2017 MID-YEAR GREATER PHILADELPHIA OFFICE MARKET REPORT AND OUTLOOK
CONTENTS
2
EXECUTIVE SUMMARY
Page 1
PHILADELPHIA
Page 2
SUBURBAN PHILADELPHIA
Page 14
VACANCY & RENTAL RATES
Page 24
COMPANY NEWS
Page 26
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GREATER PHILADELPHIA IS AN 11-COUNTY NEIGHBORHOOD THAT OFFERS A WELL-EDUCATED WORKFORCE, EASE OF ACCESS, AND A MORE COST-EFFICIENT ENVIRONMENT. COMBINE THESE FEATURES WITH OUR SPIRIT OF INNOVATION AND COLLABORATION, AND YOU’LL DISCOVER A GREAT PLACE TO DO BUSINESS.
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SELECT GREATER PHILADELPHIA COUNCIL SELECTGREATERPHL.COM
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EXECUTIVE SUMMARY Rental Rate
Vacancy Rate
$40.00
25.00%
$35.00
20.00%
$30.00 $25.00
15.00%
$20.00 10.00%
$15.00 $10.00
5.00%
$5.00 $0.00
0.00%
PHILADELPHIA
SUBURBS Select Lease Transactions
Tenant
Building
Type
Tenant
Building
Type
225,000
1500 Market
Renewal
Sparks Exhibits
115,200
3800 Marshall Lane
Renewal
RELX Group
80,407
4 Penn Center
Renewal
Radical Inc
103,334
935 First Avenue
Renewal
Spark Therapeutics
50,000
FMC Tower
New
Ashfield Healthcare
82,130
1100 Virginia Drive
New
Tierney Commnications
31,214
1700 Market
New
Envestnet Inc.
37,088
1000 Chesterbrook Blvd
Renewal/ Expansion
Vanguard
16,000
2300 Chestnut
New
Holy Redeemer
36,000
201 Veterans Way
New
PNC Bank
Size (SF)
Select Lease Transactions
Select Building Sales Building Shops at Schmidts Complex Wanamaker Building Three Parkway
Size (SF)
Select Building Sales
Sale Price
Price /SF
Building
92,647
$31.5 M
$340
Corsair I
1.3 M
$114 M
$139
$95 M
169
561,631
Size (SF) 123,000
Price /SF
$24 M
$195
80,263
$15.25 M
$190
Valley Creek Corporate Center
259,163
$45.3 M
$175
Horizon Corporate Center II
214,679
$37.5 M
$175.0
220 Renaissance Blvd.
184,118
$30.2 M
$171
Tenants in the Market
Size (SF)
Submarket
Tenant
PREIT
50,000 Center City
John Templeton Foundation
Galvanize
35,000 Center City
Undisclosed Tenant
Midspace
25,000 Center City
Greater Philadelphia Association of Realtors
Sale Price
468 & 486 Thomas Jones Way*
Tenants in the Market Tenant
Size (SF)
2,500
Center City
Undisclosed Tenant
Size (SF)
Submarket
30,000-40,000 Conshohocken 250,000
Chester/Delaware County
100,000 - Route 202 corridor (King 120,000 of Prussia to Malvern)
Microsoft
50,000
Malvern
Southco
50,000
Chester/Delaware County
* TRANSACTION REPRESENTED BY SSH REAL ESTATE 1
PHILADELPHIA OUTLOOK
RENTAL RATES At the end of second quarter 2017, the average asking rate for the Philadelphia CBD was $29.39. This represents a positive increase of 4.8% from Q2 2016, when the average asking rate was $28.03. With the recent opening of the FMC Tower and 1100 Ludlow Street, both University City and Market East submarkets have exhibited strong Class A rental rates of $44.25 and $30.90, respectively. In SSH’s 2016 Year End Market Report, the Class A rental rate at Market East was on par with that of Market West. However, at end of Q2 2017, Market East’s Class A rental rate exceeded that of Market Street West.
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VACANCY At the end of second quarter 2017, the average vacancy rate in the Philadelphia CBD was 10.08%, compared to 9.96% at end of Q2 2016. This slight increase is due to an influx of newly delivered buildings in 2016 and first half of 2017. As more and more companies and people move into Center City the long term average CBD vacancy rate will likely decrease.
INVESTMENT SALES Investment sales activity in Center City has slowed in the first half of 2017 compared to the record setting sales that took place from 2015 through mid-2016. As mentioned in the previous market report, many of Philadelphia Central Business District’s major office buildings have traded in the past five years, and building owners have been focused more on implementing value-add strategies than on selling. Many of the transactions in Center City involve landlords who own smaller investment properties.
SOLD TIER REIT Inc. sold the 1.3 million SF Wanamaker building, located at 100 Penn Square East, to Rubenstein Partners for $114 million, or approximately $139 PSF. In another transaction, TIER REIT sold Three Parkway, located at 3 Benjamin Franklin Parkway, to MRP Realty for $95 million or approximately $169 PSF. Tower Investments Inc. sold the Shops at Schmidts retail complex in Northern Liberties to the Sterling Organization, a Palm Beach, Floridabased real estate firm, for $31.5 million or approximately $340 PSF.
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NEW OFFICE DEVELOPMENTS 1800 Arch Street
Brickstone purchased The Hale Building (1326 Chestnut Street) which was a vacant building in 2015 for $5 million. Renovations are currently under way, and it has been announced that Spaces, a co-working group, will occupy floors three to eight.
The Hale Building 4
While The Hale Building is one of the renovations currently under way in Philadelphia, there are other major projects that are poised to bring new and/or renovated space to the market. 2400 Market Street (previously home to Marketplace Design Center) – Construction has begun on this property, with an expected completion date in the first quarter of 2018. Aramark already signed a 300,000 SF lease and will relocate to its new location in 2018.
One Franklin Tower (200 N 16th Street) - PMC Property Group is redeveloping the building into a mixed-use property that will include 209,372 SF of renovated office space and 306 apartments.
Philadelphia Art Museum
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UNIVERSITY CITY
N Broad St
Vine St Expy
INDEPENDENCE HALL
Pennsylvania Convention Center
Race St
Suburban Station
Arch St
30th Street Station
Jefferson Station
City Hall
John F Kennedy Blvd
Independence Mall
Market St
SOUTH BROAD
30th St
Chestnut St
MARKET STREET EAST
Walnut St Locust St
Pennsylvania Hospital
Rittenhouse Square
Washington Square
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2nd St
3rd St
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13th St
15th St
16th St
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18th St
19th St
20th St
21st St
22nd St
24th St
23rd St
Comcast Technology Center - a 1.5 million SF office tower at 1800 Arch Street will have 1.3 million square feet of office space. The building will have Comcast as the only tenant and a 222 room Four Seasons Hotel on the top of the building.
1300 Market Street - Oliver Tyrone Pulver Corp., a West Conshohocken-based developer, is under contract to acquire the vacant lot at 13th and Market Street. The developer plans to construct an 840,000 SF, 38-story office building but is seeking to pre-lease a significant portion of the building before breaking ground on the property.
21% OF ALL LEASING ACTIVITY IN 2015 AND 2016 (1.1 MILLION SQUARE FEET) WAS BY FIRMS MOVING IN FROM OUTSIDE THE CITY.
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25th St
Spruce St
2017 STATE OF CENTER CITY PHILADELPHIA CENTER CITY DISTRICT
5
MARKET WEST
The City of Philadelphia has agreed to purchase 400 N. Broad and the parking garage at 1501 Callowhill Street for its police department and other law related agencies. The deal will cost approximately $288 million, which includes a total rehabilitation of the 500,000 SF building, a leaseto-purchase agreement with owner Bart Blatstein, and the cost of redeveloping the property. Mr. Blatstein purchased the building and the parking garage in 2011 for $22.65 million with the goal of turning the property into a casino complex, which did not come to fruition. The lease with the City takes effect when financing is completed, and the City will purchase the complex five years after the police department takes occupancy in 2020. The police department will relocate from three locations: the Roundhouse at 750 Race Street, 321 S. University Avenue, and 235 N. 11th Street.
400 N. Broad
THE DEAL WILL COST APPROXIMATELY $288 MILLION, WHICH INCLUDES A TOTAL REHABILITATION OF THE 500,000 SF BUILDING. 6
Two law firms (Diamond, Polsky & Bauer and Alexander Pelli) renewed their combined 7,170 SF lease at 1608 Walnut Street. In the same building, the dental practice of William A. Dodd renewed its 1,935 SF lease on the 16th floor. The Philadelphia Foundation signed a 12-year lease on 10,660 SF at 1835 Market Street and will relocate from 1234 Market Street. Investment advisor Glenmede and JP Morgan each renewed their leases of 92,352 SF and 30,837 SF leases respectively at 1650 Market Street. Tierney Communications signed a 31,214 SF lease at 1700 Market Street. Elsevier renewed its 79,806 SF lease at 1600 JFK Boulevard. The Arden Group Inc. renewed its 14,330 SF lease at 1635 Market Street. PNC Bank renewed its 225,000 SF lease at 1500 Market Street. RELX Group, an information and analytics firm, renewed its 80,407 SF lease at 4 Penn Center.
1500 Market Street Vanguard signed a 10-year lease on two floors at 2300 Chestnut Street. The mutual fund giant will occupy 16,000 SF and will backfill space being vacated by a long time tenant. The GSA signed a four-year, 38,644 SF lease at 1601 Market Street. Convene, a co-working group, is expanding its space in the United Plaza office building (30 S. 17th Street) by an additional floor, bringing its total occupancy from 15,000 SF to 45,000 SF. Law firm Berger & Montague signed a 45,000 SF lease at 1818 Market Street. T&M Associates, an environmental and engineering firm, leased 9,608 SF at 1700 Market Street. As part of its strategic plan to seize on growth opportunities in the region, the New Jersey-based firm is expanding to accommodate growth.
4 Penn Center
7
MARKET EAST
The owners of East Market – a group consisting of National Real Estate Advisors, SSH Real Estate, Young Capital, and Joss Realty Partners – are in the final phase of constructing the 1100 Market Street building. Upon completion, the 1100 block of Market Street will include retail tenants such as Wawa, TJ Maxx, City Fitness, and Iron Hill Brewery. In addition to the retail space, it will deliver 322 new apartments and underground parking. Next door at 1100 Ludlow Street, the owners of East Market have signed leases with tenants such as Mom’s Organic, The Design Center, and Bohlin Cywinski Jackson. All the tenants are either in the process of moving in or have already moved in.
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STRONG FUNDAMENTALS ARE ALSO DRIVING NEW OFFICE DEVELOPMENT, WITH SIX COMMERCIAL PROJECTS IN VARIOUS STAGES OF DEVELOPMENT THAT WILL ADD 2.8 MILLION SF AND REPRESENT A $2.1 BILLION INVESTMENT DOWNTOWN.
2017 STATE OF CENTER CITY PHILADELPHIA CENTER CITY DISTRICT 8
As phase one of the East Market project nears completion, the owners have begun planning for phase two, which will consist of the construction of a second, taller residential tower at 1199 Ludlow. A $57 million construction loan has been secured to begin construction of a 20-story, 240unit tower. Designed by Morris Adjimi and BLT Architects, this new building will offer fewer 1- and 2-bedroom units than its shorter neighbor, and will instead offer larger units to attract established professionals and families. Philadelphia Water Department has increased its space at 1101 Market Street (Aramark Tower) from 87,145 SF to 110,103 SF. Spaces, a co-working group, has signed a lease to occupy the 3rd through 8th floors at The Hale Building, located at 1326 Chestnut Street. In 2015, Brickstone purchased the vacant building for $5 million or approximately $97 PSF.
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INDEPENDENCE HALL MRP Realty, the owner of the Bourse Building, will begin construction to transform the ground floor into a high-end “market hall�. The renovated space is planned for delivery in spring 2018 and upon completion will offer 32-34 stalls.
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New York- based Carlyle Development Group is putting the east tower portion of the Public Ledger Building (150 Independence Mall West) for sale as a possible residential or hospitality redevelopment project. The firm purchased the 533,945 SF property in 2015 with plans to reposition the bottom floor with restaurants and retail and update the office portion to attract tenants. It also received approval to add parking to the property.
SOUTH BROAD 219-225 S. Broad Street
New construction is underway at 2219-225 S. Broad Street for the Cambria Hotel. Upon completion, it will feature 14 stories and 222 rooms. 123 S. Broad* signed leases and renewals totaling approximately 30,000 SF. Deals include Philadelphia Trial Lawyers Association (2,500 SF), UPMC (5,414 SF) and Biz Equity (2,793 SF). 230 S. Broad* signed leases and renewals totaling approximately 8,500 SF. Deals include 1,800 SF with Bloomgarden & Ostroff Associates and 2,000 SF with Tag Strategies.
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SOUTH BROAD STREET HAS BEEN RECOGNIZED BY THE AMERICAN PLANNING ASSOCIATION AS ONE OF THE “GREAT PLACES OF AMERICA”. THE AVENUE’S RENOWNED PERFORMANCE VENUES, LUXURY HOTELS AND EATERIES, UNIVERSITIES, AND RESIDENCES ARE JUST A FEW REASONS WHY...
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* TRANSACTION REPRESENTED BY SSH REAL ESTATE
AVENUE OF THE ARTS WWW.AVENUEOFTHEARTS.ORG 11
UNIVERSITY CITY
The Philadelphia Planning Commission has approved zoning changes to an area where Brandywine Realty Trust and Drexel University plan their Schuylkill Yards development project. The project will consist of a $3.5 billion innovation neighborhood, with the first phase of the project to include a new park, renovations to the Bulletin Building, and a 700,000 SF tower.
Children’s Hospital of Philadelphia will vacate 226,000 SF at 3535 Market Street in early 2018 for its new facility by the South Street Bridge.
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Brandywine Realty Trust signed a 46,000 SF lease at FMC Tower, joining such tenants as Spark Therapeutics, FreedomPay Inc, FMC Corporation, University Of Pennsylvania, and NASDAQ. The building is now 97% leased.
THE NAVY YARD Jefferson Health signed a 70,000 SF lease at 3 Crescent Drive, a 95,261 SF building developed and owned by a joint venture between Liberty Property Trust and Synterra Partners. With this new space, Jefferson plans to attract patients across southeastern Pennsylvania and southern New Jersey.
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...A UNIQUE AND CENTRALLY LOCATED MODERN BUSINESS CAMPUS WITH CREATIVE, ONE-OF-A-KIND SPACES THAT CAN READILY ACCOMMODATE THE GROWTH AND EXPANSION OF NEW AND ESTABLISHED COMPANIES.
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THE NAVY YARD PHILADELPHIA WWW.NAVYYARD.ORG/REAL-ESTATE 13
SUBURBAN PHILADELPHIA OUTLOOK
RENTAL RATES At the end of Q2 2017, the average asking rental rate for Class A and B space in suburban Philadelphia was $25.77, an increase of 2.4% from the end of Q2 2016 when the average asking rate was $25.16. The submarkets of Radnor, Conshohocken and Bala Cynwyd exhibited the strongest average rental rates of $37.84, $33.46 and $32.03, respectively. VACANCY The overall vacancy rates for both Class A and B buildings in suburban Philadelphia is 11.07%. Submarkets near major transportation hubs, such as Radnor, West Chester, and Conshohocken exhibited the lowest vacancy rates. In a clear sign of tenants’ preference for new or renovated space and modern amenities, the Class A vacancy rate was 10.6%, whereas Class B was approximately 11.7%.
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INVESTMENT SALES
The King of Prussia Town Center
The suburban investment sales market for medium-sized deals is strong and steady within the $5 to $15 million range. The rise in federal interest rates has not hurt the demand for good real estate deals, and local and regional banks have been aggressively looking to issue loans to real estate investors. Due to a shortage of products for sale and plenty of investor demand, there are many who want to invest and deploy capital but are not able to find the right projects. VALLEY FORGE
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12
KING OF PRUSSIA
14 4
8
CONSHOHOCKEN
2
3
13 6 EXTON
MALVERN
WAYNE
5
FOR SALE
SOLD
1. Liberty Property Trust has listed for sale a portfolio of 14 buildings totaling 641,000 SF in King of Prussia. The real estate investment trust has been offloading properties that are not vital to its long term strategic plan. In 2016, Liberty sold 26 office and light industrial buildings totaling more than $1 million SF to Workspace Property Trust for approximately $969 million.
4. Apex Financial Advisors purchased Corsair I, a 123,000 SF building at 2701 Renaissance Blvd in King of Prussia, for $24 million or approximately $195 PSF.
2. A team consisting of Hayden Real Estate Investments, Miller Investment Management, and The Davis Companies has put Five Tower Bridge, a 222, 058 SF building, up for sale without an asking price. 3. Gladstone Commercial Corp has purchased Three Tower Bridge, a 60,000 SF office building in Conshohocken, from Oliver Tyrone Pulver for $15.45 million or approximately $258 PSF. The building is completely occupied by Jacobs Engineering Group Inc.
* TRANSACTION REPRESENTED BY SSH REAL ESTATE 16
5. A local 1031 investor purchased 468 & 486 Thomas Jones Way* in Exton, PA for $15.25 million or approximately $190 PSF. These two adjacent properties total 80,306 SF and are long-term net-leased to Collegium Charter School. 6. Valley Creek Corporate Center, a three-building office park totaling 259,163 SF in Exton, has been purchased by Pembroke IV of Bryn Mawr and Ten Capital Management of Cleveland, OH for $45.3 million, or approximately $175 PSF. 7. Leser Realty purchased Horizon Corporate Center II, a 214,679 SF building at 3800 Horizon Boulevard in Trevose, for $37.5 million or approximately $175 PSF.
HORSHAM
9 PENN VALLEY FEASTERVILLE TREVOSE WILLOW GROVE
JENKINTOWN
10 7
NORTHEAST PHILADELPHIA
BRISTOL
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Horizon Corporate Center II
NEW JERSEY CENTER CITY PHILADELPHIA
8. Zamir Equities of New York purchased the Triad Building, a 184,118 SF building at 2200 Renaissance Boulevard in King of Prussia, for $30.2 million (approximately $171 PSF) from Kairos Real Estate Partners. The building underwent renovation in 2014 and is currently 96 percent occupied. 9. MRA group finalized their purchase of 727 Norristown Road, a 133 acre former campus of Rohm & Haas Co. in Horsham, from Dow Chemical Company for $10 million or approximately $167 PSF. MRA has a three year, $60 million plan to redevelop and rebrand the property as Spring House Technology Park. 10. A partnership consisting of Red River Asset Management of New York, Advalurem Group and Lincoln Property Co. purchased 1150 Northbrook Drive, a 107,724 SF office building in Trevose, from Rubenstein Partners for $13.2 million or approximately $123 PSF. At the time of sale, the building was 85 percent occupied. The new owner plans to do minor renovations which should be completed by summer 2017.
11. Hudson Equities Management purchased Island View Crossing, a 183,000 SF office building at 1414 Radcliffe Street in Bristol, for $20 million or approximately $111 PSF. 12. Cedar Run Corporate Center, a 59,000 SF office complex at 901 E. 8th Ave in King of Prussia, sold for $6.1 million or approximately $103 PSF. 13. Westover Cos. purchased Devon Square, a two-building office complex consisting of 136,493 SF at 724 and 744 W. Lancaster Ave in Wayne, for $33.5 million or approximately $245 PSF. The property is located on 16 acres. 14. The King of Prussia Town Center was sold to a fund affiliated with CBRE for around $183 million. The newly built, 80,627 SF retail property situated between N. Gulph Road and East Swedesford Road was 87 percent leased at the time of sale.
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MALVERN / EXTON
Collegium Charter School purchased two buildings in Oaklands Corporate Center, in Exton, expanding their foot print to 389,579 SF of owned and leased space in the park. 150 Oaklands Boulevard was purchased for $16.85 million and 515 James Hance Court was purchased for $11.5 million. In a continuing effort to establish its K-12 school, Collegium has spent over $50 million on real estate in the Oaklands Corporate Center since 1999. In a separate deal involving Collegium, owner MIM-Hayden sold 468 and 486 Thomas Jones Way* (totaling 80,306 SF), two buildings occupied by Collegium, for an undisclosed price. The buyer was attracted by Collegium’s growth projections and steady rental streams. Sekisui Diagnostics and law firm Rosenthal Lurie & Broudy leased 2,467 SF and 2,755 SF, respectively, at Exton Corporate Center, an 80,135 SF property at 102 Pickering Way. PQ Corporation renewed 33,000 SF at 300 Lindenwood Drive, which is fully occupied by PQ.
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DP Partners of Exton purchased 10 Valley Stream Parkway, a 33,027 SF office building in Malvern, for $2.075 million. DaVita, a healthcare company, leased 15,991 SF at 2476 Swedesford Road in Malvern.
SIGNIFICANT REVITALIZATION SUCCESSES AND THAT SMALL-TOWN ATMOSPHERE ATTRACT BOTH YOUNG PROFESSIONALS LOOKING FOR A CONTEMPORARY FEEL AND FAMILIES IN SEARCH OF THEIR FOREVER HOME [IN MALVERN].
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CLASSIC TOWNS OF GREATER PHILADELPHIA WWW.CLASSICTOWNS.ORG/MALVERN 18
MAIN LINE
Four new leases totaling 94,100 SF were signed at Suburban Square in Ardmore. Among these, Lifetime Fitness took 78,636 SF and West Elm took 10,540 SF.
Cideon America signed a lease for 5,337 SF at 92 W. Lancaster Ave in Devon.
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KING OF PRUSSIA / CONSHOHOCKEN / RADNOR / NORRISTOWN
955 First Ave
KING OF PRUSSIA
7 12
CHESTERBROOK
6 9
WAYNE
1000 Chesterbrook Blvd.
1. CBRE Inc. relocated from Chesterbrook Corporate Center to a 25,735 SF space at 555 E. Lancaster Ave in Radnor. 2. In 2015, the University of Pennsylvania Health System purchased an 18.2-acre site at 145 King of Prussia Road in Radnor for an estimated $35 million from BioMed Realty Trust. Currently, Penn Medicine is in the preliminary planning stage of developing a medical office facility.
5. Kalmon Dolgin Affiliates Inc., owner of the 635,000 SF, fourbuilding Spring Mill Corporate Center, plans to spend $10 million to convert a former industrial building into 42,000 SF of new offices and 25,000 SF of amenities. 6. Envestnet Inc. renewed and expanded their lease to 37,088 SF at 1000 Chesterbrook Blvd in Berwyn.
3. Private school AIM Academy purchased 1200 River Road, a 71,000 SF building in Conshohocken, for $11.5 million.
7. Highway to Health is relocating this summer to their new headquarters at 955 First Ave, an 110,500 SF built-to-suit building in King of Prussia.
4. Keystone Property Group received zoning approval for their $100 million-plus, development plans for Sora West at 100 W. Elm Street in Conshohocken. The plans include over 400,000 SF of office space, a luxury hotel, retail, and a public plaza.
8. 709 Swedeland Road, previously GlaxoSmithKline’s “West Campus” in Upper Merion, was put under agreement. The property consists of 2.2 million SF of office, warehouse, and lab spaces.
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Spring Mill Corporate Center 11 10
NORRISTOWN
CONSHOHOCKEN
GULPH MILLS
8 4
5 110 W. Elm Street GLADWYNE
3 ROXBOROUGH
1
2
BRYN MAWR
9. Chesterbrook Corporate Center, which consists of several buildings, has increased its occupancy rate due to a number of signed leases. These tenants include Dell Boomi (40,000 SF), SEI Investments Inc. (37,000 SF), Harford Funds (75,000 SF), Eaglet Corp. (20,000 SF), Trevana Inc. (40,565 SF), J.G Wentworth (75,000 SF), and DecisionOne Corp (25,000 SF).
11. 320 E. Johnson Highway, an 18,010 SF retail center in Norristown, was sold at a bankruptcy auction for $1.6 million. It was 54 percent occupied at the time of the sale. 12. Ricoh USA Inc. renewed their 25,628 SF lease in Glenhardie Corporate Center, located at 1265 Drummers Lane in Wayne.
10. Montgomery County Adult Probation Services signed a full building lease for 23,373 SF at 408 Cherry Street in Norristown.
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THE BOROUGH OF CONSHOHOCKEN, “CONSHY” TO THE LOCALS, FEATURES ONE OF MONTCO’S MOST VIBRANT DOWNTOWNS...
VALLEY FORGE AND MONTGOMERY COUNTY WWW.VALLEYFORGE.ORG/TOWNS/CONSHOHOCKEN 21
PLYMOUTH MEETING / BLUE BELL Cotiviti Corporation, a payment provider for retail and healthcare companies, leased 86,621 SF at 785 Arbor Way, which is currently under a major renovation with expected completion date in early 2018. Three deals totaling approximately 65,000 SF were signed at 5 Sentry Park, a 133,000 SF office building owned by Keystone Property Group. Linde Engineering leased 33,200 SF, Physician Recommended Nutriceuticals leased 15,700 SF, and Veterinarian Recommended Solutions leased 15,700 SF. One Sentry, a nearly vacant 80,000 SF office building at 475 Sentry Parkway, was sold to a partnership consisting of Provco Real Estate, Flynn Co., and McHale Associates, for $2.56 million or $32 PSF. The group has an $8 million renovation plan for the building.
HORSHAM / WILLOW GROVE Telerx, a subsidiary of Merck & Co. Inc., relocated within Horsham to 410 Horsham Road, signing a 44,023 SF lease for eight years. The building had previously been vacant. Finance of America expanded their 32,000 SF space at 300 Welsh Road by leasing an additional 10,172 SF. Pet daycare Play Pet Resort signed an 8,000 SF lease at 1957 Pioneer Road in Huntingdon Valley. Endo Pharmaceuticals Inc. renewed their lease of 40,472 SF at 102 Rock Road.
FORT WASHINGTON / SPRINGHOUSE
LOWER BUCKS
Connexion Healthcare Oncology and Rare Disease leased 18,700 SF at 602 Office Center Drive.
Bottle supplier Premium Vials leased 13,200 SF at Riverside Industrial Complex, located at 7900 N. Radcliffe Street.
575 Pinetown Road, a 28,800 SF building that has been occupied by the U.S. Postal Service since 1998, has been purchased for $2.5 million or approximately $87 PSF. The purchaser was Mnop Inc., a real estate company based in Yardley.
Rotech Healthcare relocated from Warminster to occupy 8,100 SF at 3599 Marshall Lane in Bensalem.
Centura Capital purchased Hilton Garden Inn, a 94,861 SF hotel at 530 Pennsylvania Avenue in Fort Washington, for $22.5 million or approximately $237 PSF. Two leases totaling 158,578 SF were signed at 1100 Virginia Drive. The two deals involve Ashfield Healthcare (82,103 SF) and AON Insurance Services Inc. (76,475 SF). The latter deal with AON Insurance is a 12-year lease with a start date of October 2017.
Aris Pharmaceutical leased 5,000 SF at 2000 Hartel Street in Levittown. Access Security purchased 1025 Thomas Drive, a 20,000 SF industrial building in Warminster, for $1.2 million. Holy Redeemer moved into 36,000 SF at 201 Veterans Way in Warminster. Yardley Hospitality Holdings purchased Hampton Inn & Suites Newtown at 1000 Stone Hill Road for $10.7 million with plans to upgrade the property and extend the Hilton brand license. Sparks Exhibits renewed its 115,200 SF lease at 3800 Marshall Lane in Bensalem.
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BALA CYNWYD
5 Sentry Parkway East
Penn Real Estate is set to begin their $50 million, 11-acre mixed use development at the former Pencoyd Iron Works on the bank of the Schuykill River. This is part of a general move to reinvent this stretch of the river; within a mile of the site, developers are slated to spend $500 million on projects along the waterfront. A key factor in this area’s rebirth is the reopening of the Pencoyd Bridge, which connects Bala Cynwyd to Manayunk.
WEST CHESTER
DELAWARE COUNTY
Developer Eli Kahn acquired the former Rubenstein Office Supply & Furniture Store, which is a 70,000 SF building located at 250 E. Market Street.
Plans are underway for a highly anticipated mixed-use project at the former Granite Run Mall (1067 Baltimore Avenue). The project is set to bring higher-end stores and restaurants to the mall, as well as a 176-unit, four-story luxury apartment building. The project should be completed in fall 2018.
CHDA Management LLC* signed an 8,000 SF lease at 220 Willowbrook Lane.
Equus Capital Partners Ltd. announced that when the current lease for their headquarters at Center Square (1500 Market Street) expires in April 2018, they will move to a new 42,000 SF building at Ellis Preserve in Newtown Square. Burlington Stores sold 5202 Baltimore Pike, a 5.5 acre property in Springfield, to BET Investments for $7.4 million. * TRANSACTION REPRESENTED BY SSH REAL ESTATE 23
VACANCY & RENTAL RATES PHILADELPHIA Type
Inventory (SF)
Vacancy (%)
Avg. Asking Rent (PSF)
Market Street West
A and B
26,963,250
9.61%
$29.55
Market Street East
A and B
5,246,185
8.48%
$28.13
South Broad Street
A and B
2,863,179
11.34%
$26.30
Independence Hall
A and B
6,133,853
14.07%
$25.74
University City
A and B
4,283,103
8.42%
$37.19
Philadelphia CBD
A and B
45,489,570
10.08%
$29.39
Type
Inventory (SF)
Vacancy
Avg. Asking Rent (PSF)
A and B
1,095,449
5.57%
$33.14
Type
Inventory (SF)
Vacancy
Avg. Asking Rent (PSF)
A
21,707,887
9.84%
$30.74
B
5,255,363
8.68%
$24.68
A
2,663,256
6.67%
$30.90
B
2,582,929
10.34%
$25.29
A
2,714,407
10.52%
$29.25
B
3,419,446
16.90%
$22.96
A
2,547,165
10.78%
$44.25
B
1,735,938
4.94%
$26.82
A
29,632,715
9.69%
$31.78
B
15,856,855
10.79%
$24.93
Navy Yard
Market Street West Market Street East Independence Hall University City Philadelphia CBD
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SUBURBAN PHILADELPHIA Type
Inventory (SF)
Vacancy
Avg. Asking Rent (PSF)
Radnor
A and B
2,389,823
4.11%
$37.84
Main Line
A and B
2,088,661
9.37%
$29.19
Malvern | Exton
A and B
8,060,409
5.63%
$25.03
West Chester
A and B
2,288,581
4.62%
$23.99
Conshohocken
A and B
3,195,599
4.20%
$33.46
Norristown | Valley Forge
A and B
4,565,691
7.38%
$22.10
King of Prussia
A and B
6,360,098
13.81%
$26.64
Bala Cynwyd
A and B
3,363,975
9.15%
$32.03
Delaware County
A and B
10,241,496
8.64%
$23.81
Fort Washington | Springhouse
A and B
3,271,310
16.42%
$24.06
Lower Bucks County
A and B
6,776,422
22.11%
$22.45
Horsham | Willow Grove
A and B
4,105,725
9.36%
$24.30
Plymouth Meeting | Blue Bell
A and B
6,212,616
18.49%
$25.21
Suburban Philadelphia
A and B
62,920,406
11.07%
$25.77
Type
Inventory (SF)
Vacancy
Avg. Asking Rent (PSF)
A
1,954,073
5.03%
$38.92
B
435,750
0%
$33.00
A
608,776
13.28%
$30.40
B
1,479,885
7.75%
$28.69
A
6,136,040
5.11%
$25.18
B
1,924,369
7.30%
$24.55
A
699,228
2.06%
$25.84
B
1,589,353
5.74%
$23.17
A
2,684,526
4.51%
$34.31
B
511,073
2.61%
$28.98
A
2,380,607
6.30%
$23.56
B
2,185,084
8.54%
$20.50
A
4,065,097
9.82%
$28.98
B
2,295,001
20.89%
$22.50
A
2,259,067
10.48%
$32.99
B
1,104,908
6.44%
$30.07
A
3,978,692
13.43%
$27.38
B
6,262,804
5.59%
$21.54
A
1,607,241
23.86%
$23.84
B
1,664,069
9.24%
$24.27
A
2,932,665
22.94%
$25.55
B
3,843,757
21.48%
$20.09
A
2,271,324
10.01%
$23.39
B
1,834,401
8.54%
$23.98
A
3,602,265
13.66%
$26.59
B
2,610,351
25.14%
$23.30
A
35,179,601
10.59%
$27.82
B
27,740,805
11.68%
$23.17
Radnor Main Line Malvern | Exton West Chester Conshohocken Norristown | Valley Forge King of Prussia Bala Cynwyd Delaware County Fort Washington | Springhouse Lower Bucks County Horsham | Willow Grove Plymouth Meeting | Blue Bell Suburban Philadelphia
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ABOUT SSH REAL ESTATE SSH Real Estate is a 60-person, full service real estate company serving the Greater Philadelphia Region. Since the firm’s founding in 1952, it has evolved from a one person operation focusing on leasing storefronts and manufacturing spaces to one of the largest privately held commercial real estate companies in the region with services in brokerage, property management and investments.
About
Brokerage The Brokerage Division consists of a skilled team averaging over 20 years of experience, representing a full range of small to large private, public, and non-profit tenants, landlords and investors. SSH is an established leader in the Philadelphia region in Tenant Representation, Landlord Representation and Investment Brokerage.
Propery Management Our success derives from treating client’s real estate as our own, scaling costs and running buildings efficiently to maximize savings. We have earned a reputation among landlords as being customer-focused professionals adept at attracting and retaining tenants. Our team comprises of a broad base of professionals including certified property managers, certified public accountants, and professionals skilled in financial and database management.
Investments The Investment division along with its partners has acquired a portfolio of 14 buildings in the Mid-Atlantic Region totaling 2.3 million square feet, and valued at over $350 million. SSH has consistently produced superior returns for our investors.
CENTER CITY OFFICE 123 South Broad Street • 8th Floor • Philadelphia, PA 19109 • (215) 893-3000
SUBURBAN OFFICE (610) 995-1010
Jeffrey R. Seligsohn, SIOR, Partner • (215) 825-1500 Peter C. Soens, Partner • (215) 825-1510 Gregory B. Muller, COO & Partner • (215) 825-1513
Brian D. Mears, CCIM, Partner • (610) 601-4202
COMPANY NEWS NEW HIRES
BROKERAGE
Craig Brunner, Accounting Craig joins SSH as an accountant with more than 25+ years of experience in the real estate property management business. He has worked as a Controller and Staff Accountant with various commercial and residential real estate property management companies.
Steve Promislo represented 123 S. Broad and signed approximately 30,000 SF of new leases and renewals.
Crystal Coles, Accounts Payable Crystal joins SSH with prior work experience in both corporate and non-profit sectors. Crystal completed her undergraduate studies at Temple University and later an MBA from DeVry University.
Eric Muller represented 1100 Ludlow and leased 1,952 SF to Colonial Electric.
Bobbi Dautrich, Accounting Bobbie Dautrich joins SSH as an accountant with over 20 years of real estate accounting experience in land development, construction and management of student housing, residential and commercial properties in Philadelphia and Washington, D.C. Zanna Hall, Property Management A graduate of West Virginia University, Zanna joins SSH with prior experience at Colliers and JLL. She works closely with Jeff Engel on the property management of East Market, 919 Walnut Street, the White Building, and One Bala.
PROPERTY MANAGEMENT SSH has been appointed to manage the following buildings: • 3409 West Chester Pike in Newtown Square • 1234 West Chester Pike in West Chester • 1025 Andrew Drive in West Chester
Brian Hitchings represented 230 S. Broad and signed approximately 8,500 SF of new leases and renewals.
Brian Kash represented CDHA Management with the relocation of their corporate headquarters to 200 Willowbrook Lane in West Chester. CDHA Management leased 8,000 SF for a 7 Year term. Don Grimes was appointed the Exclusive Broker to lease or sell 52 S. 3rd Street in Yeadon, PA, which is a 47,000 SF Industrial building. Kevin Hagenberg was appointed the Exclusively Broker to represent ownership of 3 Creek Parkway, an 18,000 SF office building available for lease or sale in Boothwyn, PA. Within one month of hiring SSH, Kevin Hagenberg successfully leased 50% of the building to Pentec Health Inc. Don Grimes and Brian Mears represented Priority Express with a 33,000 sublease in Carlstadt, NJ. Brian Mears has been appointed Exclusive Broker to represent Majestic Wine & Spirits with their 20,000 SF distribution center requirement.
INVESTMENT SALES The SSH Investment team, led by Dan Mayock, represented the sellers in the sale of the below: • 3409 West Chester Pike in Newtown Square • 1234 West Chester Pike in West Chester • 1025 Andrew Drive in West Chester • 468 and 486 Thomas Jones Way
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