Thursday, November 30, 2023
Endurance sells 5-building industrial portfolio; NoLibs project secures $55.7M construction loan
By Paul Schwedelson – Reporter, Philadelphia Business Journal
A roundup of recent real estate news and transactions across the Philadelphia region:
$17 million
Camden-based logistics company NFI Industries paid $17 million for a 330,000-square-foot industrial building at 1515 Burnt Mill Road in Cherry Hill, according to Camden County property records.
NFI bought the property from Burnt Mill Group LLC, which acquired the property in 2009 for $2.3 million from Vineland Construction Co.
The property is near I-295 off Haddonfield-Berlin Road.
The Class B industrial property was built in 1960. In 2020, Devereux Advanced Behavioral Health New Jersey leased 26,500 square feet in the building.
$55.7 million
Summit, New Jersey-based Saxum Real Estate closed on a construction loan for $55.7 million for the second phase of its 466-unit development in the Northern Liberties section of Philadelphia. Phase 2, which will include 187 luxury apartments, is expected to cost $96 million with funding from a combination of equity and the construction loan.
The project site is located at 700-30 N. Delaware Ave., near the Delaware River waterfront in a part of Northern Liberties booming with new development.
Corebridge Financial, previously known as AIG Life & Retirement, provided the construction financing. Corebridge also provided a $77.5 million construction loan for the project’s first phase, which features a seven-story, 279-unit building at 711-35 N. Front St.
339,136 SF
Boston-based Taurus Investment Holdings bought a portfolio of five Class B industrial buildings in South Jersey from Wayne-based Endurance Real Estate Group. The portfolio totals 339,136 square feet and the five buildings are fully leased to 22 tenants.
Taurus declined to disclose the purchase price.
The properties are:
600 Delran Parkway, Delran (87,827 square feet)
601 Delran Parkway, Delran (57,930)
603 Heron Drive, Swedesboro (43,250)
614 Heron Drive, Swedesboro (46,888)
1 Killdeer Court, Swedesboro (103,241)
Taurus plans to build a 64,500-square-foot industrial building on a parking lot adjacent to the property at 600 Delran Parkway. The firm also plans to install rooftop solar panels on the new building and four of the existing buildings, reducing the portfolio’s annual carbon emissions by more than 300%.
Taurus’ nationwide industrial footprint includes more than 18 million square feet across 12 states.
Full story: https://tinyurl.com/32pmbc8y
Wednesday, November 29, 2023
Comparing Philadelphia’s Office Performance with Other Major US Markets
In the face of a nationwide, three-year trend of companies reducing the overall size of their offices, the Philadelphia metropolitan area has been weathering the storm better than several other major U.S. office markets. While Philadelphia saw nearly 2 million square feet of space returned to the office leasing market in the past year, nine of the 15 largest office metropolitan areas experienced even higher levels of unwanted office space as a percent of the total inventory returned by office occupiers.
This snapshot analysis looks at absorption rates, which is the pace at which occupied space changes over time. The annual absorption rate, calculated by dividing a market’s 12-month net absorption by its total office space, provides another perspective on leasing performance while accounting for market size differences. For instance, an absorption loss of 1 million square feet has very different implications for an office market the size of New York City, which has 980 million square feet, compared to Philadelphia's 330 million square feet of office space.
As of the fourth quarter, the U.S. recorded nearly 62 million square feet in negative absorption, resulting in an annual absorption rate of negative 0.7%. Philadelphia's absorption rate of negative 0.6% aligns closely with the national average. This reflects a broader trend where Philadelphia closely follows national office performance. The U.S. and Philadelphia each experienced a 430-basis-point increase in office availability since early 2020, even though Philadelphia's availability rate has historically held lower than the national average.
Meanwhile, nine of the 15 largest U.S. metropolitan areas logged even larger negative annual absorption rates than the national annual average.
San Francisco led the nation with a negative absorption of 9.3 million square feet, reflecting a negative 4.7% absorption rate, followed by Seattle which posted a negative 1.9% absorption rate and Denver at negative 1.5%. In contrast, Houston was the only metropolitan area to experience positive absorption at 900,000 square feet, equating to a 0.3% absorption rate. Minneapolis and Washington D.C., both logged a negative 0.5% rate, on par with Philadelphia's.
These figures only provide a snapshot of the past 12 months, so it's essential to recognize that conditions affecting the office market will continue to evolve over the next year. With more office leases set to expire throughout the country, rankings based on recent absorption rates may shift considerably across these metropolitan areas.
Each region’s ability to adapt to these changes will continue to be influenced by its distinctive economic composition, regional dynamics and local public-private leadership.
Monday, November 27, 2023
Monday, November 20, 2023
5-building Bala Plaza complex sells for $185M; buyer to move forward with redevelopment plan
By Paul Schwedelson – Reporter, Philadelphia Business Journal
FLD Group and the Adjmi family have acquired the Bala Plaza office complex from Tishman Speyer for $185 million and will move forward with an already approved redevelopment plan for the Bala Cynwyd property.
The transaction is one of the largest multi-tenant suburban office sales in the country this year, according to the buyers.
Bala Plaza’s 1.1 million leasable square feet of space is spread across four towers — One Bala Plaza, Two Bala Plaza, Three Bala Plaza East and Three Bala Plaza West — as well as a freestanding Saks Fifth Avenue department store off City Avenue near Monument Road, less than a mile from I-76.
New York-based Tishman Speyer acquired the property in 2004 from GIC Real Estate as part of a $1.85 billion deal for a larger 7.3 million-square-foot portfolio that included 12 office buildings in eight cities.
The buyers plan to follow through on redevelopment plans for the 61.4-acre Bala Plaza site previously put forth by Tishman Speyer. The master plan, which was recently approved by Lower Merion Township, features 2.1 million square feet of new development with multiple retail sites, a 168-room hotel, approximately 750,000 square feet of office space, and 750 residential units.
“The ownership group is committed to being thoughtful stewards of one of the region’s most prestigious assets and sees tremendous value in the future of Bala Plaza and of Bala Cynwyd as a whole,” FLD Group and the Adjmi family said in a statement to the Philadelphia Business Journal. “They are confident in their ability to execute the vision to create an experiential live work play campus.”
Eatontown, New Jersey-based FLD Group also owns an office building at 150 Monument Road, just north of the Bala Plaza property, and has increased its Philadelphia market presence in recent years. It bought 45 Liberty Blvd., a 136,977-square-foot office property in Malvern's Great Valley Corporate Center, for $36.3 million in 2021. Two years prior, FLD Group paid $15.5 million for 100 Deerfield Lane, a 91,190-square-foot office building also located in the Great Valley Corporate Center.
Full story: https://tinyurl.com/2s44csj3
CHOP continues King of Prussia expansion with $24.5M office building purchase
By John George and Paul Schwedelson – Philadelphia Business Journal
Children’s Hospital of Philadelphia is expanding its King of Prussia footprint, paying $24.5 million for a 97,290-square-foot office building at 460 N. Gulph Road.
The building is across the street from CHOP’s nearly two-year-old Middleman Family Pavilion and its adjacent specialty care center.
CHOP bought the property from UGI Corp., which acquired the 39-year-old building in 1993 for $9.1 million. In May the Business Journal reported UGI Corp. (NYSE: UGI), an oil and natural gas company, was moving its headquarters a half-mile west from 460 N. Gulph Road to 500 N. Gulph Road. The move represented the flight-to-quality trend as the Brandywine Realty Trust-owned 500 N. Gulph Road building underwent a $29.7 million renovation in 2019.
CHOP's plans for the five-story building at 460 N. Gulph Road are unclear.
“We acquired the property as part of our facilities roadmap to ensure access to high-quality, convenient care for our patients when and where they need it,” a CHOP spokesperson said in a statement. "While we do not have specific use plans to share at this time, our focus has been on operationalizing and maintaining the property as an important part of our footprint.”
CHOP has had a presence in King Prussia since the 1990s, initially with two care sites near the King of Prussia Mall.
In 2015, CHOP opened a 135,000-square-foot specialty care and ambulatory surgical center on Goddard Boulevard, at a cost of $65 million, as a replacement facility for its two pediatric care sites a few miles away.
The center features 68 exam rooms, two operating rooms, three therapy gyms and an urgent care center. It is home to physicians in more than 30 medical and surgical subspecialties including cardiology, audiology, gastroenterology, hematology, oncology, otolaryngology, and neurology.
The expanded space in the new center was designed to allow CHOP to provide care to 400 patients a day, up from 300 a day at the sites it replaced.
Full story: https://tinyurl.com/2p9957d5
