Office Sector News
1818 Market Street Sold
The mortgage for 1818 Market Street has been sold for $122 million and the deal for San Francisco-based Shorenstein Properties to buy the building from Sovereign Capital Management Group Inc. of San Diego for $200 million was scheduled to be finalized on April 30, the Philadelphia Business Journal reported.
The 37-story building totals 940,000 square feet and includes Beneficial Bank’s headquarters, Research Technology, Five Below, Zarwin Baum, and the American College of Radiology.
To read the article, please go to bit.ly/1Exg15D.
Hill International Completes Move of Headquarters
Hill International, a global construction management company, announced on April 27 that it had completed the relocation of its global corporate headquarters to One Commerce Square from its former office in Marlton, New Jersey. That office has been closed.
The company has a 12-year lease with Brandywine Realty Trust for approximately 60,000 square feet of office space, which was designed by architecture and interior design firm L2Partridge and built by INTECH Construction. Hill was assisted on the relocation by real estate advisor Newmark Grubb Knight Frank.
Hill International has 4,700 employees in 100 offices worldwide and was recently ranked the ninth largest construction management firm in the United States.
To read the press release, please go to bit.ly/1GBmJKf.
Church Pension Board Renews Lease at 2000 Market Street
The Board of Pensions of the Presbyterian Church has renewed its lease for 76,998 square feet (SF) in the 29-story 2000 Market Street building and will remain for another 12 years in the space it has occupied since 1996, the Philadelphia Business Journal reported.
CBRE arranged the transaction in the 665,649-SF building, which is 97% occupied, the article noted.
To read the article, please go to bit.ly/1HVuh9M.
Wanamaker Building Up for Sale
Amerimar Enterprises Inc. of Philadelphia and Tier REIT of Dallas, owners of the Wanamaker Building, have put the landmark up for sale and it is expected to trade for $200 million or more, the Philadelphia Business Journal reported on April 22.
The building at 100 Penn Square East is 12 stories and totals 1.9 million square feet that includes a 660-space parking garage. The partnership has invested more than $6 million in property upgrades and conversion work since 1997.
The building is 97% occupied, with Macy’s as the largest tenant and Children’s Hospital of Philadelphia as the other major tenant. Both their leases expire in 2027.
To read the article, please go to bit.ly/1zV0dUZ.
New Creative and Tech Corridor in Center City?
Creative-economy companies, including tech firms, startups and coworking spaces, are playing an expanded role in filling the office space in the forthcoming $500 million East Market development that includes the former Family Court building at 34 South 11th Street, and also in the unrelated $75 million Brickstone Realty development in the 1100 block of Chestnut Street, Technical.ly Philly reported.
East Market, owned by SSH Real Estate, National Real Estate Advisors, JOSS Realty Partners and Young Capital LLC, is expected to be completed in spring 2016. The Brickstone project, 1112-1128 Chestnut Street, should be finished by year’s end. Both build upon the work of Goldman Properties on South 13th Street.
The real estate industry is focusing more on attracting non-traditional upper-floor users, the article noted, and New York City’s coworking giant WeWork has looked at space in several developing areas of Center City, as have other coworking and shared office space businesses.
To read the article, please go to bit.ly/1zgo5rr. For more information about coworking spaces in Center City, please see the “Office” sector chapter of State of Center City, 2015 at centercityphila.org/socc/.
Collaborative Office Space in Callowhill Corridor
The Destination Maternity Corporation’s headquarters at Fifth and Spring Garden Streets, which was sold for $14 million in September 2014, is being transformed by Alliance HSP into SoNo (“Southern Northern Liberties”), a 225,000-square-foot open-plan office environment designed to attract firms seeking non-traditional workspace that might appeal to millennials and creative-class workers.
The new design calls for a roof deck with views of the city, lounge-style seating, and fire pits, plus a gym, café, and bike room.
Successful development of SoNo could help begin to fill in the significant gap in the fabric of Center City between Old City and Northern Liberties.
To view the renderings, please go to SoNoHSP.com.
Deal Underway for Property at 19th and Arch Streets
Comcast Corporation and Liberty Property Trust are partnering on acquisitions at 19th and Arch Streets across the street from the 59-story Comcast Innovation and Technology Center, now under construction, The Philadelphia Inquirer reported on April 21.
To read the article, please go to bit.ly/1DBNFCs.
Showrooms at Marketplace Design Center Seeking New Location
The 15 tenants that make up the Marketplace Design Center are seeking about 80,000 square feet (SF) for a new home rather than remain in the building during its transformation into a mixed-use development by new owners Lubert-Adler and PMC Property Group, the Philadelphia Business Journal reported on April 24.
Rebranding is a big part of the overall goal. Newmark Grubb Knight Frank is handling the search for a new location, with help from Eimer Design and Aegis Property Group.
The group is considering the Navy Yard; the Pincus Brothers building at Fourth and Race Streets; 34 South 11th Street; 701 Market Street; 801 Market Street; 1500 Market Street; the former Stock Exchange building at 1900 Market Street; 16th and Callowhill Streets; and 456 North Fifth Street, the article noted.
To read the article, please go to bit.ly/1z190tE (requires subscription).
Nonmanufacturing Continues to Expand
Regional nonmanufacturing firms responding to the Federal Reserve Bank of Philadelphia’s Business Outlook Survey for April reported continuing expansion, with new orders up for 46.2%, down for 10.3% of respondents, while remaining unchanged for 15.4%.
The number of full-time employees increased for 30.8%, fell for 7.7%, and was unchanged for 61.5%.
Looking ahead six months, 84.6% of the firms expected business activity to improve even more, 2.6% foresaw a downturn, and 5.1% anticipated no change.
To read the report, please go to bit.ly/1Dxuf16.
$28 Million Renovation of Four Seasons Hotel
The Four Seasons at 18th and the Benjamin Franklin Parkway, which will close in June, will undergo a $28 million renovation that will transform it into a 4.5-star hotel operated by Sage Hospitality, Philadelphia magazine reported. The new name of the hotel has not been announced.
The renovation will include extensive improvements to the ballroom, meeting space and spa and fitness center, while introducing a new roof-top lounge, high-end coffee bar and a new restaurant, the Urban Farmer steakhouse. The hotel is expected to re-open late in 2015.
To read the article and see the renderings for the new hotel, please go to bit.ly/1DQa7J7.
Residential Market News
Citywide, Housing Prices Higher in First Quarter of 2015
In the first quarter of 2015, the average house value in Philadelphia fell by 0.3% on a quality- and seasonally-adjusted basis, though house prices citywide remained 4.1% higher than they were during the same period last year, according to Kevin C. Gillen, Senior Research Fellow with the Lindy Institute for Urban Innovation at Drexel University, in a report released on April 28.
In the area defined by Gillen as Center City/Fairmount, significantly smaller than CPDC’s definition of Greater Center City, house prices were down -1.4%, while house prices increased in South Philadelphia (+1.0%) and University City (+6.9%).
To read the report and view the charts, please go to bit.ly/1JOz0sb.
City Reaches Agreement on Airport Expansion
The City of Philadelphia, Delaware County, and Tinicum Township on April 22 signed a multimillion-dollar financial settlement that will allow the City to move forward with its $5.2 billion plan to expand Philadelphia International Airport, The Philadelphia Inquirer reported. The Federal Aviation Administration approved the expansion plan in 2011.
The agreement settles four lawsuits and years of litigation with Tinicum, and paves the way for land acquisition and further talks with United Parcel Service about relocating from 212 acres it owns on Hog Island Road.
To read the article, please go to bit.ly/1HRLjFy.
State Senate Passes Transit Hub Revitalization Measure
The state Senate on April 20 passed SB 385, introduced by Senator Dominic Pileggi (R., Chester and Delaware Counties) on February 3, that would update the Pennsylvania Transit Revitalization Investment District (TRID) Act, originally enacted in 2004, and would encourage private development at mass transit hubs.
The new version of TRID would streamline the creation process and set clear parameters for TRID funding and the use of those funds. Any projects funded in a TRID would require a minimum one-third match from private dollars.
The bill was sent to the House of Representatives on April 27 and is being considered by the Transportation Committee.
To read the bill, please go to bit.ly/1PZ6R5X.
NJ Transit Proposes to Raise Fares
NJ Transit is proposing to increase fares by an average of 9% and to cut six bus routes, including three in South Jersey, to close an estimated $60 million budget gap, the Philadelphia Business Journal reported on April 21. If approved, the proposed service changes would take place in September and the fare changes on October 1.
A bus ride between Gloucester City and Philadelphia would increase by 35 cents from $3.90 to $4.25 with a monthly pass increasing $11 from $123 to $134, the article noted.
NJ Transit will hold nine scheduled public hearings, including one at Camden City Hall at 5:30 p.m. on Tuesday, May 19, before the agency’s board of directors considers the plan on July 8.
To read the article, please go to bit.ly/1AhDZwz.
To see a complete list of proposed changes, please go to bit.ly/1bdYQur.
To see how bus routes to Philadelphia would be affected, please go to bit.ly/1DL4N9L [PDF].
PATCO to Continue Altered Schedule Until July
The PATCO schedule in place to accommodate the upgrades on the south track of the Benjamin Franklin Bridge and in the tunnels in Philadelphia and Camden will remain in effect through July and not change this spring, as previously announced by PATCO.
Normal service will remain in place Monday through Thursday mornings, and a track-work schedule will operate between Thursday mid-day and Sunday night.
The extension allows all south track work in the $103 million Ben Franklin Bridge Track Rehabilitation project to be completed now instead of a later date as originally planned.
To read the PATCO press release, please go to bit.ly/1DHKOYj.
FY 2016 House Transportation Appropriations Bill Released
U.S. Representative Mario Diaz-Balart (R., Florida) released the FY 2016 Transportation, Housing and Urban Development funding bill. The legislation includes funding for the Department of Transportation and other related agencies.
Highlights include $100 million for TIGER grants ($400 million less than last year) with the eligible grant size reduced to $2 million-$15 million per project, down from $10 million-$200 million.
To read the summary released by the House committee, please go to 1.usa.gov/1Dx4PRw.
To read the bill, please go to 1.usa.gov/1GtMwyA [PDF].
Parks and Open Space News
Bill Would Enable Reading Viaduct Park
Councilman Mark Squilla on April 30 introduced Bill #150415 that would authorize the City’s Department of Public Property to acquire the 0.80-acre portion of the Reading Viaduct that runs between North Broad Street, the north side of Noble Street, 11th Street and the south side of Callowhill Street and lease it to SEPTA, which will enable the building of Phase 1 of the planned rail park.
SEPTA will lease the land to the Center City District (CCD) for renovation purposes. Upon completion, the CCD will turn the completed project over to the City of Philadelphia.
Designed by Studio| Bryan Hanes and Urban Engineers, the $9.6 million project will be funded through a combination of state, city, foundation and private resources
To read the bill, please go to bit.ly/1zkPjwS. To review plans for the project go to centercityphila.org/about/viaduct.php.
New Design for LOVE Park
Hargreaves Associates and KieranTimberlake unveiled a new design for LOVE Park at a public meeting on April 30, PlanPhilly reported. The design features a central fountain with a single jet with a smaller cluster of jets that crisscross in interwoven arches, two garden zones, two large lawns, and tree groves.
The round building known as “the saucer” will remain and will be renovated with new windows, lighting, a green roof, modernized systems, an ADA-accessible ramp and bathrooms that can be entered from the park, the article noted.
The design plans will be presented to the Art Commission on Wednesday, May 6, for conceptual approval, and final approval will be sought in the fall.
To read the article and view the renderings, please go to bit.ly/1zkOYdv.
New Events Begin This Week at CCD Parks
At Sister Cities Park, 18th Street and Benjamin Franklin Parkway, the park’s Boat Pond officially opened on Friday, May 1, and Rita’s Water Ice began its warm-weather season at the park, as did the Independence Visitor Center satellite office. For a full schedule of park events, please go to sistercitiespark.org.
In Dilworth Park, on Tuesday, May 5, the Pictures in the Park series begins at dusk with The Hobbit: The Battle of the Five Armies (PG-13). The series continues through June 30. For a full schedule of park events and concerts, please go to go to dilworthpark.org.
Seven Bills Introduced to Enable Gallery Redevelopment
On April 23, Councilman Mark Squilla introduced seven bills that would provide the legal framework for the transformation of The Gallery, create special sign regulations, a new neighborhood improvement district and a tax increment financing district.
Bill #150374 establishes the Gallery Neighborhood Improvement District in the area generally bounded by, and including 11th Street to the west, Filbert Street to the north, 8th Street to the east and Market Street to the South, with the exception of condominium units at 801Market Street. bit.ly/1FrqPmD
Bill #150375 authorizes the Commissioner of Public Property, the Director of Commerce, and other officials of the City to execute or approve various necessary agreements by and among the City, the Philadelphia Redevelopment Authority, the Philadelphia Authority for Industrial Development and the developers. bit.ly/1JKAunp
Bill #150376 revises the City Plan through striking and vacating subsurface and aerial portions of Market Street, 9th Street, 10th Street and 11th Street. bit.ly/1FrynWy
Bill #150377 would allow large-format signs, ground signs, marquees and planters in the development. bit.ly/1GpId7B
Bill #150378 amends the 1969 urban renewal plan that allowed for the original Gallery to be built and provides the path for the detachment of all controls previously set forth by all previous redevelopment proposals. bit.ly/1J4k4WT
Bill #150379 creates sign regulations for the Market Street East Retail Area bounded by Market Street, 8th Street, Filbert Street, and 11th Street. bit.ly/1OwnEQo
Bill #150380 creates the Gallery at Market East Tax Increment Financing District, in the area bounded by Filbert Street on the north, 8th Street on the east, 11th Street on the west, and Market Street on the south. bit.ly/1EePaKj
Lessons from the Mayoral Election in Chicago
The April mayoral election in Chicago holds some interesting parallels for the forthcoming mayoral election in Philadelphia, writes Jeremy Nowak in The Philadelphia Citizen.
To read the article, “The Chicago Election and The Philadelphia Story,” please go to bit.ly/1ECdGVM.
‘State of Center City, 2015’ Now Available
State of Center City, 2015 , a 75-page production of the Center City District/Central Philadelphia Development Corporation, provides an in-depth look at the diverse sectors that make Center City Philadelphia the largest employment center in the region.
To read State of Center City, 2015, please go to centercityphila.org/socc/. To read the 28-page Center City Philadelphia Developments, 2014-2018, please go to centercityphila.org/developments/.
To obtain additional copies of State of Center City, 2015, please fill out this form- bit.ly/1QBUTAu [PDF]. The first hard copy of the report is free, extras are $10 each.
Philadelphia Growth Coalition Launches Effort
A broad coalition of Philadelphia business, civic and labor leaders, known as the Philadelphia Growth Coalition, on April 22 formally announced its plan for job growth through tax reform.
Specifically, the plan calls for taxing commercial real estate at a rate 15% higher than residential homeowners (1.54% compared to 1.34%), and using those revenues to lower the wage tax below 3% by 2025, and cut the net income portion of the BIRT in half by 2025.
Since state law requires all real estate - homes and businesses - to be taxed at a uniform rate, the plan would require both state legislative action and a subsequent, state-wide ballot initiative to modify uniformity for Philadelphia.
To read an article in The Philadelphia Inquirer, please go to bit.ly/1FkqGl2.
To learn more about the coalition and its supporters, please go to philadelphiagrowthcoalition.com.