The Philadelphia Office market ended the third quarter 2012 with a vacancy rate of 11.5%.
Net absorption for the overall Philadelphia office market was negative 1,046,919 square feet in the third quarter 2012. That compares to positive 150,752 square feet in the second quarter 2012. Vacant sublease space decreased in the quarter, ending the quarter at 1,137,302 square feet.
Tenants moving into large blocks of space in 2012 include: Young Conaway Stargatt & Taylor, LLP. moving into 218,335 square feet at The Courthouse; Marshall, Dennehey, Warner, Coleman & Goggin moving into 131,325 square feet at 2000 Market St; and Philadelphia Media Network Inc moving into 125,000 square feet at 801 Market St.
Rental rates ended the third quarter at $20.96, a decrease over the previous quarter.
A total of two buildings delivered to the market in the quarter totaling 17,500 square feet, with 1,809,842 square feet still under construction at the end of the quarter.
This trend is compared to the U.S. National Office vacancy rate, which stayed at12.1% from the previous quarter, with net absorption positive 15.09 million square feet in the third quarter.
Full report: http://www.omegare.com/Costar-3Q2012-Market-Report-Office.pdf
www.omegare.com
Tuesday, October 9, 2012
Monday, October 8, 2012
Teva: Facility in Northeast Philly still on hold
"The big news for Teva Pharmaceuticals this week was.......still no shovels in the ground in North Philly.
Ok, yes, the world's biggest seller of generic pharmaceuticals had other issues to deal with and we'll get there in a minute.
But first things first.
In late September of 2011, Teva officials and Philly area politicians gathered on the site of the former Budd Co. plant in Northeast Philadelphia to celebrate a new facility for the company. Teva is based in Israel, but its Americas headquarters is in North Wales, Montgomery County.
But there was less happiness within the upper ranks of Teva in the months that followed the groundbreaking and by Jan. 1, 2012 Jeremy Levin was named as the replacement for CEO Shlomo Yanai. Since taking over in May, Levin has been sorting out what he likes and doesn't like about the company.
It is unclear what he thinks of the idea of a new building.
"We will not have any information to share on the proposed distribution center until December at the earliest," spokeswoman Denise Bradley said via email on Wednesday.
Levin has said he plans to spell out his grand vision for the company at an investor day in December.
Meanwhile, this week, the FDA asked Teva to withdraw Budeprion XL, its version of the antidepressant Wellbutrin XL, because it didn't work. The pill, in the 300 milligram size, was made by Impax and distributed by Teva.
The Associated Press's Matthew Perrone wrote this week that this appears to be the first FDA-requested withdrawl driven by consumer complaints and might undermine general confidence in generic drugs
“The lesson is that everyone — from pharmacists to physicians to the FDA — needs to take these reports seriously,” Dr. Tod Cooperman of ConsumerLab, a privately-held company that independently tests drugs and nutrition products, said according to AP. Cooperman said that the vast majority generic drugs work appropriately but added, “consumers will be the first to know when there is a problem.”
Teva's Bradley said, "Upon receiving the communication from the U.S. Food and Drug Administration, Teva ceased shipment of Impax's 300 mg Budeprion XL. This update to the FDA’s guidance affects the bioequivalence rating of the product and does not reflect any safety issue. Teva's first priority is to our patients and providing them with quality medicines."
Because they can be 50 to 70 percent cheaper than brand-name, patent-protected drugs, the generic versions now make up 80 percent of all the prescriptions written in the U.S. and the generic drug manufacturers' trade group noted that only 27 percent of the nation's drug bill goes to generics.
“There are approximately 10,000 FDA-approved interchangeable generics in the U.S.," Generic Pharmaceutical Association President and CEO Ralph G. Neas said in a statement. "The recall by a single manufacturer of one strength of a generic drug should in no way cast doubt on the impeccable reputation of the generic industry or the FDA in our joint commitment to patient safety.”
www.omegare.com
Demolition for Ortlieb’s Brewery
"Today the Ortlieb Brewery buildings in Northern Liberties are skeletal remains of their former selves. Windows are long gone with weeds growing on their sills, and trees poke up above the roofline. But not for long.
On Thursday night a reader tipped us off that the Ortlieb Brew House and Stock House will be demolished by developer Bart Blatstein, whose company has owned them since 2000.
In their post last night Hidden City Daily, shared this rationale from Blatstein:
“I would have kept the buildings if I would have felt it was a marketable commodity, but the condition of the buildings is such that it’s just not worth it.”
To be sure the Ortlieb buildings have seen far better days, but Bart Blatstein is to blame for their current condition. He has owned the buildings for more than a decade, and despite a glimmer of redevelopment hope back in 2007, no serious plans materialized. And even after demolition, Blatstein said he’s not sure about the future for the site.
Demolition permits were recently obtained over the counter from the Department of Licenses and Inspections. L&I spokeswoman Maura Kennedy told me that although there are some outstanding property maintenance code violations, this demolition is not being motivated by pressure coming from L&I.
To me this feels like a callous shrug from Blatstein, who essentially neglected the buildings to death. It’s far easier for a developer to work with a clean slate, and Blatstein must believe that he can command fatter rents for shiny new construction.
As of October 24 demolition can begin. So before it’s reduced to the slag heap of memory, head over to American and Poplar to say farewell to Ortlieb’s – the last of its kind in Northern Liberties, where industrial survivors are no longer desired for their grit and authenticity but for the value of the land."
Pictures/Full article: http://planphilly.com/eyesonthestreet/2012/10/05/demolition-for-ortliebs-brewery
Friday, October 5, 2012
2000 Market for sale, might bring $120M
by Natalie Kostelni
A Center City office tower that was one of the first local victims of the recession and downturn in commercial real estate is up for sale. One estimate has it trading for $120 million.
The last time 2000 Market St. sold was on New Year’s Eve 2009, while the economy was struggling and lenders continued to be tightfisted. Just a month earlier that November, RREEF, who had owned the 29-story, 665,000-square-foot office tower, voluntarily gave the building back to its lender, Prudential Life Insurance, in a deed in lieu of foreclosure.
CB Richard Ellis Investors, the pension advisory arm of CBRE Inc., stepped in. It bought the building for about $50 million, or $80 a square foot, a steep discount to the $77 million RREEF had paid for the building in 2003. It had a $49 million mortgage with Prudential.
Between the time RREEF bought the property — when the commercial real estate market was climbing to a peak — and the time it relinquished ownership, 2000 Market had lost nearly $30 million in value.
The deal highlighted a type of transaction that has played out with commercial real estate properties throughout the suburbs and Center City over the last few years and continues to do so as the market adjusts to conditions plaguing commercial real estate. Owners have routinely given up on buildings to lenders as property values dropped, or they tried to renegotiate loans as a way to retain a property.
Since buying the building, CB Richard Ellis Investors put $25 million into it; redoing the lobby, creating a large conference center in what had been a cafeteria and renovating common spaces.
It also stabilized the building with tenants. Arkema Inc. vacated more than 130,000 square feet but Marshall Dennehey, a law firm, relocated to the building from 1845 Walnut St., moving into Arkema’s space. Law firm Fox Rothschild also renewed its lease as well as the U.S. headquarters for the Board of Pension of the Presbyterian Church Pension Fund, which manages $8 billion in assets. With all of that leasing activity, 2000 Market went from 80 percent occupied at the time of sale to 96 percent occupied. The average lease term runs 11 years. CBRE is responsible for leasing the building.
Full story: http://tinyurl.com/9by9kwj
Chesterbrook braces for potential tenant defections
By Natalie Kostelni
Full story: http://tinyurl.com/93yqwty
www.omegare.com
After suffering some serious blows during the recession, Chesterbrook Corporate Center is poised to be tested again as two major tenants reconsider their office space options.
The office park has a history of ups and downs and the protracted downturn in the economy caused some vacancies to crop up. AstraZeneca terminated its lease on 25,000 square feet, Liberty Mutual Insurance Co. ended its 25,000-square-foot lease early, GFK Healthcare relocated out of 50,000 square feet, Navteq pulled out of 40,000 square feet and Centocor moved out of 120,000 square feet.
“They were major hits,” said an office broker with CBRE Inc. who handles the leasing of the park’s 15 Class A buildings totaling 1.5 million square feet. “The defections from the last recession were due to M&A activity and early terminations. Downsizing and office closures were devastating to the park.”
The series of early terminations and downsizing dragged the occupancy rate down to 70 percent after it had been enjoying a rate of around 90 percent. Chesterbrook has steadily made up some of the ground it lost. AmerisourceBergen Corp. expanded by 20,000 square feet and is now housed in a total of 190,000 square feet. After conducting a search of office space between Malvern and King of Prussia, Auxilium Pharmaceuticals decided to relocate its world headquarters into a single building totaling 74,000 square feet at 640 Lee Road in Chesterbrook. The company was in two buildings at 40 and 50 Valley Stream Parkway in Malvern.
Full story: http://tinyurl.com/93yqwty
www.omegare.com
Arborcrest redevelopment under way, master plan in the works
by Natalie Kostelni
A Maryland real estate investment trust has come up with a master plan for the former Unisys Corp.campus that entails eventually constructing an additional 800,000 square feet of office buildings.
This comes after Corporate Office Properties Trust (COPT) of Columbia, Md., has poured $69 million over the last two years in redeveloping existing buildings on the 137-acre property at Union Meeting Road and Penllyn Blue Bell Pike in the Blue Bell section of Whitpain.
In order to rebrand the property from its prior use as the headquarters for Unisys, COPT has renamed the campus Arborcrest as well as giving the five existing, older buildings new names: Lakeside I, Hillcrest I, II and III, and Woodlands I.
So far, COPT has finished the redevelopment of Lakeside I, a 219,000-square-foot building that Unisys now anchors. It is well into renovations of Hillcrest I, a 114,000-square-foot building that is 50 percent leased up and is now under way with the total overhaul of Hillcrest II, a 184,000-square-foot building. Hillcrest I and II had originally been a single, large building but has now been split into two. Part of the redevelopment of Hillcrest II will be an amenity center that will have meeting and conference rooms, a fitness area, locker rooms, and cafe.
“It’s another fairly significant investment we’ve made,” said Wayne Lingafelter, president of COPT’s development and construction division.
So far, it has leased up 490,000 square feet, or 65 percent, of 730,000 square feet in a total of four buildings. Jones Lang LaSalle has the listing.
Full story: http://tinyurl.com/8vv5t3q
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