Tuesday, May 30, 2023
Wednesday, May 24, 2023
Philadelphia's Multifamily Market Returning To More-Normalized Rent Growth
Monday, May 22, 2023
Indus Realty Starts Construction on New Allentown Logistics Facility
By Ryan Cashion Costar
Indus Realty Trust, a New York-based real estate investment trust that is about to be acquired by a much larger investor, has broken ground on a 205,468-square-foot industrial warehouse in Allentown, Pennsylvania, after purchasing the 18-acre site in December 2021.
Indus, which focuses on building mid-size industrial and warehouse buildings between 75,000 and 400,000 square feet, not the million-square-foot giants generally used by companies such as Amazon, is expected to be acquired by Centerbridge Partners, an investment firm, and GIC Real Estate Inc., the manager of Singapore's foreign reserves in an $868 million deal announced earlier this year and expected to close this summer.
The firm's new building in Allentown is located at 1115 American Parkway. According to Indus' website, the firm procured approvals for the industrial building and completed master planning. As part of the transaction, which included a multi-parcel assemblage, site remediation, and collaboration with the City of Allentown as well as owners of the adjacent IronPigs minor league baseball stadium, Indus agreed to construct additional stadium parking and realign American Parkway and IronPigs Way.
The building's foundation and footers were completed in April and the tilt-up construction has gone vertical. Lee Fittipaldi, Kim Jacobson, and Selwyn Simpson with Lee & Associates are the listing brokers for the new speculative building.
Indus Realty Trust owns several Lehigh Valley properties including Lehigh Valley Tradeport I in Lower Nazareth Township and Lehigh Valley Tradeport II on Jaindl Blvd. in Hanover Township. The company recently disclosed the $2.3 million purchase of land off Hausman Drive in South Whitehall Township where it is planning a 90,000-square-foot warehouse.
Friday, May 19, 2023
Bridge Starts Construction on Pair of Spec Industrial Buildings in Philadelphia
By Natalie Silady CoStar Research
Chicago-based Bridge Industrial, a privately owned real estate operating company and investment manager that acquires and develops industrial real estate in supply-constrained core industrial markets, has started construction on a two-building speculative development in Philadelphia named Bridgepoint Philadelphia.
Bridge, which acquired the infill industrial site off Orthodox St. near the Betsy Ross Bridge with access to I-95 and New Jersey in 2022, is building a 740,701-square-foot, cross-dock facility with 40-foot clear height and 113 exterior docks at 2951 Orthodox St. and a smaller 148,611-square-foot, side-dock structure with a 36-foot clear height with 27 exterior docks. The large building is expected to be completed in December of this year and the smaller one in November.
In marketing materials for the project, Bridge cited Philadelphia's location within a 48-hour drive to 50% of the U.S. and Canadian population and proximity to Philadelphia's international seaport, and the plans to expand air cargo capacity at the Philadelphia International Airport by 136 acres and triple its air cargo capacity.
Since its inception in 2000, Bridge has successfully acquired and developed more than 67 million square feet of industrial buildings/projects valued at more than $12.6 billion.
NexPoint Acquires Life Science Properties in Philadelphia
By David Hoffman Globest.com
NexPoint has acquired two life sciences industrial properties located in Philadelphia, PA, from Frontida Biopharm, a company in the Adare Pharma Solutions group. The properties were indirectly acquired by NexPoint Life Sciences II DST.
The real estate acquisition includes nearly 18 acres of land across the two separate properties and more than 250,000 square feet of interior space where Frontida Biopharm will remain the tenant. The first property consists of R&D, production, and warehouse facilities capable of producing three billion tablets and capsules annually. The second property features distribution facilities and packaging capacity for four billion tablets and capsules annually and allows for potential expansion on its 12-acre campus.
Tuesday, May 16, 2023
By Linda Moss CoStar News
Dermody Properties has paid $37.6 million to acquire two sites in southern New Jersey where it plans to develop two logistics facilities.
The Reno, Nevada-based private equity investment and develipment firm on Tuesday said it had purchased the parcels for the new projects in Burlington County, which is part of its East region: LogistiCenter at Lumberton in Lumberton and LogistiCenter at Mount Laurel in Mount Laurel.
New Jersey has been a hot bed of warehouse development, and in the past five years Burlington County has been one of the most active areas in the Garden State with regard to leasing activity, according to Dermody. The company said the county "is ideal for distribution to more than one third of the U.S. population within a one-day drive."
Dermody paid $30.5 million for the property to build the Lumberton distribution center. That planned 429,200-square-foot logistics facility will located on 40.5 acres at 1791 Route 38. Site work is underway and the building is expected to be completed by March 2024, according to Dermody.
The facility will include two drive-in doors, 58 dock high doors, a 36-foot-clear ceiling heights and build-to-suit office space. The building’s 56 trailer parking stalls are also expandable to 228 total parking stalls, Dermody said.
Dermody paid $7.1 million for the site for its 190,470-square-foot facility slated for Mount Laurel, according to CoStar data. It is planned for 31 acres at 2001 Briggs Road. Construction is scheduled to kick off this fall and be done by fall 2024, Dermody said. The location offers convenient access to Interstate 295 as well as the Center City district of Philadelphia, according to the developer.
“In such a challenging market, we feel very fortunate to be in a position to acquire properties such as these and expand our footprint within New Jersey,” Rob Borny, Dermody East Region partner, said in a statement. "Both projects will be state-of-the-art, Class A facilities that offer prime access to New Jersey’s strong labor pool, which is one of the most important factors for companies looking for warehouse and distribution space.”
LogistiCenter is a nationally trademarked brand owned and developed by Dermody.
In the industrial sector Dermody has also been active in acquiring former corporate campuses to repurpose as logistics and distribution sites. It paid more than $230 million last year to acquire Allstate's headquarters campus in Chicago’s northern suburbs, where it will replace office buildings with more than 3.2 million square feet of logistics space. And Dermody has a pending deal with Amazon for an office campus in Milpitas, California, the e-commerce giant acquired but never occupied.
Monday, May 15, 2023
Philadelphia’s Eds and Meds Economy Leads Region’s Employment Growth
Philly area developer Bill Glazer warns a commercial real estate slowdown is coming
by Joseph N. DiStefano Philadelphia Inquirer
Bill Glazer, owner of Keystone Development + Investment, is one of the Philadelphia area’s busiest redevelopers. Since 1991, his Bala Cynwyd-based firm has updated or repurposed 10 million square feet of office space and other commercial property along the East Coast, including the old Scott Paper and Curtis Publishing headquarters in Philadelphia, the new AmerisourceBergen headquarters complex in Conshohocken, and dozens of suburban office buildings, sometimes replacing offices with apartments or biotech labs.
He took questions from The Inquirer on how builders are dealing with higher interest rates and bank troubles. Answers edited for clarity and brevity.
How’s business?
Commercial real estate today is facing a triple threat: interest rate increases, which for us are unprecedented — over 5 [percentage points] within one year; lending and capital availability, which is down; recession and revenue pressures [which discourage tenants, making projects unattractive].
This is the real estate circle of life. We are in a cyclical business. We are now in this part of the cycle. The same stresses we’ve seen in the banking industry are playing out in real estate.
Which sector is getting hit hardest?
Every asset class is facing pressures. We are seeing universally that capital availability is being pulled back for every class. Not the least in retail — Bed Bath & Beyond just said they will not be reopening any of their stores in their bankruptcy. Warehouses, too.
Every time this happens, there is a flight to quality, to the projects most likely to succeed. Lenders face stresses from regulators, from markets, from their funding sources, and that will flow through to commercial real estate loan availability. They are looking for the best [developers, clients and] properties.
What kinds of projects are getting canceled?
You know that Toll Bros. was unable to pull off their condominium project. They demolished [part of Jewelers Row in Philadelphia], but they did not build. They sold the ground to Pearl Properties. You read that the big Durst project on the waterfront stalled.
Most new, ground-up projects are being shelved or paused or sidelined. The contractors are still finishing up jobs in their pipeline. But it’s coming. The Fed, in tamping down inflation, is adding so much pressure to the [borrowing] costs of new construction, there will be far fewer new construction starts. That will translate to fewer cranes.
Biotech, too? All those labs proposed across the Philly area?
There’s a burning need for their science in the marketplace. But the life science community and venture capital are going under a lot of capital stress right now. Anyone who needs to raise money for those projects is going to feel that pressure.
We’re having an investor day for BioLabs, our tenants at the Curtis Center. There’s about 300,000 square feet there of life science space and another 150,000 square feet left to lease. I wish I had more space in that building to convert into life science space.
We are fully capitalized and made at least $40 million in investment in mission-critical infrastructure such as backup power generation, exhaust, redundant power — the baseline requirements for Biosafety Level 2 labs and [FDA-rated] Good Manufacturing Practice labs. Ceiling heights at least 12 feet, we have 14. Floor load capacity, 200 pounds per square foot. Vibration tolerance. Engineering tolerance. Curtis was built for heavy printing presses.
Full story: https://tinyurl.com/ydb5ths2
Friday, May 12, 2023
Thursday, May 11, 2023
Wednesday, May 10, 2023
Tuesday, May 9, 2023
Monday, May 8, 2023
New Philadelphia Life Sciences Project Secures $130M
By Barbara Ballinger Globest.com
Breakthrough Properties, a developer of life sciences real estate backed by a joint venture of Tishman Speyer and Bellco Capital, has closed financing and begun construction on an eight-story, 223,000-square-foot life science building in the heart of Philadelphia’s Center City District.
Breakthrough worked with Philadelphia-based D2 Capital Advisors to secure the $130 million construction loan from Corebridge Financial.
The building is scheduled to be completed for tenant fit-out by the summer of 2024.
The project is coming to life just as hints of softening in the life science sector emerge. It is joining the more than 40 million square feet of new lab/R&D space that is under construction in this year’s first quarter, according to CBRE, with more than one quarter of that space preleased.
CBRE also reports that the lab/R&D vacancy rate increased by 132 basis points quarter-over-quarter and 170 bps year-over-year to 6.7% for the first quarter, but the firm adds that continued demand for life science space should limit any future increases in vacancy.
The country’s top 13 markets had a combined 44,000 square feet of negative net absorption in the first quarter, according to CBRE, the lowest it has been since 2016.
But results vary greatly by city, with the San Francisco Bay Area posting 260,000 square feet of negative net absorption while Philadelphia – home to this latest project – had 460,000 square feet of positive net absorption.
Indeed, the Philadelphia market has become ripe for life science development, says Dan Belldegrun, Breakthrough’s CEO and Co-Founder.
“Over the past few years, Philadelphia has emerged as a leading research hub for pioneering new modalities in immunology, cell and gene therapy, and mRNA-based technologies to name a few,” he says in prepared remarks. “These advances have opened a new multi-billion dollar marketplace for local companies and made Philadelphia a hotspot for next generation discoveries.”
The company also notes that Greater Philadelphia is a national leader in NIH grant funding for cell and gene therapy. The city, which is anchored by a number of the leading research institutions, is home to more than 730,000 professionals with degrees in the engineering and science fields.
