Wednesday, December 31, 2014
Monday, December 29, 2014
Biggest Commercial Real Estate News in Philly 2014
The Philadelphia commercial real estate market continued to experience dynamic changes in 2014, from the biggest deals, to the latest developments and market trends.
Here are the stories that you, our readers, considered to be the most interesting and newsworthy in the Philadelphia market over the past 12 months.
1. Forest City Divests Philadelphia Shopping Center for $92.3M
Cedar Realty Trust Acquires 456,000-SF Quartermaster Plaza
Forest City Enterprises, Inc. (NYSE: FCEA, FCEB) has sold the Quartermaster Plaza retail power center at 2200-2370 W. Oregon Ave. in Philadelphia, PA to Cedar Realty Trust, Inc. (NYSE: CDR) for $92.3 million, or about $202 per square foot.
2. Atlantic City May Need to Find Another Way to Make Money
New Jersey Shore Market Faces Its Fourth Casino Closure This Year
3. Comcast to Build $1.2B Skyscraper in Philadelphia
Massive Project Would Reunite Media Giant With Comcast Center Developer Liberty Property Trust
4. Liberty Closes Second Half of $697.3M Disposition
Greenfield JV Acquires 2.6M SF, 19 Acres for $329.6M
5. Bellevue Park Corp Ctr Bldgs Sold for $61.5M
BPG Real Estate Acquires 306,000 SF in Wilmington
6. Keystone, Mack-Cali Team Up to Buy Philadelphia's Curtis Center for $125M
Walnut Street, Apollo Global Mgmt Sell 886,000-SF Office Bldg
7. Brandywine Completes $248.9M Acquisition in Philadelphia
Parkway Properties Sells Ownership Stake Following Thomas Properties Merger
8. Host Hotels Sells 89% Stake in Ownership of Philadelphia Marriott Downtown for $270M
Oaktree, Clearview JV Take Control of 1,400 Rooms on Market Street
9. KBS Closes on $63M Acquisition of 1000 Continental
Equus Capital Sells 205,000 SF in King of Prussia
10. KBS REIT II Sells I-81 Industrial Portfolio for $105.7M
1.6M SF Trades Hands in Eastern PA
11. COPT Signs PRA Int'l to 150,000 SF in Blue Bell
Tenant Takes Some Space Now, Preleases Under-Development Bldg at Arborcrest Park
12. Philadelphia's Edgewater Apts Sell for $113M
JP Morgan Chase & Co Take 290 Units on Race Street
13. Horsham Seeks Master Developer For Willow Grove Base Redevelopment
Former Base North of Philadelphia Expected to Generate Nearly $1B In Construction Investment
14. Sunoco Pays $23.5M for Redevelopment Project in Newtown Square
Company to Relocate from City Center
15. Brandywine, LCOR Team Up For Center City High-Rise
www.omegare.com
Here are the stories that you, our readers, considered to be the most interesting and newsworthy in the Philadelphia market over the past 12 months.
1. Forest City Divests Philadelphia Shopping Center for $92.3M
Cedar Realty Trust Acquires 456,000-SF Quartermaster Plaza
Forest City Enterprises, Inc. (NYSE: FCEA, FCEB) has sold the Quartermaster Plaza retail power center at 2200-2370 W. Oregon Ave. in Philadelphia, PA to Cedar Realty Trust, Inc. (NYSE: CDR) for $92.3 million, or about $202 per square foot.
2. Atlantic City May Need to Find Another Way to Make Money
New Jersey Shore Market Faces Its Fourth Casino Closure This Year
3. Comcast to Build $1.2B Skyscraper in Philadelphia
Massive Project Would Reunite Media Giant With Comcast Center Developer Liberty Property Trust
4. Liberty Closes Second Half of $697.3M Disposition
Greenfield JV Acquires 2.6M SF, 19 Acres for $329.6M
5. Bellevue Park Corp Ctr Bldgs Sold for $61.5M
BPG Real Estate Acquires 306,000 SF in Wilmington
6. Keystone, Mack-Cali Team Up to Buy Philadelphia's Curtis Center for $125M
Walnut Street, Apollo Global Mgmt Sell 886,000-SF Office Bldg
7. Brandywine Completes $248.9M Acquisition in Philadelphia
Parkway Properties Sells Ownership Stake Following Thomas Properties Merger
8. Host Hotels Sells 89% Stake in Ownership of Philadelphia Marriott Downtown for $270M
Oaktree, Clearview JV Take Control of 1,400 Rooms on Market Street
9. KBS Closes on $63M Acquisition of 1000 Continental
Equus Capital Sells 205,000 SF in King of Prussia
10. KBS REIT II Sells I-81 Industrial Portfolio for $105.7M
1.6M SF Trades Hands in Eastern PA
11. COPT Signs PRA Int'l to 150,000 SF in Blue Bell
Tenant Takes Some Space Now, Preleases Under-Development Bldg at Arborcrest Park
12. Philadelphia's Edgewater Apts Sell for $113M
JP Morgan Chase & Co Take 290 Units on Race Street
13. Horsham Seeks Master Developer For Willow Grove Base Redevelopment
Former Base North of Philadelphia Expected to Generate Nearly $1B In Construction Investment
14. Sunoco Pays $23.5M for Redevelopment Project in Newtown Square
Company to Relocate from City Center
15. Brandywine, LCOR Team Up For Center City High-Rise
Wawa gets approval to expand DelCo HQ
Borough Council unanimously approved the proposed expansion of Wawa Corporation’s Red Roof headquarters at a sparsely-attended public hearing last week.
The hearing was the first official business conducted in the newly-renovated Chester Heights municipal office.
Three borough ordinances were amended during Monday’s meeting to allow construction of four buildings on the 26-acre corporate campus. The new structures will include an 11,260-square-foot, two-story storage building, a 1,500-square-foot salt shed, multi-level parking garage, and the Annex 5 office building.
The recent acquisition of the 4.3-acre Robinson property on the east side of the campus will lead to demolition of the existing residence and garage, then construction of the storage building and salt shed. The Robinson property will also be utilized for stormwater management and on-site septic disposal purposes.
The new parking garage will have two underground levels and three above ground. Of the total of 557 parking spaces, 525 will be dedicated to employees, while the rest will be handicapped- or van-accessible. The garage will have multiple access points, including a skywalk connecting to Annex 5.
Sitting atop the parking garage will be a new innovation and design center, which will include a test kitchen. The design center will feature a glass curtain wall to utilize natural sunlight.
The 98,000-square-foot Annex 5 office building will be located directly behind the Red Roof mansion and next to Annex 1 and 2. The height of both Annex 5 and the parking garage/design center will not exceed the height of the Red Roof mansion.
The additional office space will allow 212 Wawa employees, who are now occupying rented space at the old Franklin Mint complex, to join the rest of the Red Roof staff. The influx of employees will bump the number of Red Roof employees from the current 515 to over 700. By the end of build-out in 2024, Wawa expects the total Red Roof headcount to be closer to 900.
According to Wawa’s traffic Engineer Matthew Hammond, the additional workers on site should generate about 150 more vehicles at the Red Roof Drive entrance on Baltimore Pike at peak traffic hours.
To accommodate the additional cars, Wawa is petitioning PennDoT to extend the southbound Route 1 left-turn stacking lane from its current 85-foot length to 225 feet, while re-timing the traffic signal to give employees more time. PennDOT would not need to take any property or additional right-of-way along the pike to make the requested turn-lane extension, Hammond noted.
Prior to the borough’s formal hearing, the Wawa expansion plan was reviewed by the Chester Heights Planning Commission and the Delaware County Planning Department, with both advisory bodies recommending plan approval.
According to Wawa Attorney Joseph Damico, a total of 29 nearby residents were directly notified of the Wawa plan, and no objections were raised.
Of the three residents that attended the hearing, only Wawa neighbor Robert Benz asked questions, expressing concerns over stormwater runoff and potential traffic problems on Baltimore Pike.
The lack of opposition led Councilman Patrick Patterson to second the first of three motions for conditional approval.
“This information is very thorough, and we’ve all been privy to a lot of this on an ongoing basis here,” Patterson said prior to the vote. “Based on the fact that our planning commission and the county planning commission, and everyone else who has reviewed this professionally, has not found any fault, and in light of the fact that the neighbors and others and the questions presented here tonight were satisfied, I’m happy to provide a second.”
Chester Heights Council Vice President Frederick Wood abstained from all council approval votes, as he is a retired Wawa employee.
www.omegare.com
The hearing was the first official business conducted in the newly-renovated Chester Heights municipal office.
Three borough ordinances were amended during Monday’s meeting to allow construction of four buildings on the 26-acre corporate campus. The new structures will include an 11,260-square-foot, two-story storage building, a 1,500-square-foot salt shed, multi-level parking garage, and the Annex 5 office building.
The recent acquisition of the 4.3-acre Robinson property on the east side of the campus will lead to demolition of the existing residence and garage, then construction of the storage building and salt shed. The Robinson property will also be utilized for stormwater management and on-site septic disposal purposes.
The new parking garage will have two underground levels and three above ground. Of the total of 557 parking spaces, 525 will be dedicated to employees, while the rest will be handicapped- or van-accessible. The garage will have multiple access points, including a skywalk connecting to Annex 5.
Sitting atop the parking garage will be a new innovation and design center, which will include a test kitchen. The design center will feature a glass curtain wall to utilize natural sunlight.
The 98,000-square-foot Annex 5 office building will be located directly behind the Red Roof mansion and next to Annex 1 and 2. The height of both Annex 5 and the parking garage/design center will not exceed the height of the Red Roof mansion.
The additional office space will allow 212 Wawa employees, who are now occupying rented space at the old Franklin Mint complex, to join the rest of the Red Roof staff. The influx of employees will bump the number of Red Roof employees from the current 515 to over 700. By the end of build-out in 2024, Wawa expects the total Red Roof headcount to be closer to 900.
According to Wawa’s traffic Engineer Matthew Hammond, the additional workers on site should generate about 150 more vehicles at the Red Roof Drive entrance on Baltimore Pike at peak traffic hours.
To accommodate the additional cars, Wawa is petitioning PennDoT to extend the southbound Route 1 left-turn stacking lane from its current 85-foot length to 225 feet, while re-timing the traffic signal to give employees more time. PennDOT would not need to take any property or additional right-of-way along the pike to make the requested turn-lane extension, Hammond noted.
Prior to the borough’s formal hearing, the Wawa expansion plan was reviewed by the Chester Heights Planning Commission and the Delaware County Planning Department, with both advisory bodies recommending plan approval.
According to Wawa Attorney Joseph Damico, a total of 29 nearby residents were directly notified of the Wawa plan, and no objections were raised.
Of the three residents that attended the hearing, only Wawa neighbor Robert Benz asked questions, expressing concerns over stormwater runoff and potential traffic problems on Baltimore Pike.
The lack of opposition led Councilman Patrick Patterson to second the first of three motions for conditional approval.
“This information is very thorough, and we’ve all been privy to a lot of this on an ongoing basis here,” Patterson said prior to the vote. “Based on the fact that our planning commission and the county planning commission, and everyone else who has reviewed this professionally, has not found any fault, and in light of the fact that the neighbors and others and the questions presented here tonight were satisfied, I’m happy to provide a second.”
Chester Heights Council Vice President Frederick Wood abstained from all council approval votes, as he is a retired Wawa employee.
www.omegare.com
$1B in real estate transactions for Center City in 2014
by Natalie Kostelni, Staff writer for the Philadelphia Business Journal
he Center City investment market shrugged off any remnants from the recession and pulled out a year in which $1 billion worth of commercial real estate traded.
Twenty-four transactions were logged in the Central Business District compared with 16 totaling $700 million in 2013 and eight in 2012 totaling $96 million. The data excludes a $505 million transaction in which Comcast Corp. bought a majority stake in Comcast Center.
Property owners have decided to seize on the interest in commercial real estate and deals are getting done.
"We're seeing more velocity this year than I've ever seen."
Large institutional investors who historically shied away from Philadelphia are bidding on buildings that come up for sale and have managed to execute transactions.
Another factor in play is where the investment money is originating. Domestic institutions have been unable to compete with the onslaught of international capital flooding primary gateway cities, such as New York and Washington D.C. This has meant they have turned their investment attention to cities such as Philadelphia.
"Philadelphia shines in that second-tier, non-gateway market."
While office properties in the Central Business District are in high demand, all property types are getting investor attention.
Retail space has become a hot commodity and has recorded some of the biggest deals on a per square foot basis. For example, the 19,963-square-foot space at 1801 Walnut St. where Anthropologie occupies space, sold for $1,528 a square foot, and 1705 Walnut St., which totals 6,138 square feet, traded for $815 a square foot.
Some of the top office sales include: 1835 Market St. at $100 million; 1515 Market St. at $85 million; Curtis Center at $125 million; and 3535 Market St. at $140 million. Examples of some multifamily trades include the Sansom at $42 million, Edgewater at $113 million and the Avenue of the Arts at $33 million.
The suburban office market was not as robust as Center City.
Full story: http://tinyurl.com/ld8map3
www.omegare.com
he Center City investment market shrugged off any remnants from the recession and pulled out a year in which $1 billion worth of commercial real estate traded.
Twenty-four transactions were logged in the Central Business District compared with 16 totaling $700 million in 2013 and eight in 2012 totaling $96 million. The data excludes a $505 million transaction in which Comcast Corp. bought a majority stake in Comcast Center.
Property owners have decided to seize on the interest in commercial real estate and deals are getting done.
"We're seeing more velocity this year than I've ever seen."
Large institutional investors who historically shied away from Philadelphia are bidding on buildings that come up for sale and have managed to execute transactions.
Another factor in play is where the investment money is originating. Domestic institutions have been unable to compete with the onslaught of international capital flooding primary gateway cities, such as New York and Washington D.C. This has meant they have turned their investment attention to cities such as Philadelphia.
"Philadelphia shines in that second-tier, non-gateway market."
While office properties in the Central Business District are in high demand, all property types are getting investor attention.
Retail space has become a hot commodity and has recorded some of the biggest deals on a per square foot basis. For example, the 19,963-square-foot space at 1801 Walnut St. where Anthropologie occupies space, sold for $1,528 a square foot, and 1705 Walnut St., which totals 6,138 square feet, traded for $815 a square foot.
Some of the top office sales include: 1835 Market St. at $100 million; 1515 Market St. at $85 million; Curtis Center at $125 million; and 3535 Market St. at $140 million. Examples of some multifamily trades include the Sansom at $42 million, Edgewater at $113 million and the Avenue of the Arts at $33 million.
The suburban office market was not as robust as Center City.
Full story: http://tinyurl.com/ld8map3
www.omegare.com
Sunday, December 28, 2014
GSH Providing Ops and Maintenance at Former Lansdale Ford Plant Refit
by Steve Lubetkin, Globest.com
GSH Group, Inc., a multi-national facilities and energy management provider throughout the United States, Europe and India, will deliver operations and maintenance services at a 675,000 square foot former Ford Motor Company electronics plant, at 2750 Morris Road in Lansdale, PA owned by Advance Realty and joint-venture partner, The Davis Companies.
Advance and Davis are repurposing the plant into a multi-tenanted, high-technology assembly and warehouse facility.
GSH assisted Advance/Davis during their initial inspection of the facility, prior to the purchase in September 2014, and continues to provide operations and maintenance services within the facility. GSH will also provide support for the upcoming capital improvements within the facility.
“We are excited to take ownership of 2750 Morris Road with The Davis Companies, and with the expertise of GSH’s engineering services, we are looking forward to making this facility the premier location for high technology companies in the region,” says Rick Zack, managing director of property management, Advance Realty.
“We are glad to assist Advance Realty and The Davis Companies in this endeavor, and look forward to continued success as we work with Advance to develop and maintain the facility,” says GSH group regional operations director Steve Wallis.
GSH holds two other contracts for operations and maintenance services with Advance Realty including One Gateway Center in Newark, NJ and Riverview Park in Trenton, NJ.
www.omegare.com
GSH Group, Inc., a multi-national facilities and energy management provider throughout the United States, Europe and India, will deliver operations and maintenance services at a 675,000 square foot former Ford Motor Company electronics plant, at 2750 Morris Road in Lansdale, PA owned by Advance Realty and joint-venture partner, The Davis Companies.
Advance and Davis are repurposing the plant into a multi-tenanted, high-technology assembly and warehouse facility.
GSH assisted Advance/Davis during their initial inspection of the facility, prior to the purchase in September 2014, and continues to provide operations and maintenance services within the facility. GSH will also provide support for the upcoming capital improvements within the facility.
“We are excited to take ownership of 2750 Morris Road with The Davis Companies, and with the expertise of GSH’s engineering services, we are looking forward to making this facility the premier location for high technology companies in the region,” says Rick Zack, managing director of property management, Advance Realty.
“We are glad to assist Advance Realty and The Davis Companies in this endeavor, and look forward to continued success as we work with Advance to develop and maintain the facility,” says GSH group regional operations director Steve Wallis.
GSH holds two other contracts for operations and maintenance services with Advance Realty including One Gateway Center in Newark, NJ and Riverview Park in Trenton, NJ.
www.omegare.com
Monday, December 22, 2014
Top real estate stories of 2014: From Comcast tower to East Market
by Natalie Kostelni staff writer for the Philadelphia Business Journal
Each year when I look back at the top real estate stories and try to narrow them down to 10, I struggle. This year, I'm nearly paralyzed with indecision.
It's a good thing.
So many significant things took place in Philadelphia's suburban and Center City real estate scenes over the past year that I came up with 10 big stories with no problem. I had to stop myself at 25 because it was just getting ridiculous. I smiled, though. Philadelphia is achieving so much these days when it comes to real estate. Outside investors are taking a shine to it, cranes jut out of the sky, billion-dollar deals are still rare but are happening, and there's a sense of excitement about the city's future.
The suburbs are holding their own, too, and changing along with demographic and other forces demanding dense, walkable, amenity-filled communities or at the least buildings and campuses.
Three of its prime markets — Conshohocken, Pa., Bala Cynwyd, Pa., and Radnor, Pa. — are seeing rents rise and new construction around the corner. King of Prussia, Pa., is having its own building boom and suburban landlords are readily redefining office space to meet the needs of tenants looking to attract and retain top employees and appease Millennials crowding into the workforce.
Where to begin?
The year started with a bang and, though I didn't know it at the time, it was just a harbinger of what lied ahead.
It was mid-January when Liberty Property Trust and Comcast Corp. announced they would joint venture on a $1.2 billion new skyscraper called the Comcast Center for Innovation and Technology that would be designed by world-renowned architect Lord Norman Foster.
The University of Pennsylvania unveiled plans for the Pennovation Center on 23 acres at the old Marshall Labs site on the Schuylkill River now called South Bank. That, in conjunction with Drexel's Innovation Neighborhood, has the potential to create an innovation cluster that could be an incredible economic engine for the region.
Keystone Property Group bought Mack-Cali Realty Corp.'s suburban Philadelphia office portfolio for $230 million. While that was a big deal and made Keystone a bigger suburban office player, it also underscored a bigger underlying transition in the commercial real estate world: Companies are shedding their pasts and evolving into something new and redefining themselves. Mack-Cali is now focused on multifamily development. Brandwyine Realty Trust is now an owner of Class A office buildings in urban centers and ventured into transportation-oriented mixed-use development, which veers from its genesis as a suburban office landlord. Liberty Property Trust is putting the finishing touches on transforming itself into an industrial real estate investment trust by selling non-core suburban office buildings.
Lubert-Adler was an investor involved in a $9 billion transaction to buy Safeway Inc. Always looking for the real estate play, Lubert-Adler has done these sort of deals before where it buys a company for the underlying properties it may own. Safeway owns much of its real estate from which it operates its stores and in areas with high-barriers of entry.
Crosspoint at Valley Forge at 530 and 580 Swedesford Road in Wayne, Pa., isn't a huge building at 272,000 square feet but its quick lease up — going from fully vacant to fully leased in a year — spoke volumes about the direction of suburban office buildings. Tenants will gravitate to well-designed, totally renovated office buildings packed with amenities and cool spaces.
Full story: http://tinyurl.com/lxa2xw5
www.omegare.com
Each year when I look back at the top real estate stories and try to narrow them down to 10, I struggle. This year, I'm nearly paralyzed with indecision.
It's a good thing.
So many significant things took place in Philadelphia's suburban and Center City real estate scenes over the past year that I came up with 10 big stories with no problem. I had to stop myself at 25 because it was just getting ridiculous. I smiled, though. Philadelphia is achieving so much these days when it comes to real estate. Outside investors are taking a shine to it, cranes jut out of the sky, billion-dollar deals are still rare but are happening, and there's a sense of excitement about the city's future.
The suburbs are holding their own, too, and changing along with demographic and other forces demanding dense, walkable, amenity-filled communities or at the least buildings and campuses.
Three of its prime markets — Conshohocken, Pa., Bala Cynwyd, Pa., and Radnor, Pa. — are seeing rents rise and new construction around the corner. King of Prussia, Pa., is having its own building boom and suburban landlords are readily redefining office space to meet the needs of tenants looking to attract and retain top employees and appease Millennials crowding into the workforce.
Where to begin?
The year started with a bang and, though I didn't know it at the time, it was just a harbinger of what lied ahead.
It was mid-January when Liberty Property Trust and Comcast Corp. announced they would joint venture on a $1.2 billion new skyscraper called the Comcast Center for Innovation and Technology that would be designed by world-renowned architect Lord Norman Foster.
The University of Pennsylvania unveiled plans for the Pennovation Center on 23 acres at the old Marshall Labs site on the Schuylkill River now called South Bank. That, in conjunction with Drexel's Innovation Neighborhood, has the potential to create an innovation cluster that could be an incredible economic engine for the region.
Keystone Property Group bought Mack-Cali Realty Corp.'s suburban Philadelphia office portfolio for $230 million. While that was a big deal and made Keystone a bigger suburban office player, it also underscored a bigger underlying transition in the commercial real estate world: Companies are shedding their pasts and evolving into something new and redefining themselves. Mack-Cali is now focused on multifamily development. Brandwyine Realty Trust is now an owner of Class A office buildings in urban centers and ventured into transportation-oriented mixed-use development, which veers from its genesis as a suburban office landlord. Liberty Property Trust is putting the finishing touches on transforming itself into an industrial real estate investment trust by selling non-core suburban office buildings.
Lubert-Adler was an investor involved in a $9 billion transaction to buy Safeway Inc. Always looking for the real estate play, Lubert-Adler has done these sort of deals before where it buys a company for the underlying properties it may own. Safeway owns much of its real estate from which it operates its stores and in areas with high-barriers of entry.
Crosspoint at Valley Forge at 530 and 580 Swedesford Road in Wayne, Pa., isn't a huge building at 272,000 square feet but its quick lease up — going from fully vacant to fully leased in a year — spoke volumes about the direction of suburban office buildings. Tenants will gravitate to well-designed, totally renovated office buildings packed with amenities and cool spaces.
Full story: http://tinyurl.com/lxa2xw5
www.omegare.com
BET Investments breaks ground on $12M mixed-use project
by Natalie Kostelni, staff writer for the Philadelphia Business Journal
BET Investments Inc. has broken ground on a $12 million mixed-use development in Dresher, Pa.
Called Dresher Commons, the project involves constructing 40,000 square feet of mostly retail space and 24 townhouses on nine acres at Susquehanna Road and Limekiln Pike. The townhouses will be rentals. A CVS and Chipotle are among the retail tenants that have been lined up. The historic Clime House that sits on the property will be converted into office space.
BET has been working on this project for more than 10 years, said Michael Markman, president of BET Investments. "It has gone through so many different plans," he said.
Full story: http://tinyurl.com/ncyhgej
www.omegare.com
BET Investments Inc. has broken ground on a $12 million mixed-use development in Dresher, Pa.
Called Dresher Commons, the project involves constructing 40,000 square feet of mostly retail space and 24 townhouses on nine acres at Susquehanna Road and Limekiln Pike. The townhouses will be rentals. A CVS and Chipotle are among the retail tenants that have been lined up. The historic Clime House that sits on the property will be converted into office space.
BET has been working on this project for more than 10 years, said Michael Markman, president of BET Investments. "It has gone through so many different plans," he said.
Full story: http://tinyurl.com/ncyhgej
www.omegare.com
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