Office Sector News
Macquarie Relocating To 100 Independence Mall West
Macquarie Investment Management, a global asset management firm and part of Macquarie Group will relocate its Philadelphia headquarters to the Dow Building, 100 Independence Mall West, in 2020. Macquarie has entered into a lease agreement with Keystone Property Group to occupy 145,000 square feet of space and plans to redevelop the space, which links Independence Mall to Market Street East.
Independence Mall West, built in 1965, originally was the headquarters for Rohm and Haas. Keystone Property Group acquired the nine-story, approximately 400,000-square-foot Class A office building in 2013 and has been repositioning the building with new ground floor retail.
Berger Montague Moves From Long-Time Home To 1818 Market
After nearly 50 years in its brownstone building at 1622 Locust St., Berger Montague has moved its office headquarters to 1818 Market. The law firm now occupies the building's entire 36th floor and a portion of the 35th floor -- more than 40,000 square feet in total. Berger Montague worked with L2 Partridge to design the space and MJ Settelen Construction to build it.
Jazz Pharmaceuticals Opens New Office In Commerce Square
Six years after entering the region with the acquisition of two small drug companies, Jazz Pharmaceuticals has moved to a new 46,000-square-foot office on two floors at 2005 Market St. The Dublin, Ireland-based company plans to add more people in Philadelphia, which is serving as its East Coast headquarters and currently has 160 employees. The company expects to grow to 200 people in Philadelphia by 2020.
Jazz entered the local market in 2012 by buying Azur Pharma, which had its U.S. operations in Philadelphia, and EUSA Pharma, which had its U.S. headquarters in Langhorne, Bucks County. The company also said it intends to grow the relationships it has built with the region’s academic health centers and research institutions through clinical trials.
Eds and Meds News
U.S. News Ranks HUP As The Region's Top Hospital
The Hospital of the University of Pennsylvania/Presbyterian Medical has made the latest list from U.S. News & World Report of the country's top 20 medical centers. The 2018-19 rankings compared more than 4,500 medical centers nationwide across 25 specialties, procedures and conditions. In this year’s report, a total of 158 hospitals were nationally ranked in at least one specialty
The report ranked HUP 14th nationally and No. 1 in the Philadelphia region, with 12 nationally ranked specialties. Thomas Jefferson University Hospital had 10 specialties that made the national list. MossRehab and Magee Rehabilitation, which are expected to share the same parent organization when Jefferson Health and Einstein Healthcare Network complete their proposed merger, ranked 10th and 13th nationally for rehabilitation services.
Temple Hires Financial Adviser To Explore Selling Hospitals
Temple University has hired Chicago investment bank Juniper Advisory as its namesake health system mulls the possible sale of Fox Chase Cancer Center, neighboring Jeanes Hospital, or both. Juniper is an independent and privately-held investment adviser that specializes in hospital merger and acquisition and other strategic affiliation consulting.
Temple University Health System, the city's largest provider of care to the poor, posted a net loss of $5.8 million in fiscal 2017. The health system annually provides about $70 million in charity care to its patients.
Report: Philadelphia Hotel Market Is Thriving
Philadelphia hotels are forecast to see a revenue-per-available-room (RevPAR) increase of 7.7% by year-end 2018, according to CBRE Hotels’ Americas Research. This is the result of an estimated increase in occupancy of 3.6% and a 3.9% gain in average daily rates (ADR). The 7.7% increase is markedly better than the national projection of a 2.8% increase.
Leading the way in 2018 growth is the lower-priced hotel segment category, which is forecast to attain a 2.3% gain in ADR and a 5.2% increase in occupancy, resulting in a 7.6% RevPAR increase. Upper-priced hotels are projected to see an ADR growth rate of 4.9%, along with a 2.4% gain in occupancy, resulting in a 7.4% RevPAR increase.
N.C. Firm Buys 4 Walnut Street Buildings Near Rittenhouse Square
A North Carolina investment firm that targets densely populated, affluent real estate markets has acquired four buildings on the 1500 block of Walnut Street from two separate sellers.
Asana Partners has acquired four buildings on the 1500 block of Walnut Street from two separate sellers. Asana bought 1519 and 1521 Walnut St., home to Bonobos and Govberg Jewelers, from affiliates of Los Angeles-based real estate company Blatteis & Schnur Inc. for a combined $19.6 million, The Philadelphia Inquirer reported.
Asana also has taken ownership of the two buildings spanning 1501 to 1505 Walnut St. that the Post Bros. group bought from Pennsylvania Real Estate Investment Trust in 2016. The buildings, which are occupied by AT&T, Club Monaco and Red Wing Shoe Co., changed hands for $13.1 million.
Fashion District Poised To Revive ‘Lowly’ Filbert Street
In a recent article on the coming addition of the music venue and wine destination City Winery to East Market Street, The Philadelphia Inquirer noted that “Pennsylvania Real Estate Investment Trust and Macerich are bringing new clarity to their plans for the street that forms the northern boundary of what they've named the Fashion District Philadelphia project.”
The article highlighted that Filbert Street, formerly a service street, will be activated with the arrival of City Winery, which will have the entrance to its 30,000-square-foot, two-level space located on Filbert, along with a branch of barbecue chain Dallas BBQ and an AMC Theatres cinema, with more tenants along the street to be announced.
Residential Market News
Five Prominent Philadelphia Properties To Be Sold
Forest City Realty Trust, owner of five high-profile properties in Philadelphia – including the Drake – is planning to sell them to Brookfield Asset Management Inc. In addition to the historic multifamily Drake property, Forest City Realty Trust also owns NorthxNorthwest (formerly Museum Towers II) at 450 N. 18th St., One Franklin Town at One Franklin Town Blvd., the Lofts at 1835 Arch, and the translational research lab at the University of Pennsylvania at 125 S. 31st St.
Toronto-based Brookfield will pay $25.35 a share for Cleveland-based Forest City’s portfolio of 10 million square feet of office, retail, multifamily and life science space. Brookfield has $285 billion under management and also owns 34% of General Growth Properties, which is the second largest mall owner in the U.S.
Apartment Project Planned For 5th & Spring Garden
The real estate company behind the redevelopment of the former Destination Maternity headquarters at 5th and Spring Garden streets announced plans for a four-story structure on top of 11,000 square feet of retail space on a portion of the site that is currently a parking lot. Alliance Partners HSP said the building will have 50 apartments and the project will cost in excess of $15 million.
Alliance Partners bought the building in the fall of 2014 and initially had plans to convert the building into office space. The apartment plans are going through the final approval process and groundbreaking is expected in the first quarter of next year.
Residential Tower Planned At Society Hill Sheraton Site
Buccini/Pollin Group plans a 31-story residential tower on the grounds of Sheraton Society Hill hotel, which it acquired earlier this year. The developer was granted zoning permission for a 273-unit asddition to be located at the undeveloped southern part of the 2.5-acre site.
A Buccini/Pollin affiliate bought the 364-guest-room Sheraton property in March from RLJ Lodging Trust of Bethesda, Md., for $95.5 million. Buccini/Pollin said that it was planning a complete makeover of the property and that the hotel's brand would change.
Topping Off Marked For View II At Temple University
A $199 million student housing development at 12th Street and Cecil B. Moore Avenue, on the site of the former John Wanamaker High School, has been topped off. Goldenberg Group began work on the View II project last fall and it is expected to be completed by next summer.
The Temple University student housing development involves two buildings totaling 471,000 square feet that will have a total of 984 beds in 368 units. One building will stand 18 stories and the second is 12 stories. View II will also have 20,000 square feet of ground floor retail, a restaurant and commercial space.
Beury Building Is Recipient Of $200K Pa. Tax Credit For Historic Rehab
Pennsylvania officials have awarded $810,000 in tax credits for five historic-rehabilitation projects throughout Philadelphia, including $200,000 for work at the Beury Building on North Broad Street. The funding will go toward converting the long-blighted historic high-rise at Erie Avenue into apartments, a block of which are to be set aside as affordable units, the governor’s office said. The $38.1 million project is being undertaken by development group Shift Capital.
Other grants include a $60,000 credit for Civetta Property Group’s rehabilitation of the rowhouse building at 257 N. 3rd St. in Old City into apartments with ground floor retail.
Amtrak Shops Its Commercial-District Plan Amid 30th St. Station Rehab
Two years into a three-year restoration project of 30th Street Station’s facade, porticos, doors and windows, Amtrak is seeking a developer to oversee its ambitious, 35-year plan to create a commercial district surrounding the station. The plan was developed in coordination with nearby stakeholders Drexel University and Brandywine Realty Trust, which want to develop 14 adjacent acres in a project dubbed Schuylkill Yards.
When the renovation began in 2016, the cost to renovate the Art Deco station’s limestone facade and its bronze portico doors and soaring windows was estimated at $60 million. The budget has since grown to $109 million because of additional work added to the project’s scope.
Pa. Transportation Commission OKs 12-year program update
The State Transportation Commission has approved its Twelve Year Program (TYP) update for 2019 through 2030. The TYP anticipates $63.9 billion being available over the next 12 years for improvements to roads, bridges, transit systems, airports and railroads across Pennsylvania.
The newly adopted program, which takes effect October 1, anticipates $21.8 billion for the first four years. The commission said its next step will be to submit its state transportation improvement program to the Federal Highway Administration and the Federal Transit Administration for review and approval.
PPA’s Petri offers up a sweeping legislative agenda
Scott Petri, executive director of the Philadelphia Parking Authority, discussed in a wide-reaching interview with PlanPhilly his proposals to pass a suite of bills in Harrisburg and City Hall that he said will save Philadelphia money, improve the School District’s revenue streams, make ride-hailing safer, free up parking, and unclog Center City’s worsening congestion.
While details of the legislative proposals have yet to be set, Petri said he wants Harrisburg to authorize a 50-cent surcharge on all taxi, limo and ride-hailing trips in Philadelphia and use that money to increase the PPA’s enforcement of companies like Uber and Lyft. He also wants City Council to increase the cost of contractor parking permits from $150 for six months to $600, and he wants the state to allow cities across Pennsylvania to enforce traffic laws using automated cameras, radar, and other technology.
Many of Petri’s proposals reflect the concerns among city residents, businesses and developers about the worsening congestion and parking difficulties in Greater Center City. A recent CCD/CPDC report, Keep Philadelphia Moving, looks at the city’s challenges and outlines possible solutions.
Local Government News
PICA: Philadelphia Tax Collections Up Slightly Overall In July
The City of Philadelphia collected $239 million in General Fund tax revenue in May, compared to $237.8 million in July 2017, an increase of 0.5%, according to the Pennsylvania Intergovernmental Cooperation Authority (PICA).
Increases in the city portion of the combined wage, earnings, and net profits taxes, the parking tax, and the amusement tax drove the growth in collections early in the fiscal year. Beverage tax collections also increased slightly. These increases offset decreases in the business income and receipts tax (BIRT), real estate tax, real estate transfer tax, city sales tax, and other miscellaneous taxes.
For the month of July, BIRT fell -18.6%, compared to a projected increase of 2.8%; the real estate tax decreased -5.4%, compared to a projected growth of 3.5%; the realty transfer tax dropped -1.0%, compared to a projected -0.9% decrease; and Philadelphia sales tax collections fell -9.3%, compared to a projected growth of 5.9%.
City Of Philadelphia Launches Redesigned Website
The results of a nearly $2 million, 3 1/2-year project overhauling the City of Philadelphia’s official website have come to fruition with the launch of the revamped Phila.gov. The site had been in beta testing since 2016.
A project that began in December 2014, the redesigned website aims to make it easier for users to find what they need by making the site mobile-friendly, creating a global menu to ease access to specific department pages, upgrading calendars so users can better track various commission meetings and integrating cloud technology to boost security and the site's ability to handle increased traffic.