $1.15 billion acquisition of a portfolio of 74 buildings totaling about 7.3 million square feet in Phoenix and Tucson. Last spring, Equus was involved with AIG in a $1 billion recapitalization of an industrial portfolio.

When it came to the Arizona acquisition, referred to by the firm as the Pegasus Project, Equus tapped its $500 million value-add fund, Equus Investment Partnership XII L.P., as well as a $200 million separate co-investment it raised.

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