Office Sector News
Coworking Hits 1M Sq. Ft. Milestone
CommonGrounds Workplace has signed a lease on 62,461 square feet at 1700 Market Street, pushing the amount of space occupied by coworking operators in Philadelphia to more than 1.1 million square feet. CommonGrounds will open in January 2020 on two floors in the recently renovated 850,000 square foot building.
The San Diego-based coworking firm joins other national operators that have expanded in Center City this year, including WeWork, which signed a lease for 50,514 square feet at 1100 Ludlow Street, and Industrious, which took 55,000 square feet at Two Liberty Place.
REC Philly’s New HQ Is Coming To Center City
Top of Form
REC Philly, a membership-based resource center and space for creative entrepreneurs, is moving from its current North Philadelphia office to a new 10,000-square-foot headquarters at 9th and Market streets.
Features of the new space include a cafe that transforms to an event space and areas for recording, podcasting, photo/video and dance studios, as well as coworking space and conference rooms. The project has so far received $3.2 million in funding from local companies, private investors and business community leaders.
Tech Startup LeagueSide Has A New HQ And Plans For Growth
Sports sponsorship startup LeagueSide has opened its new headquarters in Center City. The four-year-old tech firm is in its seed round of fundraising. Cofounders Evan Brandoff and Zubin Teherani moved to Philadelphia after they met during a Venture for America training camp in the city.
After several years in coworking spaces across the city, LeagueSide recently obtained its own space at 2401 Walnut Street. The company matches youth sports leagues nationwide with brands that will sponsor the teams. In turn, the sponsors gain exposure and potential clients, and can track relevant metrics provided by LeagueSide. National clients include Cigna, Verizon Fios, and Uber.
Long-Shuttered Warehouse To Become HQ For Local Developer
The Edward Corner warehouse on Delaware Avenue in Fishtown, vacant for a half century and best known for the faded advertising signs on its brick façade, will reopen as the headquarters of Philadelphia real estate developer Streamline.
Work is underway, and the company aims to have most of the renovations completed by the end of the year. Since the warehouse is on the city’s Historic Register, the city’s Historical Commission will be overseeing the restoration, which has been designed by Harman Deutsch Ohler Architecture.
Apartment Complex Slated For 2.2-Acre Tract At uCity Square
Wexford Science & Technology and GMH Capital Partners have unveiled plans for a mid-rise apartment complex as part of the uCity Square development. Plans for the six-story apartment building, at 3700 Lancaster Avenue, include 463 apartment units, 13,900 square feet of retail space and a 157-space parking garage on its ground floor and underground level.
The uCity Square development will eventually encompass 6.5 million square feet of retail, residential, office, and lab space on 27 acres of existing buildings and vacant land owned by Wexford and the nonprofit University City Science Center. The project’s first new office building, 3675 Market Street, opened last year.
Eds & Meds News
Temple Reaches Deal To Sell Fox Chase Cancer Center To Jefferson
Temple University has reached a deal to sell Fox Chase Cancer Center and its interest in Medicaid and Medicare managed care company Health Partners Plans to Thomas Jefferson University. Financial terms were not disclosed. The final sale price for the transaction will be set upon completion of the formal agreement, the universities said in a joint statement.
Representatives of Temple and Jefferson said the agreement provides a framework for partnerships on cancer treatment, caring for the underserved, innovation, and increasing educational opportunities for students at both schools to benefit from programs and services at each institution.
Thomas Jefferson University Launches Multidisciplinary Council
Thomas Jefferson University is establishing a multidisciplinary body that will be tasked with advising and guiding the university’s drive for transformation in worldwide innovation, education, philanthropy and health care. The group, called the President's Global Strategy Council, will be comprised of international leaders drawn from higher education, healthcare, research, business and creative professions.
Business executive Terrence Hahn has been appointed to lead the Council. An innovator in software, services, new materials and business models, Hahn has led teams in Asia, Europe, and the Americas while serving in senior leadership roles at Axalta Coating Systems, Honeywell International, and Air Products & Chemicals.
Biopharma Firm Creating New Class Of Pain Med Raises $3.5M
A Philadelphia biopharmaceutical company working on a pain medication without the side effects traditionally associated with opioids has raised $3.5 million in a private stock sale. Mebias Discovery’s equity financing was disclosed in documents filed with the Securities and Exchange Commission.
The 3-year-old company is developing a proprietary technology for producing drugs designed to treat pain without respiratory depression, sedation, addiction, and other side effects often linked to standard opioids.
Center City Firm Developing Tech To Help Patients With Memory Loss
Center City biotech company Nia Therapeutics is developing a new therapy that could potentially stimulate memory for patients with traumatic brain injury. In July, Nia acquired technology to advance its work on an algorithm that is used to deduce the exact moment to deliver memory-supporting stimulants to the brain.
The company, located at 1900 Market Street, will review its treatment plans next month with the Food and Drug Administration and hopes to get the product to market and a prototype in the coming months.
Fox Business School Launches Accelerator For Homegrown Startups
The Fox School of Business at Temple University has launched an accelerator program for young entrepreneurs from the school’s Innovation Entrepreneurship Institute (IEI). The new 1810 Accelerator provides extra resources to early-stage startups. It features an eight- to 10-week program that hosts guests speakers and offers a variety of resources – though no funding – to help small startups and businesses get off the ground.
After the current first cohort, the school is hoping to build an infrastructure for supporting companies at different stages as well as a feeder program with other accelerators in the city that can provide capital.
Residential Market News
Median Rent, Home Values Rise; Number Of Available Homes Falls
Following a national trend, Philadelphia’s median rent and home values both rose by several percentage points in the last year as the number of available homes on the market fell, according to a recent Zillow analysis.
In June, the median rent in Philadelphia was $1,614, up 3% from a year ago, and the median home value was $233,000, up 2.4%. While home prices have increased over the past year, the number of available homes on the market has decreased by 2,791 – or 9.8% – from a year ago, Zillow said.
115% Increase Since 2000 Of College-Educated Younger Cohort Living In City
The population of college degree-holders in Philadelphia, ages 25 to 34, grew by 115% from 2000 to 2017, according to a new report released by Campus Philly. The group cited information compiled by Econsult Solutions and gleaned from census data, which showed 128,400 degree-holders in that age group in 2017, up from 59,700 in 2000.
The growth was the second largest among 13 metropolitan areas in the study, behind only Washington, D.C. The increase in college graduates translates to $6.4 billion more in earnings every year and $394 million in tax dollars, Campus Philly said.
Public School Needs Additional Classrooms For Growing Enrollment
The Philadelphia School District has announced a plan to address overcrowding at a South Philadelphia elementary school by adding four modular classrooms on the property. For the 2019-2020 school year, the William M. Meredith Elementary School has 37 more kindergartners in its catchment than there is available space.
In a letter to families with children at Meredith and the nearby George W. Nebinger School, which is designated to receive Meredith’s overflow students, the school district said it will present a modular classroom plan on August 15 to the Board of Education and, pending approval, will begin the permitting process for the expansion project. Long term, the district has embarked on a “comprehensive planning review” that will examine demographic trends to assess current usage and future needs citywide.
As noted in CCD/CPDC’s State of Center City 2019 report, Meredith is one of four elementary schools in Greater Center City where local demand has become so strong that enrollment exceeds the official building capacity. Greater Center City has become the location of choice for a growing number of families with children, with three-quarters of parents now choosing to send their children to neighborhood public schools.
Convention Center & Unions Sign 10-Year Pact Extension
The Pennsylvania Convention Center Authority has extended and expanded its contract with its labor unions for another 10 years. The new agreement, which took effect August 1, also gives Convention Center exhibitors additional rights, including the ability to build and tear down their own booths regardless of size – up from the 600-square-foot limitation.
The new agreement builds upon a five-year pact reached in 2014 by four labor unions and credited with turning around the decline in conventions coming to Philadelphia.
The Notary Hotel Opens In City Hall Annex After Renovations
A newly rebranded 499-room hotel is now open in the 100-year-old City Hall Annex building. The hotel, called The Notary, is part of Marriott’s Autograph Collection of boutique hotels The building was designed by Philip Johnson and built in 1926 in the Classical Revival style.
It was a Courtyard by Marriott hotel prior to its renovation. The Notary features 11,000 square feet of conference space across 12 event rooms, a 3,000-square-foot ballroom, a La Colombe cafe, and Sabroso + Sorbo, a Spanish restaurant.
Sheraton Society Hill Hotel Takes On The Marriott Name
The 364-room hotel formerly known as the Sheraton Philadelphia Society Hill is now part of the Marriott brand, featuring new amenities like the hotel chain's M Club lounge. Renamed the Philadelphia Marriott Old City, the four-story hotel was purchased in March 2018 by Chevy Chase, Md.-based Buccini/Pollin in a nearly $96 million deal as part of its Philadelphia expansion.
The hotel was built in 1986, and the last major renovation was in 2012. Buccini/Pollin’s first-phase renovations include changes to two restaurants, the front desk, 120 guest rooms, and the lobby. The hotel is operated by PM Hotel Group.
Visit Philadelphia Announces Executive Leadership Team
Visit Philadelphia has announced the formation of an executive leadership team, comprised of both new and veteran staff, to lead the tourism marketing organization.
Under the guidance of new President and CEO Jeff Guaracino, the team includes a chief marketing officer (a new position), a chief financial officer and four other promoted Visit Philadelphia employees. The group’s charge is to position the region for future growth in leisure tourism.
Another New Tenant Announced For Fashion District Philadelphia
Wonderspaces is opening its latest outpost in the Fashion District of Philadelphia, helping to bring its 1.1 million square feet of retail space to 90% leased. Wonderspaces promotes artists and their work, and connects them to new audiences, through art shows that travel to cities where it has locations and run for three to six months.
The three-year-old Los Angeles company has locations in Scottsdale, Ariz., San Diego, Calif., and Austin, Texas. It will open in 24,000 square feet at Fashion District, which is scheduled to open September 19.
Bank Of Princeton Announces Branch Coming To Center City
The Bank of Princeton has received approval to open a retail branch at 1839 Chestnut Street by the end of this year. Formed in 2007 after raising $30 million in capital, the $1.3 billion-asset company gradually opened 14 branches in the region, including three in Philadelphia and Montgomery County from its acquisition of startup MoreBank.
Philadelphia has become a popular destination for banks to open retail branches and loan production offices, due to its booming real estate business and its fast-growing millennial customer base. The nation’s largest bank, JPMorgan Chase & Co., said it would open 50 branches in the region over the next five years, including 30 in the city.
SEPTA Invests In Solar Panels To Save Money, Reduce Emissions
SEPTA has signed a contract with a solar farm that will generate nearly 20% of its energy consumption in the next two years. The agreement with San Francisco-based Lightsource BP could save SEPTA $400,000 on its electric bill every year for the next 20 years.
SEPTA’s board also approved a $16.2 million project to add solar panels to train signals along three of its Regional Rail lines within the next 18 months. The panels will kick in if the primary power source is knocked out, giving the track signals 48 hours of power independent of the main grid and resulting in fewer weather-related train problems.
Manufacturing, Service Industries Show Growth in July
Manufacturing conditions showed continued growth in July, according to firms responding to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia, with new orders up for 35.7% of firms, down for 16.8%, and remaining the same for 43.8%. The number of employees increased for 36.1% of the companies, decreased for 6.1%, and was unchanged for 54.2%.
Looking ahead six months, 52.8% of the firms expected conditions to improve, 14.8% anticipated a downturn, and 27.0% predicted no change.
Business indicators suggest an expansion of activity in the region’s service sector in July, according to responses to the Philadelphia Fed’s Nonmanufacturing Business Outlook Survey, with new orders up for 32.7% of firms, down for 7.2%, and remaining the same for 25.3%. The number of full-time permanent employees increased for 25.1% of the companies, decreased for 4.0%, and was unchanged for 70.9%.
Looking ahead six months, 49.8% of the firms expected regional conditions to improve, 13.7% anticipated a downturn, and 36.5% predicted no change.
Greater Center City Organizations Get $13.9M In State Redevelopment Grants
The Redevelopment Assistance Capital Program (RACP) has announced $13.9 million in state funds for eight projects in Greater Center City. Administered by the Office of the Budget, RACP grants are awarded to support the acquisition and construction of regional economic, cultural, civic, recreational and historical improvements.
The grants announced last week include: $4 million to the Kimmel Center for Merriam Theater-Kimmel Center improvements; $2 million to 1801 Vine Street Development Partners for the preservation and renovation of the former Family Court Building into a hotel; $1.7 million to the Philadelphia Museum of Art for its Art Core II project; $1.5 million to the Pennsylvania Ballet to complete its multipurpose dance center; $1.5 million to Yards Brewing to renovate its production and entertainment spaces; $1.48 million to the Schuylkill River Development Corporation for the Schuylkill River Trail; $1 million to William Way LGBT Community Center for improvements to their its historic building; and $702,000 to WHYY for improvements to its production and public facilities.
Judge Rules Against City’s Assessments Of Abated High-Rise Condos
A Common Pleas Court judge has ruled that Philadelphia’s method for assigning higher land values to nearly 300 condo units with 10-year tax abatements was improper and not credible. The ruling orders the city to refund taxes to condo owners involved in the case, who own units in two buildings on Rittenhouse Square and in the Residences at the Ritz.
The case involved the city’s 2017 changes to the way it assigns value to the land underneath buildings, which increased tax bills for many property owners with the 10-year abatement for new construction because they pay taxes only on the value of their land. The city is considering an appeal of the ruling.
Summer Issue of Center City Digest Now Available
The new issue of CCD/CPDC’s newsletter, Center City Digest, leads with a cover essay by CCD President Paul Levy on the need to think differently about our 21st century civic spaces, and on the CCD’s latest efforts addressing the resurgence of quality-of-life challenges on our sidewalks – work that spans from removing graffiti to connecting people living on the streets with essential services.
Center City Digest also features the latest information about the Plant Center City tree-planting initiative and the upcoming enhancements to the play area of Sister Cities Park, and provides information on CCD park events and Shop Center City Saturday coming next month.