Thursday, January 16, 2025
Marshall Dennehey cuts 10% of its office space in Center City lease renewal
By Jeff Blumenthal – Senior Reporter, Philadelphia Business Journal
Marshall Dennehey has renewed its lease at 2000 Market St., giving back about 10% of its space in the process.
Philadelphia’s largest defense litigation law firm said it signed a 10-year lease renewal on 120,462 square feet. The firm moved to 2000 Market from 1845 Walnut St. in 2012, signing a 15-year lease to occupy 133,000 square feet spanning floors 22 through 26. Marshall Dennehey will essentially be giving back half of a floor in its new lease.
Marshall Dennehey CEO G. Mark Thompson said it made sense to consolidate space because it is the second largest cost center for most law firms and technology is impacting modern law offices. He said the firm will cut the 13,000 square feet by restructuring file space and divesting unused or unneeded space, including a kitchen area in the basement of the building that was included in its original lease.
It also plans to redesign workspaces “for enhanced collaboration and efficiency.” Marshall Dennehey cut its paper file space by half in the move to 2000 Market and Thompson said the firm will continue to reduce it, repurposing that space. It will also reconfigure space dedicated to administrative support services, including finance, on the 22nd floor.
Thompson said 2000 Market remains attractive to the firm because the building is in a prime location with easy access to the courts, clients, the central business district and public transportation. He said landlord Nahla Capital, a real estate private equity firm based in New York, has been flexible in working with Marshall Dennehey as it evolves.
The 10% reduction in office space is much less than what most large firms have given back when signing new leases in the post-pandemic world, with many trimming between 40% to 50%. A move to hybrid working has accelerated a trend started two decades ago by advances in technology, which created less need for support staff and paper file space.
Thompson said most Marshall Dennehey lawyers still prefer coming into the office, and the firm does not offer much in the way of hoteling arrangements.
“We're doing that to a very small extent with regard to some of our IT and finance personnel,” Thompson said. “But as far as the attorneys are concerned, we're maintaining individual offices.”
Marshall Dennehey said 129 lawyers, or 25% of its total, and 211 administrative and professional staff work out of the firm’s Philadelphia office. Its next largest offices include Mount Laurel, with 55 attorneys; and King of Prussia, Pittsburgh and Roseland, New Jersey, with approximately 40 attorneys each.
Founded in 1962, Marshall Dennehey has 500 lawyers spread over 19 offices in Pennsylvania, New Jersey, Delaware, Ohio, New York, Connecticut and Florida. It has 220 lawyers working in four local offices, making it the sixth-largest firm operating in the region. The firm traditionally has focused on insurance defense litigation.
Full Story: https://tinyurl.com/5xybxh4f
Wednesday, January 15, 2025
25-story office tower added to $250M Camden redevelopment project
By Paul Schwedelson – Reporter, Philadelphia Business Journal
The public-private partnership behind the redevelopment of Camden's Walter Rand Transportation Center is taking the project to new heights, announcing plans to add the largest office tower in South Jersey.
Master developer Gilbane and property owner NJ Transit said Monday they plan to build a 25-story, 500,000-square-foot office building between Federal Street and Martin Luther King Jr. Boulevard at the transportation hub.
The office tower, named the Beacon Building, is the newest addition to the redevelopment project, for which New Jersey Gov. Phil Murphy committed more than $250 million in funding three years ago.
The building is planned to be partially occupied by Cooper University Health Care. The project’s leaders, which also include the Camden County Improvement Authority and government officials, plan to recruit New Jersey’s Administrative Office of the Courts to relocate civil courts to the building.
The Beacon Building builds on Cooper University Health Care’s $3 billion campus expansion, which includes three clinical towers. The expansion is needed to meet current and future demand at the 663-bed Cooper University Hospital and MD Anderson Cancer Center at Cooper. The expansion of the university system, life sciences and research sectors is expected to drive a need for office space.
The Walter Rand redevelopment project is also planned to include an updated transportation center, a public square and a parking structure on Lot N.
“The Beacon Building’s proximity to the Rand Transportation Center and Cooper makes it attractive as we look for additional office space to house Cooper’s growing team of support services,” Cooper University Health Care Co-CEO Dr. Anthony Mazzarelli said in a statement. “The additional parking that will be part of this important project is also attractive to Cooper.”
The existing transportation center was built in 1989 and the new design is intended to house most of the operations inside the transportation center. The new hub would better accommodate the 24 bus lines that service the facility, provide connectivity to the PATCO Speedline subway and the River Line light rail, support independent intercity bus services and provide additional parking, administrative offices and retail space.
Full story: https://tinyurl.com/4navyn88
Tuesday, January 14, 2025
UPMC inks 'long-term' lease renewal at eight Pennsylvania properties
Pennsylvania's largest nongovernment employer has renewed a lease for nearly 725,000 square feet across eight buildings in the state's central region.
The deal with medical provider UPMC comes as Pennsylvania's healthcare sector grows. In Pittsburgh, tenants like Allegheny Health Network, Excela Health and Highmark have contributed to a 3.1% growth in health services over the last 12 months, CoStar data shows. And in Philadelphia, education and healthcare companies account for 23% of employment, and lead in high-value transactions for owner-user buyers in regard to health services.
UPMC signed the "long-term" deal for clinical office space totaling 724,096 square feet, the news release said. The identified the building addresses for CoStar News:
- 2025 Technology Parkway, Mechanicsburg
- 2005 Technology Parkway, Mechanicsburg
- 2015 Technology Parkway, Mechanicsburg
- 205 S. Front St., Harrisburg
- 2501 N. Third St., Harrisburg
- 2645 N. Third St., Harrisburg
- 4300 Londonderry Road, Harrisburg
- 4310 Londonderry Road, Harrisburg
“The medical office market remains one of the most resilient and in-demand sectors in commercial real estate, and this deal is a clear reflection of the growing need for well-located, purpose-built spaces that support healthcare providers’ operations and patient care."
UPMC employs about 100,000 people and made $28 billion in revenue during 2023. According to its website, the nonprofit operates 40 hospitals and 800 doctors’ offices and outpatient sites, among other care facilities.
Monday, January 13, 2025
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Wednesday, January 8, 2025
Tuesday, January 7, 2025
Dalfen Industrial buys vacant warehouse in New Jersey
By Taylor Collins CoStar Research
A warehouse built last year in in Lumberton, New Jersey, that has since remained vacant recently sold for $34.3 million to Dalfen Industrial, according to a report published on the company's website.
The Lumberton Logistics Center at 1800 NJ-38 is 219,123 square feet and features 40-foot ceilings, two drive-ins and 36 dock doors. The property also has 115 parking spaces.
Active Acquisitions developed the site starting in August 2022, wrapping up construction the next year. Pangea Mortgage Capital, which served as Active Acquisitions’ lender, took ownership of the property through a related entity in April 2024. Then Pangea sold the property to Dalfen Industrial on Dec. 19.
Dalfen's off-market purchase is part of the company's approach to buying "last-mile buildings in high barrier-to-entry population centers,” Keith Hontz, the firm's northeast market officer, told the Business Journal.
Based in Dallas, Texas, Dalfen operates out of 11 North American offices and has a portfolio exceeding 55 million square feet. The firm currently owns and operates nearly 4 million square feet across 14 properties in the Northeast.
Monday, January 6, 2025
Radnor Court office building sells for $36M
By Paul Schwedelson – Reporter, Philadelphia Business Journal
The three-story Radnor Court office building has sold, signaling the continued strength of the Main Line submarket.
New York-based investment bank Goldman Sachs sold the 127,000-square-foot building, located at 259 N. Radnor Chester Road in Wayne. The property was bought by Florida-based mortgage lender Freedom Mortgage for just over $36 million, according to industry sources, equating to about $285 per square foot.
Goldman Sachs bought Radnor Court in 2014 from Equus Capital Partners for $43.7 million.
Freedom Mortgage, one of the nation’s largest non-bank mortgage lenders, relocated its headquarters from Mount Laurel, New Jersey, to Boca Raton, Florida, in 2021. The firm services all 50 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands.
Freedom Mortgage declined comment.
Radnor Court is 82% leased and its tenants have a weighted average lease term of 8.6 years. The building serves as the corporate headquarters for Airgas, which recently extended its lease for 10 years, helping to boost its value. Airgas, a supplier of industrial, medical and specialty gases, leases 86,000 square feet. Professional services firm Aon is also among the tenants, leasing 9,000 square feet.
The office building sits northwest of the intersection of I-476 and Lancaster Avenue, between Radnor High School and SEPTA’s Regional Rail stop.
More than 25 prospective buyers toured the property. As of the third quarter of 2024, the Main Line submarket had a 14.5% office vacancy rate, making it one of the strongest performing submarkets in Philadelphia’s suburbs. The suburbs as a whole had an average vacancy of 26%. For trophy properties, the vacancy rate was 4% a result of the flight to quality that’s taken place among tenants in recent years.
“This bodes well for high-quality, well-located office buildings even in what we all recognize is a challenged office environment."
While a number of office sales in 2024 involved properties in distress or with high vacancy rates, Radnor Court didn’t have any debt and wasn’t a distressed sale, according to Rodio and Kershner. The sale of a healthy office property with strong occupancy indicates the sales market is loosening up.
In September, Brandywine Realty Trust sold the five-office, 521,288-square-foot Plymouth Meeting Executive Campus for $65.5 million, or $126 per square foot. While it was 77% occupied at the time of the sale, a major difference from Radnor Court is that the Plymouth Meeting submarket was 43% vacant as of the third quarter of 2024.
Full story: https://tinyurl.com/4rku8r67
