Office Sector News
Law Firm Eyes A New Center City Tower For Next Move
Morgan, Lewis & Bockius, one of Philadelphia’s largest law firms, is looking for a new headquarters for its Center City practice. Morgan Lewis currently is located in 289,432 square feet in Six Penn Center at 1701 Market Street, where its lease expires in 2021.
The firm is focused on a site at 22nd and Market streets, where Parkway Corporation is planning an 18-story, 308,000-square-foot building. In addition to that $175.9 million project, Parkway is also marketing a 400,000-square-foot project at 20th and Arch streets.
WeWork Is Opening Its 5th Philadelphia Location At 1100 Ludlow
Coworking giant WeWork has announced plans to open a fifth Philadelphia location in the fall at 11th and Ludlow streets. WeWork will occupy more than 50,000 square feet on the seventh and eighth floors of the East Market development project, called 1100 Ludlow.
The new site is the fifth local WeWork space since the global company expanded into Philadelphia in 2016, starting in Northern Liberties inside the revamped Schmidt’s building. Its three other locations are in Center City at 1430 Walnut Street, 1601 Market Street and 1900 Market Street. WeWork now houses 480 companies and 2,762 members in Philadelphia.
EPA Moving To 4 Penn Center From 1650 Arch Street
The General Services Administration has signed a lease for the Environmental Protection Agency to occupy space at Four Penn Center at 1600 John F. Kennedy Boulevard. The GSA confirmed that it has entered into a 15-year lease for 173,007 square feet in the building.
The EPA currently leases 307,847 square feet at 1650 Arch Street, where the agency has had its headquarters since 1998. That lease was initially scheduled to end in May 2018, but it was extended until 2020.
$125M Development Project To Bring Biotech Firm To Philadelphia
A West Coast biotech company has signed a 136,000-square-foot lease for a new $125 million building at the Philadelphia Navy Yard. Iovance Biotherapeutics Inc., based in San Carlos, Calif., is developing cell therapies for the treatment of cancer. The company plans to invest $75 million in the project and bring several hundred jobs to the Navy Yard when the project is completed in 2021.
The project is the first to be undertaken by Gattuso Development Partners, a new firm spearheaded by John Gattuso, who had led work on most of the Navy Yard Corporate Center’s existing office and lab buildings as regional director of Liberty Property Trust. Other project partners are Synterra Ltd., Ensemble Real Estate Solutions and Investments, and Digsau.
Eds & Meds News
Immunotherapy Startup Targeting Brain Cancer Raises $25M
Imvax Inc., a Philadelphia immunotherapy startup developing a brain cancer treatment, has raised $24.8 million to advance its experimental therapy. The series B equity financing was disclosed in documents the company filed with the Securities and Exchange Commission.
Founded in 2015, Imvax is seeking to commercialize private research conducted by co-founders David W. Andrews and Craig Hooper of Thomas Jefferson University. The company's lead product is being developed to help a patient's own immune system recognize and attack tumors for glioblastoma, an aggressive form of brain cancer.
Amicus, Penn Expand Gene Therapy Collaboration
Amicus Therapeutics and the University of Pennsylvania's Perelman School of Medicine have agreed to a major expansion of their gene therapy research collaboration. Financial terms of the expanded research and licensing agreement include Amicus making a five-year, $50 million investment into Penn's gene therapy program in return for exclusive, disease-specific product development rights.
Amicus, of Cranbury, N.J., also plans to establish a new global research and gene therapy center in Philadelphia. The company will occupy the top three floors under construction at 3675 Market Street, where it expects to have 200 employees there within the next few years.
Four Seasons Philadelphia To Open Aug. 12 In New Comcast Tower
The Four Seasons Hotel Philadelphia atop the new $1.5 billion Comcast Technology Center, the city’s tallest building, will open on August 12. In addition to its 219 guest rooms, four restaurants, and spa on the 57th floor, the Four Seasons will run a fifth floor ballroom for weddings and group events.
The hotel will employ more than 500 people. It is one of 11 Philadelphia hotels set to open by the end of 2020. In 2018, Center City reached all-time highs in occupancy, average daily rate and revenue per available room, with demand outpacing supply.
Philadelphia's Second-Largest Hotel Sells, $28M Overhaul Planned
Cambridge Landmark has paid $77.4 million for the former Sheraton Downtown Philadelphia and, in a sale-lease back transaction, sold the property to Net Lease Capital Advisors. The company plans a $28 million renovation to guest rooms and other public spaces in what is an increasingly competitive hotel environment in Center City.
The former Sheraton at 201 N. 17th Street has 757 rooms and 58,000 square feet of event space. It was bought from Blackstone Group and a new franchise agreement was signed with Marriott International to regain use of the Sheraton brand. The hotel is being branded as Philadelphia 201. Interstate Hotels and Resorts, a third-party hotel management company, will continue to manage and operate the property.
Stepped-Up Traffic Enforcement Effort Resumes In Center City
Philadelphia police, SEPTA supervisors and Philadelphia Parking Authority enforcement officials have announced the launch of another Center City parking enforcement initiative, which began June 3. After a successful launch last fall, city officials said authorities will prioritize parking enforcement on Chestnut Street between 23rd and 7th streets and Market Street between 13th and 7th.
The second effort will again focus on enforcement of the bus, bike, and right-turn only lanes on Market and Chestnut streets. Enforcement officers will also continue to issue parking violations, with an enhanced effort and focus on moving violations, such as driving in the bus lane and illegal turns.
As noted in CCD/CPDC’s 2018 congestion report, Keep Philadelphia Moving, the increase in jobs and residents, new tourist destinations, hotels, retail and restaurants has led to an increase in car, bus and truck traffic and a 30% increase in pedestrians since the end of the recession. CPDC, along with the Philadelphia Police Department, expressed support for the addition of traffic enforcement officers to relieve downtown’s worsening congestion, as did 69% of Philadelphians who voted in the May primary election.
SEPTA Adds 25 Battery-Powered Electric Buses To Fleet
SEPTA is powering up new fully electric buses, which the authority says is part of the largest-of-its-kind zero-emissions transit fleet on the East Coast. Twenty-five of the Proterra-made buses, with a design more streamlined than traditional SEPTA buses, are now operating out of a South Philadelphia depot outfitted with wall chargers to power the batteries.
The buses are being used on the crosstown 29 and 79 bus routes. More battery-powered buses will be deployed early next year. SEPTA utilized a $2.6 million federal transportation grant to purchase the e-buses.
Residential Market News
Analysis: Condominium Market In Philadelphia Is Cooling
The current state of Philadelphia’s condominium market is marked by modest drops in prices and sales, along with a stabilization of inventories. Researcher Kevin Gillen, who conducted the research for Allan Domb Real Estate, found that average price of Philadelphia condos declined by 1.0% on a quality- and seasonally-adjusted basis in Q1. Currently, the general level of condo prices is down 4.7% from what it was one year ago.
However, condos located in or very near to Center City not only have the highest prices, but have also experienced the greatest price appreciation during the current cycle. The submarket indices with the highest values are Rittenhouse Square, Washington Square and Avenue of the Arts. The current condo market is mirroring the housing market’s current characteristics – strong sales, cooling prices and tight inventories – but appears to still have room for further growth, the analysis concluded.
Philadelphia’s Tallest Modular Development Now Leasing
Alterra Property Group announced that leasing is officially underway for The LVL 4125, Philadelphia’s tallest modular building. The property is located in University City, with move-ins slated to begin this month.
The six-story building is comprised of 141 modular units, including studios, one bedrooms and two bedrooms. The property features amenities including a fitness center, a gaming lounge, a roof deck with a dog run, and designated communal coworking spaces on each floor.
Biomed Office And Lab Hub Proposed Near 30th Street Station
An eight-story building with 125,000 square feet of office and lab space for burgeoning biotech companies is being proposed for the current site of a SEPTA maintenance building near 32nd and Arch streets. Washington, D.C.-based developer Republic Properties Corporation and investment partnership PHL Next State Med LLC said the proposal is a response to growing demand within Philadelphia’s flourishing gene- and cell-therapy industries for specialized lab space to test and manufacture treatments.
Developer University Place Associates also has announced a new partnership with the Wistar Institute biomedical research center to develop its long-planned 3.0 University Place project at 4101 Market Street as an office-and-lab facility for life-sciences tenants.
Manufacturing, Service Industries Continue Growth In May
Manufacturing continued to grow in the region in May, according to responses to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia, with new orders up for 28.8% of firms, down for 17.7%, and remaining the same for 50.6%. The number of employees increased for 26.6 % of the companies, decreased for 8.4 %, and was unchanged for 63.0%.
Looking ahead six months, 41.4% of the firms expected conditions to improve, 21.7% anticipated a downturn, and 27.6% predicted no change.
Business activity continued to expand in the region’s service sector in May, according to responses to the Nonmanufacturing Business Outlook Survey, with new orders up for 27.0% of firms, down for 16.4%, and remaining the same for 21.1%. The number of full-time permanent employees increased for 23.4% of the companies, decreased for 2.9 %, and was unchanged for 66.2%.
Looking ahead six months, 46.5% of the firms expected conditions to improve, 8.7% anticipated a downturn, and 44.8% predicted no change.
How Far Does A $100K Salary Go? Philadelphia Ranks 15th In U.S.
For workers who earn a $100,000 salary and live in Greater Philadelphia, their income goes farther than their peers in other East Coast cities, according to a new survey. The analysis from GOBankingRates.com ranks the 50 most populous U.S. cities by how much money would be left from a $100,000 salary after subtracting necessary expenses such as taxes, groceries, rent, utilities, health care and driving costs.
Philadelphia ranks in the top 15, above New York, Boston, Washington, D.C. and Baltimore. The report found that Philadelphia workers who make $100,000 annually end up with $37,260 in leftover income after taxes and expenses, more than about two-thirds of the U.S. cities on the list.
City Government News
$63M Trial Contests City’s 2018 Commercial Property Reassessments
One of the largest assessment appeal cases in Philadelphia’s history is underway, with an attorney for 700 commercial property owners arguing that assessors “deliberately chose to single out” some of the city’s most prominent and valuable commercial real estate in a 2018 revaluation that significantly increased their tax bills. About $63 million in tax revenue is at stake and involves office complexes, hotels, and apartment buildings that include One Liberty Place, Centre Square, and the Bellevue Hotel.
The city maintains that its reassessment methodology was legal and appropriate and did not exclusively affect commercial properties. Finance Director Josh Dubow testified that about 12,000 of the city’s 470,000 residential properties did receive changes in values last year, while between 50,000 and 60,000 commercial and industrial property owners received notices of value changes. The trial is expected to last about two weeks.
City’s New Street Sweepers Too Wide For Many Blocks
Six weeks into the Philadelphia’s pilot street-sweeping program intended to reduce the amount of garbage on city streets, officials are already talking about buying a new set of vehicles. The reason: 10 new street sweepers purchased for the pilot program at a cost of $2.73 million are unable to fit down many of the city’s narrow blocks.
At nine feet wide, the trucks are too big to navigate around parked cars on dozens of narrow streets that are part of a six-neighborhood pilot program. The trucks already purchased for the pilot will remain part of the Streets Department’s fleet, even if the city buys narrower vehicles to take over in some areas.
CPDC Meeting June 25: What’s On The City’s Agenda For The Fall?
Join us on June 25, 8 a.m. to 10 a.m., in The Union League’s Meade Room for the next meeting of the Central Philadelphia Development Corporation.
In the coming year, both City Council and the Administration will be considering a range of legislation and policies that can impact job growth, real estate development, workforce participation and funding for schools. We have invited four panelists with diverse perspectives to participate in a moderated, roundtable discussion.
Panelists will include Leo Addimando, Alterra Property Group & Building Industry Association; Ryan N. Boyer, Business Manager, Laborers' District Council of Metropolitan Philadelphia; Allan Domb, City Council At-Large; and Helen Gym, City Council At-Large. The moderator will be Chris Satullo, former editor of The Philadelphia Inquirer editorial page and former vice president of news at WHYY.
CPDC members are encouraged to invite both young professionals and other members of their firms to attend this meeting. RSVP by Wednesday, June 19 to Romina Gutierrez at email@example.com or 215.440.5543.