Wednesday, August 31, 2022

Amazon Fresh to open in revamped Montgomery County shopping center

 Ryan Sharrow Editor in Chief Philadelphia Business Journal

A new Amazon Fresh grocery store is being planned for the Willow Grove Shopping Center, state filings show, as part of a multimillion-dollar overhaul taking place at the nearly 70-year-old Montgomery County retail complex.

Filings show Amazon Retail LLC has applied for a Pennsylvania liquor license to be used at 102 Park Ave., the address of a shuttered Barnes & Noble bookstore. In marketing material posted to its website, Federal Realty Investment Trust says an ongoing renovation of the 183,000-square-foot shopping center will include an unnamed "new-to-market grocery concept."

Amazon Fresh stores are considered a lower-price alternative to the company’s Whole Foods Market. Inc. (NASDAQ: AMZN) opened its first Amazon Fresh store in the Philadelphia region in August 2021 in a 35,000-square-foot space at Creekview Center in Warrington. It is planning to open another store in Bucks County at a former Kmart at the Brookwood Shopping Center on Street Road in Bensalem, in addition to a location along Route 1 in Langhorne near the Oxford Valley Mall. Construction also continues on a planned site at a mixed-use project at 5th and Spring Garden streets in Philadelphia's Northern Liberties neighborhood.

The company is also planning a store at 2940 Springfield Road in Broomall, where it has also secured a liquor license to sell wine and beer, according to Marple documents. 

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Tuesday, August 30, 2022

Workspace Property Trust expands suburban office presence with $1.1B deal

 Natalie Kostelni Reporter Philadelphia Business Journal

A three-story, 111,184-square-foot office building at 1200 Morris Drive in Chesterbrook is part of a $1.13 billion acquisition made by Workspace Property Trust that almost doubles the company’s real estate footprint to 18 million square feet.

Workspace has acquired 53 suburban office buildings totaling 8 million square feet from Griffin Realty Trust. The deal means that Workspace, which has offices in Horsham and Malvern, now owns 200 buildings in 22 markets across the country as the company doubles down on the future strength of the suburban office market.

Workspace first made a bet on the suburbs in 2015 when it paid $245 million to buy Liberty Property Trust’s Horsham office portfolio. A few months later, Workspace was at it again, this time spending nearly $1 billion to buy 108 office and flex buildings totaling 7.6 million square feet from Liberty. All of the buildings were in the suburbs of Philadelphia, Arizona, Florida and Minnesota.

Workspace’s initial desire seven years ago to concentrate on the suburban office market was met by skeptics who saw cities as the place for companies to attract the best talent. Many companies were also convinced of the same and established satellite offices in urban centers as alternatives to their suburban offices.

Workspace was confident in its strategy, which appears to be meeting a moment in which the pandemic is accelerating demographic trends that its executives had predicted would eventually come to fruition.

“When Tom [Rizk] and I started this in 2015, it was a huge contrarian play,” said Roger Thomas, co-founder and president of Workspace. “It was really difficult for us and we got shown the door a number of times.”

The conventional wisdom at the time was that millennials, even as they aged, would continue to live in cities because they didn’t want to drive cars or have a commute and preferred the vibrancy of urban environments over the suburbs.

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Encompass Health plans to build $55M rehab hospital in Norristown area

 John George Senior Reporter Philadelphia Business Journal

Alabama-based Encompass Health Corp. plans to build a $55 million inpatient rehabilitation hospital in the Norristown area.

The proposed freestanding, 50-bed medical center on undeveloped property at 2660 Audubon Road in Lower Providence Township will serve patients recovering from debilitating illnesses and injuries including strokes and other neurological disorders, brain injuries, spinal cord injuries, amputations and complex orthopedic conditions. The medical center will offer 24‑hour nursing care along with physical, occupational and speech therapies.

An Encompass Health spokesperson said the company has not yet set a timeline for when construction will begin and when the hospital will open.

The medical center will have between 125 and 175 full-time employees within five years of opening, and feature all private patient rooms, a therapy gym with advanced rehabilitation technology, a cafeteria, dining room, pharmacy and a therapy courtyard.

In a statement, Pat Tuer, president of Encompass Health’s Northeast region, said the company's business model is to improve access to "high-quality and individualized" rehabilitative care." He said the "new hospital will allow even more residents to receive specialized care close to home."

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Lehigh Valley industrial market spreads along Route 33, attracting developers and investors

 Natalie Kostelni Reporter Philadelphia Business Journal

Just off the Chrin interchange of Route 33 in Palmer, Carson Cos. is developing a 406,801-square-foot industrial building, adding to its 1.3 million square feet of warehouse space already built in the township.

Carson isn’t stopping with the development of 1051 Carson Court. The California company plans to construct five more buildings totaling 1.2 million square feet in Palmer, which has become a new frontier for industrial development in the Lehigh Valley.

“Route 33 is a relief valve,” said Eric Zahniser, an industrial broker with Lee & Associates of Eastern Pennsylvania. “The Route 33 corridor has really become where the expansion has been pushing. The Route 33 corridor, logistically, is ideal for companies in New Jersey looking to get out of really high lease rates and find opportunities to lease space.”

Other developers have also started to seize on the opportunity Route 33 in Palmer has to offer, including Duke Realty and J.G. Petrucci. Duke Realty is developing 33 Logistics Park, which at build-out will total 2.7 million square feet. In May, the real estate investment trust sold a 1.1-million-square-foot building it built and leased to Amazon there for $154.2 million.

Aside from Amazon, XPO Logistics, FedEx, Porsche and Mondelez International Inc. are among the tenants who have landed in Palmer, and developers such as Carson are betting more will find a place there.

Industrial development along Route 33 is relatively new and the space that has so far been built has occurred over the last five years. It has been spurred by the 2015 opening of a $40 million new Chrin interchange on Route 33 between I-78 and I-80 in Northampton County as a result of industrial submarkets morphing into one another.

Historically, submarkets — whether Bucks County, Northeast Philadelphia, South Jersey or Northern Delaware — were distinct and tenants focused on those narrow geographic areas when searching for space. Now tenants will cast a wider net and look in more expansive geographic areas such as Berks and Northampton counties when evaluating buildings to lease.

Located on the east side of the Lehigh Valley, Palmer is well positioned to capture trucks coming from the Port of New York and New Jersey as they travel west along I-78 and can jump on Route 33. The submarket also draws from Central Pennsylvania and the Philadelphia markets. It’s less than two hours from Harrisburg and just over an hour from the Port of Philadelphia.

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Greek Development NJ to Redevelop Langhorne PA Warehouse for $32.1M

 By Linda Moss CoStar News

Greek Development and its partner have secured $32.1 million in financing to tear down a Pennsylvania warehouse and replace it with a new 210,564-square-foot industrial facility.

Greek Development, based in East Brunswick, New Jersey, and Principal Real Estate Investors of Des Moines, Iowa, obtained a construction loan from Provident Bank for their redevelopment of 900 Wheeler Way in Langhorne.

Greek Development and Principal Real Estate acquired the property in June 2006 for $7.9 million, according to CoStar data. They expanded the first of the two buildings on-site by 60,000 square feet in 2008. Now Greek is preparing for the demolition of a second, unrenovated building.

The new warehouse will feature 40-foot clear ceiling heights, 31 loading-dock doors, a 150-foot truck court, 80 trailer-parking stalls and parking for 242 cars. The Bucks County building is slated to be completed in the second quarter next year.

“As a best-in-class industrial warehouse in a prime last-mile market, the building’s design has been tailored to suit a variety of top-tier tenant needs,” David Greek, managing partner of Greek Development, said in a statement.“We’re eager to deliver this project in a historically supply-constrained area and to create a warehousing destination for blue-chip e-commerce, logistics and distribution companies.”

The construction loan was sourced by Greek Development’s in-house debt team in concert with the Principal’s project finance group.

The site on Wheeler Way is equidistant to the ports of Philadelphia and Newark.

Keystone Expands Life Science Conversion at Philly Landmark

 By Jack Rogers

Keystone Development + Investment has secured a $265M loan from Nuveen Real Estate to expand its conversion of Philadelphia’s landmark The Curtis into life science lab space.

The financing from Nuveen, an affiliate of Teachers Insurance & Annuity Associates of America, will enable the developer to convert another 200K SF to lab space at the former home of Curtis Publishing, which published of the Saturday Evening Post.

A portion of the funding will be allocated to infrastructure upgrades and leasing costs at The Curtis, according to a release from Keystone.

The Curtis, a 12-tory Beaux Arts-styled structure at 699 Walnut Street, was built in 1910. The ornate building features two-story high columns on its entrance fa├žade, along with old-time street lights and steps.

Keystone purchased the 912K SF building in 2014. The developer renovated the building, adding a lobby atrium and converted existing office place in the former publishing house to luxury residential units.

Space that once held printing presses at The Curtis have been converted to wet lab space for life science companies including IMVAX, Vivodyne and Aro Biotherapeutics.

Some of the attributes that were built into The Curtis to support print publishing have made it particularly suitable to life science conversion, including 15-foor-plus ceiling heights, 200 psf vibration-resistant floors, and multiple loading docks and freight elevators.

Elements that have been added during the conversion to lab space include multiple fresh air intakes, dedicated laboratory backup emergency power and numerous venting chases.

Amenities at the property now include a 300-space covered parking garage, a childcare center, a tenant meeting and lounge suite, 24-hour card access and on-site 24/7 security.

BioLabs, a flexible lab space provider, is putting a 53K Sf incubator in The Curtis, offering life science startups turnkey space.

“We’re excited to give promising biotech startups a chance to start, grow and stay in building, embedded in a rich life science community,” said Dr. Melina Blees, site director of BioLabs Philadelphia, in a statement.

According to a Q2 2022 Venture Monitor report from the National Venture Capital Association, Greater Philadelphia has seen nearly $3.8B in VC invested in 241 deals in the region thus far this year, including an estimated $2.4B earmarked for life science projects.

Philadelphia, with an estimated inventory of more than 21M SF, is one of the five largest life sciences markets in the US, a list led by Boston, San Francisco and San Diego.

A block-wide life science campus is set to rise in Philadelphia’s Center City at 2300 Market Street, where a Breakthrough Properties, joint venture of Tishman Speyer and Bellco Capital, will develop a 200K SF life science facility.

Wednesday, August 10, 2022

REIT Buys Grocery-Anchored Center in Upland Square PA for $85.7 Million

A Singapore real estate investment trust co-sponsored by Hampshire Cos. has acquired a grocery-anchored shopping center outside of Philadelphia for $85.7 million, according to CoStar data.

United Hampshire US REIT, or UHREIT, purchased Upland Square, a 400,674-square-foot retail property at 180 Upland Square Drive in Pottstown, Pennsylvania. The seller was Paramount Realty Services of Lakewood, New Jersey, according to CoStar data.

The shopping center is 95% leased, with a tenant roster that includes supermarket Giant by Ahold Delhaize and T.J. Maxx, and is shadow-anchored by Target and AMC. Other occupants include Petco, Party City, Staples and Bed Bath & Beyond.

UHREIT is sponsored by Morristown, New Jersey-based Hampshire and UOB Global Capital. The latest transaction brings the REIT's holdings up to 23 properties. Spanning over 3.8 million square feet, UHREIT's portfolio now includes 21 grocery-anchored and necessity-based properties and two self-storage facilities along the Interstate 95 corridor, Hampshire said in a statement on Monday.

“The eastern United States’ combination of population density and high household income have ensured it continues to stand out among the nation’s retail markets," Derek Gardella, UHREIT's head of investments, said in a statement. "We expect this momentum to continue over the long-term."

Upland Square is located in Montgomery County, the third-most populous county in the Keystone State. It has a population of 836,948 with an average annual household income of $153,498.

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