Monday, September 30, 2024
Jewish Federation acquires Gratz College building after school buys Main Line property
By Ryan Mulligan – Reporter, Philadelphia Business Journal
The Jewish Federation of Greater Philadelphia is acquiring the Gratz College building on its Melrose Park campus as the institution relocates to a new location on the Main Line.
In the deal for the 60,000-square-foot Ann Newman building, the Jewish Federation is taking Gratz College's equity stake in its Mandell Campus, making it the property's sole owner. Both sides declined to disclose the size of Gratz College's equity stake.
It's part of a strategic plan by the Jewish Federation to "explore all options for maximizing" on the 28-acre plot of land off Old York Road in Montgomery County just outside of Philadelphia city limits. For Gratz College, it's downsizing in a way that it can be more than just an educational space, but a Jewish community hub with the Main Line campus. Gratz has already started the move and the Jewish Federation will assume ownership of the Melrose Park building in July 2025.
Gratz College purchased the Levering Mill Tribute House in Bala Cynwyd for $1.8 million in July, Montgomery County Property records show. The building at 382 Bala Ave. won't be a traditional educational space, the way the Ann Newman property was with some 30 classrooms.
With Gratz College education largely taking place online, President Zev Eleff said that "having such a robust footprint in online graduate level programming avails us of the opportunity to think deeply about physical space." The school has around 500 students, offering graduate, certificate and continuing education for professionals.
Gratz College was an original tenant on the Mandell Campus, investing $3 million to build out the Ann Newman building. Its new home at the Levering Mill Tribute House spans about 10,500 square feet, records show.
"We're taking a really big bet, a big swing, and we want to hit a home run," Eleff said.
The new building includes an event space that could host weddings or B'nai Mitzvahs and the college is working on a conceptual design that it hopes will make it a "central gathering" space, rather than a building filled with classrooms, Eleff said.
"We're calling it a gathering space, or a third space, and that's really exciting," Eleff said. "Gratz ought to be that place. We ought to be a convener agency for the for the broader community."
Full story: https://tinyurl.com/58hdfr3c
Friday, September 27, 2024
Developer plans up to $70M shopping center at controversial Concord Township site
By Ryan Mulligan – Reporter, Philadelphia Business Journal
A long-vacant 25.5-acre plot of land in Delaware County approved for 165,000 square feet of retail space is trading hands with the new owners planning to move ahead with developing the site.
Moorestown, New Jersey-based Retail Sites is under agreement to acquire the parcel at the corner of Route 202 and Ridge Road near the borders of Glen Mills and Chadds Ford. Retail Sites is acquiring the parcel from Newport, Delaware-based real estate developer Pettinaro Co.
Retail Sites plans to spend a total of between $50 million to $70 million to build out what will be called the the Shoppes at Concord, according to President Robert Hill.
He declined to disclose the sale price, noting the acquisition has not yet closed.
In 2018, Pettinaro received approvals from Concord Township for a shopping center on the property, but never moved forward with development. The approved plans include a large anchor space of nearly 60,000 square feet, along with adjacent retails spaces of 24,600 square feet, 20,750 square feet and 13,500 square feet. Plans also call for six separate standalone structures spanning 5,000 square feet to 11,700 square feet that can have drive-through areas.
Hill said Retail Sites will try to develop the site as closely to the approved parameters as possible, nothing there will be some alterations based on the tenants.
Retail Sites will also conduct "a large amount of improvements" to the roads bordering the shopping center to ease access in and out. That could cost about $4 million, Hill said. Improvements will include widening Ridge Road, which is now two lanes, and adding three turning lanes going north. Another left turn lane will also be added to Route 202 going east.
The widening of the roads was a subject of pushback from residents in 2017 when another iteration of the shopping center was proposed, according to the Delaware County Times. The newspaper reported that Pettinaro originally received land development approval in October 2008 for the site.
Hill said he often drove by the parcel and long had interest in it, but it was never on the market. Initial talks between Pettinaro and Retail Sites began last summer, though Pettinaro wasn't ready to sell. When Retail Sites had some potential tenants express interest in the area, Hill said negotiations heated up.
A summer 2025 target has been set to be under construction for the Shoppes at Concord. Development and buildout is expected to take another 12 to 18 months, according to Hill.
Full story: https://tinyurl.com/ynh68ap5
Wednesday, September 25, 2024
Monday, September 23, 2024
Industrial development stages a resurgence across Philadelphia region in 2024
By Brenda Nguyen CoStar Analytics
Bucking the national trend, Philadelphia's industrial development saw a resurgence in construction levels in recent quarters. After falling to a three-year low at the end of 2023, the region's active pipeline of industrial construction has spiked by 28% since then.
As of the third quarter of this year, more than 17.3 million square feet across 55 industrial buildings is under construction in the Philadelphia metropolitan area—up from 13.5 million square feet at the end of 2023. Southern New Jersey, which encompasses Burlington, Camden, Gloucester and Salem counties, accounts for over 45% of the region's total industrial construction level.
Notably, Salem County now leads the Philadelphia region in industrial development activity with a total of 4.4 million square feet underway—the only locality with more than 1 million square feet under construction. Given the relatively small size of the existing industrial space market in Salem County, the current construction level amounts to an astounding 47% increase in the county's local inventory.
This surge comes as neighboring Burlington County, a former leader in industrial development, has seen construction activity slow in reaction to the large amount of speculative space that remains available for lease.
The latest uptick in industrial construction comes as availability has increased by 3.8 percentage points across the region since January 2020 following the completion of over 50 million square feet of industrial space. As of September, the availability rate for industrial space in the Philadelphia region was 10.4%, well above the national average availability rate of 9%.
Another wave of industrial development may be on the horizon. Developers have proposed building more than 75 million square feet across 250 buildings. Salem County in New Jersey, New Castle County in Delaware and Bucks County in Pennsylvania have the highest concentration of proposed projects, each with over 10 million square feet of proposed development.
While not all the proposed projects are expected to move forward, the sheer volume of projects indicates that developers remain bullish on the Philadelphia region for future industrial demand.
Sunday, September 22, 2024
Brandywine Realty focused on bringing retail at Schuylkill Yards 'up to par'
By Paul Schwedelson – Reporter, Philadelphia Business Journal
As the next to-be-built buildings in Schuylkill Yards await the right timing, Brandywine Realty Trust is beefing up the retail offerings at the University City master-planned site.
“Retail is really where we're focused,” said Jeff DeVuono, Brandywine Realty Trust’s managing director of the Pennsylvania region. “That's where we lack. We're just not up to par yet on what that wants to be.”
Brandywine (NYSE: BDN) recently completed construction on 3025 John F. Kennedy Blvd., a $300 million, 28-story building with 200,000 square feet of commercial space for office or lab space along with 326 apartments.
Nearing completion is 3151 Market St., a 472,000-square-foot life sciences building. Three more development sites at 3001 JFK Blvd., 3051 JFK Blvd. and 3101 Market St. are being planned, but Brandywine is waiting to begin construction on them.
In the meantime, the Philadelphia-based developer is adding retail amenities, a way to compete for office users and other tenants continuing their flight to quality.
“What we’ve done is we now took the retail space and that is part of our add-on factor to the building. People want amenities. That’s part of the business now,” DeVuono said at the Philadelphia Business Journal’s recent State of the Mega Project event. “It’s all our capital for the most part but what you want is a quality operator.”
Schuylkill Yards, Brandywine's $3.5 billion, 14-acre development in partnership with Drexel University has been well over a decade in the making. Brandywine was initially slow to incorporate these kinds of elements in their projects, DeVuono said. As Amtrak planned to significantly enhance retail offerings at 30th Street Station, Brandywine waited and didn’t pursue more retail on its own.
Following years of Amtrak delays, Brandywine decided it needed to improve its retail regardless. Renovations at 30th Street Station are now taking place, but it came later than anticipated.
“That's where we really need to build,” DeVuono said. “But it's up to you folks to come into the office, because if you own a restaurant, you can't make a living if you're not there during the week. So please come in.”
Full story: https://tinyurl.com/bde3fam7
Friday, September 20, 2024
Wednesday, September 18, 2024
Monday, September 16, 2024
Wednesday, September 11, 2024
Industrial developers migrate to Philadelphia’s southern counties
By Brenda Nguyen CoStar Analytics
Amid a growing backlog of unleased speculative warehouse developments and heightened interest rates, developers have slowed construction on new projects in Philadelphia's industrial market. However, developers are banking on strong pent-up demand for industrial space with a pipeline of proposed projects that totals over 75 million square feet across 250 buildings, suggesting that development activity is likely to rebound quickly once market dynamics improve.
For context, the Philadelphia industrial market has been grappling with a large influx of new industrial space, with 50 million square feet added in the past three years and 70 million square feet added in the past five.
While not all 250 proposed projects are guaranteed to move forward, the majority are likely to do so. The proposed developments are concentrated in a few key areas, hinting at where future supply pressures will surface. Across the Philadelphia market, five local industrial hubs account for 60% of the region’s proposed development projects.
Previously, much of the industrial development activity in the Philadelphia region was focused on Burlington and Gloucester counties. But industrial construction activity has fallen in recent years due to double-digit industrial space availability rates in these localities.
As a result, many developers have migrated further south to outlying industrial hubs such as Salem and New Castle counties, the southernmost localities within the Philadelphia metropolitan area, as well as Bucks County to the north.
Subsequently, Salem County now leads the region with over 11 million square feet of proposed industrial space. New Castle County and Bucks County follow closely with approximately 10.6 million square feet of proposed new industrial space each. All three industrial hubs account for approximately 14% of the region’s proposed pipeline.
The significant number of proposed projects suggests that these Philadelphia-area industrial hubs will likely face supply pressures as they are built over the next several years. The high volume of proposed projects in these southern Philadelphia-area counties underscores the need for strategic planning to mitigate potential challenges as future projects hit the market.
Tuesday, September 10, 2024
Monday, September 9, 2024
Apartment rent growth in Lancaster tops among eight largest cities in Pennsylvania
By Brenda Nguyen CoStar Analytics
Lancaster, Pennsylvania, has established itself as a thriving apartment rental market over the past decade. Among Pennsylvania's eight largest apartment markets, Lancaster has consistently led the commonwealth in rent growth over the past five years, outpacing the state’s largest cities by wide margins.
Once a quiet county in south central Pennsylvania, Lancaster has continued to see an increase in local residents, including many who have moved from New York City and Philadelphia. The local apartment market had already recorded the lowest vacancy rate of the eight largest Pennsylvania apartment markets, averaging 3.5% in the past decade. In the last three years, vacancy has further compressed to an average of 2.7%.
A lack of apartment options has enabled the market to sustain solid rent growth, averaging an annual increase of 4% over the past decade and 6.3% in the last three years.
Persistently strong annual rent growth has resulted in double-digit rent hikes over the years. In late 2024, Lancaster recorded a 31.5% cumulative rent growth over the past five years, 18.6% in the past three years, and 6.2% in the past 12 months—outpacing the rest of the Keystone State. Lehigh Valley, Scranton and Reading have followed, while the largest cities, Philadelphia and Pittsburgh, have trailed the rest of the state in terms of annualized rent growth.
The rate of increase can be attributed to the region's tight market conditions and increasing demand from local renters.
The region's growing employment base, which has increased by 7.2% in the past three years, has further fueled demand for apartments in the area. This, coupled with the presence of several higher education institutions, such as Franklin & Marshall College, contributes to a vibrant community and steady demand for rental housing.
Lancaster's appeal may have been further enhanced by its recent recognition as a top place to retire. U.S. News & World Report has consistently ranked the region highly for its quality of life, healthcare services and low taxes.
The combination of affordability, small-town charm, and strong employment opportunities has attracted residents, developers, and investors over the years and is expected to attract more in the future.
However, with so little apartment construction underway or in the proposal pipeline, Lancaster’s growing population is expected to face further rent increases in the future.
Philadelphia students scramble to secure housing for the new school year
By Brenda Nguyen CoStar Analytics
As a new school year begins across the nation, many college students in Philadelphia are scrambling to secure housing just weeks before classes start. Following a slow summer pre-leasing season for student housing, a rush of leasing activity emerged over the past month.
Student housing properties, as defined by CoStar, are those that are purposefully built or operated for students, regardless of whether the property is managed by universities or private entities. They typically feature lease terms aligned with the academic year, proximity to campus, furnished units, and amenities tailored for students, such as game rooms and study lounges. CoStar’s pre-leasing data tracks the percentage of leased beds before the first of each September.
In early August, Philadelphia’s pre-leasing rate for student housing reached only 82%, significantly lower than the 91% recorded during the same month last year. By September, leasing rates jumped to 97.1%, an impressive increase of over 15 percentage points month-over-month. This figure even surpasses last September’s pre-leasing rate of 94.7%.
Representatives from local campuses, such as Temple University, report that parents are increasingly active in the housing process, displaying increased price sensitivity and putting off signing lease agreements.
Additionally, technical difficulties with FAFSA, the U.S. Department of Education’s financial aid form, earlier this year prolonged school selection decisions for one million students nationwide, further affecting summer pre-lease rates.
While delaying housing decisions is not always the safest or least expensive choice, it has worked in favor of students in the current market cycle, particularly in urban areas within Greater Center City, where concessions for market-rate apartments are plentiful.
Despite the challenges of the summer, the recent surge in leasing activity indicates that student housing performance remains strong. Rental rates for student housing continue to outpace those of market-rate apartments, even in urban areas where concessions are plentiful.
Wednesday, September 4, 2024
Tuesday, September 3, 2024
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