Health Care Center Breaks Ground in North Philly

By Michael Boren, Inquirer Staff Writer

Promising to restore a North Philadelphia neighborhood known for dilapidated buildings and a lack of medical resources, city and state officials helped break ground Wednesday on a $15 million health-care facility near the Strawberry Mansion area.

The Stephen Klein Wellness Center, named for the developer, is expected to offer primary care, dental, and behavioral health services - as well as 50 job openings - when it opens near 21st Street and Cecil B. Moore Avenue. More than 100 people jammed inside a heated tent Wednesday for the ceremony.

High rates of obesity have been a problem in the area. In the 19121 zip code, where the center will be built, for example, more than 50 percent of adults were estimated to be obese, according to the 2012 Southeastern Pennsylvania Household Health Survey released by the nonprofit Public Health Management Corp.

Residents say they have to travel long distances for doctor's appointments or treatment.

"This is something that's really needed," longtime resident Valeria Chalmers, 67, said after the ceremony.

Project HOME, which takes on homelessness and poverty, will direct the nearly 29,000-square-foot center, which is also slated to include a pharmacy and YMCA-managed fitness area. Sister Mary Scullion, executive director of Project HOME, hefted one of the shovels to officially break ground Wednesday.

Residents and advocates point to the center as a sign of a neighborhood in transformation. Problems - abandoned properties, spurts of violent crime - still exist. But signs of improvement, such as a renovated bus hub near 33d and Dauphin Streets, are there, too. City officials said they hoped the wellness center could accelerate that trend.

"This community hung in there," Mayor Nutter said. "They never gave up on themselves, and we have a responsibility to stand with you."

Gov. Corbett, who also hefted a shovel at the ceremony, called the center "the right thing to do for the community."

"We do have an obligation," he said, "to help those who can't help themselves."

The center is the result of a collaboration among the city, Project HOME, Thomas Jefferson University Hospitals, and Phillies partners Leigh and John Middleton, among others. The Middletons; Stephen Klasko, Jefferson president and chief executive; and Stephen Klein were among the biggest funders. The center is expected to be completed in early 2015.

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First Hotel Opens at Philadelphia Navy Yard

Courtyard Philadelphia South has opened its five-story, 172-room Navy Yard location. This project, developed by Ensemble Hotel Partners, is the first hotel to be constructed at The Navy Yard. 

Erdy McHenry Architecture designed the Marriott-branded hotel, which features LEED certification, lounge, dining and fitness facilities, as well as office meeting space. The hotel, located at 1001 Intrepid Ave., is just four miles from Center City. 

"We are thrilled to open the first hotel at The Navy Yard," said Kam Babaoff, managing director of Ensemble Hotel Partners. "It's an honor to introduce this unique hotel, featuring a design that reflects the progressive campus in which it is located."
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Lannett Co Acquires Two Philadelphia Industrial Bldgs for $9M

Lannett Company, a Philadelphia-based manufacturer and distributer of affordable generic medications, acquired the industrial building at 11501 Roosevelt Blvd. in Philadelphia, PA from Bridgeblocks Partners II LP for $5 million, or about $26 per square foot. 

The 196,000-square-foot distribution building was constructed in 1969 with renovations in 2000. The building is situated on 15.3 acres and contains three loading docks and 32-foot ceiling heights. 

In a separate transaction, Lannett Company also purchased the adjacent industrial building at 11601 Roosevelt Blvd. in Philadelphia from Inrevco Associates LP for $4 million, or about $9 per square foot. 

This 452,262-square-foot manufacturing building was constructed in 1963 on 23 acres in the Greater Northeast Industrial submarket of Philadelphia. It features five loading docks, 15-foot clear heights, and A/C. 
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Horsham Seeks Master Developer For Willow Grove Base Redevelopment

The Horsham Land Redevelopment Authority (HLRA) has put out a call for proposals from developers for the redevelopment of the former Naval Air Station/Joint Reserve Base Willow Grove in Horsham, PA, into 862 acres of residential, retail, office, and community space. 

The HLRA's redevelopment plan calls for 1,486 residential units of various types,1.8 million square feet of commercial space, including a hotel and conference center; and 452,000 square feet of other uses that would include a regional recreation center, school, historical aviation museum, along with parks and open space. 

The agency this week issued a request for proposals to prequalify developers, which will then be invited to participate in a request for proposals expected to begin in the second quarter. 

Redevelopment of the former base in Montgomery County, PA, is expected to generate nearly $930 million in construction spending, create 10,000 jobs and generate $15.6 million a year in new tax revenues for Horsham Township, according to a report by the U.S. Navy, which departed from the base in 2011. 

The government transferred control of the base to the Pennsylvania Air National Guard and the name changed to the Horsham Air Guard Station. 
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Nordstrom to Open Fulfillment Center in Elizabethtown

Nordstrom, Inc. will open its third fulfillment center at Conewago Industrial Park on Zeager Rd. in Elizabethtown, PA. 

The 1.14 million-square-foot distribution building will be comprised of 672,000 square feet in addition to a 470,000-square-foot mezzanine. The project will break ground this month as weather allows, and is expected to deliver in mid-2015. Nordstrom said the center will create nearly 400 full-time jobs in the area in the first three years, and may ramp up to 700 full-time jobs plus additional seasonal employees as the business grows. 

"Today's announcement continues Pennsylvania's steady economic progress with another company expanding and more jobs for our citizens," said Governor Tom Corbett. "It's a testament to why Pennsylvania is built to advance - our keystone location, our talented and hardworking people - all contributed to Nordstrom bringing hundreds of new jobs to Lancaster County." 

The new fulfillment center will enable faster delivery for Nordstrom.com and catalog orders from customers on the East Coast. The company's other two centers are located in Cedar Rapids, Iowa and San Bernardino, Calif. 

"Speed of delivery is simply just part of our customers' expectations of what good service means today," said Jamie Nordstrom, president of Nordstrom Direct. "This is an ideal location to add to our fulfillment capabilities and improve the delivery experience for our customers. E-commerce is the fastest growing area of our business and this is another example of how we're investing in people and capabilities to help us support this growth and responding to our customers' changing definition of service." 

Martin and William Murray own the Conewago Industrial Park, offering a wide range of distribution and light industrial facilities with access to air, rail and interstate highway systems. H&M Company will construct the build-to-suit property on 92 acres on Lot #4 in the park, located in the Lancaster County Industrial submarket of Philadelphia. 
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Why Tenants AND Landlords Should Love Tenant Rep Brokers

by Kristian Lee

I have recently completed a transaction where I was the representative for the Landlord on a property and executed a lease with a tenant who did not understand the talent (Tenant Rep) AND time required to open a new location! Although the tenant was a very smart medical doctor, they had no experience in commercial real estate nor any experience in opening a new office location for the very first time!

At our first initial meeting they wanted to move quickly and get their practice up and running in short order. Negotiating the general lease terms through to the final proposals happened over a course of a few days, keeping on track with their fast pace desires.

Things started to stall once the lease was drafted and they brought in their general contractor to determine what needed to be done to the vanilla box suite.

At this time it was evident the process of commercial real estate was now taking over the speed of the transaction.

Since this tenant prospect was new to commercial real estate, AND they had no tenant representation (cringe) they had no clue how much time building-out their space would really take; the players necessary to execute the task; nor the cost and time needed to do it properly. For me, it was so very hard to watch this prospective tenant with no clue and the fact that my obligation was to the landlord. In my capacity, I was only able to advise them of the process, but not fully assist.

This is where a tenant representation broker can really ease the pain. A tenant representation broker is not just there to assist in finding the right space and negotiating a marketable deal, they are also there to hold the tenant’s hand and assist with the entire process and work hand in hand with the landlord’s broker.

Note to Tenant:

If believe you can go it alone (not advisable), please be aware of how long this stuff really takes and what professionals you need as an integral part of your team!

Note to Landlord:

If you want the process to go smoothly and have a great experience with your new tenant, who you will be living with you for the next 5 years, appreciate those tenant representation brokers who are at the frontline!

Blog Bonus: I want to share my take on what a typical timeline looks like. In this particular case, the tenant really had no idea how long and drawn out this process could be.

Typical Timeline

Step 1:

Allow a few weeks time to identify and meet a good broker to represent you. 

Step 2:

When evaluating a new location one must consider how it will best function for their needs. If construction is needed, it is advised to bring in a general contractor to discuss the layout, and obtain a budget. This could take a week or more depending on the build-out needs.

Step 3:

For a total renovation or building from a vanilla box an architect will be needed. The architect will put together the demolition plans, new construction plans, MEP (mechanical, electrical and plumbing plans) and prepare all the necessary documents for permit. This process is estimated to take 2-3 weeks.

Step 4:

Architect shall file for permit. Permit time ranges for every municipality but one can expect 4-6 weeks for issuance of permits.

Step 5:

During the permit filing, your general contractor will facilitate subcontractors and quotes. Once you have selected the trades they can start ordering materials.

Step 6:

Construction. This time frame varies based on the scope of the work. Most permitted jobs take anywhere from 4-8 weeks.

Step 7:

Final walk-through with the municipality to provide occupancy permit.

As you can see from the above list of the time and talent involved, from broker selection to lease execution to actual business opening, the entire process can take you 18 weeks or more.

Of course, the entire process is subject to many variables, such as, size of the deal, specific build-out needs, equipment vendor schedules, and building-specific issues, such as work schedules and other unforeseen conditions. No matter what, you should go in with your eyes wide open as far as the potential timeline and the impact on your business, when trying to find new space. Always remember that the tiniest detail overlooked, can throw your schedule off course and cause delays.

Based on the complexity of finding new space and preparing the space for your unique needs, it is vital to have the right team in place to assist you through the entire commercial real estate process from selection to opening and you need to have a realistic understanding of how long it really takes!

Full story: http://tinyurl.com/px4tj4r
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CRE in the Philly Suburbs Isn't Dead

Summary of the Biz Now event on January 15, 2014

They're not even undead. That was the message our record-turnout crowd heard at our first-ever Future of the Suburbs Summit in King of Prussia. (Though the thought of undead soccer moms is itself epic.)

For one, the 'burbs are finally shedding their image of sprawl, says Pennoni SVP Joe Viscuso (left, with JLL managing director Mike Morrone, Keystone SVP Rich Gottlieb, and Hayden REI's CEO Tony Hayden). Joe sees more clustering around urban nodes that are transit-oriented, like West Chester to Doylestown, with projects such as the renovations to the Malvern train station having positive impacts on growth.

Gen Xers with kids and downsizing Boomers are the key demographics for these nodes. Rich says Keystone is pursuing mixed-use developments along City Avenue in Bala Cynwyd to give people a live/work/play locale, and rezoning single-use properties will be a necessary component of that. Plus, having restaurants and other retail outside the 9-to-5 window helps a lot in easing traffic congestion.

Hayden Real Estate Investments hosted us at 150 South Warner Rd, in 32k SF of third-floor space. To get it ready for lease, Tony says the floor is getting a full renovation. He and the panelists agree that the new office economy looks a lot different. Tenants are seeking leases for smaller spaces and ditching cubicles for open-floor plans and collaborative spaces. (Mike, our moderator, quipped that this event was the first time brokers were actually paying a landlord to see their property.)

While homeownership dominates, at least a third of the population will continue to rent, Morgan Properties CFO Patrick O'Grady says (left, we snapped him with Liberty VP Tom Sklow). Indeed, Fannie and Freddiehave been good for multifamily in the suburbs by providing loans at the same rates as the city. It's true that job growth post-recovery has been less than robust, but Pat believes that long-term population patterns favor a rising tide that will lift all boats. (Double great news for multifamily house boats.)

What about demand for amenities? Tom says it's great for larger developments like Liberty's 700-acre Great Valley Corporate Center, which includes daycare, fitness centers, and shopping to go with over 3MSF of office space. But for buildings under 100k SF, these things may be harder to sustain. Still, Brandywine SVP Jeff DeVuono says people expect a high-end product: “A lukewarm approach to amenities doesn't have the samepayback,” Jeff says. He also sees the end of low interest rates, with Tom predicting more M&A activity before rates angle upward. (It's like junior prom: Everyone looks for a dance partner before they play Green Day's "Good Riddance.")

Hayden acquired 150 South Warner (aka Walnut Hill Plaza) through a partnership with MIM last August. (Pictured: VP Tara Hayden, founderTony Hayden Sr., CEO Tony Hayden Jr., and Stephanie Hayden.) The four-story building includes over 45k SF in leasing opportunities and is getting brand new elevators, restrooms, and lighting. Located just off the Turnpike and the 202 corridor—not to mention right by a fancy Wegman's—the team sees 100% occupancy as a realistic achievement.

Full story: http://tinyurl.com/k9qlfsl
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