Office Sector News
Renovations planned for office portion of Wanamaker building
The landmark Wanamaker building is undergoing a $5 million renovation. Rubenstein Partners and Amerimar Enterprises Inc. are initially focusing on the lobby of the office portion of the 1.4 million-square-foot building, which is occupied by Macy’s on three floors and office space on floors six through 12.
Key features of the lobby will be a 350-square-foot video screen at the visitor entry point, a concierge desk and a new security desk on the mezzanine level. Also planned is a new 7,136-square-foot office suite on the 10th floor that will be marketed to tenants.
For more, go to bizjournals.com/philadelphia/news/2018/02/21/wanamaker-to-undergo-renovations.html.
1911 Walnut Plans Revised To Add Hotel-Length Stays
Southern Land Co. has revised its plan for a residential tower at 1911 Walnut St. to add short-term stays. The Nashville-based developer will offer hotel-length stays in furnished units within the 48-story tower, dubbed The Laurel, in response to demand for such accommodations in the neighborhood, The Philadelphia Inquirer reported.
The company plans to open a sales office in the coming months to market the 54 units planned on the floors set aside for condominiums. Prices will start at about $2.5 million.
For more, go to philly.com/philly/business/real_estate/commercial/philadelphia-walnut-street-high-rise-hotel-apartments-condos-20180223.html.
NYT Examines Philadelphia’s Schuylkill Yards Development Project
An article in The New York Times on February 20 discussed the plan to develop a hub for technology and life-sciences companies through the 20-year, $3.5 billion Schuylkill Yards project.
“Not only will the project fill in an underused section of real estate, it is also intended to develop business opportunities for research coming out of Drexel University and the University of Pennsylvania, both just a few blocks away,’” the report noted.
For more, go to nytimes.com/2018/02/20/business/philadelphia-commercial-real-estate.html.
In related news, CBRE has been retained by Schuylkill Yards developer Brandywine Realty Trust to provide retail advisory and transaction services for the project.
For more, go to philadelphia.citybizlist.com/article/467554/cbre-teams-with-brandywine-realty-trust-for-retail-portion-of-35b-schuylkill-yards-development.
Taxpayer Costs Could Rise Under Deal For New Police HQ
A deal to borrow $252.5 million to transform 400 North Broad St. into a new police headquarters could cost taxpayers more than anticipated when City Council approved the agreement last year. The potential cost increase for the project, already the second-priciest historic rehab of its kind in Pennsylvania history, stems from a change to the deal's financing.
Instead of a 19-year loan with a fixed interest rate of 3.75% as discussed last summer, the approved loan will be paid out over the next nine years at a 4.02% interest rate, with an option to refinance when the term ends.
For more, go to planphilly.com/articles/2018/02/26/new-terms-on-city-s-deal-to-buy-inquirer-building-for-new-philly-police-hq-threaten-to-increase-cost-for-taxpayers.
Nightclub Owner Buys Adjacent Lot Where Apartments Were Planned
The owners of a nightclub north of Chinatown have acquired an adjacent parking lot that they’ve previously discussed as a development site for a 16-story apartment tower. Meritis Group, controlled by the mother-and-son development team Micheline and James De Berardine, paid $2.4 million for the 7,840 square foot lot on the northwest corner of 12th and Vine streets, according to city records.
The developers said in 2016, before opening the NOTO club at 1209 Vine St., that they intended to buy the next-door lot for a 99-unit apartment building. They withdrew their permit application for the planned tower later that year.
For more, go to philly.com/philly/business/real_estate/commercial/philadelphia-apartments-noto-nightclub-meritis-group-deberardine-20180227.html.
Blatstein Plans Final Development For Northern Liberties
Tower Investments CEO Bart Blatstein is planning a six-building, mixed-use complex on a 4.4-acre vacant lot he owns adjacent to Schmidt's Commons, formerly the Piazza at Schmidt's, and the Acme-anchored retail building called the Shops at Schmidt's — both of which he developed and later sold.
The complex will contain around 1,200 apartments above 45,000 square feet of ground-floor retail around a public plaza. Blatstein plans to complete the project in phases over five years at a cost of more than $350 million, with groundbreaking by March 2019.
For more, go to philly.com/philly/business/real_estate/commercial/blatstein-returns-focus-to-northern-liberties-with-plan-for-remaining-brewery-parcel-20180227.html.
City Asks For Study On Combining Visit Philadelphia, PHLCVB
The Greater Philadelphia Hotel Association will conduct a study, requested by city Commerce Director Harold T. Epps, examining whether to combine destination marketing organizations Visit Philadelphia and the Philadelphia Convention & Visitors Bureau. The request for review comes after the recent announcement that Visit Philadelphia president and CEO Meryl Levitz will step down at the end of 2018.
Visit Philadelphia markets to domestic leisure visitors, and the Philadelphia Convention & Visitors Bureau is the primary sales and marketing agency for the Pennsylvania Convention Center. PHLCVB also promotes the city to overseas leisure travelers.
For more, go to bizjournals.com/philadelphia/news/2018/02/27/epps-letter-visitphilly-phlcvb-combine-tourism.html.
Eds and Meds News
Jefferson Unveils Plans For Biological Manufacturing Center
Thomas Jefferson University has unveiled plans to establish what it says will be the first education and training center for biological manufacturing in North America. Jefferson has formed a partnership with the National Institute for Bioprocessing Research and Training (NIBRT), based in Dublin, Ireland, for the project.
The Jefferson Institute for Bioprocessing will prepare engineering students and industry professionals for leadership positions in the emerging field of biological manufacturing. Biologic therapies are substances derived from living organisms, or laboratory-produced versions of those substances, and developed to treat a variety of diseases such as rheumatoid arthritis, diabetes and cancer.
For more, go to prnewswire.com/news-releases/thomas-jefferson-university-to-establish-the-first-education-and-training-center-for-biologics-manufacturing-in-north-america-in-partnership-with-global-leader-nibrt-300601623.html.
CHOP Forms Partnership With UAE Children’s Hospital
Children’s Hospital of Philadelphia and Al Jalila Children’s, the United Arab Emirates’ only children’s hospital, have entered into a memorandum of understanding to collaborate on a dedicated neurology outreach program. A key aspect of the alliance will be the use of telemedicine consultations, where CHOP physicians will assist Al Jalila doctors caring for patients with complex conditions.
Matthew Bayley, CHOP's senior vice president and chief strategy officer, said the Philadelphia-based pediatric hospital is "committed to improving health for children worldwide" and excited to be collaborating with Al Jalila Children’s.
For more, go to chop.edu/news/al-jalila-children-s-and-childrens-hospital-philadelphia-align-collaborative-clinical-care.
Peirce College Taps N.J. College Administrator As New President
Peirce College, which largely serves adult learners in Philadelphia, has tapped a New Jersey college administrator as its new president. Mary Ellen Caro currently serves as vice president of enrollment management and learner services at Thomas Edison State University in Trenton, N.J.
Caro is the first female president in the Center City college’s 153-year history. She will replace James J. Mergiotti, who is retiring after nine years at the helm.
For more, go to prnewswire.com/news-releases/dr-mary-ellen-caro-named-first-woman-president-and-ceo-of-peirce-college-300605113.html.
Residential Market News
Philadelphia Condo Market Ends 2017 With Strong Numbers
Philadelphia’s condominium market ended 2017 with its best numbers since the recession. According to a new report by Kevin Gillen for Allan Domb Real Estate, the average price of Philadelphia’s condos increased by 1.8% on a quality- and seasonally-adjusted basis in Q4, up from 0.9% in the previous period.
Condo price levels posted their biggest annual gain since the recession, with average prices 8.1% higher than they were one year ago -- the largest year-over-year gain since 2006, right before prices began their decline.
For more, go to allandomb.com/author/kgillen-ad/.
Home Values Continue To Increase In Philadelphia
Philadelphia home values rose 9.1% citywide over the past year, according to real estate services firm Zillow's Home Value Index.
The Philadelphia Business Journal, which examined the city’s ZIP codes to compare changes in home value, found the biggest one-year median value increases in University City (19104) and Point Breeze/Graduate Hospital/Grays Ferry (19146), both at 19.2%, followed by South Philadelphia West (19145) at 15.7% and Germantown (19144) at 11.9%. Only three ZIP codes saw slight decreases, each of 1.8% or less: Nicetown/Tioga (19140), West Oak Lane (19138) and North Philadelphia (19132).
For more, go to bizjournals.com/philadelphia/news/2018/02/16/philadelphia-where-did-home-values-rise-the-most.html.
Report: Most Philadelphians Want To Buy Homes In City
Nine out of 10 house hunters in Philadelphia looking to buy a new home are keeping their searches within the city, according to a new migration report by real estate website Redfin.
Specifically, 87% of Philadelphia-based homebuyers looked for homes on Redfin within Philadelphia in 2017. The city ranked ninth out of the top 10 cities of users looking to stay put. Boston saw the most loyal homebuyers, with 91.5% looking to buy in their hometown.
For more, go to redfin.com/blog/2018/02/q4-migration-report.html.
CPDC’s annual report on housing in Center City will be released shortly.
Former Gallery Mall Office Space Sold To N.Y. Buyer For $41.8M
Thor Equities LLC of New York has purchased 214,000 square feet of office space inside the former Gallery at Market East shopping mall from Pennsylvania Real Estate Investment Trust and Macerich. Thor paid $41.8 million for the offices occupied by Health Partners Plans, on top three floors of the 907 Market St. property.
The deal completes efforts by PREIT of Philadelphia and Macerich of Santa Monica, Calif., to sell off the office space at the former Gallery, which they are redeveloping into the Fashion District Philadelphia. Thor owns more than 160 commercial properties valued at $10 billion in markets including New York, Paris and London. The 907 Market St. acquisition is its first Philadelphia asset.
For more, go to prweb.com/releases/2018/02/prweb15241995.htm.
Uber Bus-Like 'Express Pool' Service Arrives In Philadelphia
Uber has expanded its Express Pool service to Philadelphia. The new bus-like offering is up to 75% less expensive than Uber X, the company’s standard option. In Philadelphia, some Express Pool trips across Center City could cost less than $2.50, the base fare for SEPTA.
Uber’s quest to secure a larger share of the market has already led to intense competition with the city’s taxis and with rival ride-share business Lyft. SEPTA has expressed concerns that ride sharing is cutting into bus ridership, and studies indicate that ride-sharing services like Uber are adding to congestion in many large cities.
For more, go to planphilly.com/articles/2018/02/21/uber-bringing-new-bus-like-express-pool-service-to-philly-stepping-up-competition-with-septa.
New CCD, CPDC Report Examines Center City’s Congestion Problem
Ride-sharing services like Uber, along with increasing numbers of commercial and delivery vehicles, ongoing construction, and an underfunded and fragmented system of agencies involved in managing the city’s streets and sidewalks are among the factors increasing traffic congestion in Center City, according to the Central Philadelphia Development Corporation’s new research report, Keep Philadelphia Moving.
This report examines the problems of congestion in Center City and offers recommendations for funding, coordination, infrastructure and technology to enable Philadelphia's 17th-century street grid to adapt to the needs of today.
For more, go to: centercityphila.org/research-reports/transportation.
Traffic Deaths Remain High In Philadelphia And Across The U.S.
Traffic deaths across the U.S. remain stubbornly high, a recent report by the National Safety Council (NSC) has found. An estimated 40,100 Americans were killed last year in traffic accidents, slightly lower than 2016’s death toll but 6% higher than in 2015. In Philadelphia last year, there were 99 traffic fatalities, up from 76 in 2016, according to the Bicycle Coalition of Greater Philadelphia.
Kelley Yemen, Philadelphia’s Director of Complete Streets, said with six deaths per 100,000 residents, Philadelphia’s rate is double the annual rate in New York and triple the rate in Boston.
For more, go to planphilly.com/articles/2018/02/19/traffic-deaths-remain-stubbornly-high-in-philly-and-across-the-u-s.
PICA: General Fund Revenue Collections Hit $1.58B In Q2 FY2018
A new PICA analysis of the Quarterly City Managers Report (QCMR) for the second quarter (October 1-December 31, 2017) shows the city’s General Fund revenue collections were $1.58 billion, $127.4 million more than the second quarter of fiscal year 2017. General Fund obligations totaled $2.01 billion, an increase of $45.5 million over the second quarter of last year.
The QCMR projects year-end revenues and obligations to increase, by $50.8 million and $28.9 million respectively, compared to the projections found in the City’s Revised Five Year Plan. Additionally, the City’s year-end fund balance for FY2017 totaled $189.2 million, over $100 million more than projected, thus, the City’s projection for FY2018’s year-end fund balance has increased to $203.3 million.
For more, go to picapa.org/2018/02/just-released-picas-staff-report-on-citys-second-quarter-city-managers-report/.
Manufacturing, Service Industries Continue Growth in February
Manufacturing improved in the region in February, according to responses to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia, with new orders up for 41.4% of firms, down for 16.9%, and remaining the same for 41.7%. The number of full-time employees increased for 30.3% of the companies, decreased for 5.1%, and was unchanged for 63.9%.
Looking ahead six months, 55.4% of the firms expected conditions to improve, 14.2% anticipated a downturn, and 26.5% predicted no change.
Business activity continued to expand in the region’s service sector in February, according to responses to the Nonmanufacturing Business Outlook Survey, with new orders up for 28.9% of firms, down for 12.2%, and remaining the same for 27.5%. The number of full-time employees increased for 26.5% of the companies, decreased for 5.3%, and was unchanged for 60.0%.
Looking ahead six months, 43.1% of the firms expected conditions to improve, 12.1% anticipated a downturn, and 44.8% predicted no change.
For the Manufacturing report, go to philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2018/bos0218.
For the Nonmanufacturing report, go to philadelphiafed.org/research-and-data/regional-economy/nonmanufacturing-business-outlook-survey/2018/nbos0218.
Report: Philadelphia Ranks No. 4 For Women In Tech
Philadelphia is one of the country’s best cities for women in the tech industry, according to fintech site Smart Asset’s latest rankings. Philadelphia landed at No. 4 on the new “Top 15 Cities for Women in Tech” list -- a considerable jump from 2017, when the city ranked 10th, and 2016, when the city was 15th.
In creating the rankings, SmarTech looked at data for cities with at least 200,000 residents and ranked regions based on four metrics: gender pay gap in tech, income after housing, percentage of women in the tech force, and tech employment growth.
For more, go to smartasset.com/mortgage/best-cities-for-women-in-tech-2018.
Philadelphia Mayor Calls For Tax Hikes To Cover School Deficits
Philadelphia Mayor Jim Kenney’s budget proposal for Fiscal 2019 calls for increasing property taxes and reducing scheduled business tax reductions. The mayor’s plan would send a projected $980 million to the School District of Philadelphia’s budget over five years.
The budget plan proposes a 6% property tax increase that would generate $475 million; an increase in the real estate transfer tax to add $66 million; an increase in the city’s annual contribution to the School District that would add $100 million over the next five years; a slowdown in planned wage tax reductions that would divert $340 million to the School District.
For more, go to beta.phila.gov/media/20180301094657/FY19-Budget-in-Brief.pdf.
Some city business leaders are expressing concerns about parts of Kenney’s proposal, the Philadelphia Business Journal reported. Josh Sevin, an economic development strategist and former acting director of the Economy League of Greater Philadelphia, called the proposed slowdown in reductions to the wage tax “a step backward.”
Post Brothers CEO Michael P. Pestronk said instead of slowing down the wage tax reduction, the city should consider changes to its 10-year tax abatement policy. Councilman at-Large Allan Domb questioned why any tax hike is proposed while hundreds of millions of dollars in delinquent taxes have yet to be collected.
For more, go to bizjournals.com/philadelphia/news/2018/03/05/perelman-sevin-hornstein-pestronk-kenney-budget.html.