Office Sector News
CBD Vacancy Rate Well Below Suburban’s
Cushman & Wakefield's count of 40,298,290 square feet (SF) of office space in the central business district (CBD) shows a vacancy rate of 9.4% at year-end 2015 (down from 11.0% at the end of 2014) and an average asking rent of $28.16, according to the company’s Marketbeat Office Snapshot Q4 2015. East of Broad Street, there was 128,934 SF of positive absorption for the year offsetting the negative absorption of 92,671 SF west of Broad, for an overall positive absorption in the CBD of 36,263 SF.
The same report noted 88,236,326 SF of office space in the suburbs, with a 14.8% vacancy rate, average asking rent of $24.46, and 452,676 SF of positive absorption.
To read the report, please go to cushwk.co/1m8VUV7 [PDF].
IRR: Philadelphia in Expansion Phase
Integra Realty Resources’ Viewpoint offers analyses of five core property types and presents charts showing where cities fall in four possible stages: Expansion, Hypersupply, Recession and Recovery.
In all five types, Philadelphia falls in the Expansion phase, defined as decreasing vacancy rates, moderate/high new construction, high absorption, moderate/high employment growth, medium/high rental rate growth.
The CBD Office Market and Hospitality Market are in the middle of the Expansion cycle, while Retail and Industrial are in the early stage of Expansion, with Multifamily in the final phase of Expansion.
To read the report, please go to bit.ly/1o00uqf (requires registration).
Curalate Raises $27.5 Million
Curalate, headquartered at 2401 Walnut Street and one of Center City’s fastest-growing start-ups, just raised $27.5 million more in venture funding through a Series C round, bringing its financial backing to $40 million, the Philadelphia Business Journal reported on February 2. Curalate analyzes images across social media networks in order to improve brand recognition and sales.
Just a few years ago, Curalate had only five employees located in coworking space and now has more than 100 people working for the company in offices in Philadelphia, New York and Seattle.
To read the article, please go to bit.ly/1UKjhQX.
PPA and Brickstone in Talks for Project on Chestnut
The Philadelphia Parking Authority (PPA) board has authorized ongoing discussions with Brickstone Realty to replace its worn, 450-space garage at 10th and Ludlow Streets with a pair of new mixed-use towers, PlanPhilly reported on February 2.
The PPA property includes 60 feet of long-vacant, street-level retail at 1023-29 Chestnut Street; Brickstone owns 1021 Chestnut Street. The proposed development would include a 650-lot parking garage, first-floor retail, and mix of residential and commercial space above. PPA would run the garage, and Brickstone would manage the commercial and retail spaces. The lots are zoned CMX-5, which would allow for high-density, mixed-use development.
To read the article, please go to bit.ly/1P78qyX.
Bourse to be Renovated
MRP Realty of Washington, D.C., has acquired a controlling interest in the Bourse and, in partnership with current owner, the Kaiserman Company, will spend $40 million to renovate the 10-story building along with 325 Chestnut Street and 400 Market Street, as well as the Bourse parking structure and movie theater, The Philadelphia Inquirer reported on February 1.
BLT Architects is designing the Bourse’s renovation, which will accommodate higher-end dining and cocktails on the ground floor, with revamped offices on the upper floors. All three buildings will get new lobbies, roof decks, gyms, and other amenities.
To read the article, please go to bit.ly/1WZUTMB.
Leasing Begins at 1919 Market Street
LCOR and Brandywine Realty Trust, partners in the development of 1919 Market Street, announced on January 27 that they have begun leasing the 321 units in the 28-story, mixed-use building with 24,000 square feet of commercial space, now 100% leased. Units are available for move-in beginning in March 2016.
Amenities include a state-of-the-art fitness center, clubroom, outdoor roof entertainment center, infinity pool, wine-tasting room with available wine storage, bike storage and more.
To read the press release, please go to prn.to/1KVd6nA.
Blatstein Proposes Riverfront Development
Developer Bart Blatstein has announced plans for 21 acres he owns along the Delaware River in South Philadelphia, where the Foxwoods Casino had been proposed. The plans would include a shopping plaza, boxy retail stores, gas station, 670 apartment and townhouse units, and parkland, The Philadelphia Inquirer reported on February 4.
The parcel along Columbus Boulevard is part of the Central Delaware Riverfront Overlay District, created in 2013, which prohibits such development, with street-adjacent parking lots and gas stations specifically off-limits, the article noted. The project would require a variety of zoning exceptions.
To see an illustration of the plan, please go to bit.ly/20Jv05M [PDF]. To read the article, please go to bit.ly/20tUAz9.
Eds and Meds News
Report Documents City’s Substantial Support of Schools
A new report from Temple University’s Center on Regional Politics suggests that Philadelphia provides substantial financial support for schools, and residents are carrying a disproportionately heavy tax burden in a city with 26% poverty.
The study notes that Philadelphia’s contribution to public schools grew by 27.9% between 2011 and 2014, while the average increase in districts across the state averaged 7%.
Nationally, Philadelphia ranks high in three important measures of local spending on education: dollars per capita spent on schools (10th); dollars per $1,000 income spent on schools (5th); and percentage of total local spending that goes to schools (8th).
To read the report, How Well Does Philadelphia Support Its Public Schools? A New Perspective, please go to bit.ly/23HEcdg.
Two City Schools in Top 50 for SAT Scores
The Pennsylvania Department of Education has published the average composite SAT test scores for public high schools statewide, and Philadelphia has only two high schools in the top 50, the Philadelphia Business Journal reported on February 4.
Julia R. Masterman High School ranked first, while Central High School was 25th.
Each SAT test has a reading, math and writing portion with scores ranging from 200 through 800, which are combined for the composite score. Data are for tests taken in 2015.
To read the article, please go to bit.ly/1X6rD6N.
Hotel Occupancy Rate High in 2015
As of December, Center City hotel occupancy was on track to hit 77.4% in 2015, up from 75.5% in 2014 (final data aren’t in yet), with travelers having booked an estimated 3.1 million rooms, giving Center City the highest hotel occupancy rate since 1949, PlanPhilly reported on January 21.
One-day leisure trips still account for the largest segment of tourism, but overnight trips are the fastest growing, rising from 12% to 17% in the last 10 years, while business-trip numbers remain flat, the article noted.
Currently, there are 11 major hotel projects either under construction or in the development pipeline in Center City.
To read the article, please go to bit.ly/1UDUJZL.
PHLCVB Reports Record Bookings
The Philadelphia Convention & Visitors Bureau reported 2015 as its highest booking year ever, with 856,663 room nights secured for future years, up 1.2 % from 2014, the Philadelphia Business Journal reported on Friday. The bookings are estimated to generate more than $1.1 billion in economic impact, the article noted.
Approximately 75% of the room nights booked are related to meetings and conventions that will take place at the Pennsylvania Convention Center, and 69% of the future conventions secured in 2015 are returning customers.
To read the article, please go to bit.ly/1Q05986.
Among the bookings, the National Medical Association will hold its convention in Philadelphia in 2017, from July 27 to August 3, and expects 3,500 attendees, the Philadelphia Business Journal reported on January 28.
The group cited the city’s easy walkability, good hotel options and the changes made in the work rules at the Pennsylvania Convention Center in making their decision to return to the city after 14 years, the article noted.
To read the article, please go to bit.ly/1PZptAs.
CBRE Reports on Airbnb
During the 12-month period ending September 2015, the number of U.S. Airbnb units considered active for at least one day or more exceeded 420,000, according to a new report, The Sharing Economy Checks In: An Analysis of Airbnb in the United States, from CBRE.
With an average rate of $148.42, the Airbnb rate was higher than the average hotel night of $119.11. Among the reasons for Airbnb’s higher rate were the amenities found at some Airbnb units: 90% offered access to a kitchen, 68% offered access to a washing machine, 67% had free parking, and 12% offered breakfast.
Philadelphia ranked 11th in the U.S., with 5.8% of available rooms offered by Airbnb, but showed a 185% growth in number of active rooms. New York was first, with 19.5% of available lodging rooms on Airbnb and active unit growth of 76.1%.
To read the report, please go to bit.ly/209EZzh [PDF].
Renovations Planned for IVC
The National Park Service (NPS) in partnership with the Independence Visitor Center Corporation is planning a phased series of renovations to the Independence Visitor Center in Independence National Historical Park, NPS has announced.
Since the center opened in 2002, average yearly park visitation has increased by more than 600,000, or nearly 25%, with more than 2 million visitors annually. The public is invited to review the proposed changes and to comment on the project by 11:59 p.m. on Monday, February 15.
To read the announcement, please go to bit.ly/1QJ63Tk. To view the plans and comment, please go to bit.ly/1nQg4Fg.
Visit Philadelphia to Highlight City’s Historic District
Visit Philadelphia has received two $1 million grants, from philanthropist H.F. “Gerry” Lenfest and the state Department of Community & Economic Development, for an initiative that will raise awareness for the city’s historic district, the Philadelphia Business Journal reported on February 5. A 2006 study found most travelers visited the Liberty Bell and Independence Hall, but missed some of the lesser-known attractions.
The new campaign will begin in May and officially brand Historic Philadelphia as the Delaware River to Seventh Street and Lombard to Vine Streets.
To read the article, please go to bit.ly/1PXmBE2 (requires subscription).
Arts and Culture News
Artists’ Reception at Park Towne Place
Park Towne Place will host a wine-and-cheese reception for its permanent Collections and Exhibitions, featuring 100 works by local and national artists, Thursday, February 11, from 6:00 to 8:00 p.m., at Park Towne Place South Tower, 2200 Benjamin Franklin Parkway.
Beginning at 7:00 p.m., there will be artist talks by Eric Berg, Erica Harney, Jim and Lynn Lemyre, Elisabeth Nickles and Annie Stone. To RSVP, please go to bit.ly/1nMZHbJ.
GPCC Members Optimistic About 2016 Business Conditions
Responses to a survey of Greater Philadelphia Chamber of Commerce (GPCC) members conducted by the Federal Reserve Bank of Philadelphia indicate business conditions in the city improved in 2015 compared with 2014, and a majority of respondents (59%) expressed optimism that conditions will continue to improve in 2016, the Bank reported on February 3.
The survey found that more than 44% of respondents expected to hire more full-time permanent employees in 2016. Overall, respondents identified domestic competition, labor quality, and poor sales as their most critical business issues.
To read the report, please go to bit.ly/1NUclLm.
In other GPCC news, John A. Fry, President of Drexel University, has been named Chairman of the Board of GPCC, effective in October, the Philadelphia Business Journal reported on Friday. Fry will succeed Denis O’Brien, an Exelon Corporation senior executive.
Fry will continue to lead Drexel’s development of its multibillion-dollar Innovation District and other large-scale plans in the university’s neighborhood.
Among the GPCC’s current initiatives are the Health Care Innovation Collaborative and Action Team, Roadmap for Growth, and Greater Philadelphia Energy Action Team.
To read the article, please go to bit.ly/1NUFUwg.
How Business Improvement Districts Can Boost Employment
In 2011, the University City District (UCD) inaugurated the West Philadelphia Skills Initiative, which connected unemployed residents in the area with anchor institutions in the district, including the University of Pennsylvania and the Children’s Hospital of Philadelphia.
Since the launch, 91% of Skills Initiative graduates have been prepared for and succeeded at jobs as lab technicians, desktop support professionals, inpatient clerks, and medical assistants, jobs that pay an average starting wage of $13.60 an hour, writes Matt Bergheiser, Executive Director of UCD, in Next City.
“Marrying workforce development to a BID redefines what it means to invest in a place. As a national conversation about equity and inclusion unfolds, this strategy transcends what is often presented as a false dilemma between downtown investments and neighborhood equity,” Bergheiser suggested.
To read the article, please go to bit.ly/1SKTxoq.
Act 89 Projects May Not be Funded
Pennsylvania will be about $6 billion short of funds for projects targeted in Act 89, the 12-year transportation plan passed in 2013, which covers about 2,800 projects at a cost of about $34 billion, exceeding the $28 billion in revenue projected for that time frame, the Pittsburgh Tribune-Review reported on February 1. A hearing was held on February 2 by the state Senate Transportation Committee. Secretary Leslie Richards testified about the shortfall.
To read the article, please go to bit.ly/1odwmI6.
Parks and Open Space News
Sweetheart Skate at Rothman Rink at Dilworth Park
The Rothman Institute Ice Rink and the Rothman Cabin will continue to be open through February 28.
On Sunday, February 14, Valentine’s Day, the Rothman Institute Ice Rink will host the Sweetheart Skate, featuring favorite love songs presented by a live DJ. Enjoy complimentary hot chocolate and flowers, plus free photo keepsakes in the Lovers Photo Booth. The cost is $20 per person and includes admission, skate rental, hot chocolate and giveaways.
For advance tickets, please go to bit.ly/1ZSHV8C.
Kenney Names New Health Commissioner
Thomas A. Farley, former commissioner of New York City’s Department of Health and Mental Hygiene, on February 1 was appointed commissioner of the Philadelphia Department of Health, the Philadelphia Business Journal reported.
In New York, Farley pursued initiatives such as making the city’s parks and beaches smoke-free, reducing the amount of salt in food, and restricting the use of air-polluting fuels.
To read the article, please go to bit.ly/1VEi7q4.
Pew Study Notes Changes in City Council
The average tenure among Philadelphia’s 17 council members fell from 15.5 years at the end of 2010, then the longest tenure among the 15 U.S. cities studied, to 8.2 years as of January 2016, the third longest behind Baltimore (14.2) and Chicago (9.2), according to a study conducted by The Pew Charitable Trusts’ Philadelphia Research Initiative and released on January 25.
The average salary for council members in Philadelphia now stands at $132,789, making it the third-highest (up from fourth-highest), with only Los Angeles ($189,041) and Washington, D.C. ($137,375) higher. Boston ($99,500) and nine other cities paid council members less than $100,000.
To read the study, please go to bit.ly/1JBDZ4F.
Mayor Selected for Initiative to Address Poverty Issues
Mayor Jim Kenney is one of eight city leaders who will participate in a two-year initiative from the National League of Cities, Financial Inclusion Systems and City Leadership, which will help cities develop and implement programs to combat poverty, the Philadelphia Business Journal reported on January 25.
The project includes technical assistance for families, and opportunities to apply for grant funds and take part in educational programming. The seven other cities are Pittsburgh; Boston; Lansing, Michigan; Dubuque, Iowa; Durham, North Carolina; Hattiesburg, Mississippi; and St. Petersburg, Florida.
To read the article, please go to bit.ly/1Kt66mM.
Number of Homeless Estimated at 6,000
The annual January Point-In-Time Count of the homeless, a survey conducted each year on the same night in cities across the U.S., found approximately the same number of homeless in Philadelphia as in last year’s count, 6,000, with more than 5,300 in shelters, The Philadelphia Inquirer reported on January 29.
Joining the 370 volunteers who helped throughout the night with the count was Mayor Jim Kenney and White House Chief of Staff Denis McDonough, who visited Philadelphia because of its relatively low number of homeless, despite the city’s high poverty rate, the article noted.
To read the article, please go to bit.ly/1VD8BDE.
San Francisco has approximately 7,000 homeless people. For yesterday’s Super Bowl, the city of San Francisco relocated about 24 homeless who were living in the area where the National Football League had set up its “Super Bowl City” with activities programmed for families and others visiting the city, the Wall Street Journal reported. The two dozen were given priority at one of the city’s shelters.
The city said no homeless people were arrested or given citations during the Super Bowl City relocations, but the homeless and their advocates complained that police and city officials had kicked people out of the most popular tourist spots.
Philadelphia likely will face similar issues when it hosts the Democratic National Convention in July. To read the article, please go to on.wsj.com/1KoIm37.
Sarasota Struggling With Legality of Anti-Panhandling Law
The City of Sarasota (Florida) repealed its panhandling law in response to an ACLU lawsuit alleging the law was unconstitutional and crafted a new law that prohibits soliciting in a variety of public places, including sidewalk cafés and bus stops, WTSP in Tampa, Florida, reported on February 1. The new ordinance also prohibits aggressive panhandling and persistent soliciting or use of abusive language.
However, the ACLU’s Andrea Mogensen expects the new law will be challenged, claiming, “This is a regulation of annoyance,” Mogensen says. “There’s no constitutional right to be free of annoyance; there is a constitutional right to be annoying.”
To read the article, please go to on.wtsp.com/1PNAHrl.
Groundbreaking for LOVE Park Renovation
Philadelphia Parks & Recreation will break ground for the renovation of LOVE Park on Wednesday, February 10, at 11:00 a.m. at the corner of 15th Street and John F. Kennedy Boulevard, JFK Plaza/LOVE Park.
The design teams are led by Hargreaves Associates and KieranTimberlake. The construction budget is $16.5 million – $3.2 million for the reuse of the Fairmount Park Welcome Center and $13.3 million for the park itself, which is expected to reopen in 2017.
For additional details and to view renderings of the new LOVE Park, please go to PlanPhilly’s article at bit.ly/1RCQegx.
ULI Spring Meeting
The 2016 ULI Spring Meeting, an annual gathering of international members, will be held at the Pennsylvania Convention Center from April 19 to April 21. Topics on the agenda are trends in residential, commercial and mixed-use development, new sources of capital, and the economic outlook.
The ULI Spring Meeting Co-Chairs are William P. Hankowsky, Chairman, President and CEO, Liberty Property Trust; Gerard H. Sweeney, President and CEO, Brandywine Realty Trust; and Marilyn Jordan Taylor, Dean, University of Pennsylvania School of Design.
To register, please go to spring.uli.org/register/.