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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

231-Unit Luxury Complex Set to Break Ground in Downtown Wilmington

8 May 2015, 1:19 pm

By Veronica Grecu, Associate Editor

This summer, Buccini/Pollin Group will break ground on a new luxury apartment complex as part of a revitalization plan in Wilmington.

Named the Residences at Midtown Park, the project is expected to serve as a gateway between the city’s decades-long redevelopment effort on Market Street and a newly proposed Creative District that will take shape immediately west of downtown.

As reported by The News Journal, Buccini/Pollin Group’s new residential complex is set to replace the Midtown Parking Center—which is located downtown Wilmington, between 8th, Orange, 9th and Shipley streets—, the Ninth Street Book Shop, and other adjacent retail stores.

The Residences at Midtown Park will consist of two high-rise buildings that, combined, will offer 231 luxury apartments targeting Millennials. The new apartments are expected to be occupied in record time, seeing that the overall downtown Wilmington luxury rental market hit 93.2 percent in Q4 2014, according to research data compiled by MPF Research and quoted by the news source. Approximately 800 new luxury apartment units have been completed in this part of the city in the last 15 years, yielding an occupancy rate of 99 percent. The high-end luxury apartments completed post 2000 posted an average rent of $1,643 in downtown Wilmington.

Metro Self Storage Pays $29 million for Self-Storage Portfolio in Suburban Philadelphia

23 Apr 2015, 7:01 pm

By Veronica Grecu, Associate Editor

Hot on the heels of the National Storage Center’s record sale in Michigan, another portfolio of self-storage properties changed hands this month in suburban Philadelphia in a transaction brokered by HFF on behalf of the seller, PFG Capital of York, PA.

StorageWORKS! - Warminster, PA

StorageWORKS! – Warminster, PA

The portfolio was purchased for $29.25 million or $153 per square foot by Chicago-based Metro Self Storage, which operates more than 100 self-storage facilities in 11 states. “The aggressive pricing of this portfolio was dictated by the strong fundamentals of the self-storage industry combined with the abundance of institutional equity chasing quality self-storage properties,” said HFF Managing Director Richard Schontz  in a prepared statement.

According to an official statement, the buyer teamed up with LaSalle Investment Management—a subsidiary of JLL—to purchase the three-property portfolio, expanding Metro Self Storage’s existing Pennsylvania assets by 191,000 rentable square feet. All three properties were 89 percent occupied at the time of sale.

The portfolio acquired by Metro Self Storage included:

-          Newton Storage, a 26,568-square-foot complex consisting of two two-story buildings and located at 100 Silver Lake Road in Newtown, roughly 28 miles north of Philadelphia;

-          StorageWORKs! Warminster, an 89,210-square-foot self-storage assembly of 15 buildings located at 1634 Mearns Rd. in Warminster;

-          StorageWORKS! North Wales, which consists of eight single-story buildings totaling 75,120 square feet of rentable space located at 418 N. Sumneytown Pike in North Wales.

With this new acquisition, Metro Self Storage now owns and operates 10 self-storage facilities in suburban Philadelphia. According to The SpareFoot Storage Beat, last year the Chicago-based company purchased four properties in the area—three self-storage facilities totaling more than 259,000 square feet from Storage King USA and an 851-unit facility in Limerick, which was acquired for $9.93 million.

Image courtesy of Metro Self Storage

$140 Million Upscale Shopping Center Underway in Lower Macungie

16 Apr 2015, 8:10 pm

By Veronica Grecu, Associate Editor

One of the largest open-air shopping centers in the U.S. in recent years is under construction in Lower Macungie Township, north of Philadelphia.

Hamilton Crossings - Lower Macungie

Hamilton Crossings – Lower Macungie

Developed by a joint venture between the Goldenberg Group of Blue Bell, PA, and New York City-based TCH Development, the $140 million Hamilton Crossings will sit on 70 acres of land located between Hamilton Blvd. and the Route 222 Bypass at Krocks Road. As mentioned in a news report by Lehigh Valley Business, the construction site was formerly occupied by two abandoned iron mines. The site is currently being cleaned of mine wash, a highly saturated material with no structural strength that has to be removed from and replaced with clean fill, the news report said.

Hamilton Crossings will encompass 565,000 square feet of upscale retail space which, according to the news source, has already been leased to several big-box tenants such as Whole Foods and Costco—marking the retailers’ first supermarkets in Lehigh Valley—, Target and Dick’s Sporting. Other tenants include Five Belowm Designed Shoe Warehouse, ULTA Cosmetics, Nordstrom Rack, Old Navy, Rally House and Pier 1 Imports, and several others which haven’t been disclosed by the developers. In Total, Hamilton Crossings will house 33 businesses, including up to eight restaurants, and will feature shopper-friendly amenities such as 22 miles of walking and bike paths, a rain garden with 160,000 plants and outdoor gathering places.

The massive shopping center is scheduled for opening in July 2016. The retail project will have a positive impact on Lehigh Valley’s employment market, generating 495 construction jobs. Additionally, almost 620 full-time jobs and 300 part-time jobs will be created after the shopping center opens. The development project will also bring the first adaptive traffic control system in the region: seven high-tech traffic signals placed at intersection around the shopping center that will communicate with each other and make real-time adjustments to the duration of light based on the flow of traffic. These signals will be equipped with video cameras and will be connected to a computer that will help alleviate traffic, according to lehighvalleylive.com.

Courtesy rendering

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