Office Sector News
Aramark Will Stay in Downtown
Aramark will keep its world headquarters in downtown Philadelphia, its home of 55 years, but it may move from 1101 Market Street, The Philadelphia Inquirer reported on April 7.
About 1,150 of Aramark’s 6,500 Philadelphia employees work in the downtown headquarters. Reported factors in the decision included balancing concerns about public behavior issues in the East Market corridor with the company’s desire to maintain its identification with the city and continue to employ existing local staff, and financial incentives offered. Aramark employs 14,000 workers statewide. Aramark is reported to be considering sites in the Navy Yard and on West Market Street.
To read the article, please go to bit.ly/1qxtCXA.
Market East Leads in Rental Rate Growth
Downtown Philadelphia’s office occupancy rate in the first quarter of 2016 was 91.4%, with average asking rent of $28.56/psf in 44,135,010 sf of office space, according to JLL’s Philadelphia CBD Office Insight - Q1 2016. Year-to-date absorption was 96,146 sf.
Though small in size, Market East led all submarkets across the CBD for rental rate growth with a 12.5% increase year-over-year. Many buildings are being renovated to Class A and creative standards, pushing asking rates for the first time into the $30 range east of Broad. The next closest, though much larger, Market West, saw 4.2% asking rate growth. Overall, the CBD has experienced an average 5.5% increase in asking rents.
The report notes 2,447,264 sf of office space under construction, with 85.2% (primarily Comcast) preleased.
To read the report, please go to bit.ly/1qMmQgc [PDF].
Indy Hall Expands Coworking Space
The coworking space Indy Hall has signed a lease for 10,000 sf of office space at 399 Market Street, after seven years in 8,000 sf at 22 North Third Street, the Philadelphia Business Journal reported on April 6.
Indy Hall, one of the city’s oldest coworking communities, was founded in 2006 by Alex Hillman and Geoff DiMasi.
To read the article, please go to bit.ly/1RYvXDF.
Microsoft to Open Innovation Center
The Microsoft Innovation Center, an events, training, and marketing space, will open in July on the ground floor of the University City Science Center’s 3711 Market Street location, owned by Wexford Science + Technology, Technical.ly Philly reported on April 6.
Microsoft plans to launch the space in time for the Democratic National Convention, during which the company will offer events focused on politics and civic engagement. It will not sell any products at the center.
To read the article, please go to bit.ly/25LNUMI.
Health Tech Company Opens New Headquarters
GSI Health, a healthcare technology company, on April 14 cut the ribbon on its new headquarters in 13,000 sf of top-floor space at 1735 Market Street.
The collaborative office space is outfitted with writable walls, advanced conferencing capabilities and mounted touch-displays for projection and virtual white-boarding, the press release noted. It also touts the headquarters’ close proximity to train stations, local restaurants and other city amenities.
To read the press release, please go to prn.to/1WujwSZ.
Philadelphia’s Advantages Attract Portland Startup
Spatial Terra, a four-year-old Portland startup specializing in a blend of market research, risk-mitigation analysis, and consulting, moved into 1,700 sf of office space in a renovated warehouse in Fishtown, after the company’s owner researched various cities and chose Philadelphia, The Philadelphia Inquirer reported on April 4.
Advantages included a sizable downtown, easy train and highway access to other metropolitan areas, proximity to a major airport, cost of living, leasing costs, and a variety of activities from nightlife to restaurants to sporting events.
To read the article, please go to bit.ly/1T9Qi9a.
Eds and Meds News
Drexel to Lead National Research Institute
The U.S. Department of Defense has named Drexel University as a key leader in the creation of a $75 million national research institute that will support American textile manufacturers in bringing sophisticated new materials and textiles to the marketplace, the university announced on April 1. The institute, Advanced Functional Fabrics of America, will be a national manufacturing resource center for industry and government.
MIT, Drexel, the University of Central Florida and Cornell University are leaders of the institute because of their complementary research in novel fibers for textiles, rapid textile prototyping and computer simulation.
To read Drexel’s press release, please go to bit.ly/1SQMJSB.
Independence Beer Garden Returns
Season 3 of the Independence Beer Garden across from the Liberty Bell on Independence Mall opened Friday and Saturday and will officially begin its season on Thursday, April 21.
For hours and to see the menu, please go to phlbeergarden.com.
Residential Market News
Delta Associates: Outlook Optimistic for Class A Apartments
Vacancy dropped 270 basis points in the City of Philadelphia from 6.3% one year ago to 3.6%, while effective rents were up 3.0% in the first quarter of 2016, according to State of the Philadelphia Class A Apartment Market, First Quarter, from Delta Associates.
The current volume of construction will restrain rent growth and push up vacancy in the near-term. Over the long-term, however, Delta suggests that rental demand will be supported by sustained job growth, demographic shifts, and a growing preference for rental over ownership.
As of March 2016, Philadelphia saw a record-setting 5,419 apartment units scheduled to deliver over the next 36 months.
In the intermediate- and long-term, Delta expects the renter share of Philadelphia metro-area households to continue to rise, supporting robust demand for Class A apartments. Over the next 24 months, Delta forecasts annual rent growth in the region to remain in the 2% to 4% range.
Arts and Culture News
Philadelphia Orchestra to Emphasize Community Outreach
The Philadelphia Orchestra has announced a new department, HEAR (health, education, access, research), to promote education and community access to music, Newsworks reported on April 7.
The new initiative will include pop-up performances, incentives to provide musical instruments for the Philadelphia School District, and music therapy for the homeless. Existing programs such as tickets for teenagers; free neighborhood concerts; and providing for amateur instrumentalists to play alongside orchestra musicians will be continued under the new department.
To read the article, please go to bit.ly/22gfoWq.
SEPTA Concourse Improvements and Other News
SEPTA has posted notice that concourse improvement work will begin today, Monday, April 18, under the Rebuilding the System program. Upgrades will be made to the corridor connecting South Broad Street to East Market and to the corridor connecting South Broad to Dilworth Park and Center Square. Those portions of the concourse will be closed during construction, which is expected to be completed in March 2017.
To learn more about the Rebuilding the System, please go to bit.ly/1SHw5V8. To read Philadelphia magazine’s article about the closure, please go to bit.ly/1NdRFo4.
In related news, SEPTA's $548.63 million capital budget for fiscal year 2017 (FY17), which begins July 1, includes money for more accurate travel information, improved stations, and 525 new buses, The Philadelphia Inquirer reported earlier this month.
New vehicles have been budgeted at $168 million, including $60 million for the new 40-foot buses expected to be delivered between 2017 and 2021 at a total cost of $415 million.
To read the Inquirer article, please go to bit.ly/2666qQ7. To view the SEPTA budget, please go to bit.ly/1NdOYTx [PDF].
SEPTA will launch its new payment technology, SEPTA Key, on Monday, June 13, with an “Early Adopter” program that will offer 10,000 Key Cards available on a first-come, first-serve basis, PlanPhilly reported Friday. SEPTA will set up a special system for the early users to provide feedback.
The pilot is limited to buses, trolleys, subway lines and the Norristown High Speed Line. SEPTA Key implementation on Regional Rail and paratransit will begin next year. To read the article, please go to bit.ly/1SQGtu4.
New Schedules for Regional Rail and PATCO
SEPTA’s Regional Rail lines adopted new schedules on Sunday, April 10, with trains departing earlier, some trains getting new numbers, and some destinations shifted. For complete information on the new schedules, please go to bit.ly/2615MDB.
PATCO introduced its new schedules on Saturday, April 9. Saturday trains will run every 20 minutes instead of every 25 minutes and some departure times have been changed for evening trains on the weekend. To view the new schedules, please go to bit.ly/1NoPE3i.
I-676 to Close Four Nights Next Week
I-676 will be closed in both directions between the I-76 and Broad Street (Route 611) interchanges today, Monday, April 18, through Thursday, April 21, from 11:00 p.m. to 5:00 a.m. the following morning, for overhead bridge construction, PennDOT announced on Thursday.
The overnight work is part of the four-year, $64.8 million project to replace seven structurally deficient bridges over I-676 between 22nd Street and 18th Street, and to make landscaping and streetscape improvements above the expressway. Construction began in April 2015 and will finish in fall 2019.
For more information on the I-676 project, please go to bridgesover676.com. For detours and other up-to-date information, please go to 511PA.com.
Thinking about Infrastructure at a Mega-Regional Scale
An opinion piece in yesterday’s New York Times offers an example of thinking at a scale not currently within our national, state or regional political dialogue.
To read the article, please go to nyti.ms/1MD95KY.
Parks and Open Space News
Spring Training in Dilworth Park
On Tuesdays, Wednesdays and Thursdays through May 26, Dilworth Park is hosting a variety of free sports and fitness programs, conducted by experts in the field of personal fitness, thanks to the generous support of the Rothman Institute and Jefferson Health. From yoga to Zumba, this program is designed to get everyone informed and in-shape for spring and summer.
For more information, please visit DilworthPark.org.
Groundbreaking for Memorial Park
A groundbreaking ceremony was held April 6 for the June 5 Memorial Park that will honor the memory of six people who died when the Salvation Army building collapsed in 2013, Newsworks reported. More than a dozen people also were injured. The park recognizes the lives of all those who were lost, injured or impacted by the building collapse.
The Salvation Army donated the property for the memorial, and nearly $1 million in labor also has been donated. The park, expected to be finished by the fall, will include a memorial sculpture of three granite slabs more than eight feet tall with two windows in each to represent each of the six victims, whose names will be etched into the stone. A seventh window pays tribute to the universal experience of losing loved ones.
To read the article, please go to bit.ly/1TRSxAc.
Improvements for City Hall Courtyard
The City of Philadelphia, the Mayor’s Fund for Philadelphia, Southwest Airlines Company and the Project for Public Spaces on April 12 announced a grant valued at $200,000, including monetary and technical support, from the Southwest Airlines Heart of the Community program to develop and implement a strategy to enliven the City Hall Courtyard.
The grant will build on recent investments in City Hall and its surroundings, including the renovation of Dilworth Park and the JFK Plaza/LOVE Park redesign.
Philadelphia is among five communities to receive a grant, selected from more than 90 applicants from 60 cities.
To read Southwest’s announcement, please go to bit.ly/1WssgsY.
New Members of the Art Commission
Alan Greenberger, former deputy mayor and former chairman of the Philadelphia City Planning Commission, has been appointed chairman of the City of Philadelphia’s Art Commission, which reviews development that impacts the public environment, PlanPhilly reported on April 6.
Other members of the commission are Joe Laragione, a painter; Robert Roesch, a sculptor; Carmen Febo San Miguel, of Taller Puertorriqueño; Mario Zacharjasz, of PZS Architects; Jose Almiñana, a landscape architect with Andropogon; Matthew Perks, a lawyer who serves on the Parks & Recreation Commission; and John Herzins, Department of Public Property.
To read the article, please go to bit.ly/20zCQP3.
Mayor Issues First 100 Days Report
Mayor Jim Kenney on April 12 reported on the accomplishments of his first 100 days in office and noted the launch of a pre-K and community school outreach effort, the end of fire department brownouts, the Commerce Department’s new Talent Development Unit to strengthen and train Philadelphia’s workforce, and the establishment of the position of Chief Diversity and Inclusion Officer.
Also the Mayor budgeted for a reduction in wage and business taxes, proposing to continue the City’s commitment to wage tax relief, with rates reduced throughout the Five Year Plan. Specifically, rates would decline from the current rate for residents from 3.91% to 3.73% and for non-residents, from 3.348% to 3.33% by 2021. This would be the lowest resident wage tax rate since 1975.
To read the report, First 100 Days, Just Getting Started, please go to 1.usa.gov/1Si97tR [PDF].
In related news, Mayor Kenney named Adam Thiel to replace Derrick J.V. Sawyer as Fire Commissioner, Philly Voice reported on April 11.
Thiel has served as the Deputy Secretary of Public Safety and Homeland Security in Virginia since February 2014. Prior to that, he was the Fire Chief of the City of Alexandria, Virginia, from 2007 to 2014. To read the article, please go to bit.ly/1Q7toKT.
CPDC Meeting on Thursday, April 28
The Central Philadelphia Development Corporation's Membership Meeting will be held Thursday, April 28, at 8:30 a.m., in the Grant Room of the Union League, 140 South Broad Street.
The date has been changed from Tuesday, April 24, so as not to conflict with the Pennsylvania primary.
Come to the release of our State of Center City report and hear a panel discussion about the downtown marketplace.
Speakers will be Paul R. Levy, Executive Director, CPDC, on highlights from the State of Center City 2016 report; Daniel Moore, Managing Director, Hines, with a project overview of 1213 Walnut (co-developed with The Goldenberg Group) and why they are investing in Center City; Wayne L. Fisher, Executive Managing Director, Newmark Grubb Knight Frank, on the state of the office market; and Peter Tyson, Managing Director, PKF Consulting/CBRE Hotels, will focus on hotel trends.
Business casual attire required. No denim.
CPDC members are encouraged to invite both young professionals and other members of their firms to attend this meeting. Please RSVP to Casandra Dominguez by April 25, firstname.lastname@example.org or 215.440.5533.
May Event in Dilworth Park Marks Anniversaries of CCD and CPDC
To celebrate the 25th anniversary of CCD and the 60th anniversary of CPDC, we are planning a special fundraiser at Dilworth Park during the evening of Thursday, May 5, so we can do even more for the downtown! We will highlight the work of both organizations and launch the Center City District Foundation, the charitable affiliate of the CCD, to help support the next generation of public space improvements in Center City Philadelphia.
Want to send invitations via email? Here’s a link: centercityphila.org/anniversary/anniversary_invite.php. To purchase individual tickets or a table for 10, please go to bit.ly/1pzjb5j.
Janette Sadik-Khan Will Discuss Her New Book
Janette Sadik-Khan, the former New York City DOT Commissioner who revolutionized New York street planning, is coming to WHYY, 150 Sixth Street, on May 4, from 5:30 p.m. to 8:30 p.m. for a reception and discussion of her new book, Street Fight: Handbook for an Urban Revolution. Tickets are $10, but space is limited.
For more information or to purchase tickets, please go to bit.ly/1SQICGd.
One Riverside Topping Off Ceremony
Dranoff Properties will host a topping off ceremony at One Riverside, 25th and Locust Streets, on Wednesday, May 25, from 5:30 p.m. to 7:30 p.m.
The $90 million condominium tower with 22 stories and 82 residential units will offer underground parking spaces, fitness center, in-door pool, club room, hospitality suite, and business center. Plans also include a private garden with broad lawns, as well as a separate terrace adjoining the lobby with an outdoor kitchen. For more information, please visit oneriversidecondos.com.