EQT real estate fund acquires Amazon-leased logistics facility near Scranton, PA

 By CoStar News Staff

EQT said its EQT Real Estate Industrial Core-Plus Fund IV acquired the Scranton North Logistics Center, a recently constructed logistics facility located in Olyphant, Pennsylvania, as the Sweden-based logistics giant continues to remake its U.S. industrial portfolio.

EQT has been actively selling older industrial properties and acquiring newer ones that better fit the modern specifications coveted by the logistics industry. Over the past two months, it has completed three U.S. industrial portfolio dispositions totaling 13.2 million square feet, including one of the year's largest U.S. industrial portfolio sales last month, while purchasing 4.8 million square feet of newly constructed facilities.

According to a deed, EQT paid $133.35 million for the Scranton North Logistics Center, a cross-dock distribution center spanning 1 million square feet completed in 2023. The building features modern logistics specifications, including 40-foot clear heights, a 600-foot building depth, a 185-foot truck court, 233 trailer stalls, and 163 dock-high doors, along with four additional drive-in doors.

Amazon signed a full-building lease shortly after the facility was completed to cap the successful speculative development of the property by an affiliate of Radnor, Pennsylvania-based Endurance Real Estate Group and Boston-based Cabot Properties.

The facility is located at 1300 Corporate Way and includes a small office buildout and full truck circulation. It serves as an inbound cross-dock node for inventory distribution to regional fulfillment centers.

The building is approximately one mile from U.S. Route 6 and five miles from the confluence of Interstates 81 and 84. According to EQT, the I-81 Corridor is one of the most competitive big-box industrial markets in the country, with a vacancy rate below 4% and limited availability.

EQT has been especially active of late. Over the past two months, the Stockholm-based firm completed three U.S. industrial portfolio dispositions totaling 13.2 million square feet while purchasing 4.8 million square feet of newly constructed facilities, according to multiple company statements. The transactions reveal a deliberate strategy to harvest gains from stabilized holdings and redeploy capital into higher-quality assets.

It recently dropped $70.2 million to acquire Gateway Logistics Center Building III, a 748,791-square-foot complex in West Jefferson, Ohio, and in October, EQT acquired an 11-building portfolio of newly constructed warehouses located in Houston, Texas; Greenville and Spartanburg, South Carolina, Jacksonville, Florida, and Indianapolis, Indiana.

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Full ULI PwC report: https://www.pwc.com/us/en/industries/financial-services/asset-wealth-management/real-estate/emerging-trends-in-real-estate-pwc-uli/trends.html

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2M+ SF Industrial Park Planned for Central Pennsylvania

 By Margaret Sutherland

After acquiring a 182-acre development site earlier this year near Mechanicsburg in Silver Spring Township, Pennsylvania, for its first development project in Central Pennsylvania, New York-based developer Rockefeller Group has commenced construction on the first two buildings in the Silver Spring Logistics Park, a three-building, two-million-square-foot logistics development. Rockefeller is developing the project in a joint venture with MBK Real Estate LLC, a subsidiary of Mitsui & Co. Ltd.

The development site, part of the former 451-acre Hempt Farm, is located off Carlisle Pike, also known as U.S. Route 11, approximately three miles from Interstate 81. Silver Spring is also five miles from Interstate 76 and 10 miles from Interstate 83 at its southbound ramp.

The development team is proceeding to build the first two logistics buildings at 261 Hempt Road on a speculative basis, without tenant commitments in place. A third building at 281 Hempt Road is also planned.

"Due to continued demand for industrial space in the region, we will develop the 803,520-square-foot building and the 318,060-square-foot building immediately. These buildings will be completed by spring 2026,” said Jacqueline Schwartz, associate for Rockefeller Group’s North Central region, in a statement announcing the new project. “The third building, a 892,620-square-foot distribution center, will follow thereafter."

All three buildings will include 40-foot clear heights, 54-foot x 50-foot column spacing and 185 truck courts. The larger two buildings, each measuring more than 800,000 square feet, will be cross-docked facilities.

The project architect is Margulies Hoelzli Architecture, PLLC, the civil engineer is Alpha Consulting, and the general contractor is Penntex Construction.

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Medical office building in downtown Philadelphia hits market for potential redevelopment

 By Jonathan Lehrfeld CoStar News

A 10-story medical office building in downtown Philadelphia has hit the market as a potential redevelopment opportunity, joining other workplace properties in the city that have been pitched for or undergone a transformation to another commercial use.

The 135,825-square-foot property at 919–921 Walnut St. in Center City is available for $13.5 million, according to a listing on CoStar Group’s LoopNet platform. The property, built in the early 20th century, is known as the Neville Building.

The site “supports a broad range of potential uses, including residential, office, hospitality, retail, or institutional redevelopment,” according to the listing. The building is a "High Vacancy Property," the listing says.

The office property could become the next to transform to another purpose, as CoStar data shows demand contracting in the office market in the final stretch of the year.

“Looking ahead, Philadelphia will find it difficult to sustain the rent growth seen prior to 2020. With tenants continuing to downsize as leases expire, rents are expected to remain soft.”

Owners of other Philly office buildings intend to pursue plans to convert them or have completed projects to transform them.

The four-story office building at 1232 Chancellor St. sold this fall for $1.75 million, CoStar data shows. The new owner plans to convert the upper floors to boutique apartments, Philadelphia Business Journal reported. Alterra Property Group this year turned the 18-story office building at 1701 Market St. into a 299-unit luxury apartment complex.

The Neville Building, three blocks west of the historic Washington Square park, is owned by Thomas Jefferson University and has been used by Jefferson Health. The university bought the building for $13 million in 2013, CoStar data shows. The university did not immediately respond to an email request for comment.

The property’s commercial history includes a stint as the home of Associated Services for the Blind and Visually Impaired, the marketing material notes.

“Its incorporation into Jefferson’s expanding urban campus supported the institution’s broader strategy of integrating nearby properties to support clinical, administrative, and academic functions," according to the marketing materials. "This latest chapter underscores the building’s continued adaptability and enduring relevance within Center City’s evolving institutional corridor."

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