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Apartment Building Sale in Philadelphia Sets New Record

30 Jun 2015, 3:45 pm

By Adriana Pop, Associate Editor

ICON 1616 Apartment Building in Philadelphia

ICON 1616 Apartment Building in Philadelphia

A new transaction highlights the strength of Philadelphia’s multifamily market.

Icon, a 206-unit Art Deco apartment building at 1616 Walnut St., recently sold for $112 million, which equates to a record-breaking price tag of more than $542,000 per unit.

According to the Commercial Observer, Meridian Capital Group negotiated an $80.4 million Fannie Mae loan on behalf of the property’s new owner, Castle Rock Equity Group of New York.

The 10-year loan, originated by Berkadia Commercial Mortgage, includes a 4.06 percent interest rate and a 30-year amortization schedule.

Located less than two blocks from Rittenhouse Square, the 25-story historic tower was previously owned by a partnership involving Federal Capital Partners, Cross Properties and Alterra Property Group.

The companies acquired the high-rise in 2012 for an undisclosed amount and invested $50 million into its conversion from office to residential use.

Open since April 2014, the rebranded Icon high-rise now features a mix of one-, two- and three-bedroom apartments, with an average size of 730 square feet. There are also 160 parking spaces and 23,000 square feet of retail space occupied by Santander Bank, Theory, TownHome and Pizzeria Vetri.

Amenities include a sky deck with a grilling station, herb garden, outdoor living area and fireplace; a private dining room with fireplace; club level with kitchen, pool table, and large-screen televisions; and a fitness floor with a yoga studio and massage room.

What is special about this conversion project is that the developers worked with Delos, a New York real estate company that came up with the Well Building standards, which are similar to sustainable and LEED building standards, but focus on promoting human health and wellness within the built environment.

The property came up for sale in October and was marketed by Jim Galbally and Erin Miller of JLL. According to the Philadelphia Business Journal, the Icon apartments command an average rental rate of about $3.50 per square foot, which ranks as one of the highest in Philadelphia’s Center City.

Photo credits: www.icon1616.com

Find out more about the newly-developed WELL Building Standard, the first protocol of its kind to focus on human wellness within the built environment.

Starwood’s First Dual-Branded W + Element Hotel Coming to the ‘City of Brotherly Love’

22 Jun 2015, 1:43 pm

By Adriana Pop, Associate Editor

Pennsylvania  Convention Center in Philadelphia

The Broad Street facade of the Pennsylvania Convention Center in Philadelphia

Starwood Hotels & Resorts Worldwide, Inc. officially began construction on its first-ever W and Element dual-branded hotel development.

The upcoming 755-key, trophy-class tower is rising in the heart of downtown Philadelphia. By the time it opens in early 2018, the 51-story building will feature a 295-room W Philadelphia and a 460-room Element Philadelphia.

The owner of the project is Chestlen Development, an affiliate of Brook Lenfest, and the developer is Vine Street Matthews Development.

According to the Philadelphia Business Journal, the cost of the high-rise amounts to $280 million. This includes $33 million in tax increment financing, as well as construction loans totaling $160 million. HFF arranged the financing by placing a $100 million senior loan with Bank of the Ozarks and a $60 million mezzanine loan with Cornerstone Real Estate Advisers.

The two hotels will have separate characteristics and entrances.

W Philadelphia will be the luxury brand’s only hotel in the city. It will feature a 150-seat restaurant, 2,900-square-foot spa, 1,400-square-foot gym, an outdoor terrace totaling 7,000 square feet with a year-round heated outdoor pool and bar, as well as 45,000 square feet of meeting and event space.

Not as fancy as the W, the eco-friendly, extended-stay Element will have a 1,400-square-foot breakfast and lounge area, a 1,600-square-foot fitness center and 560 square feet of branded meeting space.

Local officials have long waited for this type of development, which will complement the nearby $786 million expansion of the Pennsylvania Convention Center and encourage large-scale new business to select Philadelphia as their convention destination.

Guests will also have easy access to leading city attractions such as the Avenue of the Arts, Independence Hall, Barnes Foundation, Liberty Bell, Mutter Museum, the Philadelphia Museum of Art, and a variety of galleries, restaurants and boutiques.

Upon completion, the project will increase Starwood’s total portfolio in the city to 12 hotels across seven of its nine brands.

Photo credits: Wikimedia Commons

Retirement Complex Sold for $62 Million

29 May 2015, 3:23 pm

By Veronica Grecu, Associate Editor

Watermark Retirement Communities, a senior living company based in Tucson, AZ, sold one of its retirement communities in center City Philadelphia.

The Watermark at Logan Square

The Watermark at Logan Square

According to property records cited by the Philadelphia Inquirer, The Watermark at Logan Square changed hands earlier this month for nearly $62.3 million. The buyer was identified as SNR 21 Logan Square Owner.

Completed in 1984, the retirement community is located at Two Franklin Town Blvd. in Philadelphia’s Logan Square neighborhood. The property consists of 264 rental apartments for seniors as well as 200 assisted living units in a mix of personal care, memory care, and rehabilitation units. The 23-story building also incorporates a fitness center, restaurant, café, spa center, and below-ground parking garage.

PropertyShark data indicates that the 420,000-square-foot asset was purchased by Watermark Retirement Communities for $25 million in fall 2006.

Image courtesy of Watermark Retirement Communities

833 Chestnut St. Trades Hands for $160 Million

21 May 2015, 6:11 pm

By Veronica Grecu, Associate Editor

Less than one year after it was put on the market, the 12-story data center and medical office building sitting across from Thomas Jefferson University Hospital (TJUH) in Center City Philadelphia is under new ownership.

833 Chestnut St. - Center City Philadelphia

833 Chestnut St. – Center City Philadelphia

The announcement was made by HFF, which was hired exclusively by colocation services and data center solutions provider Digital Realty Trust to market the asset. The building was purchased by California-based real estate investment trust HCP Inc. in a transaction valued at $160.75 million, or roughly $228 per square foot.

Located at 833 Chestnut St., the 705,061-square-foot Class A medical office structure is one of the largest buildings in Center City. It was 92 percent leased at the time of sale, according to HFF. Around 60 percent of the building is currently occupied by Jefferson Health System, while the rest of the space is leased to other major tenants such as the U.S. Government and the Ballinger Company.

“We had significant interest from all the ‘usual suspects’ in the medical office building space, as well as private equity, pension fund advisors, and even some foreign capital. The size of the property can really move the needle for some of these groups. Pricing was aggressive, and this transaction is a testament to how accretive the current MOB market is for sellers,” said Michael Bennett, managing director of HFF’s National Healthcare Capital Markets Group, in a prepared statement.

Designed by Graham, Anderson, Probst & White, the building was completed in 1928 as home to the Gimbel Bros. department store. According to the Philadelphia Business Journal, a $40 million renovation that included new elevators, electrical and ventilation systems and other major improvements was completed in 2000 by a partnership involving Trimont Real Estate Advisors and Lehman Brothers. Five years later, the asset was purchased by Digital Realty Trust for $59 million.

Image via HFF

Keystone’s Class A One Presidential Building in Bala Cynwyd Almost Fully Leased

15 May 2015, 2:42 pm

By Veronica Grecu, Associate Editor

One Presidential Building, a premier office property located in one of the most desirable submarkets in suburban Philadelphia, will soon reach full occupancy.

One Presidential Building - Bala Cynwyd PA

One Presidential Building – Bala Cynwyd PA

Owner Keystone Property Group announced it signed a lease agreement with Live Nation Entertainment for 12,000 square feet of space at the four-story Class A asset. Keystone was represented in-house by Scott Paymer, while Newmark Grubb Knight Frank advised Live Nation in this transaction.

According to a statement for the press, the Beverly Hills-based entertainment giant will occupy Keystone’s former headquarters in the building over the next ten years. Live Nation’s move from nearby Bala Pointe Office Center at 111 Presidential Blvd. is set to bring the company’s four local affiliates— Live Nation Philadelphia, Live Nation Arenas, Ticketmaster and Maverick —under one roof.

“Welcoming one of the world’s most prominent entertainment and event companies to One Presidential is affirmation of the improvements we’ve made to the space in order to attract world-class tenants,” said in a prepared statement Bill Glazer, President of Keystone. “As we continue to develop and improve our properties to accommodate today’s most forward-thinking companies, we’re especially pleased to have Live Nation aboard,” he added.

Located at the corner of City Lane Ave. and Presidential Blvd., the 130,804-square-foot building was completed in 1956 as the headquarters of Gulf Oil and one of the first big-box office properties outside Philadelphia. In 2006, the property was sold by the Morgan Family Trust to Keystone for south of $19 million, according to data provided by real estate website PropertyShark. Two years later the new owner completed an environmentally friendly redevelopment at the building that included upgrades to the HVAC system to meet the Energy Star rating code for Building Automation System, new energy efficient lighting, installation of a new E-glass curtain wall system with an insulated glazing system that helps reduce energy consumption, as well as renovation of the main lobby that now displays a two-story waterfall, marble floors and wood paneled walls.

Image courtesy of Keystone Property Group

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