Philadelphia-area industrial tenants face some of the highest rent hikes at renewal

 

By Brenda Nguyen CoStar Analytics

Philadelphia's industrial real estate market this year solidified its status as one of the top performers in the nation, ranking third among the 15 largest U.S. industrial markets for sustained rent growth.

In the past five years, Philadelphia’s industrial rent growth saw cumulative gains of 57.6%, surpassed only by Phoenix and Atlanta. This growth rate is nearly 16 percentage points higher than the national average of 41.7%. The surge in local rents can be attributed to the demand during the booming years of 2021 and 2022 when the supply of available industrial space hit a record low. New demand formation has made it competitive for businesses seeking locations, driving rents upward.

While landlords are still reaping the benefits of this demand, tenants nearing the end of their leases are facing significant increases in rental costs. For instance, a tenant who signed a lease for a 25,000-square-foot warehouse at $6 per square foot in 2019, paying a base rent of $150,000 annually, could see the rent spike closer to $235,000 if the existing landlord brings the rent to market rates.

Philadelphia's rent gains have surpassed those of nearby Northeast markets such as Boston and New York, reinforcing its position as a vital logistics hub within the regional corridor. Despite the recent performance, Philadelphia's average rent of $11 per square foot is still more affordable than that of Washington, D.C., at $17; New York and Boston at $16 each; and northern New Jersey at $15.50.

Several factors have fueled this remarkable rise in the industrial market, including land availability, lower operating costs and a strategic location within a day's drive of over 40% of the U.S. population.

Additionally, the ongoing expansion of the Port of Philadelphia has significantly contributed to this growth. The modernization and deepening of the Delaware River channel have both enabled larger vessels to dock and increased cargo volumes, thereby driving demand for warehouse space near the port. In mid-2024, the port reached a new record of 750,000 twenty-foot equivalent units. TEU is used to meausre the capacity of container ships and ports. This port in particular forecasts cargo volume to double to more than 1.5 million TEUs by 2040.

Looking ahead, Philadelphia's industrial market shows no signs of slowing down. With an annual growth rate currently at 4.1%, it ranks fourth among the top U.S. markets for rent growth. The ongoing expansion of logistics infrastructure combined with its advantageous location and relative affordability indicates Philadelphia will maintain its competitive edge in the national logistics network for years to come.

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Walmart closing South Jersey fulfillment center

 By Ryan Mulligan – Reporter, Philadelphia Business Journal

Walmart is shuttering a South Jersey warehouse in a move that will impact 113 workers.

The warehouse at 200 Birch Creek Road in Swedesboro is a fulfillment center for Walmart's (NYSE: WMT) Sam's Club brand. It will close operations by March 7, according to a Worker Adjustment and Retraining Notification Act filed with the New Jersey Department of Labor and Workforce Development.

Walmart says it is relocating operations from the Swedesboro location to other fulfillment facilities. Impacted employees will be offered a $7,500 transfer bonus and relocation benefits to move to Walmart's newly opened next-generation fulfillment centers like the one in Greencastle, Pennsylvania.

They are also eligible for relocation to nearby warehouses in Smyrna, Delaware; and Westampton and Pedricktown, New Jersey. Impacted employees are able to transfer to Walmart stores and Sam's Club outposts as well.

"We’re continuously evolving our fulfillment network to improve service for our customers and members as their needs change," a Walmart spokesperson said in a statement.

The timing of the decision was driven by Walmart's lease commitments, according to the company.

The move comes after Walmart closed another fulfillment center in nearby Pedricktown in May impacting 271 workers, one of multiple warehouses the retail giant has at the Salem County site.

In that wave of terminations, Walmart also offered identical bonuses to transfer to the tech-forward Greencastle facility.

The 113 impacted workers represent the full workforce at the Swedesboro warehouse. The building at 200 Birch Creek Road spans nearly 600,000 square feet. It's unclear how much space Walmart occupies at the site.

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$172M Center City apartment sale signals more deals are on the way

By Paul Schwedelson – Reporter, Philadelphia Business Journal

The $172 million sale of a high-rise development in Logan Square marks one of the largest Center City apartment transactions in recent years and could indicate more deals are on the way.

New York investment firm Briar Capital Management acquired the 572-unit NorthXNorthwest from Boca Raton, Florida-based apartment owner Mill Creek Residential, according to industry sources. The Arizona State Retirement System bought a 50% stake in Mill Creek Residential in 2018.

The development, at 450 N. 18th St., includes two towers and 16 townhomes with a combination of studios, one- and two-bedroom apartments. It was 95% leased when the property was put up for sale in early February.

The property was most recently assessed at $104.4 million.

While suburban multifamily portfolios have sold for higher prices, this sale is one of the largest recent deals in Center City and Philadelphia overall. The 45-story building at 1500 Locust St. sold for $233 million in late 2021. The St. James, a 45-story, 304-unit apartment building in Washington Square West sold for more than $220 million in 2022. Outside Center City, the four-building, 1,015-unit Presidential City property along City Avenue sold for $357 million in 2022.

This year, aside from several local properties being part of Blackstone's $10 billion acquisition of AIR Communities in June, there have been few Center City apartment building transactions as interest rates forced a slowdown in sales volume.

According to CoStar, Blackstone's acquisition included four multifamily buildings in and around Center City. Though the price of each is unclear given the nature of the acquisition, the portfolio included 534-unit Sterling at 1815 John F. Kennedy Blvd., which was most recently assessed at $185 million.

Earlier this year in Center City, the 151-unit Packard Motor Car Building at 317 N. Broad St. sold for $39.7 million and a nine-story, 54-unit building at 1530 Chestnut St. sold for $12.3 million. Neither of those deals came close to the price of NorthXNorthwest.

A 34-story, 321-unit building at 2116 Chestnut St. was put up for sale more than a year ago but hasn’t been sold.

The last major institutional Center City apartment acquisition was in July 2022 when Sentinel Real Estate Corp. bought The Republic at 1930 Chestnut St. and The Broderick at 400 Walnut St. for a combined $68.5 million. That was in the early months of the Federal Reserve's interest rate hikes — and institutional buyers have pulled back since.

Industry experts believe the sale of NorthXNorthwest could be a sign of more transactions in upcoming months. Institutional investors' return to quality properties typically signals market confidence, CoStar Associate Director Brenda Nguyen said. Since institutional buyers usually wait until interest rates stabilize and prices reflect market conditions, Briar Capital Management's purchase could foreshadow how other similar buyers might soon act.

"We are either at or have passed the cyclical market bottom," Nguyen said.

The NorthXNorthwest property encompasses two towers. The 17-story, 286-unit northwest tower has 13,000 square feet of commercial space and was built in 1987.

Cleveland-based Forest City Residential Group doubled the residential complex in 2017 when it completed the 16-story, 270-unit north tower. The $110 million second phase included 16 townhouses and a 400-space parking garage, according to the Center City District. Forest City Residential Group was bought by Brookfield Asset Management Inc. in 2018 for $11.4 billion.

NorthXNorthwest, originally known as Museum Towers II, was the only Philadelphia property in Mill Creek Residential’s portfolio. Briar Capital Management doesn’t list its properties on its website.

Full story:  https://tinyurl.com/5n8726nz

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$21M sale of Bala Cynwyd site paves way for apartment development

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

Plans for more than 400 apartments near City Avenue in Bala Cynwyd are moving forward at the site of a former office building that has recently been demolished.

Houston developer Hanover Co. recently purchased the 8.5-acre site at 111 Presidential Blvd. for $21.3 million from Amerimar Realty Co., according to Montgomery County property records. Demolition of Bala Pointe Office Center, the 172,710-square-foot office building that previously stood on the site, was completed this fall.

While Hanover Co. declined to comment, the demolition and sale show the firm’s project is making progress.

In September 2022, the Lower Merion Township Board of Commissioners approved Hanover Co.’s preliminary land development plan for a five-story, 425-unit apartment building with 25,564 square feet of ground-floor commercial space and a 676-spot parking garage in the building.

Renderings of the project presented to Lower Merion Township show a walkway connecting the two sides of the building. Commercial office or retail space would be situated along Presidential Boulevard. The plan included public gathering space and streetscape improvements.

The building is just west of I-676, near the City Avenue exit.

The development continues the trend of suburban office buildings being torn down for new uses.

In Dresher, BET Investments is demolishing three interconnected office buildings totaling 861,000 square feet at the former Prudential Insurance Co. campus. The developer is planning to build more than 900 residential units and 100,000 square feet of retail space and more. BET is also planning to tear down two or three one-story office buildings in Conshohocken, where it would build up to 200 apartments and more than 20,000 square feet of retail.

Next to the Cherry Hill Mall, mall owner PREIT is demolishing the nine-story, 116,742-square-foot One Cherry Hill office building and has submitted an application to Cherry Hill Township to build a 120,000-square-foot sporting goods store in its place.

Hanover Co.’s project lies within the City Avenue District, a business improvement district that has emphasized more connectivity between properties along City Avenue. Long known as an auto-centric thoroughfare, the City Avenue District released a master plan this past spring that called for a more walkable area with seamless connections.

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PREIT demolishing high-profile Cherry Hill office building

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

A nearly 50-year-old high-profile office building on the doorstep of the Cherry Hill Mall is being demolished as the beleaguered office market continues taking hits.

The nine-story, 116,742-square-foot building — known as One Cherry Hill — is owned by Philadelphia mall owner PREIT.

The building at 1 Mall Drive is in the Cherry Hill Mall’s parking lot. PREIT has made an effort in recent years to position parcels of land adjacent to its malls for residential or other development.

PREIT confirmed its plans to demolish the building but declined to comment on the future of the site. Cherry Hill Township officials didn’t immediately respond to a request for comment. The demolition was first reported by 42freeway.com.

One Cherry Hill was more than half empty earlier this year before the entire building was vacated.

The vacancy rate of office buildings in Camden County in the third quarter was 15.9%.

As the office market has dealt in recent years with tenants downsizing and more chunks of vacant space, developers have floated the idea of demolishing office buildings. The land itself, they argue, is as valuable or more valuable than the structure on top of it.

By demolishing One Cherry Hill, PREIT will have the opportunity to develop that section of the property or sell it as a development site. PREIT CEO Jared Chupaila, who began his role in April, has said the company’s top priority is creating liquidity.

Elsewhere in its portfolio, PREIT is adding new uses to traditional mall properties. At the Moorestown Mall, PREIT sold a 6.3-acre portion of the parking lot for $11.8 million to developer Bel Canto Asset Growth Fund, which is now planning to build 375 residential units at the site. Cooper University Health Care opened a $150 million, 166,000-square-foot outpatient campus at the Moorestown Mall in late 2023. A 100,000-square-foot family entertainment center reported as Parky’s is also being planned at the mall property.

At the Plymouth Meeting Mall, PREIT is looking to sell a piece of the parking lot where a developer could potentially build up to 275 residential units.

Full story: https://tinyurl.com/z64vzx5u

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E-commerce delivery firm, Veho, leases entire industrial building in Philadelphia

 By Lauren Diggs CoStar Research

A delivery firm serving e-commerce companies has signed a lease for 148,611 square feet in Philadelphia.

The property at 4501 Richmond St., for which Veho inked the deal in June with a move-in date of Oct. 1, features a one-story distribution center situated within the Bridge Point Industrial Park. Bridge Industrial owns the property, which was built in April.

Bridge Industrial bought the site in 2022 for about $24 million after it was remediated following its use as gas manufacturing site in the 1920s. The property was also used from 1929 to 1982 to make metallurgical coke as part of steelmaking.

Bridge Industrial is a privately owned real estate manager operating in Chicago, Miami, Los Angeles, San Francisco, Seattle and London, as well as New York and New Jersey.

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'The market is picking up': Philadelphia industrial real estate sees jump in leasing activity

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

The vacancy rate of industrial properties in the Philadelphia region just dropped for the first time in two years, partly the result of an uptick in tenant demand.

Much of that industrial demand has come from third-party logistics companies, specifically those based in Asia, that had previously been priced out of the Northeast market, according to real estate services firm CBRE. As vacancies increased and conditions favored tenants, third-party logistics companies made up almost 80% of leasing activity in the region in the third quarter, CBRE reported.

“Speaking with our brokers lately and listening to the market activity, there is a noticeable uptick in activity and requirements and tours in the market,” CBRE Director of Research Joe Gibson said. “So I believe the demand part is going to come back to some sort of equilibrium state.”

In the third quarter, the region’s industrial vacancy rate fell from 7% to 6.5%, the first time it dropped since late 2022, according to brokerage firm Colliers. It’s a vacancy rate that more closely resembles those seen during the period from 2016 to 2019 rather than the record lows of around 2% posted during the Covid-19 pandemic.

Developers rushed to construct new industrial buildings to meet demand from e-commerce companies and other industries boosted by the pandemic, and the projects completed in the years since have significantly grown the supply of industrial space in the Philadelphia area.

That’s opened opportunities for third-party logistics companies like California-based Lecangs, which signed a lease to take the entirety of an 845,280-square-foot building at 1900 River Road in Burlington, New Jersey, and Netherlands-based Cirro, which leased a recently built 806,000-square-foot warehouse at 1183 Florence Columbus Road in Bordentown, New Jersey.

“Companies had been taking a really long time to make decisions and they’re finally starting to move,” Colliers Market Research Director Rose Penny said. “We’ve been having an increase in tours and interest in buildings.”

Chicago-based Bridge Industrial is in the middle of developing 1.4 million square feet of warehouse distribution space in Philadelphia. Third-party logistics company Veho recently signed a lease for 148,611 square feet to fully occupy a new warehouse at 4501 Richmond St. in Philadelphia’s Bridesburg neighborhood.

Connor Milanaik, director of investments for Bridge Industrial, said volatility in interest rates forced companies to hesitate before making real estate decisions. With the Federal Reserve now beginning to lower rates, “we do expect that’s going to allow more certainty from a tenant demand perspective,” Milanaik said. “That is what we’re seeing.”

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Brandywine CEO Sweeney says 'greed will start to overtake fear’ in office sales market

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

Brandywine Realty Trust CEO Jerry Sweeney expects office sales to pick up in 2025, after years of a frozen market and uncertainty swirling around interest rates.

With rates projected to continue stabilizing and possibly dropping further, Sweeney said the increasing access to capital will lead to more sales opportunities.

“The market has been really — fear has driven everything,” Sweeney said. “All the investment decisions, development decisions, capital allocation decisions. I think we’re getting to a point now, with visibility of the interest rate climate, that greed will start to overtake fear.”

Philadelphia-based Brandywine (NYSE: BDN) is the city’s largest office landlord. Speaking at the Urban Land Institute’s 2025 Real Estate Forecast event Tuesday at the Bellevue Hotel, Sweeney noted the volume of office transactions have been at a historic low, around 60% to 70%.

A key factor in the slowdown has been not just interest rates, but also widespread concerns about the office market as companies settle into their long-term remote and hybrid work routines. Sweeney highlighted the dichotomy in the office market, however, in which high-quality buildings are almost entirely leased and performing well. Meanwhile, low-quality buildings face significant challenges as occupancy drops and loan payments come due, setting up potential foreclosures.

Sweeney said the average sale price of large-scale office buildings has been well below $100 million, which he attributed to debt capital markets that “have not been open.”

“You’re starting to see beginning signs of the debt markets recovering,” Sweeney said. “I think debt has been the gating issue for a lot of transactional buying, particularly in office and some of the other sectors as well.”

Wayne Avenue Enterprises President Bill Hankowsky echoed Sweeney and said the overall lending environment has a lot to do with availability of capital, not just the amount of the loan. Hankowsky was previously CEO of Liberty Property Trust, which developed Comcast Center and Comcast Technology Center, and he's also on the board of Citizens Bank.

Hankowsky cited three recent regional bank failures that led to increased regulation for lenders. As a result, banks have lowered their exposure to commercial real estate, Hankowsky said. But a shift could take place in 2025.

“I think what will happen in ‘25, I think it’ll still take probably two more quarters for banks to get their CRE exposure and their portfolios to the levels they want,” Hankowsky said. “But then I think they will reopen for business.”

In Philadelphia, five Center City office sales combined to wipe out $151 million of value based on the properties’ assessed value, a 61% decrease. The sales, though, were largely caused by decreasing occupancy or an upcoming loan maturity.

Well-performing office buildings have yet to trade since the office market is at or near the bottom of its cycle after values have dropped dramatically. If the debt market loosens like Sweeney predicts, the Philadelphia office market could finally have a sale that isn’t for a struggling building. 

Buildings that have recently sold, and are now being planned to be converted to other uses, means there’s less overall office space available.

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Spending on industrial property in Pennsylvania capital sets new record

 

By Brenda Nguyen CoStar Analytics

A Pennsylvania industrial real estate market experienced unprecedented growth in 2024, with year-to-date sales volume hitting $740.6 million.

This amount for the Harrisburg area is already more than double last year's total of $328.1 million, setting a new record for the market. Recent performance builds upon a decade of steady growth, transforming the region into a major Northeast distribution hub.

Over the past decade, industrial sales averaged over $330 million annually, notably outpacing office, retail and multifamily properties by significant margins.

The upward trajectory of industrial growth reflects Harrisburg's geographic advantages. Located at the intersection of major highways, including interstates 81 and 83, the region offers superior access to Northeast population centers while maintaining operating costs lower than primary markets.

The area's extensive transportation infrastructure, including Norfolk Southern's intermodal facility and major ports, also draws in national and international capital.

In August, EQT Exeter acquired Building 1 at Core5 in Middletown for $170.5 million. The single-tenant, 1.2 million-square-foot distribution facility built in 2023 was occupied by Amazon at the time of sale. The company's lease expires in October 2034.

And last month, EQT Exeter acquired a portfolio consisting of three buildings at Carlisle Distribution Center for $210 million. The two single-tenant buildings, constructed in 2006 and 2009, were fully occupied by decor retailer At Home and supply chain specialist Geodis. Meanwhile, the multitenant building was 55.5% leased at the time of the sale. This portfolio sale is Harrisburg’s largest industrial acquisition in history.

Recent sales volumes indicate a shift in market perception, with institutional investors increasingly viewing Harrisburg as a prime industrial market rather than a secondary location. The region's success in attracting major distribution facilities has created a network effect, drawing additional industrial users and investors to the market.

With year-to-date volume already exceeding the combined total of office, retail and multifamily sales, industrial has become the defining feature of Harrisburg's commercial real estate market.

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National law firm fuels Philadelphia growth with office expansion

 By Katie Burke CoStar News

National law firm Polsinelli is making good on its ambitious growth plans in the Philadelphia area with a deal to roughly double its office space to accommodate its expansion.

Within a few months of making its regional debut, the Kansas City, Missouri-based firm signed a deal to take over two floors at the Three Logan Square tower, Polsinelli confirmed. The expansion means it can grow its 60-person regional workforce to about 120 employees.

The long-term deal with Brandywine Realty Trust totals about 40,800 square feet across the 11th and 12th floors of the building at 1717 Arch St. Polsinelli earlier this summer made its debut in the Philadelphia area, where it has been working from about 21,650 square feet on a higher level within the more than 1 million-square-foot tower.

The firm's growth in the area meant it soon outgrew the space, and Polsinelli began looking for alternatives both within the Brandywine-owned building as well as elsewhere across the Philadelphia-based landlord's portfolio.

The law firm expects to shift to the expanded space by mid-2025 once finish-out work wraps up.

The legal industry collectively signed on for about 17 million square feet nationally in 2023, according to a recent Cushman & Wakefield report, an assertive rebound from the early years of the pandemic when law firms were pulling back on deals or hesitant to take on new space.

The burst of new leases has also pushed the legal sector to the forefront of the national office market as other industries remain wary about making long-term commitments to office space.

Legal boost

Law firms' emphasis on space in high-end buildings has helped prop up leasing activity across the United States, as many have prioritized office decisions in the nicest and newest properties.

Some major law firms have increasingly used office space as a tool to attract and retain talent, often moving into newer, higher-quality space in a boost to landlords of top-tier buildings. While some law firms have opted to reduce their real estate portfolios and hop to smaller spaces in newer properties, other firms have signed some of the country's largest deals in the past couple of years.

Law firms across the country "are expected to continue to be in the market for office space given their proclivity for in-office work and apprentice-based business model," according to the Cushman & Wakefield report.

Law firms accounted for roughly 9% of all office leasing activity last year in the country's largest legal markets, including Boston, Philadelphia, Chicago and Atlanta, according to Cushman & Wakefield. That's almost double the share that law firms accounted for in 2022.

For Brandywine, more than 60% of the new leases it signed in the third quarter account for what CEO Jerry Sweeney attributes to the "flight to quality" trend.

The landlord's Three Logan Square tower is already home to a party of law firms that have expanded to the downtown tower in recent years. National law firms Post & Schell, Barnes & Thornburg and Flaster Greenberg have all recently relocated to or expanded within the building, according to CoStar data.

Once it moves into its newly expanded space, Polsinelli will be one of the tower's largest tenants.

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After Montgomery County debut, more Dill Dinkers indoor pickleball sites planned in region

By John George – Senior Reporter, Philadelphia Business Journal

The region's first Dill Dinkers pickleball complex officially opened its doors in Lansdale on Friday, and its operator said more clubs are on the horizon.

Andrew Wakefield, who with his father serves as regional developer of Dill Dinkers sites in Bucks, Chester and Montgomery counties, said he is hopeful their second location in Hatboro will open later this year, followed by additional outposts.

"We hope to add another three places next year," Wakefield said. "We've been out scouting sites, and we have some promising ones."

He declined to disclose exactly where they are looking for competitive reasons. Wakefield said the plan is to own and operate two of those planned pickleball centers and bring in a franchisee for the third.

The Wakefields added Bucks County to their territory earlier this year after originally obtaining the rights to Chester and Montgomery counties from Maryland-based Dill Dinkers.

Husband and wife Jim and Mia Cassady signed a deal to be Dill Dinkers regional developers for Delaware County and northern Delaware this summer.

The debut of the Wakefield's first Dill Dinkers site, which spans 37,000 square feet at Velocity Station at 1180 Church Road, comes several months later than initially expected. They had hoped to open the complex over the summer but ran into construction delays.

"Our customers have been pretty understanding," Wakefield said. "Construction delays happen in everything from pickleball centers to skyscrapers."

The Lansdale Dill Dinkers, created at what was once a Merck training facility, includes 11 indoor courts, a pro shop, event space that can accommodate up to 80 guests and ball machines for practicing.

The next Dill Dinkers will span 48,000 square feet at Hatboro's Station Park, a mixed-used commercial building at 330 Warminster Road. It will feature 18 courts.

Velocity Venture Partners of Bala Cynwyd is the landlord for both properties.

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Office sublet space shrinks as Philadelphia office tenants give back less space

 By Brenda Nguyen CoStar Analytics

After seven consecutive years of increasing availability of office sublease space, Philadelphia's office market is showing early signs of recovery.

The proportion of sublet options across the total available office inventory decreased to 15.1% in late 2024, down from a peak of 16.8% in mid-2023. This marks a notable shift following a continual increase in sublet availability since 2017, suggesting that the worst of the demand contraction may be behind the Philadelphia office market.

Over the past year, 66 office sublet leases were executed, totaling 470,000 square feet. The latest annual figure is comparable to 2023 when 68 office sublet leases were recorded. They involved more space, for a total area of 730,000 square feet.

Among the largest sublet agreements signed so far this year are PassageBio’s 15,850-square-foot sublease at 1835 Market St. in Center City and PetroChoice’s 14,500-square-foot sublease at 933 First Ave. in King of Prussia.

The relative persistence in sublet leasing activity suggests that the reduction in the share of sublet space can be attributed to two factors.

First, fewer tenants have listed office space on the sublease market in 2024, reducing the number of available options.

Second, several previous sublet listings have converted to direct leases as their lease terms expired, further diminishing the sublet share of available office inventory.

Despite the conversion to direct space, the overall amount of available office space in Philadelphia has shifted downward from an all-time peak of 50.8 million square feet in early 2024 to 49.4 million square feet in October, which means approximately 1.4 million square feet of office space was taken off the market throughout the year.

Although early signs are encouraging, the Philadelphia office market still faces challenges, as approximately a quarter of office leases signed before April 2020 have yet to expire. However, recent trends suggest the uptick in vacancy will be at a slower pace than years prior.

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Rubenstein signs 131,000 SF of new leases at Chesterbrook campus

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

Rubenstein Partners has signed leases totaling 131,000 square feet since the summer at its Chesterbrook office campus. The deals are highlighted by a 36,000-square-foot lease signed by a government defense contractor and a financial services company taking an entire 35,000-square-foot building.

The deals bring Chesterbrook’s occupancy to 62%.

Rubenstein Vice President of Asset Management Brian Simel attributed the recent leasing to the location between I-76 and Route 202 near King of Prussia combined with renovations the real estate firm recently completed.

“I think we’ve got something compelling,” Simel said. “That’s what the leasing says about it.”

Arcfield, the government defense contractor, is taking 36,000 square feet at 1400 Morris Drive, the first tenant to move into the building since Cencora, formerly AmerisourceBergen, vacated in 2021.

Philadelphia-based Rubenstein bought the 14-building, 1.1 million-square-foot campus for $148.5 million in 2019 and was aware of then-AmerisourceBergen’s intention to depart for Conshohocken. With 1400 Morris Drive fully vacant, Rubenstein renovated the lobby and entrance.

Arcfield’s 11-year lease brings the four-story, 92,459-square-foot building to 39% occupied.

“It’s an important indication we’re on the right track,” Simel said. “It’s a 1 million-square-foot campus so we’re going to keep working and try to win even more of these. It’s a big lease. It’s a great tenant.”

Full story: https://tinyurl.com/4xedjn4b

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BET Investments pays $17M for Conshohocken office campus, plans mixed-use redevelopment

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

BET Investments has purchased a six-building corporate campus in Conshohocken for $17 million and plans to redevelop the property with a mix of apartments and retail space, while maintaining a portion of the existing offices.

The Dresher-based developer is planning to build up to 200 apartments and between 20,000 and 30,000 square feet of retail space on the 16-acre site at 625 W. Ridge Pike, known as Conshohocken Ridge Corporate Center.

The property is currently home to one 91,700-square-foot, four-story office building and five one-story office buildings, each roughly 25,000 square feet. Together, they total around 200,000 square feet and are 62% occupied. As part of the redevelopment, BET would tear down two or three one-story office buildings to make way for new uses.

BET closed on the property in August, buying it from Radnor-based EQT Exeter.

The property is just south of the intersection of I-476 and West Ridge Pike on the northern edge of Conshohocken. It's also less than two miles from I-276 and three miles from I-76.

“As far as raw, centrally located real estate in the region, it’s probably one of the best pieces of real estate I’ve ever purchased,” BET Investments President Michael Markman said. “… The key for us is we look at things a lot differently than everyone else. This particular property is screaming out for a redevelopment.”

BET specializes in suburban mixed-use developments that incorporate apartments and retail space.

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