Office Sector News
Office Space 90.3% Occupied in CBD
The occupancy rate in the Philadelphia central business district (CBD) rose to 90.3% in the third quarter of 2015, up from 88.4% in the second quarter, with net absorption of 179,064 square feet (SF) and an average asking rent of $27.77 per SF, according to Cushman & Wakefield's MarketBeat Office Snapshot Q3 2015, Philadelphia, PA-CBD. The suburban occupancy rate was 85% for the quarter, with 446,987 SF of absorption and average asking rents of $24.29.
A primary reason for the increased occupancy, however, was the continuing withdrawal of substantial inventory with the sale of the 607,000-square-foot One Franklin Plaza to PMC Property Group, which plans to redevelop it into 400,000 SF of apartments and 200,000 SF of multi-tenant office space, to be completed next year.
To read the report, please go to cushwk.co/1MoqSyj [PDF].
Counting a slightly different inventory, the CBRE Marketview Greater Philadelphia Office, Q3 2015, put downtown Philadelphia’s occupancy rate at 89.4%, with 489,417 square feet (SF) of net absorption in the quarter, and an average leasing rate of $27.40 per SF. The Greater Philadelphia region’s occupancy rose to 83.8%, 90 basis points lower than Q2 2015.
To read the report, please go to bit.ly/1kZL8R7 (requires registration).
RJMetrics Expands Office Space
RJMetrics, a software startup specializing in data infrastructure and analytics, is adding more than one-third additional space to its offices at the Widener Building, 1339 Chestnut Street, The Philadelphia Inquirer reported on October 28.
The company opened in early 2014, and now has 21,500 square feet divided between the fourth and 15th floors.
To read the article, please go to bit.ly/1LM0v8w.
Festival Pier Developer Chosen
The Delaware River Waterfront Corporation (DRWC) on Friday officially selected Jefferson Apartment Group and Haverford Properties to develop the Festival Pier waterfront site at Spring Garden Street, PlanPhilly reported.
The development, designed by architect Cecil Baker, will have 550 apartment units in a four-to-five story project, 30,000 square feet of ground-floor retail space, and a public boulevard extending out to the water’s edge.
The site will be 9 1/2 acres, with half the area dedicated as public space, designed and programmed by OLIN, the article noted.
To read the article, please go to bit.ly/1P1GmPx.
New Design for Boyd Theatre Development
Pearl Properties’ new plan for the Boyd Theatre development in the 1900 block of Chestnut Street (also designed by Cecil Baker) calls for a 32-story tower of glass and aluminum that rises above a base of off-white painted metal and limestone incorporating the historic theater's façade, The Philadelphia Inquirer reported on October 21.
The new plan also moves entrances to the building's loading docks and underground parking lot from Sansom Street to 20th Street and reduces the height of the structure where it is adjacent to shorter buildings.
To read the article and see a rendering, please go to bit.ly/1NUApDP.
Gallery NID Bill Scheduled for Council Vote
Bill #150374, which would establish the Gallery Neighborhood Improvement District (NID), is scheduled for a vote by City Council on Thursday, November 12.
The purpose of the NID is to provide a financial mechanism to guarantee the proposed Gallery tax increment financing district, and would designate the Gallery Neighborhood Improvement District Corporation, a Pennsylvania nonprofit corporation, as the Neighborhood Improvement District Management Association for the District.
To read the bill, please go to bit.ly/1FrqPmD.
PCPC Approves Italian Market Development
The Philadelphia City Planning Commission (PCPC) on October 20 voted to recommend Bill #150667, introduced by Councilman Mark Squilla on September 10, that would allow Midwood Investment & Development to build a five-story, 70-unit apartment complex on the southeast corner of Ninth Street and Washington Avenue, where Anastasi Seafood currently operates, PlanPhilly reported.
The project would have 18,000 square feet of retail space on the ground floor and two levels of underground parking. It needs City Council approval of a zoning change from CMX-2 to CMX-3.
To read the article, please go to bit.ly/1QSlxUh.
To read bill #150667, please go to bit.ly/1W6vkHJ.
City Hall Gates to Be Completed
Over the next three weeks, contractors working for the CCD will install the three remaining sets of ceremonial gates at the east, south and north portals of City Hall. The first pair of gates was installed in September on the Dilworth Park side of City Hall. In 1867 City Hall’s architect, John McArthur, Jr., designed these ornate, decorative gates, but they were never fabricated or installed. For more information, please go to centercityphila.org/pressroom/prelease090915.php.
Eds and Meds News
Drexel Board Extends University President’s Contract
The board of trustees of Drexel University has unanimously approved a second five-year contract for President John A. Fry, extending his contract to August 2020, The Philadelphia Inquirer reported on October 21. Drexel has 26,000 students and currently is conducting a $900 million capital campaign, the article noted.
To read the article, please go to bit.ly/1MTRMTJ.
Residential Market News
Federal Reserve Study of Gentrification
Countering claims of large scale displacement, a new study released in October by the Federal Reserve Bank of Philadelphia finds that when one takes into account the normal mobility patterns in any lower income neighborhood, existing residents in gentrifying neighborhoods have only slightly higher mobility rates than those in non-gentrifying neighborhoods.
Drawing on a unique large-scale consumer credit database, the study notes that gentrification is associated with some positive changes in residents’ financial health as measured by individuals’ credit scores. However, when more vulnerable residents (low-score, longer-term residents, or residents without mortgages) move from gentrifying neighborhoods, they are more likely to move to lower-income neighborhoods with lower values on quality-of-life indicators.
To read the report, Gentrification and Residential Mobility in Philadelphia, please go to bit.ly/1kZACt9.
House Prices and Sales Volume on the Rise
House sales and prices continued robust growth in the third quarter of 2015, with price increases in every neighborhood, and a record-breaking number of million-dollar sales, according to Kevin C. Gillen, Senior Research Fellow with the Lindy Institute for Urban Innovation at Drexel University, in a report released on October 20. The median house price increased 2.5% to $142,000 during the quarter, and rose 7.05% over the same quarter last year.
Neighborhoods with the highest increases included Center City/Fairmount (Gillen’s geography), +3.0%; West Philadelphia, +3.3%; and South Philadelphia, +5.2%.
There were 4,655 arms-length city home sales in the quarter, up sharply from 4,198 in the previous quarter and the highest volume of any quarter since 2007, with 34 homes sold for $1 million or more, double the 16 in the previous quarter, and breaking the previous record of 25 in the third quarter of 2008.
To read the report, please go to bit.ly/1GhXPt6.
Post Brothers Expanding Into University City
Post Brothers will invest more than $250 million in University City and has bought 550 apartments in seven properties and now owns the entire south side of the 4400 block of Walnut Street, the Philadelphia Business Journal reported on October 22. The company plans to upgrade those properties.
Among the recent purchases was Garden Court Plaza, a 13-story, 146-unit apartment complex at 4701 Pine Street.
To read the article, please go to bit.ly/201atKG.
Regional Service Economy Strong in October
Regional nonmanufacturing activity remained strong in October in the region, according to firms responding to October’s Nonmanufacturing Business Outlook Survey, conducted by the Federal Reserve Bank of Philadelphia, with new orders increasing for 42.5% of the firms, decreasing for 12.5%, and remaining the same for one-fourth (25%).
Only 10% of the respondents reported fewer full-time employees, while 30% reported an increase, and 60% indicated the number remained the same.
Looking ahead six months, 85% expected business to improve, none anticipated a downturn, and 7.5% foresaw no change.
To read the report, please go to bit.ly/1GZy2aV.
Strong Retail Activity in Center City
Retail activity remained brisk in the third quarter in Center City, particularly along Chestnut Street, where Five Below opened a 13,000 square foot store at 1529 Chestnut, and Target Express signed two leases, one at 1900 Chestnut and another at 1112-1128 Chestnut Street, according to the CBRE Marketview Greater Philadelphia Retail, Q3 2015.
Available retail space in the Philadelphia region continued to shrink, dropping to 7.3% from the second quarter’s 8.7%.
The report noted that over the past year, nationally, restaurant and bar sales receipts exceeded sales at grocery stores for the first time on record.
To read the report, please go to bit.ly/1kZL8R7 (requires registration).
Bill Would Change Zoning Code to Enable New Casino
Councilman Kenyatta Johnson on October 15 introduced Bill #150767, which would create the changes in the Special Purpose Entertainment District (SP-ENT) zoning regulations needed for Stadium Casino, LLC to build their Live! Hotel and Casino, awarded Philadelphia’s second casino license, KYW reported.
The $400 million proposed casino complex in South Philadelphia calls for 200,000 square feet for the gaming facility, plus a 220-room hotel.
To read the article, please go to cbsloc.al/1LIeTMS. To read Bill #150767, please go to bit.ly/1OKQkVh.
SugarHouse Revenue Dips in September
Revenue slipped slightly in September at SugarHouse Casino on the Delaware River, according to the Pennsylvania Gaming Control Board.
In September, the casino took in $20,767,026 compared to $21,033,898 in August. The Commonwealth’s share of taxes in September was $5,347,174, compared to August’s $5,635,613. The City of Philadelphia collected $673,333, compared to $701,787 in August.
To see all casino revenues, please go to bit.ly/1I0aqlt.
Arts and Culture News
Report Measures Impact of Parkway Organizations
The Parkway Council Foundation’s 20 member organizations, which include educational organizations, non-profits, and residences in the Benjamin Franklin Parkway area, generate more than $600 million annually for the City of Philadelphia, and nearly $700 million for the Commonwealth of Pennsylvania, according to a new study from Econsult Solutions, Inc., released on October 29.
The 20 organizations, in aggregate, spend approximately $305 million on their operations annually and have undertaken more than $420 million in capital investments over the past three years, the report noted.
Member attractions reported a collective attendance of more than 3.7 million visits in 2014, and an estimated 4,200 school and 2,250 community groups made visits to Parkway institutions. The report can help the next Administration understand what losses are incurred when major events scheduled on the Parkway restrict or eliminate access to the area.
To read the report, Parkway Council Economic Impact Report, please go to bit.ly/1kWizUy.
City’s Public Art Showcased in New Book
Newly available, A Guide to Philadelphia’s Public Art is a 228-page, full-color, pocket-sized book that offers photos and descriptions of 167 works of public art. The book is organized by geographic area and each section includes a map with locations of the art.
The guide book was compiled by the Office of Arts, Culture and the Creative Economy, under the leadership of Margot Berg, Public Art Director, and was made possible by a generous grant from the William Penn Foundation.
The book is available at the City Hall Visitor Center, in the East Market Street portal to City Hall courtyard. Donations received in exchange for the guide will go toward the care and preservation of the City’s public art collection. For complete information, please go to creativephl.org/PHLpublicartguide.
Philadelphia Orchestra Approves Contract
The Philadelphia Orchestra has approved a one-year contract that gives its musicians a 3% raise and increases the size of the orchestra by one, to 96 members, Newsworks reported on October 19.
Each musician will have a health savings account, in which the orchestra will invest, and changes were made to travel rules to ensure the viability of future international touring. The agreement establishes the musicians' base salary as $2,472 per week.
To read the article, please go to bit.ly/1N8WLLY.
New Stars for Music Walk of Fame
The Philadelphia Music Alliance on October 26 inducted seven entertainers into the Philadelphia Music Walk of Fame in a ceremony held at the newly opened Fillmore Philadelphia in Fishtown, The Philadelphia Inquirer reported.
Among the new inductees were The Roots, Andrea McArdle of Annie fame, DJ Harvey Holiday and the late Billie Holiday.
To read the article, please go to bit.ly/1LAl7jZ.
Change in Benjamin Franklin Parkway Traffic Pattern
PennDOT is replacing the 20th Street-Benjamin Franklin Parkway bridge, which will create traffic changes through July 2016. The bridge is one of seven structurally deficient bridges over I-676 to be replaced as part of a $64.8 million transportation improvement project.
The new traffic pattern reduces the Parkway’s eastbound inner lanes from three lanes to two approaching 21st Street and shifts the two eastbound through lanes to the right onto temporary pavement. Westbound traffic will have two lanes coming from Logan Circle onto the Parkway at 20th Street.
For complete information, please visit bridgesover676.com.
TIGER Grant to Fund Three Projects
On October 27, Philadelphia was awarded a $10.265 million U.S. Department of Transportation TIGER grant to be divided among three projects, PlanPhilly reported.
The Schuylkill River Swing Bridge, an abandoned bridge over the Schuylkill River near Grays Ferry, will receive $3.265 million toward the $14 million renovation. The bridge will connect the Grays Ferry Crescent Trail, which runs along the perimeter of the University of Pennsylvania’s “Pennovation” campus, to a segment of the Bartram’s Mile Trail currently under construction.
Another $5 million will go for improvements to American Street in Kensington and the remaining $2 million will go to transform a bridge on West Westmoreland Street into a full-service bridge.
To read the article, please go to bit.ly/1Wh6rco.
SEPTA to Invest in Energy Efficiency
The SEPTA board on October 22 approved a plan to begin installing LED lighting, improve water conservation, and make a variety of capital improvements designed to reduce energy use on SEPTA regional rail trains and subway cars, and at five facilities, The Philadelphia Inquirer reported.
Constellation NewEnergy Inc. of Baltimore was awarded the $18.3 million contract for the work, the article noted. The upgrades are expected to yield nearly $2 million in annual savings, most of which will be used to pay for the costs of capital equipment.
To read the article, please go to bit.ly/1i1iUDq.
Transforming Alleys by Targeting Trash
An article in PlanPhilly about attempts by McGillin’s Old Ale House to improve the 1300 block of Drury Street describes both the opportunities and challenges of transforming commercial service alleys into well-landscaped pedestrian spaces. Many of the issues center on the difficulties of managing and consolidating commercial dumpsters.
To read the article and view a rendering of a proposal to transform Drury Street, please go to bit.ly/1indjrd.
Parks and Open Space News
KieranTimberlake Awarded Gold Medal for Dilworth Park
AIA Philadelphia on October 14 awarded KieranTimberlake the Gold Medal for its design work for Dilworth Park at City Hall. The Gold Medal, the top annual design award, recognizes a single built work of the most exemplary design quality.
The jury from Portland, Oregon, recognized the transformed park as “a truly civic project that is inclusive and allows for many types of people to coexist happily.”
For a complete recap of the AIA Philadelphia Design Awards, please go to bit.ly/1MV4fGV.
Rothman Institute Ice Rink at Dilworth Park
Construction is currently underway for the opening of the Rothman Institute Ice Rink at Dilworth Park on Friday, November 13. For complete information about ice skating at the Rothman Rink and other activities at CCD parks, please go to ccdparks.org.
600 New Bus Shelters Planned
Over the next five years, 318 bus shelters will be replaced, 282 new ones will be added citywide, and 100 freestanding advertising kiosks may be added in Center City, raising questions about sidewalk overcrowding, The Philadelphia Inquirer reported on October 26. Arts and culture groups will no longer have exclusive access to low-cost advertising on bus stops along Walnut Street.
The City has entered into a 20-year contract with Intersection advertising (formerly Titan Outdoor), which will pay to build and maintain the new streetscape furniture, and share up to $100 million in ad revenue with the City.
The Philadelphia Art Commission approved four shelter sizes with glass-paneled walls, wood benches, and a lattice design supporting flat tinted roofs, the article noted.
To read the article and view the new shelter design, please go to bit.ly/1PalLam. To suggest locations for new bus shelters, please go to phillytransitshelters.com.
PICA Asks the BRT for Faster Property Tax Appeals
The Pennsylvania Intergovernmental Cooperation Authority on October 29 sent the Board of Revision of Taxes a letter requesting that it “expedite its hearing process for the remaining 2014 and 2015 assessment appeal cases,” The Philadelphia Inquirer reported.
Of the 29,522 appeals filed for tax years 2014 and 2015 combined, 2,557 cases remained to be heard as of October 15. Only 775 of those outstanding appeals have been scheduled for a hearing by year’s end, with the remaining 1,782 not yet scheduled.
To read the article, please go to bit.ly/1My9zBs.
Edward Powell Award Goes to Jerry Sweeney
On October 27, Gerard H. “Jerry” Sweeney, President, Chief Executive Officer and Trustee of Brandywine Realty Trust, was honored with the 2015 Edward Powell Award. The award is presented once every four years to a Philadelphia business leader recognized for outstanding contributions to the economic prosperity of the city. The selection committee cited “the tremendous impact [Sweeney] has had on the Philadelphia region through his business and civic engagement.”
Sweeney will donate the $125,000 prize that accompanied the award to five non-profit organizations: Schuylkill River Development Corporation; 22nd and Market Memorial Park Fund; Cityteam Philadelphia (Family Services Ministry); St. Barnabus Catholic School and St. Veronica Catholic School.
To read the press release, please go to bit.ly/1P0kiEY.
Readers Respond to Developments E-Mail Survey
Twenty-seven of CPDC’s 109 member firms (25%) responded to our survey about the bi-weekly Center City Developments e-mail newsletter:
• 96% responded that the newsletter was the right length, though some suggested making it a little “tighter;”
• 78% valued the newsletter highly with 26% reading it beginning to end; 37% reading most of it, and 37% skimming headlines to focus on articles of interest;
• 85% reported they regularly forward the newsletter to others in their company.
Many thanks to the CPDC members who responded. We will incorporate your suggestions and welcome any other ideas.
Tomorrow Is Election Day
Election Day in Philadelphia is tomorrow, Tuesday, November 3, with polls open from 7:00 a.m. to 8:00 p.m. Please remember to vote! For complete information on the election, please visit the Committee of Seventy’s website at bit.ly/1jxbAkC.
DVRPC to Celebrate 50 Years of Planning and Partnerships
The Delaware Valley Regional Planning Commission will celebrate its 50th anniversary with a reception and dinner on Wednesday, December 9, at the Hilton Philadelphia at Penn’s Landing, 201 South Christopher Columbus Boulevard.
A cocktail reception begins at 5:30 p.m., followed by the program at 7:00 p.m., and dinner at 8:00 p.m.
Tickets are $95 each. To register online, please go to dvrpc.ticketleap.com/50th/. To register by check or credit card, please fill out the form at bit.ly/1Gzr7uu [PDF].