Office Sector News
PREIT Sells Office Space on Market Street
Pennsylvania Real Estate Investment Trust (PREIT) has under agreement for sale 300,000 sf of office space it owns on the third through sixth floors of the former Strawbridge & Clothier building at 801 Market Street, The Philadelphia Inquirer reported on August 8.
Current tenants that occupy the space include the Philadelphia Media Network and the state’s Department of Labor and Industry. PREIT is continuing to sell some of its assets to raise capital for the major transformation of the former Gallery retail mall.
To read the article, please go to bit.ly/2uMkdBv.
Gallery Makeover Changes Name
In related news, Pennsylvania Real Estate Investment Trust (PREIT) and Macerich, developers of the Gallery at Market East, announced on August 16 that they were moving away from the concept they called the Fashion Outlets toward a more expansive mix of retail, entertainment and dining, to be named the Philadelphia Fashion District, The Philadelphia Inquirer reported.
The reopening is a year away, but the new concept will include fast fashion retailer H&M; a relocated, deep-discounter Burlington Coat Factory; and a “dine-and-recline movie theater,” not yet identified. The new development will also include other dining and entertainment. Century 21 at Eighth and Market Streets will remain.
To read the article, please go to bit.ly/2weoaiY.
Liberty Property Acquires Additional Properties
Liberty Property Trust has purchased 1926-34 Arch Street, a four-story, 52,104-sf office building, and 1936 Arch Street, an adjacent 6,000-sf surface parking lot, the Philadelphia Business Journal reported on August 14.
The properties are across the street from an assemblage of nearly a block bound by Arch, 19th, Cherry and 20th Streets owned by Liberty and geared toward future development, presumably for Comcast, the article noted. The Comcast Technology Center, developed by Liberty, is expected to be completed by early 2018.
To read the article, please go to bit.ly/2wN6LL3 (requires subscription).
Electric Factory Property Purchased
Arts & Crafts Holdings has paid $20.1 million to buy the two-building complex at 421 North 7th Street that is home to the Electric Factory, the Philadelphia Business Journal reported on August 9. Most of Arts & Crafts assets have been concentrated around the former Reading Viaduct, so this represents a significant expansion to the east.
The 2.47-acre property in the Callowhill neighborhood includes two large surface parking lots and is zoned CMX-3, which would allow for mixed-use development. The neighborhood is increasingly drawing attention – this property drew 16 offers – due to transformation of the Reading Viaduct into an elevated park and the availability of older industrial buildings that are good candidates for redevelopment, the article noted.
To read the article, please go to bit.ly/2uq4pAl.
Residential Market News
Regional House Prices Rebound in Second Quarter
After multiple quarters of decreases, suburban Philadelphia’s house price index rose 5.5% in Q2 2017, compared to the 3.2% increase in the city’s, with the median suburban house price up 13.6% to $244,000, comparable to the 13.9% increase in the city’s median house price, according to Kevin C. Gillen, senior research fellow at Drexel University's Lindy Institute for Urban Innovation, in a report released on August 7. The city’s increase was attributable to the large number of sales of newly constructed and improved homes, while in the suburbs, sales of new homes were only 4% of the total.
There were 24,676 arms-length sales in the suburbs in Q2, a 62% increase over the previous quarter and a 41% increase over the same quarter a year ago.
Region-wide, there were 279 sales of houses priced at $1 million or more, one shy of the record 280 in Q3 of last year.
To read the report, please go to bit.ly/1qntloS.
In related news, the average difference between a home or condo with a parking space and one without is between $18,000 and $28,000, according to PlanPhilly, referencing another new report from Gillen. A parking space within a mile of City Hall adds around $60,000 to its value (8% for houses, 14% for condos).
As a percentage of a home’s total value, parking is valued most highly in rowhouse neighborhoods such as Kensington, South Philadelphia, and the Lower Northeast, where a parking space can increase value up to 25%. To read the PlanPhilly article, please go to bit.ly/2vKYvNb. To read the report, What Price Do Philadelphians Really Place on Their Parking?, please go to bit.ly/2xb871M [PDF].
Eds and Meds News
High Rankings for Philadelphia Hospitals
The Hospital of the University of Pennsylvania-Penn Presbyterian ranked 10th and Thomas Jefferson University Hospital was 16th on the latest U.S. News & World Report Best Hospital Honor Roll, the Philadelphia Business Journal reported on August 8.
The Rothman Institute at Thomas Jefferson Hospital ranked fourth nationally for orthopedics. Other hospitals not in the top 10, but with a nationally ranked specialty area for adults, were: Wills Eye Hospital, second in ophthalmology; MossRehab, 10th in rehabilitation; and Magee Rehabilitation Hospital, 13th in rehabilitation.
To read the article in the Philadelphia Business Journal, please go to bit.ly/2wq8Cpa. To see all the rankings, please go to bit.ly/1jv66oM.
Increase in Retail Vacancies
A page one Sunday Philadelphia Inquirer story, bleakly titled “Shuttered storefronts and stagnating rents,” highlights the recent increase in vacancies on some of Center City’s prime shopping streets.
Many result from recent departures -- Armani Exchange, True Religion and Ralph Lauren – that have probably occurred around the same time because original leases were executed at the same time.
The retailers exiting the Center City market have also been underperforming nationally (i.e., Ralph Lauren announced it would be closing 50 stores nationally, including its Fifth Avenue flagship in NYC to make way for a new digital focused strategy, while True Religion filed for bankruptcy in July and Nine West is shuttering stores, including all their NYC locations). By contrast, retail categories with strong sales nationally include grocery, furniture, home and garden, health, fitness and beauty, fast fashion, restaurants, value/outlet, and online retailers, all correspond with retailers who are opening, expanding and thriving in Center City.
Nonetheless, the story points to several challenges facing Center City retail: a significant increase in supply and the expansion of successful retail zones in surrounding neighborhoods in Greater Center City. The untended growth in homelessness and panhandling of Center City streets has not helped either. In September, CCD will be launching a new marketing effort to attract both customers and retailers to downtown.
To read the article, please go to bit.ly/2v3TnRv.
Arts and Culture News
BF Parkway Centennial Year Celebration Seeks Support
Parkway 100, the centennial celebration of the Benjamin Franklin Parkway, debuts with the Parkway 100 We are Connected Festival on Friday, September 8, from 4:00 p.m. to 10:00 p.m. and continues through November 2018. Presented by the Parkway Council, in partnership with PECO, the cultural district open house offers 100 family-friendly activities throughout the Parkway Museums District, including extended hours and free or pay-what-you-wish museum admission.
The Parkway Council is seeking 100 civic leaders to join in helping to finance this celebration. For a tax-deductible gift of $1,000 or more, you can be included in the list of individual supporters and be kept up to date on the robust schedule of Parkway 100 exhibitions, events, and community conversations.
Please contact Parkway Council Executive Director Judi Rogers at firstname.lastname@example.org or 215.763.3427.
Several CPDC are already supporting banners along the Parkway. These include Morgan Lewis, Goldman Properties, Joseph Pasquarella, Keystone Property and PREIT.
On Tuesday, December 19, at 8:30 a.m., the CPDC Membership Meeting will focus on the future of the Parkway at Sky Philadelphia, The Vista Room, Three Logan Square, 1717 Arch Street.
For more information on the Parkway 100 celebration, please visit parkway100.org/Events/113/. To learn more about how you can contribute, please go to bit.ly/2fRS7hQ [PDF].
Merriam Theater to Be Renovated
The Kimmel Center is planning to renovate the Merriam Theater and possibly demolish part of it to build a residential tower above, in partnership with a real estate developer, The Philadelphia Inquirer reported on August 12.
KieranTimberlake has created preliminary renderings, though the Kimmel Center is seeking additional ideas and public input before making a final decision. A public meeting will be held in late September. No estimated costs have been made public.
To read the article and see the renderings, please go to bit.ly/2v2BxgR.
Parks and Open Space News
Progress at The Rail Park
Philly By Drone on August 8 captured the state of progress at Phase 1 of The Rail Park. Phase 1, an elevated, 25,000-square-foot linear park built atop a dilapidated quarter-mile portion of the Reading Viaduct that runs from Broad Street southeast across 13th and 12th Streets to Callowhill Street, is expected to be completed in early 2018.
Thanks to the generosity of so many, the CCD has reduced the gap needed to fully fund the $10.3 million project to just over $200,000. You can help make this transformative new public green space a reality by making a gift today. For a list of donors and to learn more, please visit supportccdf.org/our-work/rail-park or contact Nancy Goldenberg at email@example.com. To view the Philly By Drone photos, please visit phillybydrone.com/rail-park.
Wine Garden at Collins Park
The Center City District Foundation (CCDF) and Chaddsford Winery have partnered to present downtown Philadelphia's newest summer pop-up, the Wine Garden at Collins Park. Conveniently located at 1707 Chestnut Street, the Wine Garden at Collins Park will be open two more Fridays, August 25 and September 1, from 4:00 p.m. to 9:00 p.m., offering Chaddsford wines and hard cider, by the glass ($8), or by the bottle ($20).
The Wine Garden at Collins Park helps support the CCDF, which owns and maintains the park for public enjoyment. To learn more about CCDF, please go to supportccdf.org. Visit johnfcollinspark.org and follow @CCDParks on Twitter for more information and updates.
Pictures in the Park Finale
This Friday, August 25, the final Pictures in the Park at Dilworth Park will begin at 8:30 p.m. Have a cocktail or beer while watching the movie, Guardians of the Galaxy Vol. 2, on the big screen al fresco. Be sure to bring your own blanket or chair.
For information on all activities in Dilworth Park, please go to dilworthpark.org.
Amtrak Partners With Lyft
Amtrak's 30th Street Station and the ride-sharing service Lyft have created a partnership that allows train passengers to book a trip with Lyft through Amtrak's mobile app, the Philadelphia Business Journal reported on August 9.
The agreement is a blow to the medallion cab industry, the article noted, and likely to create more headaches for the Philadelphia Parking Authority (PPA), which regulates taxis and ride-sharing services.
To read the article, please go to bit.ly/2vjz5WL.
American Airlines Adds Three Non-Stops to Europe
American Airlines next year on March 25 will begin year-round, non-stop service to Zurich, as American moves the route from JFK International Airport in New York to Philadelphia International, the Philadelphia Business Journal reported on August 16.
In addition, summer seasonal service to Budapest and Prague will be offered from May 4 through October 27 of next year. Bookings can be made beginning today (August 21).
To read the article, please go to bit.ly/2w1E8MY.
Street Closures for Chestnut Street Bridge Repairs
Beginning today, August 21, Schuylkill Avenue between Walnut and Chestnut Streets near 30th Street Station will be closed for approximately five months to facilitate repairs to the Chestnut Street Bridge, NBC10 reported. A detour has been provided for motorists, cyclists and pedestrians.
In addition, the on-and-off-ramps at the I-76 Interchange between Chestnut Street and Walnut Street will be restricted to a single lane and there will be nighttime and weekend full closures of the ramps during construction. The repairs are part of a PennDOT $103 million revitalization project.
To read the article, please go to bit.ly/2x5iUui.
SEPTA’s Revenue and Ridership Down in FY17
SEPTA annual ridership in FY17 was 308.3 million, or 5.5% below the previous year. Year-over-year ridership declined due to structural defects in the Silverliner V Regional Rail cars affecting one-third of the fleet, a six-day City Transit strike, and increased competition from ride sharing services coupled with low gas prices.
The net impact of the City Transit strike was a loss of $5.6 million in passenger revenue and 5.2 million in City Transit ridership over the six-day period. Total passenger revenue in FY17 was 6.2% below the previous year’s revenue.
SEPTA’s performance over the last few years has followed the national trend of declining City transit ridership, the report noted. To read the report, please go to bit.ly/2wkjdnQ [PDF].
In related news, SEPTA has introduced a new app, Transit Watch, to advance its “see something, say something” safety campaign, PlanPhilly reported on August 16. The app allows riders to send a text with photos or video about safety and security issues to SEPTA police dispatchers.
SEPTA is spending $254,000 over three years for the app from ELERTS Corporation, which has developed similar programs for Boston’s MBTA, Atlanta's MARTA and Toronto’s TTC.
To read the article, please go to bit.ly/2fRXHkf.
Legal Sparring Over Second Casino License
The Pennsylvania Gaming Control Board (PGCB) on August 9 once again approved Stadium Casino LLC’s plan for a casino and hotel in South Philadelphia, the city’s second casino, after the Pennsylvania Supreme Court sent the case back to the PGCB, The Philadelphia Inquirer reported.
SugarHouse Casino and others had appealed the PGCB’s award of the license for Live! Philadelphia Casino & Hotel, questioning whether its financial support was in compliance with the state Gaming Act. Based on information gathered at a July 31st hearing, the PGCB determined it was. The PGCB also will create a statement outlining why the board came to its decision, which can be appealed as well.
To read the article, please go to bit.ly/2vqTIii.
Revenue Up at SugarHouse Casino
Revenue at SugarHouse Casino on the Delaware River increased in July to $24,610,093, up from $23,914,821 in June, according to the Pennsylvania Gaming Control Board.
The commonwealth collected $6,425,822 million in July, compared to $6,162,587 during the previous month. The City collected $194,161, as its share of revenue from table games.
To view all casino revenues, please go to bit.ly/2uMroWC.
Regional Manufacturing Continues to Expand
Manufacturing conditions in the region modestly advanced in August, according to responses to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia, with new orders up for 39.2% of the responding firms, down for 18.7%, and remaining the same for 40.6%.
The number of full-time employees increased for 15.2% of the companies, decreased for 5.0%, and remained the same for 79.6%.
Looking ahead six months, 48.8% expected regional conditions to improve, 6.5% foresaw a downturn, and 32.6% predicted no change.
To read the report, released on August 17, please go to bit.ly/2x8HJWg [PDF].
BRT Has Backlog of Property Tax Appeals
The City of Philadelphia’s Board of Revision of Taxes (BRT), responsible for deciding the value of a property when an owner appeals the assessment, has a backlog of more than 1,800 appeals, but has taken a six-week summer vacation, The Philadelphia Inquirer reported on August 9. The appeals directly impact the revenues that will be available to the School District of Philadelphia and to municipal government.
To read the article, please go to bit.ly/2vn326P.
Plan Calls for Zero Waste by 2035
Mayor Jim Kenney on August 7 unveiled the Zero Waste and Litter Action Plan and an interactive, data-driven website for residents, CleanPHL.org, noting that every year Philadelphia disposes of nearly 1.5 million tons of residential and commercial waste, one ton for every resident. The plan commits Philadelphia to the goals of Zero Waste by 2035, eliminating the use of landfills and conventional incinerators, and focusing on waste reduction in buildings and at events. It also aims to explore citywide organic material collection.
Los Angeles, New York City and Atlanta have established similar progressive sustainability goals to address waste management.
To read the Mayor’s press release, please go to bit.ly/2hHadn7. To read the City’s action plan, please go to bit.ly/2vjE2gD [PDF].
City and Police Agree on Contract
Members of the Fraternal Order of Police Lodge 5, which represents the majority of the Philadelphia Police Department’s 6,300 officers, have agreed on a new contract that will give officers annual raises of about 3% for each of the next three years, The Philadelphia Inquirer reported on August 15. The previous contract expired on June 30 and the new one will run through June 2020.
The deal’s total cost exceeds by $45 million the amount the City has budgeted for the contract and the City has 20 days to revise its five-year financial plan.
To read the article, please go to bit.ly/2wR2FBF.
PNC Presents Live @ Lunch Returns to Dilworth Park
The popular midday concert series at Dilworth Park, returns on Wednesday, September 6, from 12:00 noon to 1:30 p.m., and continues each Wednesday through October 18. Enjoy lunch on the PNC Terrace with your favorite specialty from the Dilworth Park Café.
Here’s the musical lineup: Nalani & Sarini, September 6; Matt Santry, September 13; Joy Ike, September 20; Ernie Halter, September 27; Nelly’s Echo, October 4; Matt Cusson, October 11; and Philly Keys, October 18.
For information on all the events at Dilworth Park, please go to dilworthpark.org.
Catto Sculpture Unveiling
The sculpture honoring Octavius V. Catto, a complex installation designed by artist Branly Cadet, will be unveiled on the south side of City Hall at 11 a.m., Tuesday, September 26, The Philadelphia Inquirer reported.
It will be the first public sculpture raised at City Hall since John Wanamaker, Citizen was dedicated in 1923, the article noted. Catto was an African American political activist murdered on Election Day, October 10, 1871, as he traveled to vote. He was 32 years old.
To read the article, please go to bit.ly/2w9zuwm.