Office Sector News
Architectural Firm Moving HQ From Suburbs To Center City
An architectural firm based in Folcroft, Delaware County, is relocating its headquarters to Center City in November. Formcraft, which opened a 2,800-square-foot satellite office in 2016 at 1515 Market Street, will move those workers and its additional 31 suburban workers into an 8,500-square-foot office at Two Commerce Square.
Company officials said the Delaware County location made it difficult to recruit young talent. Formcraft focuses on corporate office interiors. Its current projects include an 8,000-square-foot space for CapREIT at Two Liberty Place.
Proposed Designs Unveiled For Schuylkill Yards Towers
Brandywine Realty Trust has unveiled the architectural designs of the first two high rises in Schuylkill Yards, the $3.5 billion 14-acre development project near 30th Street Station. Construction is expected to begin in early 2020.
The 512-feet-tall East Tower at 3001 JFK Boulevard features a stacked cube design, 34 floors of office space, 7,000 square feet of retail, and amenities on the 14th floor. The West Tower at 3025 JFK Boulevard will offer 9,000 square feet of retail, 219,000 square feet of residential, 200,000 square feet of office space and covered parking. Both towers will be sitting atop a foundation of fluted pedestals, forming a series of archways.
Center City Tech Firm Receives $1M In Local Seed Funding
Marketing technology firm Sidecar Interactive is one of the first companies to secure an investment from Ben Franklin Technology Partners’ new Global Opportunity Philadelphia Fund. The regional, state-backed seed fund said its investments intend to close a gap in the local investing ecosystem and help its portfolio companies stay and grow in Philadelphia.
The fund, which has raised about $25 million out of its $50 million goal, contributed $1 million to Center City-based Sidecar’s recent $7.5 million funding round. Sidecar specializes in performance marketing for online retailers.
SEPTA GM Jeff Knueppel To Retire In December
SEPTA General Manager Jeff Knueppel has announced that he will retire on December 31. He started at the transit agency in 1988 as an engineer, and served as assistant and deputy general manager before being named to the top role in September 2015.
Knueppel’s tenure is marked by a hands-on approach and major investments in train safety features and the rollout of SEPTA Key, a system of new fare payment technology. SEPTA said an official announcement about Knueppel’s successor will be made in the fall.
Residential Market News
Q2 Housing Market: Modest Price Gains, Big Drop in Sales Activity
The average Philadelphia home price rose by 1.4% in Q2 on a quality- and seasonally-adjusted basis, continuing the market’s recent trend of positive but modest price appreciation, according to the latest data from Drexel University’s Lindy Institute. Philadelphia’s house prices are up 8.5% year-over-year, an increase in line with the average annual house appreciation rate of the current expansionary economic cycle.
The median house price in Philadelphia in Q2 was $174,900; the 21.6% increase from the previous quarter’s $143,800 is largely due to seasonal trends for sales of higher-priced houses that traditionally occur in the second quarter. Home sales activity for Q2 fell 15.4% from the same quarter a year ago, from 6,460 to 5,462. The average number of days that it takes to sell a home in Philadelphia rose to 53 days, up from 38 days a year ago.
2019 Is “A Banner Year For Philadelphia’s Multifamily Market”
The Philadelphia metro area is on pace to deliver 6,100 new rental apartments by the end of the year, which would be the biggest single year going back more than two decades, according to a Q3 market report from Marcus & Millichap.
Bisnow Philadelphia, in its analysis of the report, said that despite concerns about the economy on a national level, “thanks to Philly's slow-and-steady nature supported by its eds and meds, a downturn will likely hit the city later and less severely than the rest of the country.”
24-Story Tower Planned At Center City Wendy’s Site
A 24-story tower of short-stay apartments is planned for the site of a former Wendy’s restaurant at 11th and Walnut streets. Abrams Realty & Development LLC’s proposal calls for a 111-unit tower with 6,000 square feet of retail space on the first and second floors.
San Francisco-based Sonder Corporation, which leases apartment buildings for use by short-term visitors seeking hotel-length stays, has previously announced that it had a deal for the site as part of its Philadelphia expansion. Abrams, based in Elkins Park, is approved to build higher than would otherwise be allowed on the 5,300-square-foot lot in exchange for a $638,280 contribution to the city’s housing trust fund for low-income residents as part of the city’s “density bonus” program.
Toll Bros. Finalizes Acquisitions For Jewelers Row Tower
Toll Bros. has finalized its acquisitions of the section of Jewelers Row on Sansom Street where it plans to build a 24-story mirrored-glass condo building. Toll has had five parcels on the 700 block of Sansom under contract for several years as it overcame challenges from preservation groups who sought to maintain the current buildings.
The Horsham-based builder plans to raze the properties spanning 702-710 Sansom, along with an adjacent property on 7th Street. Bottom of Form
Construction could begin before the end of the year, according to CoStar Group, which last week reported the sale of 704 Sansom for just over $1.1 million.
Waterfront Development Project Attracts LA Private Equity Investor
Resmark Companies, a private equity firm based in Los Angeles, is joining with the Bethesda, Md.-based Concordia Group and Philadelphia’s D3 Real Estate Development in the construction of 248 single-family rowhouses planned as part of an expansive Delaware River waterfront development.
The residential complex is slated to rise on a vacant 30-acre parcel at 2001 Beach Street, a former shipbuilding site that operated from 1830 until the end of World War II. Concordia and D3 also have proposed about 850 apartments spread across four seven-story buildings at the site. The rentals are to be developed separately from the partnership with Resmark.
Mid-Rise Apartment Building Planned For Vacant Fairmount Lot
A 55-foot-tall apartment complex is planned for the site of a vacant lot in the Fairmount neighborhood north of Center City.
The 2601 Poplar Street project will include about 130 apartments with a deck on the top floor and a green roof. Commercial space will occupy the ground level and 51 off-street parking spaces will be provided, according to plans submitted to the city by developer North Broad Living Management.
Manufacturing, Service Industries Continue Growth in August
Regional manufacturing conditions continued to grow in August, according to firms responding to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia, with new orders up for 41.4% of firms, down for 15.6%, and remaining the same for 41.6%. The number of employees increased for 24.5% of the companies, decreased for 20.9%, and was unchanged for 54.6%.
Looking ahead six months, 46.3% of the firms expected conditions to improve, 13.7% anticipated a downturn, and 33.3% predicted no change.
Business indicators suggest continued expansion of activity in the region’s service sector in August, according to responses to the Philadelphia Fed’s Nonmanufacturing Business Outlook Survey, with new orders up for 24.1% of firms, down for 14.8%, and remaining the same for 33.1%. The number of full-time permanent employees increased for 27.9% of the companies, decreased for 5.8%, and was unchanged for 62.9%.
Looking ahead six months, 27.2% of the firms expected regional conditions to improve, 27.9% anticipated a downturn, and 43.3% predicted no change.
PICA: City Currently Spending in Excess of Incoming Revenues
In two separate reports, the Pennsylvania Intergovernmental Cooperation Authority (PICA) notes that while many City tax revenues are up, projected for FY2019 at $4.74 billion, expenditures are estimated at $4.83 billion, according to PICA’s Quarterly City Managers Report (QCMR) for the fourth quarter ended June 30. These estimates are higher than the revenue and expenditure projections in the City’s FY2019-FY2023 Five-Year Plan by $125.2 million and $107.2 million, respectively.
While both estimated revenues and expenditures increased, City spending is once again outpacing revenues, PICA noted in the report. The estimated year-end General Fund balance totals $297.7 million, $158.2 million higher than in the Five-Year Plan.
Parks & Open Space News
Dilworth Park Profiled By World Landscape Architecture
The widely read blog World Landscape Architecture has published a detailed write-up and photo essay about Dilworth Park. The piece describes the transformation of the park from an unused and inhospitable space to the “the central square it was always intended to be, and a beloved park befitting its iconic location.”
September 24: The Next CPDC Meeting
Join us for the next CPDC meeting at The Union League, Lincoln Hall, 140 South Broad Street on September 24, when our discussion will be Center City Developments: Trends in 2019, Expectations for 2020.
At this meeting, CPDC/CCD will release the new version of our annual real estate report, Developments 2019, highlighting 62 major projects in Center City with an estimated development value of $6.8 billion.
Our panel will focus on their three projects – one office, one retail/entertainment and one residential – and what these projects tell us about current industry trends, the strength of the Center City market and how best to sustain local development momentum.
The panelists are Brian Berson, Senior Vice President of Real Estate & Development at Parkway Corporation; Heather Crowell, Executive Vice President of Strategy and Communications at PREIT; Jim Pearlstein, President of Pearl Properties and Paul R. Levy, Executive Director of CPDC
Continental breakfast & networking start at 8 a.m., program starts at 8:30 a.m. Membership meetings are open to all members of CPDC firms. RSVP by September 18 to Romina Gutierrez at email@example.com or 215.440.5543
Festival 2019 Is Coming To Cherry Street Pier On September 26
Feastival returns to Cherry Street Pier on September 26, when Philadelphia’s top chefs from more than 70 restaurants will present exclusive, one-night-only dishes. Proceeds from this annual fundraiser, now in its 10th year, benefit FringeArts.
Click the link below and enter code FEASTIVAL19 to receive 25% off tickets.