"American Executive Centers moved its Chester County location from the Exton area to Malvern, getting bigger and more high-tech in the process.
The executive suites provider is now located in Brandywine Realty Trust's Valleybrooke Corporate Center at 101 Lindenwood Drive, Malvern spending $1.5 million to make the move.
"It was a big investment," said G. Michael Howard, president of American Executive. The reason for the investment: "there is a lot of demand in the (Great Valley) marketplace, a positive pulse."
Its previous location was 102 Pickering Way, Exton.
American Executive has a 10-year lease at its new location, home to 56 private offices for on-site clients and a number of virtual clients."
Tuesday, May 31, 2011
Friday, May 27, 2011
Investment in Real Estate is Investment in Commodities
Commodity pricing has a huge effect on commercial property prices and commodity prices help to drive up the price of office real estate, Philip Blumberg, founder and Chairman, Blumberg Capital Partners.
Volpe Enterprises Acquires 40,000 SF Facility in North Wales PA
"The 40,000-square-foot industrial building located at 217 Church Road in North Wales, PA was purchased by Volpe Enterprises for $1.825 million, or about $45 per square foot from William and Joe Wildman.
The property was previously used as light manufacturing facility by Deluxe Corporation. The acquisition will allow for expansion into the Bucks, Lehigh and Southeastern areas of Pennsylvania.
This industrial facility was originally constructed in 1963. Plans are under way to completely remodel the building."
The property was previously used as light manufacturing facility by Deluxe Corporation. The acquisition will allow for expansion into the Bucks, Lehigh and Southeastern areas of Pennsylvania.
This industrial facility was originally constructed in 1963. Plans are under way to completely remodel the building."
Judge dismisses Chapter 11 petition of 10 Rittenhouse developer
By Alan J. Heavens
"A federal bankruptcy judge has dismissed the Chapter 11 petition filed by the developer of 10 Rittenhouse Square, the luxury condominium building at 130 S. 18th St.
The petition by Philadelphia Rittenhouse Developer L.P. came Jan. 5, just seven minutes before Common Pleas Court Judge Albert W. Sheppard Jr. was to have appointed a receiver. On Dec. 30, Sheppard had approved efforts by the project's senior lender, Istar Financial of New York, to foreclose on the property.
In his late Wednesday decision, Chief Bankruptcy Judge Stephen Raslavich called the Chapter 11 filing "a transparent litigation tactic in a battle between Istar" and Delaware Valley Real Estate Investment Fund, which, as mezzanine lender, has a total claim of $62 million.
In July, after months of lackluster sales at 10 Rittenhouse, Delaware Valley Real Estate Investment Fund - which manages the pensions of 47,200 workers in the region, mostly in the building trades - sued Istar and took control of the property.
Dismissal of the Chapter 11 petition could pave the way for Common Pleas Court to appoint the receiver Istar requested. Bankruptcy Court documents show Istar is owed about $205 million in loans to the 143-unit, 33-story project.
Albert A. Ciardi, attorney for Philadelphia Rittenhouse Developer, said Thursday, "We are disappointed with the decision and are evaluating our options." He said the developer would try to keep things going and reassure homeowners and buyers.
When asked whether he thought Istar would now proceed with the appointment of a receiver, Ciardi said Istar was likely looking at all its options, too.
Efforts Thursday to reach Istar were unsuccessful.
Since 10 Rittenhouse opened in November 2009, just 38 condos - originally priced from $600,000 to $15 million - have sold, according to the city Office of Property Assessment website. Data from the city Recorder of Deeds Office show that a majority of condos sold in Center City since the end of 2008 have been priced less than $500,000.
Developed by Robert Ambrosi and the late Hal Wheeler as ARC Wheeler L.L.C., 10 Rittenhouse opened two years later than planned because of legal battles over preservation and zoning, effectively missing the real estate boom, which ended here in the third quarter of 2007.
On assuming control of the building last summer, Delaware Valley Real Estate Investment Fund created a wholly owned subsidiary to manage it, putting John M. Decker of Dequity Investment Group L.L.C. in charge.
In its July lawsuit in Common Pleas Court, the investment fund accused Istar of "hatching a scheme" to defraud it and the developer by letting the project go into default and assuming control, with the result that "only Istar would obtain repayment." That suit is pending as the state court considers whether monetary damages should be awarded to the investment fund.
In September, in response to the investment fund's suit, Istar filed for foreclosure in Common Pleas Court and requested that a receiver be appointed.
Under a reorganization plan filed in Bankruptcy Court in March, the remaining units at 10 Rittenhouse would have been sold in three to four years and Istar repaid the $200 million-plus it was owed, even though some of the money realized from those sales, as well as rental of commercial space, would be used for completing the building and for operational costs.
In his 59-page decision, however, Raslavich said that "the only credible valuation evidence," given in February by Istar appraiser Joseph D. Pasquarella, put the value of the building at just $140.2 million, which Philadelphia Rittenhouse Developer L.P. accepted.
Instead of repaying Istar, therefore, the loan would be deficient by about $65 million, Raslavich said.
"The plan doesn't protect the secured creditors' debt," he said, but requires Istar "to suffer the diversion of some unquantified portion of those proceeds over to the debtor to use, as it sees fit, for an array of project-related costs and expenses."
In addition, Raslavich said, precedent requires such a plan to be "tested," typically by putting some units on the auction block to determine real market price.
Istar sought such a test. The developer rejected it.
The three largest unsecured creditors - Dale Corp., Turner Construction, and PZS Architects - are owed $4.92 million of a total $5.7 million in that category. Raslavich said they could not understand why the developer had filed for bankruptcy, nor would they approve the reorganization plan.
"Whether the court evaluates this case based on an overfly of the forest or a walk through the thicket of trees, its impression remains the same," the judge said. "The debtor [Philadelphia Rittenhouse Developer L.P.] bore the burden of providing subjective good-faith intentions and the negating of the objective futility of its [reorganization] plan, and did neither."
"A federal bankruptcy judge has dismissed the Chapter 11 petition filed by the developer of 10 Rittenhouse Square, the luxury condominium building at 130 S. 18th St.
The petition by Philadelphia Rittenhouse Developer L.P. came Jan. 5, just seven minutes before Common Pleas Court Judge Albert W. Sheppard Jr. was to have appointed a receiver. On Dec. 30, Sheppard had approved efforts by the project's senior lender, Istar Financial of New York, to foreclose on the property.
In his late Wednesday decision, Chief Bankruptcy Judge Stephen Raslavich called the Chapter 11 filing "a transparent litigation tactic in a battle between Istar" and Delaware Valley Real Estate Investment Fund, which, as mezzanine lender, has a total claim of $62 million.
In July, after months of lackluster sales at 10 Rittenhouse, Delaware Valley Real Estate Investment Fund - which manages the pensions of 47,200 workers in the region, mostly in the building trades - sued Istar and took control of the property.
Dismissal of the Chapter 11 petition could pave the way for Common Pleas Court to appoint the receiver Istar requested. Bankruptcy Court documents show Istar is owed about $205 million in loans to the 143-unit, 33-story project.
Albert A. Ciardi, attorney for Philadelphia Rittenhouse Developer, said Thursday, "We are disappointed with the decision and are evaluating our options." He said the developer would try to keep things going and reassure homeowners and buyers.
When asked whether he thought Istar would now proceed with the appointment of a receiver, Ciardi said Istar was likely looking at all its options, too.
Efforts Thursday to reach Istar were unsuccessful.
Since 10 Rittenhouse opened in November 2009, just 38 condos - originally priced from $600,000 to $15 million - have sold, according to the city Office of Property Assessment website. Data from the city Recorder of Deeds Office show that a majority of condos sold in Center City since the end of 2008 have been priced less than $500,000.
Developed by Robert Ambrosi and the late Hal Wheeler as ARC Wheeler L.L.C., 10 Rittenhouse opened two years later than planned because of legal battles over preservation and zoning, effectively missing the real estate boom, which ended here in the third quarter of 2007.
On assuming control of the building last summer, Delaware Valley Real Estate Investment Fund created a wholly owned subsidiary to manage it, putting John M. Decker of Dequity Investment Group L.L.C. in charge.
In its July lawsuit in Common Pleas Court, the investment fund accused Istar of "hatching a scheme" to defraud it and the developer by letting the project go into default and assuming control, with the result that "only Istar would obtain repayment." That suit is pending as the state court considers whether monetary damages should be awarded to the investment fund.
In September, in response to the investment fund's suit, Istar filed for foreclosure in Common Pleas Court and requested that a receiver be appointed.
Under a reorganization plan filed in Bankruptcy Court in March, the remaining units at 10 Rittenhouse would have been sold in three to four years and Istar repaid the $200 million-plus it was owed, even though some of the money realized from those sales, as well as rental of commercial space, would be used for completing the building and for operational costs.
In his 59-page decision, however, Raslavich said that "the only credible valuation evidence," given in February by Istar appraiser Joseph D. Pasquarella, put the value of the building at just $140.2 million, which Philadelphia Rittenhouse Developer L.P. accepted.
Instead of repaying Istar, therefore, the loan would be deficient by about $65 million, Raslavich said.
"The plan doesn't protect the secured creditors' debt," he said, but requires Istar "to suffer the diversion of some unquantified portion of those proceeds over to the debtor to use, as it sees fit, for an array of project-related costs and expenses."
In addition, Raslavich said, precedent requires such a plan to be "tested," typically by putting some units on the auction block to determine real market price.
Istar sought such a test. The developer rejected it.
The three largest unsecured creditors - Dale Corp., Turner Construction, and PZS Architects - are owed $4.92 million of a total $5.7 million in that category. Raslavich said they could not understand why the developer had filed for bankruptcy, nor would they approve the reorganization plan.
"Whether the court evaluates this case based on an overfly of the forest or a walk through the thicket of trees, its impression remains the same," the judge said. "The debtor [Philadelphia Rittenhouse Developer L.P.] bore the burden of providing subjective good-faith intentions and the negating of the objective futility of its [reorganization] plan, and did neither."
Vacancies rise as Bala Cynwyd office market falls behind
by Natalie Kostelni
"The office market here, attractive for its proximity to Philadelphia but without the tax burden, has seen better days.
After once enjoying a tight, enviable 3.9 percent vacancy in 2000, the amount of empty space lingering on the market has been on a steady climb since. Office tenants have been migrating to shinier, newer office buildings just down the road in Conshohocken, Radnor and other nearby markets or closing up altogether.
Tenants are also shrinking. For example, Pearson VUE, which administers professional tests, this month renewed its lease at Three Bala Plaza for 42,000 square feet, down from 68,000 square feet. In addition, many existing tenants simply hopscotch around the office submarket, leaving it with half a dozen buildings with pockets of empty space and a 20.7 percent vacancy rate as of the first quarter. Data puts the vacancy rate at the end of the first quarter at about 17 percent.
Tenants who have moved or closed vary in size and type. Janney Montgomery Scott, Hartford Insurance and Verizon shuttered offices in the market. St. Joseph’s University, which had been in 17,000 square feet at Three Bala, relocated back to renovated space at the former Episcopal Academy campus, which it owns. AT&T trekked out to King of Prussia; Judge Group, Smith Barney and ECBM Insurance moved to Conshohocken; Teva Pharmaceuticals went to Horsham; and GfK U.S. Healthcare headed to Blue Bell.
The market totals 2.9 million square feet so small fluctuations can feel bigger but, still, activity hasn’t been as robust as in Radnor or Conshohocken.
“When you lose a 35,000-square-foot tenant in Bala, it’s significant,” Dugan said. “There’s some small deal activity, but you’re not seeing the 15,000- to 30,000-square-foot deals.”
The pool of office tenants who consider Bala also look in Conshohocken and Radnor, both of which have newer buildings or offices that have undergone major overhauls, putting Bala at a disadvantage.
“It’s a market that was used to having 5 to 6 percent vacancy, but it has spiked. Bala is a simple market. It has a phenomenal location but what has been built in the last 20 years? Nothing.”
Landlords have spent money, sometimes millions of dollars, to make interior renovations. Tishman Speyer, the market’s largest landlord with just over 1 million square feet, has made some interior upgrades to its One, Two and Three Bala buildings, but not to the extent of some of the buildings in Radnor and Conshohocken. Maguire Partners sank $6 million into renovating One Belmont. Keystone Property Group totally re-did One Presidential Blvd. and 225 City Ave. — but that only accounts for 208,000 square feet of space. All of those makeovers still can’t keep up with Conshohocken or Radnor.
“What draws people to Bala Cynwyd...is a lot of executives on the Main Line can live close to the office and don’t pay city taxes, but you still have easy access to the city. What has happened over the years is the asset quality has really fallen behind buildings in Conshohocken and Radnor.”
Bala also doesn’t attract a lot of large space users, which has also been a challenge. Bala is predominantly tenanted by companies leasing 2,500 to 6,000 square feet.
“It’s very hard to make up for 40,000 square feet of vacancy. In other markets, there are a lot of 20,000-square-foot tenants that can come in and fill in that.”
Nearby suburban businesses also hesitate to move to Bala because rents are relatively high and asset quality isn’t as good as where they are, he said.
Rents average about $31 a square foot.
“For Bala to be competitive for the next 20 years, we need new development,” said Gary Brandeis, managing director of Fb Capital Partners, which invests in real estate and owns the Crown Plaza on City Avenue. Brandeis also sits on the City Avenue Special Services District. “Bala can’t compete against Radnor, Conshohocken and new development. I think for an office submarket, this is a critical part of keeping Bala Cynwyd competitive over the long run.”
Lower Merion is trying to establish an overlay district along the City Avenue corridor that could have the potential to spur new development. The new zoning would promote taller buildings and denser, mixed-use development that would be more pedestrian friendly in a designated area.
The proposal, for example, would allow the height of existing and new buildings to reach up to 300 feet tall, or roughly 30 stories high. The zoning would flank both sides of City Avenue and Philadelphia City Council passed the zoning district in 2009. Lower Merion Commissioners have yet to sign off on it and hearings this summer are expected to refine the ordinance.
The overlay district has been controversial. Opponents worry that taller buildings will mean more traffic congestion and be a detriment to the residential communities. If the zoning eventually passes, development activity would be years away but once in place, could potentially pull more tenants out of Center City who are seeking breaks on Philadelphia taxes and proximity to the city and brand-new buildings.
“The location of Bala will never change but the rezoning is going to be a factor to make it more competitive. It needs the rezoning, otherwise more tenants will leave.”
"The office market here, attractive for its proximity to Philadelphia but without the tax burden, has seen better days.
After once enjoying a tight, enviable 3.9 percent vacancy in 2000, the amount of empty space lingering on the market has been on a steady climb since. Office tenants have been migrating to shinier, newer office buildings just down the road in Conshohocken, Radnor and other nearby markets or closing up altogether.
Tenants are also shrinking. For example, Pearson VUE, which administers professional tests, this month renewed its lease at Three Bala Plaza for 42,000 square feet, down from 68,000 square feet. In addition, many existing tenants simply hopscotch around the office submarket, leaving it with half a dozen buildings with pockets of empty space and a 20.7 percent vacancy rate as of the first quarter. Data puts the vacancy rate at the end of the first quarter at about 17 percent.
Tenants who have moved or closed vary in size and type. Janney Montgomery Scott, Hartford Insurance and Verizon shuttered offices in the market. St. Joseph’s University, which had been in 17,000 square feet at Three Bala, relocated back to renovated space at the former Episcopal Academy campus, which it owns. AT&T trekked out to King of Prussia; Judge Group, Smith Barney and ECBM Insurance moved to Conshohocken; Teva Pharmaceuticals went to Horsham; and GfK U.S. Healthcare headed to Blue Bell.
The market totals 2.9 million square feet so small fluctuations can feel bigger but, still, activity hasn’t been as robust as in Radnor or Conshohocken.
“When you lose a 35,000-square-foot tenant in Bala, it’s significant,” Dugan said. “There’s some small deal activity, but you’re not seeing the 15,000- to 30,000-square-foot deals.”
The pool of office tenants who consider Bala also look in Conshohocken and Radnor, both of which have newer buildings or offices that have undergone major overhauls, putting Bala at a disadvantage.
“It’s a market that was used to having 5 to 6 percent vacancy, but it has spiked. Bala is a simple market. It has a phenomenal location but what has been built in the last 20 years? Nothing.”
Landlords have spent money, sometimes millions of dollars, to make interior renovations. Tishman Speyer, the market’s largest landlord with just over 1 million square feet, has made some interior upgrades to its One, Two and Three Bala buildings, but not to the extent of some of the buildings in Radnor and Conshohocken. Maguire Partners sank $6 million into renovating One Belmont. Keystone Property Group totally re-did One Presidential Blvd. and 225 City Ave. — but that only accounts for 208,000 square feet of space. All of those makeovers still can’t keep up with Conshohocken or Radnor.
“What draws people to Bala Cynwyd...is a lot of executives on the Main Line can live close to the office and don’t pay city taxes, but you still have easy access to the city. What has happened over the years is the asset quality has really fallen behind buildings in Conshohocken and Radnor.”
Bala also doesn’t attract a lot of large space users, which has also been a challenge. Bala is predominantly tenanted by companies leasing 2,500 to 6,000 square feet.
“It’s very hard to make up for 40,000 square feet of vacancy. In other markets, there are a lot of 20,000-square-foot tenants that can come in and fill in that.”
Nearby suburban businesses also hesitate to move to Bala because rents are relatively high and asset quality isn’t as good as where they are, he said.
Rents average about $31 a square foot.
“For Bala to be competitive for the next 20 years, we need new development,” said Gary Brandeis, managing director of Fb Capital Partners, which invests in real estate and owns the Crown Plaza on City Avenue. Brandeis also sits on the City Avenue Special Services District. “Bala can’t compete against Radnor, Conshohocken and new development. I think for an office submarket, this is a critical part of keeping Bala Cynwyd competitive over the long run.”
Lower Merion is trying to establish an overlay district along the City Avenue corridor that could have the potential to spur new development. The new zoning would promote taller buildings and denser, mixed-use development that would be more pedestrian friendly in a designated area.
The proposal, for example, would allow the height of existing and new buildings to reach up to 300 feet tall, or roughly 30 stories high. The zoning would flank both sides of City Avenue and Philadelphia City Council passed the zoning district in 2009. Lower Merion Commissioners have yet to sign off on it and hearings this summer are expected to refine the ordinance.
The overlay district has been controversial. Opponents worry that taller buildings will mean more traffic congestion and be a detriment to the residential communities. If the zoning eventually passes, development activity would be years away but once in place, could potentially pull more tenants out of Center City who are seeking breaks on Philadelphia taxes and proximity to the city and brand-new buildings.
“The location of Bala will never change but the rezoning is going to be a factor to make it more competitive. It needs the rezoning, otherwise more tenants will leave.”
Thursday, May 26, 2011
Sonco Worldwide Inks 50,000-SF Lease at Bldg 200
"Sonco Worldwide, a distribution and manufacturing company, signed a lease for 50,000 square feet of warehouse space at Crownwood Industrial Estates. In addition to the warehouse space, Sonco also leased 1.5 acres of land to use as additional storage area.
Located at 805 N. Wilson Ave. in Bristol, PA, Building 200 was completed in 1975 and totals 110,968 square feet. Crownwood Industrial Estates consists of four buildings totaling about 219,000 square feet on 25 acres. Crownwood Industrial Estates is located less than one mile from the PA Turnpike."
Located at 805 N. Wilson Ave. in Bristol, PA, Building 200 was completed in 1975 and totals 110,968 square feet. Crownwood Industrial Estates consists of four buildings totaling about 219,000 square feet on 25 acres. Crownwood Industrial Estates is located less than one mile from the PA Turnpike."
Rittenhouse Row Building Sells For $2M
"Democratic County Executive Committee sold its 6,000-square-foot office building to Pearl Properties LLC for $2 million, or about $333 per square foot.
Located at 1421 Walnut St. in downtown Philadelphia, Rittenhouse Row will be renovated into a retail / office location."
Located at 1421 Walnut St. in downtown Philadelphia, Rittenhouse Row will be renovated into a retail / office location."
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