Office Sector News
Equity Commonwealth Announces 1600 Market Sale
Chicago-based real estate trust Equity Commonwealth is selling 1600 Market, the 39-story office tower once known as the PNC Bank Building, to American Real Estate Partners of Herndon, Va.
Equity Commonwealth, controlled by investor Sam Zell, said in a statement it will reap $156 million in proceeds from the sale of the 826,000-square-foot property after accounting for various costs. The real estate company has been selling its Philadelphia properties and, once the sale of 1600 Market is complete, it will still own the 54-story 1735 Market tower, known as BNY Mellon Center.
For more, go to businesswire.com/news/home/20180123006496/en/.
2100 Chestnut Hits Market As Possible Development Site
The site of the two-story retail and office building at 21st and Chestnut Streets in west Center City, now home to tenants including Monde Market and the Day By Day restaurant, is being marketed for sale and potential redevelopment.
At least $20 million is being sought for the 19,125-square-foot structure at 2100 Chestnut, which is being sold by a unit of Philadelphia building owner Wil Rappaport’s Sansom Asset Management. A marketing brochure lists potential uses from renovating the building for a single user to clearing the half-acre parcel for a new high-rise.
For more, go to philly.com/philly/business/real_estate/commercial/philadelphia-redevelopment-chestnut-street-rappaport-katz-20180122.html.
Toll Bros. Revises Plans For Proposed Jewelers Row Tower
Toll Bros. has revised its plans for a condo tower on Jewelers Row. The Horsham-based home builder’s latest proposal calls for a 24-story tower with 85 condos atop a glass-and-brick base with ground-floor retail on the 700 block of Sansom Street.
Toll Bros. first announced its plan in August 2016 to demolish the jewelry shop buildings between 702 and 710 Sansom St., along with a contiguous property at 128 S. Seventh St., and to replace them with a 16-story condo tower. By July 2017, Toll encountered difficulties making what had grown into a 29-story proposal fit within height limits imposed by area zoning rules.
For more, go to philly.com/philly/business/real_estate/commercial/toll-bros-jewelers-row-proposal-philadelphia-real-estate-20180123.html.
With $56M In Loans, N. Broad’s Met Eyes December Opening
The historic Metropolitan Opera House on North Broad Street has received a $56 million financing package that developer Eric Blumenfeld said will push its restoration project forward to a December 2018 opening as a Live Nation venue.
The package of loans from the Philadelphia Industrial Development Corp., Fulton Bank, New Jersey-based lender Billy Procida, and New Orleans-based Enhanced Capital will be used to complete construction on the 39,200-square-foot opera house, built in 1908 at 858 N. Broad St.
12th Street Gym Closes After 30 Years
The 12th Street Gym, a Center City fixture for more than 30 years, has closed amid financial troubles. Frank Baer, the gym’s owner, said that the gym was facing a bill of at least $500,000 to address fire code violations and that real estate taxes on the property have surged in recent years.
Whether the building will remain or be demolished is unclear. The building also houses at least 20 small businesses, ranging from massage therapists to salons.
For more, go to philly.com/philly/news/lgbt-gym-closing-gayborhood-gloria-casarez-mural-20180125.html.
Philadelphia Hotels Report Record-Setting 2017
Center City hotels reported a 4.5% increase in visitors last year, registering a record 1.1 million room nights, and a record 78.2% occupancy rate, including 90% on Saturday nights, according to Visit Philadelphia.
The tourism marketing organization is planning a spring campaign to promote an overnight hotel package tied to dining, a video series in partnership with Bon Appétit magazine and the annual nominations announcement of the James Beard Foundation culinary awards. Visit Philadelphia also unveiled a “Homesick Philly” campaign aimed to attract former Philadelphians to visit or extend their stays.
Residential Market News
Report: Philadelphia Housing Inventory Ends 2017 At All-Time Low
Philadelphia ended 2017 with 3,329 single-family homes for sale, the city’s lowest-ever recorded level of housing inventory, while house prices fell slightly from the last quarter, according to a new report from Kevin Gillen, senior research fellow at the Lindy Institute for Urban Innovation.
In the fourth quarter, the median house price citywide fell slightly to $150,000 from $159,900. Gillen notes it is not uncommon to see this decrease at the end of the year, as the housing market tends to slow during the winter months.
For more, go to drexel.edu/lindyinstitute/initiatives/reports.
CPDC will release its annual housing report next month.
New Rowhouse Development Planned At Former Foxwoods Site
A Secaucus, N.J.-based development company plans a new development of rowhouses on part of a Delaware River waterfront property where a Foxwoods casino was once proposed. National Realty Investment Advisors’ proposal calls for 169 four-story homes of around 3,100 square feet each with ground-floor space to park one or two cars.
A subsequent phase for the 15-acre site would include 45 more houses on a pier attached to the site and a waterside public plaza, along with other public recreational spaces.
For more, go to philly.com/philly/business/real_estate/commercial/foxwoods-rowhouse-blatstein-atrium-delaware-river-waterfront-20180125.html.
22-Story Apartment Tower Planned On Delaware River’s Pier 34
Ensemble Investments LLC of Phoenix is proposing a 308-unit apartment tower with a half-acre public plaza on the site of what is currently a blighted Delaware River property.
The site plan places a 244-foot tower on the partially submerged Pier 34. It proposes that the adjacent Pier 35, now completely underwater during high tides, would be restored and landscaped into a public space.
Apartment Market Ends The Year With Mixed Results
The Class A apartment market throughout the region ended with mixed results in 2017 with rent growth modest and vacancy rates ticking up, according to Delta Associates’ Q4 report on the multifamily market.
Philadelphia fared better than its suburban counterparts: The city’s fourth-quarter vacancy rate inched up 1.4%, to 3.7%. For the region, the vacancy rate nudged up by 2.3% to 5.5%, and climbed by 2.5% in the western suburbs to 5.8%.
The overall lease up pace for new apartments in the city is taking on average 13 months, according to Delta’s analysis of a dozen buildings now seeking renters for their units. Projects that started marketing to renters in 2016 that are still in the process of filling up include the Griffin, AKA University City, Dalian on the Park, Divine Lorraine and North by Northwest.
For more, go to bizjournals.com/philadelphia/news/2018/02/01/apartment-market-ends-the-year-toned-down.html.
CPDC will release its annual housing report next month.
CB2 Comes To Walnut Street
CB2, the spin-off brand of the popular retail chain Crate & Barrel, opened its doors in Philadelphia on Feb. 2 in a 12,000-square-foot showroom in the space formerly occupied by Kenneth Cole and Lacoste at 1422 Walnut St.
The Philadelphia location marks CB2’s 12th store in the country and fifth East Coast location. As the Center City District’s latest Philadelphia Retail report notes, a dramatic increase in affluent and highly educated Center City residents since 2000 has attracted 60 national retailers to the downtown in the last four years.
For more, go to centercityphila.org/research-reports/2017philadelphia-retail.
PREIT Gets $250M Loan Backed By Fashion District
Pennsylvania Real Estate Investment Trust has secured a $250 million interest-only loan to finance the Fashion District Philadelphia, the former Gallery space currently undergoing redevelopment on East Market Street. PREIT is a half-owner of Fashion District; Macerich Co. owns the other half. The loan matures in January 2023.
Tenants lined up for the 1.4-million-square-foot mall include H&M, Wills Eye Hospital, an AMC movie theater, Columbia Sports, Levis, Sketchers, and Francesca’s.
Court Says PPA Not Liable for Taxi Losses From Uber and Lyft
The Philadelphia Parking Authority is not liable for the losses that city taxis have experienced amid the rising popularity of ride-sharing businesses like Uber and Lyft, a federal judge has ruled.
District Judge Michael Baylson granted the PPA’s request for a summary judgment in the lawsuit brought by the owners of hundreds of taxi medallions. The value of medallions plummeted as ride-sharing caught on, and the lawsuit was an attempt to get compensation from the PPA for their losses. Medallions worth $545,000 in 2014 had a value of $10,000 just two years later.
Manufacturing, Service Industries Continue Growth in January
Manufacturing improved in the region in January, according to responses to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia, with new orders up for 35.6% of firms, down for 25.5%, and remaining the same for 39.0%. The number of full-time employees increased for 24.4% of the companies, decreased for 7.6%, and was unchanged for 67.2%.
Looking ahead six months, 50.1% of the firms expected conditions to improve, 7.9% anticipated a downturn, and 34.7% predicted no change.
Business activity continued to expand in the region’s service sector in January, according to responses to the Nonmanufacturing Business Outlook Survey, with new orders up for 36.9% of firms, down for 15.4%, and remaining the same for 24.6%. The number of full-time employees increased for 11.2% of the companies, decreased for 11.7%, and was unchanged for 72.6%.
Looking ahead six months, 68.1% of the firms expected conditions to improve, 5.5% anticipated a downturn, and 26.3% predicted no change.
For the Manufacturing report, go to philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2018/bos0118.
For the Nonmanufacturing report, go to philadelphiafed.org/research-and-data/regional-economy/nonmanufacturing-business-outlook-survey/2018/nbos0118.
Eds and Meds News
Jefferson, Magee Finalize Merger
Thomas Jefferson University has completed its acquisition of Center City’s Magee Rehabilitation. Jefferson and Magee, once partners in the defunct Jefferson Health System, last February announced a preliminary deal to merge. The deal was finalized this month.
Since 2015, Jefferson has grown from three hospitals into a 14-hospital, multistate health system with more than 50 outpatient locations and annual operating revenues of about $5 billion.
PICA: City Spends $93 Million on OT Through Q2
The City of Philadelphia’s overtime costs totaled $93 million in the first half of FY2018, or 68.4 percent of the city’s annual overtime allocation. PICA’s Quarterly Overtime Update for the second quarter states that while the city has achieved recent reductions in overtime spending, city departments spent $1.5 million more on overtime than in the first half of FY2017.
The report also found that Q2 overtime costs were $45.7 million, almost $8 million higher than in the second quarter of FY2017, reversing a recent downward trend in overtime spending beginning in FY2016.
For more, go to picapa.org.
CCDF Needs Your Support To Bring Pulse To Dilworth Park
The Center City District Foundation cordially invites you to a cocktail reception with artist Janet Echelman to find out how you can support Pulse, a dynamic and immersive work of public art that will animate the fountain at Dilworth Park. Using curtains of dry mist, Pulse will trace above-ground in real time the movement of the subway lines below, creating an engaging experience for Dilworth Park visitors.
Help CCDF make Pulse a reality and an amenity at Dilworth Park that will be enjoyed for generations to come. Join us for this fundraising event on Tuesday, February 27, 6-8 p.m. in the Rothman Institute Cabin at Dilworth Park. RSVP to Romina Gutierrez at firstname.lastname@example.org or 215.440.5543 by February 19.
For more, go to supportccdf.org/our-work/pulse-at-dilworth-park.