Tuesday, November 8, 2022
Monday, November 7, 2022
Thursday, November 3, 2022
1M SF Logistics Center to be Completed in Chambersburg, PA 4Q 2023
By Linda Moss CoStar News
Endurance Real Estate Group and its partner Guardian Life Insurance Co. of America have started construction on a 1 million-plus-square-foot logistics center in Chambersburg, Pennsylvania.
The Chambersburg Logistics Park is slated for a 93-acre site immediately off of Exit 10 on Interstate 81. Radnor, Pennsylvania-based Endurance over the past two years has obtained the necessary entitlements for the development. The $115 million project will be the first joint venture between Endurance and New York-based Guardian, according to Guardian President Benjamin Cohen, and is expected to be completed in the fourth quarter of next year.
“This project is a continuation of our long-term strategy to acquire and develop sites that offer superior access, proximity to abundant labor, and the ability to provide best-in-class design features to attract a variety of high-quality users,” Jared Newman, Endurance senior vice president and partner, said in a statement.
Endurance will oversee the construction of the cross-dock warehouse-distribution facility, which will include state-of-the-art features such as tilt-wall panel construction; 40-foot clear heights; 60-foot deep speed bays; high-bay LED lighting with motion sensors; 166 overhead dock door positions, 101 equipped with 9-by-10 doors with mechanical levelers, bumpers, seals and dock lights; four 14-by-16 drive-in doors; 213 trailer stalls and 375 car parking spaces; and 4,000 amp, three-phase main electric service.
The location is near major East Coast markets and regional seaports and has access to multiple air, rail and highway systems.
PREIT Sells New Jersey Mall for $45 Million to Kohan Retail Investment
By Linda Moss CoStar News
Pennsylvania Real Estate Investment Trust has sold one of its New Jersey malls for $45 million to Kohan Retail Investment Group, that landlord's second recent purchase in the Garden State.
The sale of the Cumberland Mall in Vineland, New Jersey, is part of Philadelphia-based PREIT's effort to raise capital and improve its balance sheet. PREIT didn't disclose the buyer, but according to CoStar data it was Kohan Retail of Great Neck, New York. Kohan Retail didn't immediately respond to to an email and phone call seeking comment Wednesday.
The sale price is a significant discount from the $59.5 million that PREIT paid for Cumberland Mall in February 2005.
This isn't the first time Kohan Retail is buying a New Jersey mall. Known for picking up distressed properties, Kohan Retail acquired Livingston Mall from Simon Property Group in June for $60.5 million.
PREIT, which emerged from Chapter 11 bankruptcy protection in December 2020, has been trying to get its financial house in order. It has been selling some malls and redeveloping others, adding uses such as multifamily housing and medical facilities.
"As a result of completed asset sales, the company has applied proceeds and excess cash from operations to pay down debt by $148 million through Oct. 31," PREIT said in a statement on Wednesday.
The firm also has an additional $127 million of properties under contract or negotiation for sale, deals that are expected to close in the coming months.
With the completion of the sale of the Cumberland Mall and several outparcels, PREIT said it will have raised $110 million in capital this year. The REIT also "has a robust pipeline of additional asset sales in various stages," according to its statement.
Back in August, PREIT officials said they had over $200 million in property sales either completed or pending, capital it planned to use to pay down more of its debt.
Tuesday, November 1, 2022
KKR Buys Philly's Presidential City Apartments for $357M
By Jack Rogers Globest.com
Private equity giant KKR cast a resounding vote of confidence in Philadelphia’s apartment market—at least the part of it with a tenant base of well-paid professionals—with its purchase of the Presidential City apartment complex for a record $357M.
The purchase price for the venerable 1950s-era complex of four 12-story buildings—built by Pentagon developer John McShain—tops the previous record for an apartment sale in Philly by more than $100M.
Prior to this mega-transaction, the most expensive sale of an apartment complex in Philadelphia was 1500 Locust St., a 45-story apartment building that sold for $233M in December.
KKR’s Real Estate Select Trust fund, a non-traded fund aimed at individual investors, made the purchase in partnership with Mack Real Estate Group.
Post Brothers bought Presidential City in 2012; in 2017, Post renovated the entire complex in a $100M spruce-up that included the installation of outdoor swimming pools.
KKR’s big move comes in the midst of a national cooldown in apartment transactions. Apartment transactions totaled $74B in the US in the third quarter, a YOY drop of 17%. Buyers are pulling back on the residential market because of the rising cost of debt and a likely slowdown—possibly even a pullback—in rent growth.
KKR told the Wall Street Journal the lucrative deal for Presidential City made sense because the buyers assumed an existing fixed-rate mortgage held by Post Brothers, a loan with a much lower rate that current levels that are topping 7%.
KKR COO Billy Butcher told WSJ that the occupants of Presidential City are primarily high-wage professionals who spend less as a percentage of their income on rent compared with similar tenants living in properties closer to downtown.
Rents for one-bedroom apartments at Presidential City start around $1,800 per month, compared to average rents in the city center, which generally start above $3,000.
Butcher suggested this puts Presidential City in a strong position to weather a recession. “It provides a lot of stability,” he told WSJ.
McShain originally intended to build 48 apartment towers at Presidential City—and keep naming them after US presidents. The four that were built are named for the first four presidents.
KKR Real Estate Select Trust has invested about 19% of its fund in residential buildings, including a 365-unit apartment complex in Brooklyn that it purchased for $190M in July.
