Monday, June 27, 2022

Has the Industrial Real Estate Market Peaked? (Video)

NFI Industries to occupy new 264,600-square-foot industrial building in Quakertown

Natalie Kostelni Reporter Philadelphia Business Journal

NFI Industries Inc. will occupy the Quakertown Logistics Center, a newly constructed 264,600-square-foot building just off the Quakertown Interchange of I-476.

The process that led NFI to take the space was circuitous but reflects the sometimes fast-changing needs of companies that manage the distribution of products for clients.

In July 2020, the Camden-based trucking and logistics company put 33 acres under contract just off Route 663 in Milford as Gorski Engineering Inc., the owner, sought to get the property approved for the development of a 264,600-square-foot warehouse. In October 2021, with the approvals secured, NFI closed on buying the land and moved forward with constructing the new warehouse.

In addition to trucking and logistics, NFI owns more than 60 million square feet of real estate that it uses or leases to tenants. Some of the properties are used for transportation purposes such as truck terminals and others are distribution centers.

Full story:

Thursday, June 23, 2022

Milbrook Properties Purchases Franklin Center in Chambersburg

 By Nathan Cloud CoStar Research

Milbrook Properties has closed on its first purchase in Pennsylvania as it continues to grow its shopping center portfolio.

The Manhasset, New York-based firm purchased the 174,063-square-foot Franklin Center in South Central Pennsylvania community Chambersburg from Coastal Equities. Milbrook paid roughly $20.35 million for the shopping center, according to Franklin County real estate records.

Franklin Center, located at 1320 Lincoln Way East, originally opened in 1990 and was recently renovated in 2015. The 91.5%-leased shopping center is home to a dynamic mix of anchor tenants, including Dick's Sporting Goods, T.J. Maxx, Ulta Beauty, Petco and Ollie's Bargain Outlet, which account for 78% of gross property income, according to JLL. The property also includes value-add opportunities through future building expansion and multiple out-parcel pad site development.

While this is Milbrook's first purchase in Pennsylvania, the company has been active in New Jersey. Milbrook recently paid $47 million for the 189,773-square-foot Essex Mall at 907 Bloomfield Ave. in West Caldwell — its ninth retail center in the Garden State.

"The retail sector continues to attract strong interest from institutional, REIT and private capital. "We saw a tremendous amount of investor interest for Franklin Center due to its best-in-class tenancy in T.J.Maxx, Dicks and Petco as well its irreplaceable location within the Chambersburg market."

Tuesday, June 21, 2022

Philadelphia Inquirer Inks Long-Term Lease for New Headquarters

 By Caleb Hayes CoStar Research

The Philadelphia Inquirer has signed a long-term lease at 100 Independence Mall West for its new headquarters, which is set to accommodate increased hybrid and remote work.

The 193-year-old newspaper is set to occupy 36,744 square feet on the sixth floor of 100 Independence Mall West, a 419,175-square-foot office building owned by Keystone Development + Investment that is now 97% leased.

"This move underscores our commitment to Philadelphia and our work by putting The Philadelphia Inquirer in the most historic setting in the country," Inquirer Publisher and CEO Lisa Hughes said in a press release. "We are eager to be in our new space, which we are designing to allow us to collaborate in new and innovative ways."

The Inquirer is expected to move into its new headquarters space during the first quarter of 2023. The newspaper is the latest major tenant at 100 Independence Mall West, joining The Macquarie Group, U.S. General Services Association and Nelson Worldwide.

Your Office Can Boost Your Business (Video)

What the Fed Rate Hike Means for CRE Investors (Video)

Monday, June 13, 2022

Singapore REIT Buys Grocery-Anchored Center Near Philadelphia

 By Mark Heschmeyer CoStar News

United Hampshire US REIT, a Singapore-based real estate investment trust, has added to its U.S. holdings, acquiring a grocery-anchored center in suburban Philadelphia.

United Hampshire acquired Upland Square Shopping Centre in Pottstown, Pennsylvania, for $85.7 million, the company disclosed in filings with the Singapore Stock Exchange.

The REIT is using money raised from the sale of self-storage properties earlier in the year to boost its holdings in grocery retail properties.

“Following the recently announced divestment of the Elizabeth and Perth Amboy self-storage properties, we are pleased to be able to achieve our goal of recycling the proceeds of the sale into a higher yielding, sizeable, stabilized grocery and necessity asset,” Robert Schmitt, CEO of the REIT, said in a statement. “Upland Square is set to substantially enhance [United Hampshire’s] income visibility and resilience.”

The 400,674-square-foot Upland Square is 100% leased with an average lease term of 6.3 years. The property is tenanted by a Giant grocery anchor, as well as off-price apparel, quick service food and beverage facilities, pet services, and a fitness facility.

With the acquisition, United Hampshire will broaden its tenant base. Rent from its top 10 tenants will reduce from the current 60.2% to 56.8%, providing increased tenant diversification and stabilizing the portfolio’s income, the company said.

Paramount Realty Services of Lakewood, New Jersey, was the seller and had purchased the property for $83.3 million in October 2016, according to CoStar data.

Saturday, June 11, 2022

Longfellow, University of Pennsylvania Partner On Life Science Facility in Philadelphia

 By Linda Moss CoStar News

Longfellow Real Estate Partners is teaming up with the University of Pennsylvania to plan and develop a 455,000-square-foot life science facility at the college's 23-acre innovation incubator, which is adjacent to its Philadelphia campus.

The project — a research, development and manufacturing hub — will mark Longfellow's first development in the Philadelphia market. The Boston-based firm is the largest privately owned commercial developer of life science buildings in the country, with offices in New York City, San Diego, the San Francisco Bay Area, and the Research Triangle area of North Carolina. Its portfolio spans nearly 15 million square feet.

The Philadelphia project will include two adjoining six-story buildings and is scheduled to open in the fourth quarter of 2025. It will be located at 3401 Grays Ferry Ave. at Pennovation Works, which was developed by the university to accommodates science facilities, researchers, entrepreneurs, and industry partners. Roughly 70 companies and an estimated 400 people are currently located at Pennovation.

The demand for purpose-built lab space is growing in the Philadelphia market, with the area now dubbed “Cellicon Valley” because of its track record of developing cell and gene therapies, according to a statement from Longfellow. The Philadelphia region is home to more than 350 life sciences firms, with many having ties to the city’s universities, research institutions, hospitals, and pharmaceutical companies.

The new project will have 387,000 square feet of research-and-development space, and 68,000 square feet of biomanufacturing space, according to Longfellow. It will feature rooftop terraces with views of Philadelphia’s skyline and Penn’s campus, as well as access to amenities at Pennovation Works. The project will include flexible lab/office space, which tenants can customize to meet their needs.

“Philadelphia and the University of Pennsylvania have a long history of academic excellence and fostering innovation," Jessica Brock, Longfellow Partner of Real Estate Operations, said in a statement. "As the region continues to be a leader in cell and gene therapy, Longfellow looks forward to delivering the infrastructure the life science industry needs to thrive.”

Partnering with an institution such as the University of Pennsylvania builds off Longfellow's track record of working with other schools such as Harvard, Duke, Stanford, and the Massachusetts Institute of Technology, according to the company's CEO and co-founder, Adam Sichol.

The new project will be near University City, home to the Hospital of the University of Pennsylvania, Amtrak’s 30th Street station, Drexel University, the University City Science Center, and Children’s Hospital of Philadelphia.

“The pace of innovation coming out of Penn is astounding. We have brilliant scientists generating a record number of new [Food and Drug Administration] approvals in the life sciences. ... Attracting Longfellow to Philadelphia and Pennovation is a vote of confidence in Penn’s efforts to grow Philadelphia’s innovation ecosystem and enable the Lower Schuylkill master plan to flourish,” Craig Carnaroli, the university's senior executive vice president, said in a statement.

Longfellow’s partnership with the University of Pennsylvania extends the firm’s East Coast presence. It has also acquired 43TEN Labs in Long Island City in Queens, New York, and partnered with the New York City Blood Center to develop Center East, a 13-story, 600,000-square-foot life science hub in Manhattan that is expected to break ground next year.

Tuesday, June 7, 2022

Walmart Goes Mega With Four New High-Tech Warehouses Including 1.5M SF in Greencastle, PA

 By Linda Moss CoStar News

Walmart, the nation's biggest retailer, is opening four new high-tech mega-warehouses to beef up its ability to get online orders to customers faster and compete with Amazon.

The Bentonville, Arkansas-based company unveiled its plans on Friday. Its expansion stood in stark contrast to those of Amazon, one of its main competitors. The Seattle-based e-commerce giant several weeks ago sent shock waves through the commercial real estate industry when it said it was slowing down distribution center development.

Walmart said it plans to open automated, state-of-the-art fulfillment centers, totaling 6.3 million square feet, in Joliet, Illinois; Lancaster, Texas; McCordsville, Indiana; and Greencastle, Pennsylvania. The one at 3501 Brandon Road in Joliet, 45 miles from Chicago, is set to open this summer. That facility is 1.1 million square feet.

The size and opening dates for the other three, which will all facilitate next-day and two-day shipping, are:

5259 W. 500 N in McCordsville, Indiana, 20 miles northeast of Indianapolis. The 2.2 million-square-foot facility is set to open spring 2023.

2500 E. Belt Line Road in Lancaster, Texas. The 1.5 million-square-foot facility is slated to open fall 2023.

1915 Ebberts Spring Court in Greencastle, Pennsylvania. The 1.5 million-square-foot facility is set to open in 2024.

Other national retailers such as Target, Macy's and Kroger have been bolstering their distribution networks — and adding advanced automation — to facilitate same-day, next-day and two-day delivery for e-commerce orders. That's an effort to put them in the same league as Amazon, especially when it comes to delivery speed. And it is also seen as enhancing their ability to increase their growing online sales.

The size of Walmart's new fulfillment centers, each over 1 million square feet, mirrors a strategy that Amazon has taken. The online retailer has built a network of mega-warehouses across the country.

Insomnia Cookies To Open New HQ & Storefront in Philadelphia

 By Michelle Stockner CoStar Research

Late-night cookie maker Insomnia Cookies is relocating its headquarters from Newtown Square to Center City Philadelphia.

Insomnia Cookies is taking the former Walgreens space at 1 S. Broad St. for its new headquarters, offering both a "store of the future" and corporate offices for about 80 employees across 26,000 square feet and three floors. Its space will also include a test kitchen.

The landlord is New York-based Aion Partners. It took three separate transactions related to Insomnia's headquarters deal. Walgreens, along with numerous large retailers, declined to renew its lease amid the coronavirus pandemic. Facilitating the complex deal required navigating retail lease terminations, leases for temporary office space and the final lease for the three-story space.

Insomnia Cookies founder Seth Berkowitz began the cookie chain out of his dorm room as a University of Pennsylvania student almost a decade ago.

In addition to opening a new headquarters, Insomnia Cookies also recently announced plans to triple its store count in the next five years to a footprint of 600 shops nationwide.

Monday, June 6, 2022

Why Invest in REITs? (Video)

Tennessee-Based Southern Land Co. Breaks Ground on Multifamily Project in Center City Philadelphia

 By Michelle Stockner CoStar Research

Southern Land Co. has started construction on its new 27-story multifamily development at 1620 Sansom St. in Center City Philadelphia.

The Nashville, Tennessee-based developer's latest Philadelphia project is set to include 254 luxury rental units, including multiple penthouses with private terraces. Southern Land Co. purchased the site for the development project, which was previously home to an aging parking garage, in December 2020 for $24.5 million, according to CoStar data.

The 320-foot tower will include 5,000 square feet of ground-floor restaurant space and 17,000 square feet of space on the second floor ideal for another restaurant or a health and wellness facility. Its amenities will include a club lounge, sky lounge with an outdoor rooftop pool, a fitness center with a yoga room, coworking space and resident storage. A unique feature of the building is its intentional five-foot set-back from the property line, which will widen the sidewalk along Sansom Street

Southern Land Co. utilized Philadelphia's Mixed-Income Housing Bonus program to incorporate an additional 75,000 square feet of residential space in the project, resulting in a $2 million payment to the Philadelphia Housing Trust Fund.

The 1620 Sansom St. project is set to be completed in winter 2023.

This is Southern Land Co.'s latest development project in Center City, following its under-construction, 48-story luxury condominium and apartment high-rise tower, The Laurel Rittenhouse Square, at 1911 Walnut St. That project is expected to welcome its first residents in fall 2022. The developer's first project in Philadelphia was a 28-story apartment tower at 3601 Market St., which was completed in summer 2015.

Friday, June 3, 2022

ATR Corinth Partners has sold West Manchester Town Center in York, PA

ATR Corinth Partners has sold West Manchester Town Center, a shopping center located in the southern Pennsylvania community of York.

The Dallas-based owner, manager and developer sold the 488,037-square-foot shopping center to a Paramount Realty joint venture, according to JLL, which brokered the deal. West Manchester Town Center sold for about $42.5 million, according to York County real estate records.

West Manchester Town Center is anchored by Kohl's, At Home, HomeGoods, Hobby Lobby and Burlington. Formerly operating as an enclosed mall, which opened in 1981, the property was completely redeveloped in 2014 into an open-air shopping center.

The shopping center is located on 94.1 acres at 415 Town Center Drive in an infill location. The center drew more than 4.2 million customer visits over the last year, making it the No. 2 most-visited open-air shopping center within a 15-mile radius.

"ATR Corinth did a phenomenal job executing the redevelopment by curating a dominant super-regional retail center with best-in-class anchor tenants and a complementary lineup emphasizing contemporary retail uses. We are excited to watch the Paramount Realty team continue to add value through future development, expansion of the property’s retail footprint and lease-up potential."

"We have seen renewed demand for best-in-class power centers over the last 24 months, which speaks to the positive macro performance of big box retailers as we exited the pandemic. With an extremely competitive bid process, West Manchester is a perfect example of this ongoing trend."

Wednesday, June 1, 2022

How The Pandemic Impacted CRE Property Types (Video)

PREIT Completes Land Parcel Sales Totaling $35M

 By Ingrid Tunberg

PREIT has agreed to sell 11 outparcels and a vacant hotel land parcel for a total of $35 million.

The sale of the 11 outparcels will generate more than $32 million in gross proceeds for the firm.

The additional vacant parcel at Springfield Town Center in Springfield, VA sold for $2.5 million and will be developed into a hotel site. This transaction aligns with publicly-traded REIT’s mission to deliver one-stop destinations in its communities.

The firm expects the outparcel transactions to close in multiple phases, primarily before June 30, 2022. The hotel parcel transaction is expected close in Q4 2022.

The deals are included in the firm’s asset sale pipeline, which was presented in the REIT’s Q1 2022 earnings release earlier in May, and includes $275 million of in-process transactions.

“Our plan to raise capital is materializing as a result of a portfolio that is thriving due to our efforts to bring in dynamic and compelling uses and our optimally-located platform,” states Joseph F. Coradino, chairman and CEO of PREIT. “We have a clear mandate to raise capital and improve our balance sheet and we are unwavering in our commitment to generate results. As new opportunities continue to arise, we are confident we can strategically harvest value from our portfolio to reduce debt.”

By June 30, 2022, PREIT expects to close on asset sales totaling $109 million in gross proceeds.