OFFICE SECTOR NEWS
CBD Trend Continues Of Smaller Footprints Among Large Tenants
Philadelphia’s CBD office market saw positive overall performance for Q3, with healthy net absorption and a noteworthy reduction in vacancy. The continuing trend nationally, as noted in research reports from both NEWMARK KNIGHT FRANK and JLL, is that many large tenants are gravitating to smaller and more efficient floorplates – even as they maintain or increase staffing levels.
A number of high-profile companies are relocating to smaller footprints within the CBD including Macquarie, Towers Watson and Wells Fargo; conversely, Reliance Standard is moving into a bigger space and Entercom is moving from Bala Cynwyd to 2400 Market St. and quadrupling its size to 67,000 square feet. The biggest addition for the quarter is Comcast Technology Center and its 1.3 million square feet of new office space.
Center City Tech Company Stitch Acquired For $60M Cash
Center City-based Stitch has been acquired by Redwood, Calif.-based Talend in a $60 million all-cash deal. Stitch employs 33 at its 1500 Chestnut St. headquarters. Stitch CEO Jake Stein said that all Stitch employees will receive job offers from Talend and additional staff will be hired in Philadelphia.
Talend sells data-integration enterprise software to clients including General Electric and Domino's Pizza. Stitch, a spinoff of technology firm RJMetrics, provides technology for companies to move information to remote cloud-based data storage without hiring data-integration specialists.
EDS & MEDS NEWS
Philadelphia Ranks 6th Among U.S. Cities 'Getting Health Care Right'
Philadelphia ranked sixth on a health care data company’s annual list of the top 100 U.S. cities “getting health care right.” Cities were ranked in Healthgrades’ 2019 National Health Index based on 14 variables that included a population’s overall health, whether consumers had good access to doctors, if local specialists achieved high marks in patient satisfaction and if patients had access to high quality hospitals.
Rochester, Minn., topped the list followed by Burlington, Vt., and Charleston, S.C. Philadelphia finished one spot behind Baltimore and one spot ahead of Gainesville, Fla. The report noted that Philadelphia was “scoring high for hospital quality and availability of highly rated specialists.”
Temple U. Shares $13.5M NCI Grant To Study Health Disparities
The Lewis Katz School of Medicine at Temple University and Hunter College of the City University of New York jointly received a $13.5 million grant from the National Cancer Institute to create an entity to study cancer health disparities.
The five-year grant will allow the partnership to seek effective approaches to reducing cancer health disparities that adversely affect African-American, Asian-Pacific-American and Hispanic-American communities. More than 70 investigators will be involved across the two organizations.
Penn Completes $78M Adaptive Reuse Project
The University of Pennsylvania has completed a $77.6 million adaptive reuse project called the Ronald O. Perelman Center for Political Science and Economics, which brings together its school of arts and sciences’ political science and economics departments. KPMB Architects of Toronto renovated the existing building at 36th and Walnut streets and connected it to a newly built structure.
The West Philadelphia Title and Trust Co. building, which totals 54,400 square feet and built in 1925, was renovated and a new 56,700-square-foot addition was constructed with design elements inspired by the bank building. The new facility includes a 120-seat auditorium, faculty and student lounges, classrooms, meeting rooms and outdoor space.
TOURISM & HOSPITALITY NEWS
PHLCVB, BrandUSA Roll Out UK Marketing Campaign, Seek Support
Tourism officials kicked off a comprehensive Philadelphia marketing campaign in London that coincided with last month’s NFL game at Wembley Stadium between the Eagles and the Jacksonville Jaguars.
A collaboration between the PHLCVB and Brand USA, a national marketing organization charged with promoting travel to the U.S., the campaign includes 30-second television spots expected to reach 8 million viewers; an Expedia U.K. geo-targeted ad campaign; print and digital ads; a social media campaign and more.
A proposed 2018 congressional budget cap agreement would significantly undercut the ability of Brand USA and organizations like PHLCVB to market the city to international visitors. PHLCVB is asking those who support the reauthorization of BrandUSA’s funding to add their names to a letter of support by November 13:
Solomonov, Cook To Open All-Day Rittenhouse Square Restaurant
CookNSolo Restaurant Partners — the parent company of Zahav, Federal Donuts, Abe Fisher and others — has signed on to open an all-day and as-yet-unnamed restaurant next spring at The Harper, a mixed-use development near Rittenhouse Square owned by Pearl Properties.
The Harper is being built on the site of the former Boyd Theater and will consist of a 24-story, 183-unit luxury apartment tower, retail and office spaces, outdoor pool and deck, fitness center, a 10,000-square-foot green roof and park, and an underground garage.
New Brewery To Open In Former Yards Brewing Site
Work is underway to transform the former Yards Brewing Co. space into Craft Hall, a bakery, brew house and barbecue kitchen led by Avram Hornik of FCM Hospitality and slated to open in February at 901 E. Delaware Ave. Mainstay Independent Brewing Co. is the first of several artisan food and beverage purveyors to open at Craft Hall.
Yards Brewing Co. relocated to 5th and Spring Garden streets and in November 2017 it opened the 70,000-square-foot Yards Brewery & Taproom.
Grand Opening Date Set For Fashion District Philadelphia
Fashion District Philadelphia has an official opening date: September 19, 2019. Pennsylvania Real Estate Investment Trust officials said more than 700,000 square feet, or 85% of the total space, has now been committed.
Highlights to-date include City Winery, a first-to-market dining and entertainment concept; Dallas BBQ, the restaurant chain’s first location outside of New York City; Market Eats, a collection of quick-bite eateries; Uniquely Philly, a selection of products made by local small businesses; an AMC Theatre, Center City’s first movie theater in nearly two decades; and an as-yet unnamed entertainment operator featuring bowling, ping pong, billiards and other games.
Philadelphia Is 1 Of 3 Test Cities For Dollar General Urban Format
A new Bloomberg article features the Northern Liberties neighborhood as a prime example of the up-and-coming urban areas where rural discount store chain Dollar General is opening. Specifically, the chain is bringing its small-store DGX concept to the places where “urban, millennial shoppers … are starting to settle down and look for reliable, affordable places to shop.”
Philadelphia and two other cities – Raleigh, N.C., and Nashville, Tenn. – are the testing grounds for the DGX stores, which are about half the size of Dollar General’s regular 9,000-square-foot stores and described by Bloomberg as “a tidy mashup of a drugstore, convenience store and corner grocer.”
American Airlines To Add N.C. & Tenn. Flights From PHL
American Airlines plans to add two additional domestic routes in and out of Philadelphia International Airport. American announced it will add daily year-round service to Asheville, N.C., and Chattanooga, Tenn., starting on May 3, 2019.
The Texas-based carrier has been ramping up its network out of PHL, with three flights to Florida and four flights to Europe also starting next year. American, which controls over 70% of PHL air traffic, also plans to offer more seats and premium economy on flights between PHL and Prague — seasonal flights that launched this year — due to strong ticket sales, according to officials.
PHL Ranks 7th Best Airport in U.S. Based On Customer Criteria
Philadelphia International Airport ranked 7th best in the country, according to a new report that rates the busiest U.S. airports on criteria passengers list as most important. The new report from travel website The Points Guy ranks the 30 busiest airports in the nation based on data including on-time statistics, transportation costs, and the number of restaurants per passenger.
Airports scoring highest had the most consistently above-average percentages of on-time departures and arrivals, lower rates of canceled flights and shortest waits at security checkpoints. Sky Harbor International Airport in Phoenix came in first; JFK in New York was at the bottom.
Driverless Cars Might Not Fix Congestion
Congress for the New Urbanism founding member Peter Calthorpe tells The New York Times that self-driving cars will not help solve urban congestion, contrary to predictions by some tech leaders, and could actually worsen it. Calthorpe has simulated through computer models the impact of autonomous personal vehicles in urban settings. He argues that if used the way today’s vehicles are — most often carrying a single individual — they will create more congestion.
Calthorpe has proposed an alternative — autonomous rapid transit, or ART — using fleets of self-driving vans in reserved lanes on main arteries. Those lanes would allow the vehicles to travel faster and require a lower level of autonomous technology.
Wall Street Journal Examines Center City’s Congestion Problem
The Wall Street Journal examined Philadelphia’s effort to respond to traffic congestion Center City through a temporary deployment of traffic police and more aggressive enforcement of parking violations. The report stated that the number of tickets issued by police more than doubled after the initiative began in September, while the volume of citations issued by the Philadelphia Parking Authority was up about 50%. But without changing ticket pricing for illegal truck parking, the article noted that enforcement alone will not change behavior for delivery companies that see tickets as a cost of doing business.
The paper conducted an analysis with a transportation analytics firm for its story, and found traffic speeds in Center City are down by 8.2% since 2015. Of the 10 most populous cities in the country, only Phoenix has seen a greater slow down, the paper reported.
CPDC’s report on traffic congestion, released last February, suggested that until Philadelphia increases the funds committed to traffic management and enforcement and either centralizes or better coordinates traffic management functions, not much progress can be made on reducing congestion,
RESIDENTIAL MARKET NEWS
Post Bros. Selling 5 Properties To Fund New Ground-up Projects
Post Brothers has put up for sale five properties that include 589 apartments and 18 townhouses. Three properties are for sale in Northern Liberties near the Piazza. Another two properties are located in University City.
The developer hopes to sell those properties for a combined $214 million and has plans to direct the proceeds into turning its focus on developing new, ground-up apartment projects.
East Market, $400M Mixed-Use Development, Marks Milestone
With several buildings complete and retail space leased out, National Real Estate Development celebrated the first phase of its $400 million mixed-use project, East Market, with a ribbon-cutting ceremony. National is the primary developer for the project and co-owns it with New York-based Joss Realty Partners and locals SSH Real Estate and Young Capital.
The development's first phase includes two residential towers with 562 apartments between them: the 17-story Ludlow and the 23-story Girard. Sixty of its apartments are furnished for an extended-stay hotel managed by Roost. Stretching between 11th and 12th streets and Market to Chestnut streets, East Market will contain six buildings at full completion. The three completed buildings have ground-floor retail including TJ Maxx, MOM's Organic, Iron Hill Brewery, and City Fitness.
Science Center Debuts Its New Home At 3675 Market
The latest uCity Square development at 3675 Market St., a 14-story, 344,000-square-foot building, has officially opened its doors. The mixed-use property, part of a partnership including the Science Center, Cambridge Innovation Center, Wexford Science and Technology, BioLabs and Ventas, houses lab, clinical, office, educational, event and co-working space.
The Science Center is relocating its headquarters there, leasing 50,000 square feet of the property, and has turned its popular Quorum entrepreneur’s hub into a two-story 15,000-square-foot space now accessible from the ground level.
Development Proposed Next To Chocolate Factory Site
A second mixed-use development is being proposed for Washington Avenue’s industrial corridor. The project at 2201 Washington Ave., designed by JKRP Architects, calls for the redevelopment of a full block of Washington between 22nd and 23rd streets, presently the home of the Joseph E. Biben Sales Corp. building.
The proposal includes ground-floor retail along Washington Avenue with 90 apartments overhead. On the site’s northern portion, 21 townhomes would stretch from 22nd to 23rd streets. The project is being overseen by OCF Realty and sits across from OCF’s upcoming mixed-use development on the former Frankford Chocolate Factory site.
Photo Studio And Event Space Planned For 990 Spring Garden
The remaining unleased space on the ground floor of the redeveloped 990 Spring Garden St. will be home to a photo studio and event space. The roughly 10,000-square-foot space, dubbed Location 215, is being leased by Jen Blauvelt and Nicole Poulin, whose commercial photography business has included IKEA and Urban Outfitters among its clients.
The space, which also will be available for use by businesses and individuals for events or other occasions, will occupy the southern half of the building's ground floor, facing a defunct rail structure that is being targeted for development into a later phase of the Rail Park.
Panel Seeks Second Review On Callowhill Storage Facility Plan
The Civic Design Review Board has asked for more discussion about plans for a self-storage facility in a growing Callowhill commerce and residential corridor. The proposal calls for a 134,000-square-foot building on what is now a surface parking lot at 1314 Spring Garden St., with ground-floor commercial space and six stories of self-storage facilities above.
Board members noted that the project is in a burgeoning neighborhood, citing the nearby Rail Park and an increasing number of residential and retail developments. The advisory panel voted to require developer Johnson Development Associates to return for a second review.
Axalta Moves R&D From Delaware To New Philadelphia Facility
Axalta Coating Systems Ltd. has moved more than 200 engineers and scientists who were located in Wilmington, Del., into a new research and development facility at the Philadelphia Navy Yard. Axalta, which had $4.4 billion in revenue last year, supplies liquid and powder paints and coatings to a variety of industries.
Liberty Property Trust and Synterra Partners developed the estimated $70 million building, which was chosen by Axalta partly because of its proximity both to the company's Center City headquarters and to the region’s many universities where the company recruits.
Contemporary Art Nonprofit Is Getting Permanent Home In 2019
After two years of programming its exhibitions in locations around the city, the nonprofit Philadelphia Contemporary will soon have a permanent home designed by Los Angeles-based architecture firm Johnston Marklee. The visual and performing arts organization, founded by former Pennsylvania Academy of the Fine Arts museum director Harry Philbrick, will remain devoted exclusively to contemporary art and is slated to open in 2019.
Philadelphia Contemporary is not disclosing the site location, or what the space will look like, but Johnston Marklee says it will challenge the concept of a conventional museum as well as the boundaries between a museum and its visitors.
Voters Approve $181 Million Bond For Improvements Citywide
Philadelphia voters have approved a $181 million municipal bond that will fund capital projects including commercial corridor improvements and boosting acquisitions of industrial-zoned sites. While comprising a small part of the $4.7 billion capital budget for next year, the bond proceeds will help the city leverage private, state and federal money sources, which often require local matching funds — combined, those outside sources make up 35% of the city’s FY 2019 capital budget.
The Commerce Department will oversee $1.5 million earmarked for improvements to commercial corridors throughout the city. The money will go toward upgrading sidewalks, lighting, landscaping and parking, in an effort to support and grow local storefront businesses. The Philadelphia Industrial Development Corporation will get $3 million from the bond to boost its revolving fund for acquiring and investing in industrially zoned sites, which it then sells off to private companies.
Join Us December 18 For CPDC’s Membership Meeting
The final Central Philadelphia Development Corporation meeting of the year will convene a panel who will look ahead in a session entitled: Philadelphia 2019: Strengths, Opportunities & Challenges. Please join us on Tuesday, December 18, 8:30 a.m. at The Union League, 140 South Broad St., Grant Hall. In a series of quick, lightning round responses, panelists will highlight the opportunities they see before us in the New Year and the challenges and hurdles that Philadelphia must overcome to capitalize on these opportunities.
Panelists will be Della Clark, President, The Enterprise Center; Michael Forman, Chairman & CEO, FS Investments; Mike Pearson, President & CEO, Union Packaging; Shari Reams-Henofer, Senior Vice President, Northeast REIT Client Manager, PNC Real Estate; Jerry Sweeney, President & CEO, Brandywine Realty Trust; and Richard Vague, Managing Partner, Gabriel Investments.
CPDC members are encouraged to invite both young professionals and other members of their firms to attend. RSVP to Romina Gutierrez at email@example.com or 215.440.5543.