Monday, November 20, 2023
Friday, November 10, 2023
Thursday, November 9, 2023
Phoenixville Emerges as a Rising Star for Apartment Development in Philadelphia Suburbs
By Brenda Nguyen Costar
Phoenixville, a quaint borough in Chester County, Pennsylvania, is making waves in the Philadelphia region's apartment construction scene. As of late 2023, this locality boasts the highest concentration of new apartment units under construction for any borough, township or city in the region, except the City of Philadelphia. Phoenixville has four ongoing multifamily projects totaling 908 units under construction.
Originally settled as Manavon, the borough took its name from the local Phoenix Iron Works to become Phoenixville when it was incorporated in 1849.
Over the past 12 months, the borough has added 313 units to strengthen its reputation as a fast-growing suburban community. Development has closely followed Phoenixville's recent burgeoning population, which has grown by an impressive 12% between 2019 and 2022, according to the U.S. Census Bureau.
The most significant development underway in Phoenixville is Steelworks, a mixed-use development that is adding 336 high-end apartments, 40,000 square feet of retail space and a 22,000-square-foot piazza. Developed by The DeMutis Group, Steelworks will replace a formerly abandoned slaughterhouse site on the western side of Bridge Street, extending the downtown area when it is completed in 2024.
Delaware-based developer Capano Management also has two significant projects in the pipeline: The Phoenix and The Reserve at Steelpointe. Once completed, each development will add 240 new apartments to the area for a total of 480. The developer also recently completed the 108-unit Reserve on Forge, which opened to its first tenants in June of this year and is still in lease-up.
Several factors have contributed to Phoenixville's recent surge in investment and real estate development. The suburban area has become a hotspot for young professionals who work in nearby employment centers such as King of Prussia and Malvern, both about a 20-minute drive away.
Moreover, its picturesque setting along the Schuylkill River, coupled with a vibrant and revitalized downtown area, has made it increasingly attractive for renters and investors. A walkable downtown, a full calendar of cultural events, and a burgeoning dining and brewery scene have further contributed to its growing popularity over the years.
While Phoenixville has led the Philadelphia region's suburban apartment growth, other localities have also experienced an apartment construction surge. Wilmington, Delaware, trails closely with the second-highest apartment construction in the region, with 830 units under construction. Langhorne and Downingtown, both Philadelphia suburbs on the Pennsylvania side, also have a notable number of new units under construction.
Wednesday, November 8, 2023
Tuesday, November 7, 2023
Greek Real Estate makes $80M bet on redevelopment of Northeast Philadelphia industrial property
By Paul Schwedelson – Reporter, Philadelphia Business Journal
Two years after buying a 305,706-square-foot industrial building in Northeast Philadelphia for $31.5 million, Greek Real Estate Partners knocked it down and is replacing it with a new warehouse.
The 287,000-square-foot building at 2121 Wheatsheaf Lane is expected to cost about $50 million to build, Greek Real Estate Partners Managing Partner David Greek said. The East Brunswick, New Jersey, developer secured a $44 million construction loan from First Citizens Bank.
The cost of land and construction adds up to an $80 million bet that a modern industrial building in a dense part of Northeast Philadelphia will yield a high return.
“I have to have a pretty strong belief in the overall market to make this sizable investment at this time,” Greek said. “We remain really confident that there is a significant amount of demand for this space.”
Demolishing the building was part of the plan all along, Greek said. It was knocked down over the summer and the new one is planned to be ready for tenants in about a year. The industrial building had been leased to cocoa bean distributor Dependable Distribution Services, and a neighboring 25,000-square-foot office building was leased to Amazon, which used the site for parking.
Having those tenants in place bought time for Greek Real Estate Partners to gain approvals to redevelop the site. The initial purchase came with a short due diligence period, Greek said, so the approvals weren’t in place at the time.
“With that open-ended risk, the fact that we had two leases in place and that the asset was producing cash flow actively from the day we bought it, allowed us to say we can spend this $30 million and if we are not successful, the worst that can happen is we continue to collect rent checks,” Greek said.
What happened, though, was the best case for Greek Real Estate Partners. The firm gained the necessary approvals and both leases had termination clauses so the leases could end as long as the tenants were given 18 months notice.
“If the property was just land and didn’t have any leases in place, we would not have been able to afford the purchase price we paid,” Greek said.
While the existing buildings offered short-term cash flow, Greek said a new building can command “significantly higher” rent. Since the developer plans to be a long-term owner and hold the property for 15 to 20 years, Greek can further justify the construction costs.
The previous industrial building was built in the 1950s and added onto in the 1970s. While leasable when the property was purchased, Greek didn’t think that value would last over the next 15 to 20 years.
The previous building had 22-foot heights and 10 dock doors. The new building is planned to have 40-foot heights, 36 dock doors and two drive-in doors. It’ll also have 65 trailer parking spaces and 258 car parking spaces, another sizable upgrade.
The building is being built without tenants in place and could be specialized for specific uses like cold storage, data centers and e-commerce distribution. It could also accommodate multiple tenants, although Greek said it’s likely it’ll be leased to one. He anticipates leasing activity picking up next year once the walls and roof are built and a lease signed potentially around next summer.
“One of the things that holds up my confidence is the lack of other options in this market,” Greek said.
Greek touted the site as one that could be popular with e-commerce distributors who want to be close to population centers. The density of Philadelphia and challenge of replicating a site like this help Greek believe in the project.
Full story: https://tinyurl.com/3st345ta
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