Monday, January 31, 2022
Friday, January 28, 2022
Wednesday, January 26, 2022
Hilco Secures $500 Million Loan for Philadelphia Oil Refinery Redevelopment
PCCP has provided $500 million in financing to Hilco Redevelopment Partners for the multibillion-dollar redevelopment of the former Philadelphia Energy Solutions oil refinery.
The 1,300-acre South Philadelphia property, now called the Bellwether District, is set to be transformed into a state-of-the-art, 15 million-square-foot life science, e-commerce and logistics campus.
The borrower is a joint venture, led by operating partner Hilco Redevelopment Partners with co-investors, including Caisse de dépôt et placement du Québec, which acquired the property out of bankruptcy in 2020 for $225.5 million. The transformation of the former oil refinery includes the decommissioning of the refinery and significant demolition and remediation work, including the removal of roughly 30,000 tons of asbestos.
Redevelopment efforts initially began in June 2020 and substantial progress has been made to date. Site work and vertical construction are expected to commence this year with the first tenants expected to occupy buildings in 2023.
Once home to a 150-year-old oil refinery that produced 16% of all Philadelphia’s greenhouse gasses, Bellwether District is expected to become an economic engine for Philadelphia, supporting businesses, generating an estimated 19,000 permanent jobs, creating millions in tax revenue and preparing hundreds of students for their future careers through internship and apprenticeship programs, according to a press release announcing the financing for the project.
Novaya pays $50M for nearly 80 acres in Bucks County, sells Target-leased building in Upper Merion
By Natalie Kostelni – Reporter, Philadelphia Business Journal
Affiliates of Bruce E. Toll sold 79.5 acres of land in Langhorne for $50 million to Novaya Foxfield Industrial, a Boston real estate company that has been active in the Philadelphia area.
At the same time, Novaya Foxfield has moved on from the first property it acquired in the region, selling 900 River Road in Upper Merion as part of the disposition of that building and one in Georgia for a total of $142 million at the end of last year.
The building at 900 River Road traded for around $116 million, or roughly $350 a square foot, according to market sources. At that price, it exceeds a $240 a square foot high water mark set last year when a 1.1-million-square-foot warehouse-distribution center leased to Target Corp. in Logan, New Jersey, sold $265 million.
The Langhorne property was considered “underutilized” land of the Reedman Toll Auto World, said Michael Markman, president of BET Investments Inc., which is Bruce E. Toll’s real estate company. A total of 37 parcels along Lincoln Highway, Old Lincoln Highway and Virginia Avenue were sold in two separate transactions, according to Bucks County property records.
The land comprising Reedman Toll at 1700 Lincoln Highway was retained and the auto dealership continues to operate business as usual, Markman said.
Full story: https://tinyurl.com/365669ss
Traditional Retailers, Not Pure E-Commerce Sellers, Led to Record Large Warehouse Leases
By Linda Moss CoStar News
Big warehouse leases hit a record last year, driven by not only e-commerce but traditional retailers as the economy rebounded and the boom in the U.S. industrial market forged ahead.
Companies committed to 57 warehouse leases of 1 million square feet or larger in 2021, a 19% increase from 2020. By market, Chicago led the list with the greatest number of the top 100 lease transactions, at 12, representing 12 million square feet.
The company looked at the increase in mega-warehouse leases as part of its analysis of the 100 largest U.S. industrial and logistics leases last year. It found among those 100 leases the average 2021 transaction size increased to 1,053,000 square feet, slightly above 2020’s average of 1,038,183 square feet.
The industrial market overall is so strong that the demand has been outstripping supply, with record-low vacancy rates and rents soaring. While e-commerce and juggernauts such as Amazon have fueled a lot of logistics demand in the past, CBRE instead found general retail and wholesale dominated 2021’s largest industrial leases. General retail sales have been rising after the peak of the pandemic in 2020, and they increased about 14% this holiday season, with shoppers returning to stores and malls. On top of that, even traditional retailers need more warehouse space to hold merchandise to fulfill their online orders.
“The trend of broad industrial demand by a variety of industries is expected to continue this year, as strong retail sales and the need to hold more inventory close to consumer markets is expected to increase the average transaction size. A possible headwind to this forecast is a dwindling supply of mega facilities, especially in core markets such as central New Jersey with little land available for development.”
The industry making up the largest share of the 100 biggest leases was general retail and wholesale, which recorded 44 transactions for 46.1 million square feet. That was a significant increase from 2020, when that sector had 32 such leases, representing 35 million square feet. E-commerce-only occupiers, last year’s leader, were second at 21 deals, for 27 million square feet, followed by food-and-beverage users at 15 deals, for 14.2 million square feet.
The brokerage’s study was notable in “that only one quarter of the deals were signed by e-commerce-only firms,” Adrian Ponsen, CoStar’s director of U.S. industrial analytics, said in an email.
“This is a sign that the recent surge in industrial leasing isn’t just about households shopping online more during the pandemic, it is also about financially healthy U.S. consumers that are spending more across a broad range of brick-and-mortar retail categories."
Pennsylvania Is a Leader
The Pennsylvania Interstate 78/81 corridor — an area that includes Lehigh Valley — was just behind Chicago in terms of the greatest number of the top 100 transactions, with 11. But that area of the Keystone State racked up the most square feet, at 12.4 million.
“One thing that stands out from the report is that thanks to its optimal location within a half day’s drive of the largest cluster of purchasing power in the U.S., Pennsylvania’s I-78/I-81 corridor continues to garner an outsized share of leases. It registered a comparable number of top 100 leases to what Chicago and Dallas-Fort Worth tallied, despite having an industrial inventory that is only about two-thirds the size of those other major markets.”
Scranton, Lehigh Valley and Harrisburg are the major logistics hubs on Interstates 78 and 81, “but many smaller ones are popping up along those highways,” according to Ponsen.
As industrial space has tightened in north and central Jersey, developers have been going over the border to Pennsylvania to build massive distribution hubs. Land is more available and cheaper there than in the Garden State, driving a surge in construction.
The company also found that California’s Inland Empire posted 10 large transactions. And Greenville-Spartanburg, South Carolina, a fast-growing Southeast market, made the top 10 for the first time, according to the brokerage.
The complete list of the top leading markets in terms of warehouse leases, by number of transactions and square feet, is:
- Chicago, 12 leases, 12 million square feet.
- Pennsylvania’s Interstate 78/81 Corridor, 11 leases, 12.4 million square feet.
- California's Inland Empire, 10 leases, 10.2 million square feet.
- Dallas-Fort Worth, nine leases, 8.6 million square feet.
- Atlanta, eight leases, 8.4 million square feet.
- Indianapolis, six leases, 5.5 million square feet.
- Phoenix, five leases, 6 million square feet.
- Columbus, Ohio, five leases, 5 million square feet.
- Central Jersey, five leases, 4.6 million square feet.
- Greenville-Spartanburg, South Carolina, three leases, 2.7 million square feet.
