Office Sector News
Trophy Space Tightens
Nine of the city's 10 trophy properties along West Market Street and JFK Boulevard have continued to experience strong leasing activity this year with rental premium gains of 32.4%, according to Philadelphia Skyline Review: Trophy rent growth energizing market shift, a new report from Jones Lang LaSalle.
With no new construction in the pipeline, the tightening of available trophy space is bringing larger tenants to the market two to three years before their leases expire.
Law firms accounted for most of the large-space leases over the past year with Reed Smith, Cozen O�Conner and Ballard Spahr signing long-term leases in trophy buildings.
A suburb-to-CBD migration is developing for those technology firms that are relying on young professionals, such as FiberLink and IHS Global, which recently announced plans to relocate downtown, and Bentley Systems.
To read the report, please go to tinyurl.com/bw7p2x8 [PDF].
In other West Market news, the law firm of Marshall Dennehey Warner Coleman & Goggin has completed the move of its headquarters to 2000 Market Street, after 21 years at 1845 Walnut Street, the Philadelphia Business Journal reported on October 18.
The firm signed a 15-year lease for 131,000 square feet on floors 22 to 26, which will be home to 136 lawyers and more than 220 support staff.
Two Penn Center Sold
Two Penn Center, a 20-story, 505,000-square-foot office building at 1500 John F. Kennedy Boulevard has sold for $66 million, the Philadelphia Business Journal reported on October 15.
Crown Properties, Inc., sold the building to a joint venture involving Philadelphia real estate investor Alex Schwartz. Crown Properties bought the property in 1997 for $33.5 million. Jones Lang LaSalle arranged the transaction. The property is 82% percent occupied and rents are about $23 a square foot, the article noted.
RFQ for Family Court Building
The Philadelphia Industrial Development Corporation (PIDC), on behalf of the City of Philadelphia, has issued a request for qualifications (RFQ) for firms interested in acquiring and redeveloping the Family Court Building, 1801 Vine Street. The building currently houses the Family Division of the Court of Common Pleas of the First Judicial District of Pennsylvania, which will relocate to 15th and Arch Streets, opening up a major opportunity to add more life to the Benjamin Franklin Parkway.
The PIDC is only soliciting proposals from firms with demonstrated ability to successfully design, finance, and develop historic properties of a similar size, cost, scope, and complexity. The deadline is December 14. To register for and view the RFQ, please go to
Casino Proposed for North Broad
Developer Bart Blatstein and his company, Tower Investments, on October 24 presented a plan for a $700-million transformation of the former Philadelphia Inquirer/Daily News building at 400 North Broad Street into a casino and entertainment complex. The casino, to be called The Provence, would be managed by Hard Rock International.
Plans for the 650,000-square-foot mixed-use complex envision a 120,000-square-foot casino with 3,300 slot machines and 150 table games; a 125-room hotel; a botanical garden; 60,000 square feet of shopping area with a mix of restaurants and retail; two private swim clubs; a jazz club; and a concert hall.
The project hinges on Blatstein being awarded a casino license from the Pennsylvania Gaming Control Board (PGCB). The deadline for applying is November 15.
To see a rendering of the proposed project, please go to tinyurl.com/9o5jyxr.
Modest Gains Expected in Real Estate in 2013
A hold strategy has been recommended in 2013 for all property sectors in Philadelphia, according to the Urban Land Institute�s (ULI) and PricewaterhouseCooper's (PwC) new report, 2013 Emerging Trends in Real Estate. Reasons cited are nominal population growth, flat job growth, and negative net migration.
However, modest gains in leasing, rents, and pricing will extend across all U.S. markets and improve prospects for all property sectors, including housing, the report noted. Worldwide economic uncertainty, weakened credit markets and high government deficits will restrain growth.
Multifamily housing will continue to offer solid development opportunities, though some concern about overbuilding is forecast by 2014 or 2015. The report warned against taking low interest rates for granted and advises to prepare for eventual increases.
Office tenants will continue to house more workers in smaller spaces and retail tenants will require smaller places as they blend store and online sales, and all will favor green buildings that operate efficiently.
Industrial properties and hotels will show the biggest improvement in 2013, the report predicts.
To read the 104-page report, please go to tinyurl.com/brzazje [PDF].
Philadelphia Among Most Affordable for Moderate Incomes
The average cost burden for housing and transportation for moderate-income households in the Philadelphia metro area is 52% of their total household income — the second lowest of the 25 largest metro areas studied, according to Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation, released this month by the Center for Housing Policy and the Center for Neighborhood Technology, both advocates for affordable housing. Renters spent 50% of their income on those two basics and Philadelphia was the fifth most affordable city for that group. Housing and transportation costs rose faster than income during the 2000s, the report noted.
Median income for Philadelphia-area homeowners was $48,094, with average monthly housing costs of $1,124 (28%), and average transportation costs of $12,423 (26%).
Median income for renters was $43,309, with housing costs averaging $961(27%) and transportation costs averaging $9,979 (23%).
To read the report and view the charts, please go to nhc.org/media/files/LosingGround_10_2012.pdf [PDF].
Manufacturing Shows Modest Improvement
Business activity reported by manufacturing firms responding to the October Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia indicated an overall improvement, though employment continued to languish.
The survey�s broadest measure of manufacturing conditions, the diffusion index of current activity, increased 8 points, to 5.7, the first positive reading since April, with 28.4% of firms reporting increased activity. Twice as many firms reported decreases in employment (22%) as reported increases (11%).
To read the report, please go to tinyurl.com/8jauol5.
Philadelphia Vital Statistics
For a snapshot of Philadelphia's static employment situation as well as other trend data, please see this month's Vital Statistics, compiled by CCD/CPDC staff:
Eds and Meds
In-Depth Information on City Schools
On October 15, the nonprofit Philadelphia Schools Partnership (PSP) launched the website GreatPhillySchools.org, which provides in-depth information on more than 400 public, charter, Catholic, and private schools in the city, grades K-12.
Available information includes academic results, safety, demographics, and special programs, according to the website. In addition, the website allows parents to compare two schools at one time.
The website offers for citywide parents what CPDC and CCD have been offering Center City parents since 2004 at
Marshalls Opens on Market Street
Marshalls, the retailer that sells discounted brand-name and designer fashions along with housewares, officially opened in Center City on October 18.
The 60,000-square-foot store, at 1046 Market Street, formerly was home to a Staples store.
Slight Decline in Revenue for SugarHouse Casino
SugarHouse Casino on the Delaware Riverfront saw a dip in revenue in September, taking in $20,685,564 compared to August�s $22,651,433, according to the Pennsylvania Gaming Control Board (PGCB). The Commonwealth�s share of taxes in September was $5,691,974, compared to $6,336,868 in August. The City of Philadelphia collected $697,287 in September, compared to $769,595 in the previous month.
To see revenue from all casinos, please go to tinyurl.com/bmeunzj.
Arts and Culture News
Re-Imagining Avenue of the Arts
In anticipation of the Avenue of the Arts, Inc.�s (AAI) 20th anniversary in 2013, AAI has teamed up with the Pennsylvania Horticultural Society (PHS) to launch the �New Vision for South Broad Street� Request for Proposal (RFP) project.
Four teams have been selected to make presentations on Wednesday, November 14. They are Bohlin Cywinski Jackson, Cairone & Kaupp, Inc., Jonathan Alderson Landscape Architects, Inc., and LRSLA Studio. The goal is to develop an up-to-date, plan that considers streetscape enhancements, as well as the integration of light, sound, transportation, navigation, ecology and economic and residential development.
The RFP winner will be announced on Tuesday, November 20, with the hope that work can begin in 2014, dependent on city support and fund-raising.
Carl Dranoff, President of Dranoff Properties, is funding the RFP project. To read the press release, please go to tinyurl.com/9jhjxba.
Transportation and Infrastructure News
$105 Billion for Surface Transportation
The Moving Ahead for Progress in the 21st Century Act, known as MAP-21, took effect October 1, and provides funding for surface transportation programs at $105 billion for Fiscal Years 2013 and 2104 through the U.S. Department of Transportation.
MAP-21 addresses the needs of highway, transit, bike, and pedestrian programs. Among the programs is State of Good Repair (SGR) for which $2.1 billion will be available in 2013 for agencies that have a transit management plan in place, and a program funded at $420 million for buses and bus facilities.
Also, the Fixed Guideway program has $1.9 billion allocated for funding projects that expand capacity of major transit corridors by more than 10%. For complete details on MAP-21, please go to www.fhwa.dot.gov/map21.
Number of Bicyclists in the Downtown Growing
The number of bicyclists coming into downtown Philadelphia during the morning rush hour has increased 10.5% over the last two years, according to a new study conducted by the Center City District (CCD) and released on October 24.
The CCD documented the increase in a survey of bicycle riders conducted during the first two weeks of October. The increase in the number of young adults living in the downtown and surrounding neighborhoods, as well as the addition of dedicated bike lanes to Center City streets and ever-rising gas prices, are among the reasons cited for the increase.
The new report also offers helpful graphics and explains the survey�s methodology. In addition, it is a valuable tool in helping to understand the impact of bike lanes as the City moves toward the goal of adding more dedicated and buffered bike lanes to the street grid. The Philadelphia City Planning Commission recently recommended installation of up to 117 new miles of bike lanes city-wide.
To read or download the new report, Center City Reports: Bicycles, please go to www.centercityphila.org/docs/CCDBicycles2012.pdf [PDF].
Bike Lanes Good for Retail
The New York City Department of Transportation (DOT) analyzed the retail activity around some of the first of its protected bike lanes on Eighth and Ninth Avenues and found an increase of as much as 49% in retail sales at businesses on Ninth Avenue from 23rd to 31st Streets since the bike lane was initiated in the fall of 2007, according to a new report released on October 24 by the DOT. In that same time period, retail sales increased only 3% in the rest of Manhattan.
In addition, the report, Measuring the Street: New Metrics for 21st Century Streets, noted a 49% drop in commercial vacancies in the area around new pedestrian plazas and reconfigured traffic flow at Union Square. To read the report, please go to
Infrastructure Needs and Funds at Odds
The total need for transportation infrastructure spending is far greater than available revenue, with the vast majority of funding currently dedicated to preservation, maintenance, and replacement of outdated infrastructure, with limited funding for new capacity, according to a new report from the Delaware Valley Regional Planning Commission, Connections 2040: Transportation Investment Scenarios, released on October 25.
Among the findings: More than 28% of locally maintained bridges over 20 feet are structurally deficient; the Broad Street Line heavy-rail vehicles need to be replaced in the 2030s; Interstate 95 requires a $22 billion makeover, and SEPTA needs $5 billion to get its system in good repair.
The report notes that taxpayers are increasingly unwilling to pay more in taxes and fees for infrastructure repair and construction. It imagines three different levels of funding and envisions how the allocation would address the needs under each scenario.
To read the report, please go to www.dvrpc.org/reports/13004.pdf [PDF].
To participate in developing a vision for growth and development, please go to www.dvrpc.org/choicesandvoices.
Trail to Be Completed by Memorial Day
The Delaware River Waterfront Corporation (DRWC) planners unveiled renderings of the Penn Street portion of the Central Delaware Waterfront Trail on October 26, PlanPhilly reported.
The trail will connect a greenway on Spring Garden Street to the Central Delaware trail, and will run north from Spring Garden on Delaware Avenue, turn onto Penn Street and into the SugarHouse Casino parking lot, the article noted. SugarHouse will build the section of the trail that runs through its property.
Construction is expected to begin in February 2013 with the trail opening on Memorial Day.
To view a rendering of this proposed section of the trail, please go to tinyurl.com/8rtltnc.
City Launches Start-Up Program
Mayor Nutter on Friday launched a new initiative to support startups and entrepreneurs in Philadelphia. The City and the Philadelphia Industrial Development Corporation (PIDC) have earmarked $3.5 million in a two-tiered investment and grant-making initiative called Startup PHL. The intent is to stimulate tech startups and retain them.
A Request for Proposals (RFP) will be issued to manage the program with a deadline of December 7. Meanwhile, the Commerce Department will begin accepting submissions for startups and entrepreneurs, with a deadline for submissions of December 14.
For more details, please go to www.startupphl.com.
Tax Break for Bringing Jobs to State
On October 18, the Pennsylvania General Assembly passed the Promoting Employment Across Pennsylvania bill (known as PEP!), HB 2626. The new law is intended to encourage out-of-state employers to transfer their jobs to the Commonwealth by allowing them to keep some withholding taxes for a period of time, depending on their employee-retention rate. The companies are required to pay good wages, and provide health insurance to full-time employees, paying at least 50% of the health insurance premium. The bill was introduced by State Representative Kerry Benninghoff (R., Centre County) on September 24.
To read the bill, please go to tinyurl.com/9gkdlbr [PDF].
City Tax Revenue Up in September
The City of Philadelphia�s tax revenues for September totaled $175.8 million, a 6.4% increase from the same month last year, according to the Office of the City Controller�s Financial Forecast & Snapshot. Wage, earnings and net profit tax collections for the month totaled $120.3 million, a 9% increase over last September.
Monthly sales tax revenues totaled $20.6 million, a 1.5% increase over last year�s and the 11th consecutive month that year-over-year collections have increased.
The report also examined energy costs in Philadelphia, where the average unit cost of electricity dropped 8%, from $.173 per kilowatt hour (kWh) in August 2011 to $.159 per kWh in August 2012. The average unit cost of utility gas declined by 7%, from $1.256 per therm to $1.169 during the same period.
To read the report, please go to tinyurl.com/br5dh75 [PDF].
City Has New Design Review Committee
The formation of the City�s first Civic Design Review Committee (CDRC), mandated as part of the city�s new zoning code, was announced on October 24 by Mayor Nutter.
The CDRC will advise the Philadelphia City Planning Commission as it reviews development projects that have a significant impact on public streets, sidewalks, trails, parks, and open spaces. Meetings will be open to the public and advertized on the Planning Commission�s website, www.phila.gov/cityplanning.
The new members of the committee are: architect Nancy Rogo Traine; architect Michael Johns; landscape architect Anita Toby Lager; Dan Garofalo, senior facilities planner at the University of Pennsylvania; Anne Fadullon, director of real estate development and investment at the Dale Corporation; and architect Cecil Baker. The seventh seat is rotating for each project.
To read the press release, please go to
Revising Tax Credits for Job Creation
Bill #120855, introduced in City Council on October 25, would revise the total amount of all tax credits available in any year for new job creation. To read the bill, please go to tinyurl.com/c5jqaar. (Bill postings are delayed, due to the hurricane closures.)
New Strategic Plan for William Penn Foundation
The William Penn Foundation on October 22 announced a new strategic plan to guide its funding for the next decade. The plan titled Capitalizing Change calls for strategies that will help Greater Philadelphia embrace and benefit from the rapid pace of global and regional change.
The Foundation's strategic plan charts the board's goals for Greater Philadelphia and identifies new strategies to achieve them by implementing three new grantmaking centers, which will operate as 10-year campaigns to pursue these goals: Close the achievement gap for low-income children by increasing the supply of high-quality schools; make Philadelphia an even more creative community, from Center City to the neighborhoods, including investments in great public spaces; and ensure clean water by protecting the Delaware and Susquehanna watersheds.
The Foundation�s grantmaking centers will be integrated with two additional investment vehicles — a Transformation Fund and an Innovation Fund — creating new opportunities for the Foundation and other philanthropists to invest in breakthrough ideas and help key legacy organizations respond to changing conditions. New program guidelines and application procedures will be published early in 2013. To read the report, please go to
New Chairman for GPCC
Citizens Bank executive Daniel K. Fitzpatrick officially became chairman of the board of the Greater Philadelphia Chamber of Commerce (GPCC) on October 24, taking over for outgoing Chairman William P. Hankowsky. Fitzpatrick, president and CEO of Citizens Bank and RBS Citizens for Pennsylvania, New Jersey, Delaware and New York, was introduced at the 212th annual meeting of the chamber, held in the Grand Ballroom of the Pennsylvania Convention Center. He will serve a two-year term.
Save the Date!
The next Central Philadelphia Development Corporation's (CPDC) Membership Meeting will be Tuesday, December 11, from 8:15 a.m. to 9:45 a.m. at the Union League, 140 South Broad Street.
Guest speakers will be New York City leaders of organizations similar to the Center City District.
They are Elizabeth Berger, President of the Alliance for Downtown New York; and Tim Tompkins, President of the Times Square Alliance.
Ms. Berger will focus on efforts to continue to attract and retain office tenants to the Wall Street and World Trade Center area while continuing to diversify land-use through residential and retail development.
Mr. Tompkins will focus on efforts to attract and retain both office and entertainment uses to Times Square, while creating new pedestrian spaces and plazas in the midst of Broadway.