by Natalie Kostelni
" Locals know Cowboys as a landmark and are apt to refer to it when giving directions. For old-timers, that will still hold true but now that the property at 2-18 E. Lancaster Ave. has traded hands, it will diminish.
A local partnership of three real estate investors going under the name Paoli Town Center LLC bought the 18,000-square-foot, four-story property structure for $925,000. The seller was Tim Bruni, who runs Bruni Tailoring out of one of the property’s commercial spaces. Apartments are on the upper floors."
http://www.omegare.com/
Tuesday, July 5, 2011
Conshohocken office building sells for $4M
by Natalie Kostelni
"An office building in Conshohocken, Pa., has sold for $4 million, in what may be the first office property to trade in that submarket since 2005 when 300 Four Falls sold for a eye-popping $100 million.
Though not on that scale, this recent transaction may be the beginning of other sales to come in the submarket.
A partnership out of Jenkintown bought the 31,000-square-foot building at 375 Elm St. from Royal Bank, which had taken the property over. The building, constructed 10 years ago, is half-empty but the buyer is planning to make interior and exterior upgrades."
http://www.omegare.com/
"An office building in Conshohocken, Pa., has sold for $4 million, in what may be the first office property to trade in that submarket since 2005 when 300 Four Falls sold for a eye-popping $100 million.
Though not on that scale, this recent transaction may be the beginning of other sales to come in the submarket.
A partnership out of Jenkintown bought the 31,000-square-foot building at 375 Elm St. from Royal Bank, which had taken the property over. The building, constructed 10 years ago, is half-empty but the buyer is planning to make interior and exterior upgrades."
http://www.omegare.com/
Developer O’Neill on hook for $5M judgment
by Natalie Kostelni
"As he struggles to deal with multiple judgments entered against him totaling tens of millions of dollars, developer J. Brian O’Neill’s woes have grown.
Firstrust Bank secured a $5.56 million judgment against O’Neill personally as well as against Washington Street Associates III LP, an entity affiliated with O’Neill Properties Group. The judgment was entered in Montgomery County Court on May 31 after O’Neill defaulted on a loan and forbearance agreement worked out between the developer and the bank, according to court documents.
The King of Prussia developer, through Washington Street Associates, had originally taken out a $2.2 million loan in October 2004, and a second, $3.8 million loan in July 2006. The money was being use to remediate the former Hale Products site at 433 Washington St. in Conshohocken in preparation for a residential project.
The bank and O’Neill worked out a forbearance agreement that laid out a payment schedule on the two loans as well for additional security on the loans. For that, O’Neill personally “unconditionally guaranteed” payment of the loans, interest and other fees associated with the loans, according to the agreement filed in court. A March 7, 2011, letter from Firstrust to O’Neill provided the developer with formal notice that Washington Street Associates was in default by not paying monthly interest on the notes beginning in November 2010 and failed to pay the loans off in full on their extended maturity date of Jan. 31, 2011. The bank added that it would seek judgment against Washington Street Associates as well as the developer personally.
Firstrust Bank, through a spokeswoman, declined to comment, citing pending litigation. Several calls to O’Neill weren’t returned.
Perhaps O’Neill has gone quiet as a reported settlement is being worked out or has been worked out between Citizens Bank and him. I’ve heard a range of different settlement figures, the latest around $42 million. Such a deal, if true, would put to rest litigation that erupted between Citizens and O’Neill after Citizens sought and secured in November 2009 a $61 million judgment against the developer for a loan taken out for the construction of Uptown Worthington in Malvern. O’Neill vowed to “go to war” with Citizens and filed an initial $8 billion suit against the bank that was subsequently lowered. The real estate company said in court papers it wasn’t in default and the bank had “engaged in fraud and deceit and had breached its contractual obligations,” according to documents filed in Chester County Court.
While that litigation was going on, the bank continued to try to put the Worthington development in foreclosure and filed a petition to appoint CB Richard Ellis as receiver until it was time to bring the property to sheriff sale, according to court documents filed in Chester County. Several hearings on that matter were postponed while the reported settlement was being worked out.
I’m eager to see how all of this will get resolved.
Many people who know Brian O’Neill personally call him a survivor. I’ve heard that description so many times that it’s hard to disagree with it and with that in mind, it will be interesting how O’Neill and his real estate company emerge from all of these challenges. He’s got office properties up for sale and other deals in the works. He is already thinking of the future, and is seeking a mall developer for a $2 billion, 8 million-square-foot mixed-use project in Sayreville, N.J. How the project would be financed couldn’t be disclosed, according to an email from Josh Greenwald, a spokesman for O’Neill on the Point.
The other interesting facet to this goes beyond O’Neill’s troubles and Citizen’s and Firstrust’s business maneuvers. It will be interesting to see how real estate developers and banks move forward once the market fully pulls out of the doldrums, the banks’ books are cleaned up of bad loans and developers begin to build again. Both sides have learned many lessons during the recession. Let’s see how they apply them."
http://www.omegare.com/
"As he struggles to deal with multiple judgments entered against him totaling tens of millions of dollars, developer J. Brian O’Neill’s woes have grown.
Firstrust Bank secured a $5.56 million judgment against O’Neill personally as well as against Washington Street Associates III LP, an entity affiliated with O’Neill Properties Group. The judgment was entered in Montgomery County Court on May 31 after O’Neill defaulted on a loan and forbearance agreement worked out between the developer and the bank, according to court documents.
The King of Prussia developer, through Washington Street Associates, had originally taken out a $2.2 million loan in October 2004, and a second, $3.8 million loan in July 2006. The money was being use to remediate the former Hale Products site at 433 Washington St. in Conshohocken in preparation for a residential project.
The bank and O’Neill worked out a forbearance agreement that laid out a payment schedule on the two loans as well for additional security on the loans. For that, O’Neill personally “unconditionally guaranteed” payment of the loans, interest and other fees associated with the loans, according to the agreement filed in court. A March 7, 2011, letter from Firstrust to O’Neill provided the developer with formal notice that Washington Street Associates was in default by not paying monthly interest on the notes beginning in November 2010 and failed to pay the loans off in full on their extended maturity date of Jan. 31, 2011. The bank added that it would seek judgment against Washington Street Associates as well as the developer personally.
Firstrust Bank, through a spokeswoman, declined to comment, citing pending litigation. Several calls to O’Neill weren’t returned.
Perhaps O’Neill has gone quiet as a reported settlement is being worked out or has been worked out between Citizens Bank and him. I’ve heard a range of different settlement figures, the latest around $42 million. Such a deal, if true, would put to rest litigation that erupted between Citizens and O’Neill after Citizens sought and secured in November 2009 a $61 million judgment against the developer for a loan taken out for the construction of Uptown Worthington in Malvern. O’Neill vowed to “go to war” with Citizens and filed an initial $8 billion suit against the bank that was subsequently lowered. The real estate company said in court papers it wasn’t in default and the bank had “engaged in fraud and deceit and had breached its contractual obligations,” according to documents filed in Chester County Court.
While that litigation was going on, the bank continued to try to put the Worthington development in foreclosure and filed a petition to appoint CB Richard Ellis as receiver until it was time to bring the property to sheriff sale, according to court documents filed in Chester County. Several hearings on that matter were postponed while the reported settlement was being worked out.
I’m eager to see how all of this will get resolved.
Many people who know Brian O’Neill personally call him a survivor. I’ve heard that description so many times that it’s hard to disagree with it and with that in mind, it will be interesting how O’Neill and his real estate company emerge from all of these challenges. He’s got office properties up for sale and other deals in the works. He is already thinking of the future, and is seeking a mall developer for a $2 billion, 8 million-square-foot mixed-use project in Sayreville, N.J. How the project would be financed couldn’t be disclosed, according to an email from Josh Greenwald, a spokesman for O’Neill on the Point.
The other interesting facet to this goes beyond O’Neill’s troubles and Citizen’s and Firstrust’s business maneuvers. It will be interesting to see how real estate developers and banks move forward once the market fully pulls out of the doldrums, the banks’ books are cleaned up of bad loans and developers begin to build again. Both sides have learned many lessons during the recession. Let’s see how they apply them."
http://www.omegare.com/
Giant Supermarket to open in Northeast, Philadelphia
"Giant Food Stores said Tuesday it will open its first Philadelphia supermarket on July 20.
The 74,000-square-foot store, at 2550 Grant Ave. in Northeast Philadelphia, will be open 24 hours a day and include a pharmacy and on-site gas pumps.
During promotional periods, the grocer’s Bonuscard holders will receive a gasoline discount of 10 cents a gallon by buying $100 in grocery or out-of-pocket pharmacy items.
Giant said the store will have 275 employees, both full- and part-timers.
Giant Food Stores, which is based in Carlisle, Pa., has 139 stores statewide and 47 in Bucks, Chester, Delaware and Montgomery counties. It has 25,000 employees statewide."
http://www.omegare.com/
The 74,000-square-foot store, at 2550 Grant Ave. in Northeast Philadelphia, will be open 24 hours a day and include a pharmacy and on-site gas pumps.
During promotional periods, the grocer’s Bonuscard holders will receive a gasoline discount of 10 cents a gallon by buying $100 in grocery or out-of-pocket pharmacy items.
Giant said the store will have 275 employees, both full- and part-timers.
Giant Food Stores, which is based in Carlisle, Pa., has 139 stores statewide and 47 in Bucks, Chester, Delaware and Montgomery counties. It has 25,000 employees statewide."
http://www.omegare.com/
PA warehouse rentals up; burb offices still weak
by Joseph N. DiStefano
"The big job payoff from Gov. Corbett's kindness to his natural gas developer pals may still be years in the future - if ever - but industrial spaces are filling back up in eastern Pennsylvania - America's Warehouse - thanks to a revival of import and export trade, according to new data.
That's good news for warehouse workers and truck drivers who haul imports to stores and exports from factories. But office leasing is still slow.
Philadelphia-area warehouse and other industrial vacancies have fallen to 8.6%, down from over 9% last winter, as wholesalers leased back nearly 2 million sq ft that went empty during the 2008 recession. That's a "welcome trend," but the Federal Reserve Bank of Philadelphia has warned, as he puts it, that "a slowing of manufacturing activity in the region may portend stalled occupancy" this fall.
Up in the Easton-to-Chambersburg I-81/I-78 corridor - the freeway alternative to the tollboths of the Pennsylvania Turnpike and I-95, thank you federal taxpayers - industrial vacancies dropped to 9.4% from 9.8% in the winter. As in the Philadelphia area, wholesale importers and exporters took more space.
But that's still not enough to encourage new construction, except up at developer Rob Mericle's speculative CenterPoint Commerce & Trade Park in Pittston. As in PA, South Jersey and Wilmington-area industrial vacancies have also fallen, to around 10%.
The office market is weaker. Center City Philadelphia is the bright (or less-bad) spot: vacancy is down to 14%, from 15% late last year, but still way above the sub-10% brokers measured way back in 2007.
Out in the burbs things are worse: In the PA suburbs vacancy edged up to nearly 18% as drug companies cut back. Tenants are still demanding deep concessions, especially up in Bucks and central Montgomery counties. South Jersey vacancies slipped just below 18%, though banks and other financial companies have started to add space again. Down in New Castle County, vacancies are still rising toward 18%, and likely to go higher as Wilmington Trust's new owner, M&T Bank, prepares to lay off redundant headquarters workers."
http://www.omegare.com/
"The big job payoff from Gov. Corbett's kindness to his natural gas developer pals may still be years in the future - if ever - but industrial spaces are filling back up in eastern Pennsylvania - America's Warehouse - thanks to a revival of import and export trade, according to new data.
That's good news for warehouse workers and truck drivers who haul imports to stores and exports from factories. But office leasing is still slow.
Philadelphia-area warehouse and other industrial vacancies have fallen to 8.6%, down from over 9% last winter, as wholesalers leased back nearly 2 million sq ft that went empty during the 2008 recession. That's a "welcome trend," but the Federal Reserve Bank of Philadelphia has warned, as he puts it, that "a slowing of manufacturing activity in the region may portend stalled occupancy" this fall.
Up in the Easton-to-Chambersburg I-81/I-78 corridor - the freeway alternative to the tollboths of the Pennsylvania Turnpike and I-95, thank you federal taxpayers - industrial vacancies dropped to 9.4% from 9.8% in the winter. As in the Philadelphia area, wholesale importers and exporters took more space.
But that's still not enough to encourage new construction, except up at developer Rob Mericle's speculative CenterPoint Commerce & Trade Park in Pittston. As in PA, South Jersey and Wilmington-area industrial vacancies have also fallen, to around 10%.
The office market is weaker. Center City Philadelphia is the bright (or less-bad) spot: vacancy is down to 14%, from 15% late last year, but still way above the sub-10% brokers measured way back in 2007.
Out in the burbs things are worse: In the PA suburbs vacancy edged up to nearly 18% as drug companies cut back. Tenants are still demanding deep concessions, especially up in Bucks and central Montgomery counties. South Jersey vacancies slipped just below 18%, though banks and other financial companies have started to add space again. Down in New Castle County, vacancies are still rising toward 18%, and likely to go higher as Wilmington Trust's new owner, M&T Bank, prepares to lay off redundant headquarters workers."
http://www.omegare.com/
Friday, July 1, 2011
MIM-Hayden fund buys office buildings in Wayne
by Natalie Kostelni
"A local real estate fund teamed up with a Boston real estate investment firm to buy two buildings in the Valley Forge Office Center on East Swedesford Road in Wayne.
MIM-Hayden Real Estate Fund aligned with Davis Cos. to acquire the first mortgage on 530 and 580 E. Swedesford Road. The loan totaled roughly $44 million and was bought at a discount from CW Capital for somewhere in the low to mid-$30 million range, according to various real estate sources.
The two, four-story buildings total 258,000 square feet and are fully leased to Independence Blue Cross and GE Capital for the next four years.
“The bet we’re making is you have a four-year runway to get the building up and running,” said Anthony J. Hayden, principal of Hayden Real Estate Investments of Conshohocken.
The new owners intend to spend more than $13 million making exterior and interior renovations of which the most notable will getting rid of the drab red exterior and re-skinning the buildings with a facade that is more consistent with some nearby redeveloped office properties. The owners will also add a fitness center and cafeteria. D2 Solutions was retained to complete the design work.
The buildings had been owned by Keystone Property Group of Bala Cynwyd but the loan, which came due last August, was taken over by a special servicer and subsequently put out to bid. Keystone even attempted to buy the loan.
“The note was marketed for sale and Keystone aggressively bid to purchase the note,” said William H. Glazer, president of Keystone. “Based on Keystone’s experience as a buyer and seller of real estate in this market, where we own and operate more than 3 million square feet, we determined in the final bidding for the note, the capital required to purchase the note on risk adjusted basis was better deployed in other investments.”
Such loan sales are common these days as lenders try to get rid of bad commercial mortgages on their books and sell loans at a discount and owners try to buy their own loans to regain control of the property but at a lower price than the loan. These sales have helped to push down commercial real estate prices here and across the country. Moody’s/Real National All Property Price Index that was released last week indicated that commercial real estate prices slipped by 3.7 percent in April.
Even though transaction volume has increased, many are distressed transactions and that has hindered a broad market recovery at this time, according to Moody’s. Distressed sales have comprised at least 20 percent of the repeat-sales transaction volume for 17 consecutive months, according to Moody’s data. On the bright side, trophy properties in top-tier markets started a year ago to experience a price recovery and that continues.
Keystone bought the six-building Valley Forge Office Center, which totals 480,000 square feet, in 2005 for $64 million from the Ashforth Co. of Connecticut and GE Capital. Keystone launched a major, multimillion-dollar renovation of the six buildings soon after it acquired them. Four of them were transformed into Class A space and 530 and 580 E. Swedesford — the buildings the fund and Davis bought — were left as is.
While Davis focuses on repositioning distressed assets, the Valley Forge acquisition is the type of deal the MIM-Hayden fund is seeking out for its $108 million fund it closed on in March. The fund is co-managed by Miller Investment Management and Hayden Real Estate Investments and is targeting underperforming office, industrial and flex properties within a 200-mile radius of Philadelphia. It is looking to make a significant bet on the Washington market and is also interested in Center City. Hayden Chairman J. Anthony Hayden (Anthony J. Hayden’s father) stepped down from his seat on the Liberty Property Trust board so he could pursue properties he may have competed with Liberty to buy.
While Hayden has a long history in real estate, Miller Investment, which manages and invests money on behalf of high-net-worth families and institutions, was seeking to add real estate to its offerings.
“Real estate is an area that is very important for our clients,” said Radcliffe Hastings of Miller. “We think the timing is good.”
Davis focuses on the redevelopment of distressed assets and was looking to enter the Philadelphia market. It anticipates joint venturing with the MIM-Hayden fund on other acquisitions.
It has used 20 percent of the fund on five properties totaling 325,000 square feet as well as a 46-acre in-fill tract in Montgomery County. It expects to close four deals this month and to fully invest the fund over the next two years."
http://www.omegare.com/
"A local real estate fund teamed up with a Boston real estate investment firm to buy two buildings in the Valley Forge Office Center on East Swedesford Road in Wayne.
MIM-Hayden Real Estate Fund aligned with Davis Cos. to acquire the first mortgage on 530 and 580 E. Swedesford Road. The loan totaled roughly $44 million and was bought at a discount from CW Capital for somewhere in the low to mid-$30 million range, according to various real estate sources.
The two, four-story buildings total 258,000 square feet and are fully leased to Independence Blue Cross and GE Capital for the next four years.
“The bet we’re making is you have a four-year runway to get the building up and running,” said Anthony J. Hayden, principal of Hayden Real Estate Investments of Conshohocken.
The new owners intend to spend more than $13 million making exterior and interior renovations of which the most notable will getting rid of the drab red exterior and re-skinning the buildings with a facade that is more consistent with some nearby redeveloped office properties. The owners will also add a fitness center and cafeteria. D2 Solutions was retained to complete the design work.
The buildings had been owned by Keystone Property Group of Bala Cynwyd but the loan, which came due last August, was taken over by a special servicer and subsequently put out to bid. Keystone even attempted to buy the loan.
“The note was marketed for sale and Keystone aggressively bid to purchase the note,” said William H. Glazer, president of Keystone. “Based on Keystone’s experience as a buyer and seller of real estate in this market, where we own and operate more than 3 million square feet, we determined in the final bidding for the note, the capital required to purchase the note on risk adjusted basis was better deployed in other investments.”
Such loan sales are common these days as lenders try to get rid of bad commercial mortgages on their books and sell loans at a discount and owners try to buy their own loans to regain control of the property but at a lower price than the loan. These sales have helped to push down commercial real estate prices here and across the country. Moody’s/Real National All Property Price Index that was released last week indicated that commercial real estate prices slipped by 3.7 percent in April.
Even though transaction volume has increased, many are distressed transactions and that has hindered a broad market recovery at this time, according to Moody’s. Distressed sales have comprised at least 20 percent of the repeat-sales transaction volume for 17 consecutive months, according to Moody’s data. On the bright side, trophy properties in top-tier markets started a year ago to experience a price recovery and that continues.
Keystone bought the six-building Valley Forge Office Center, which totals 480,000 square feet, in 2005 for $64 million from the Ashforth Co. of Connecticut and GE Capital. Keystone launched a major, multimillion-dollar renovation of the six buildings soon after it acquired them. Four of them were transformed into Class A space and 530 and 580 E. Swedesford — the buildings the fund and Davis bought — were left as is.
While Davis focuses on repositioning distressed assets, the Valley Forge acquisition is the type of deal the MIM-Hayden fund is seeking out for its $108 million fund it closed on in March. The fund is co-managed by Miller Investment Management and Hayden Real Estate Investments and is targeting underperforming office, industrial and flex properties within a 200-mile radius of Philadelphia. It is looking to make a significant bet on the Washington market and is also interested in Center City. Hayden Chairman J. Anthony Hayden (Anthony J. Hayden’s father) stepped down from his seat on the Liberty Property Trust board so he could pursue properties he may have competed with Liberty to buy.
While Hayden has a long history in real estate, Miller Investment, which manages and invests money on behalf of high-net-worth families and institutions, was seeking to add real estate to its offerings.
“Real estate is an area that is very important for our clients,” said Radcliffe Hastings of Miller. “We think the timing is good.”
Davis focuses on the redevelopment of distressed assets and was looking to enter the Philadelphia market. It anticipates joint venturing with the MIM-Hayden fund on other acquisitions.
It has used 20 percent of the fund on five properties totaling 325,000 square feet as well as a 46-acre in-fill tract in Montgomery County. It expects to close four deals this month and to fully invest the fund over the next two years."
http://www.omegare.com/
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