OFFICE SECTOR NEWS
Another $3M In Renovations For Wanamaker Building
A partnership between Rubenstein Partners and Amerimar Enterprises has nearly completed a $10 million, first phase of a renovation at the Wanamaker Building to improve the lobby’s logistics. Next up is a $3 million second phase to create a new amenity space between the 8th and 9th floors. That work, to be completed by March, will add an interior staircase to connect the two floors and updating a fitness center located on the 8th floor.
An atrium space on the 9th floor also will be fashioned into a common area with a coffee bar with seating. The space will have new fixtures, flooring and finishes. Combined, the two floors total 20,000 square feet.
EDS & MEDS NEWS
Program Aims To Get Philadelphia ‘Eds & Meds’ To Buy Locally
Philadelphia officials have launched a citywide initiative to spur hospitals and universities to increase their local purchasing of goods and services, from desk chairs to lab equipment to paper cups.
Called Philadelphia Anchors for Growth and Equity (PAGE), the effort brings together Philadelphia’s Department of Commerce and the Economy League of Greater Philadelphia, along with 20 founding partners and supporting organizations. The aim is to intervene throughout the supply chain – from the massive institutions that buy, to the supply-chain companies that deliver the goods, to vendors themselves – in order to keep in Philadelphia about $500 million normally spent elsewhere each year, and create up to 5,000 jobs.
Pearl Properties Acquires Embassy Suites Center City Hotel
Pearl Properties has added a second hotel and second Parkway property to its Center City portfolio with the acquisition of the Embassy Suites Center City Hotel at 1776 Benjamin Franklin Parkway. The hotel features 288 suites, 5,000 square feet of meeting space and a 150-space garage.
The hotel underwent a recent renovation that included upgrades of guest rooms, common spaces, the lobby and elevators. Pearl, which paid $67 million for the hotel, said it has plans for additional renovations that will include new restaurant spaces.
Stephen Girard Building To Become Hilton-Branded Hotel
The historic Stephen Girard Building in Center City will become a hotel under the Hilton Canopy brand. Plans call for the 13-story, 120-year-old-plus Beaux Arts building on 12th Street, between Market and Chestnut streets, to accommodate about 251 guest rooms with a restaurant and retail on its lower stories.
The hotel plan is part of the East Market commercial and residential complex. Washington D.C.-based National Real Estate Development controls the property under a long-term lease with its owner, the estate of late Philadelphia industrialist Stephen Girard. Hilton has 27 Canopy-branded properties in cities including Washington, D.C., London, and Chengdu, China.
Public Ledger Building Owners Consider Extended-Stay Units
Carlyle Development Group plans to revamp the Independence Hall-facing section of the Public Ledger office building into upscale extended-stay hotel rooms and possibly condominiums. The 290,000-square-foot eastern wing of the building will accommodate up to 190 units.
The property’s owners, led by Carlyle, are in talks with extended-stay hotel brands and may add condominiums if market conditions lend themselves to that use. The group aims to start on the redevelopment by early summer 2019 and to finish work in 2020 at a cost of up to $90 million.
CCD/CPDC’s New Retail Report
Center City’s retail landscape is growing both east and west of Broad Street, with a mix of well-known national retailers and local businesses that exists nowhere else, The Philadelphia Inquirer noted in an article on CCD/CPDC’s new ^ report on the state of downtown retail.
“The Center City District expects the success of retailers near Rittenhouse Square to continue expanding to the greater downtown, while East Market Street is poised to realize its potential and become a hot new retail area,” the article stated.
The 24-page report, Philadelphia Retail 2018, analyzes all of the demand drivers for downtown retail and includes detailed data and demographics on Center City residents, workers, visitors and students, updated pedestrian traffic counts and a roundup of selected major retail developments in the pipeline. It is produced annually to support efforts to attract new retailers to Center City.
PREIT CEO: Amazon Retail Stores Likely In Philadelphia By 2020
Amazon.com is scouting locations for physical stores in Philadelphia and will probably open one in the city within the next two years, PREIT CEO Joseph Coradino told attendees of a recent commercial real estate forum hosted by the Urban Land Institute. The Seattle-based e-commerce giant is eyeing sites for outposts of its Amazon Books stores, which are opening nationwide, and its Amazon Go cashierless grocery stores, now open in Seattle, Chicago and San Francisco.
Coradino declined to say whether Amazon is mulling a location in PREIT's Fashion District Philadelphia opening in September 2019, but he said sites on city retail streets and in shopping malls are under consideration.
Forbes Says The Bourse “Has Finally Grown Up”
In an article about the just-opened food hall in The Bourse building, Forbes had praise for the redesign, stating that “Philadelphia’s once-grand Bourse building has finally turned back into a place that Philadelphians can take pride in.”
Forbes noted that The Bourse’s location in the middle of the bustling historic district and the Independence Visitor Center, as well as the 30 independent food and drink merchants, make MRP Realty’s $40 million renovation a plus for visitors, workers and residents in the area.
Wawa Sets Opening Date For New Center City Location
The largest store in the Wawa convenience store chain is opening in Center City this week on December 14 with a new concept that includes artisan coffee, café seating and specialty items not offered at other locations.
The Wawa, which will be located at 6th and Chestnut streets, will take up 11,300 square feet. The largest currently existing Wawa, at 3300 Market Street on Drexel University’s campus, measures 8,760 square feet.
RESIDENTIAL MARKET NEWS
Philadelphia Housing Market Continues Current Trends In Q3
The city’s housing market is continuing to experience strong sales volume, low inventories and flattening prices, according to the new third quarter report from Drexel’s Lindy Institute for Urban Innovation.
The average price of Philadelphia homes rose 2.1% in Q3 on a quality- and seasonally-adjusted basis, according to the report. House price changes in individual submarkets were modest but mostly positive, while home sales activity remains strong. There were 6,403 home sales in Q3, up 14.6% from 5,585 in the same quarter one year ago. This marks the second-highest volume of quarterly home sales since the current market began its post-recession expansion in 2012 and the highest Q3 volume since 2006, when the last bull market in housing occurred.
Rent Rankings: Philadelphia Ends 2018 About Where It Began
Apartment rental listing service Zumper has published its final rent report for the year, and Philadelphia is ending 2018 as the 16th most expensive rental market in the nation. In January, it was 15th on the list.
The report cites an average national increase in December for one-bedroom rents, up 0.8% to $1,212, and in two-bedroom rents, up 0.5% to $1,430. In Philadelphia, one-bedroom units fell -0.7% to $1,520 monthly. Two-bedroom rent rates were up 1.2% since last month to $1,700.
Local Developer Breaks Ground On 26 Affordable Homes
Local developer Frankel Enterprise has broken ground on a development that city officials said is the latest step in a plan to create 1,000 new affordable housing units. In all, 26 new single-family dwellings will be built on vacant, city-owned lots near North 11th and Wallace streets, within walking distance of the Broad Street Line’s Fairmount and Spring Garden stations, and less than a mile from City Hall.
The development is being built with support from the city’s Workforce Housing Initiative, which offers publicly owned land to developers at a reduced price with the goal of incentivizing them to build below market-rate homes in neighborhoods where real estate values are rising.
Former Industrial Building On North 2nd Street Sells For $5.6M
The Charles Schober Co. building, a 10-story structure on North 2nd Street, has sold for $5.6 million to a local developer who has plans for a residential project. The 86,950-square-foot building in the Norris Square neighborhood was sold by a partnership involving the Schober family, who operated a wholesale furniture business from the property since buying it in 1968.
E. Built Inc., a Philadelphia real estate company, has plans for 78 residential units in the 96-year-old former hosiery mill and a new four-story building on an existing parking lot that will have 52 units and a dozen townhouses.
95-Unit Apartment Building Planned Near Berks Stop On Market-Frankford Line
A 95-unit apartment building is coming to a Fishtown lot near the Berks elevated train stop. The developer is GY Properties, which previously brought Cambridge Lofts to Northern Liberties. The structure would lie to the east of Kensington High School’s athletic fields, with its front facing Norris Street.
The proposed six-story building will include commercial uses on the ground floor, a roof deck, a dog run, and a mix of mostly one-bedroom units, along with some studios and two-bedrooms.
Philadelphia Officials Investigate NYC Traffic Enforcement Efforts
Several Philadelphia City Council members paid a recent visit to New York City to determine whether its successful traffic enforcement with civilians, rather than police, could work in Center City. New York has more than five times as many residents as Philadelphia's 1.5 million population, but only about twice as many traffic deaths.
New York’s traffic enforcement bureau employs 3,434 people, most of them civilians. Among them are 443 agents who handle the tasks that Parking Authority personnel do in Philadelphia, and have the authority to control traffic, oversee construction sites, and enforce blocking-the-box infractions.
Council President Darrell Clarke, joined on the trip by Councilman Mark Squilla and Councilman Curtis Jones Jr., told The Philadelphia Inquirer that he envisions a new category of officers under the authority of the Philadelphia Police Department, though this may require a change in Commonwealth law.
The reconsideration of Philadelphia’s traffic enforcement policy comes amid increasing concerns cited by residents, businesses and developers about the worsening congestion and parking difficulties in Greater Center City. This year’s CCD/CPDC report, Keep Philadelphia Moving, looks at the city’s challenges and outlines possible solutions, and was widely cited in media reports about the new congestion crackdown effort.
SEPTA Awarded $15M USDOT Grant For 30th Street Subway Station
A $15 million federal grant will give SEPTA’s 30th Street subway stop an upgrade, another step in the larger plan to modernize the transit hub at Amtrak’s 30th Street Station. The Department of Transportation BUILD grant supplements $21 million from SEPTA and $2 million from Brandywine Realty Trust, one of the developers working on the 30th Street Station project.
SEPTA’s upgrades for the subway station include a new elevator at 30th Street, a new head house at the stairway near 31st Street, platform widening, and new escalators. The work is the first phase of a $37 million upgrade of the site by 2020, and complements a $6.5 billion project to remake 30th Street Station and the land around it.
PHL Plans $5.5M Land Purchase To Grow Air-Freight Activity
City officials plan to spend $5.5 million to acquire 15 acres near Philadelphia International Airport as part of a plan to develop a massive air-freight complex serving a broad swath of the mid-Atlantic. The land is adjacent to the 135-acre property in Tinicum Township known as the Henderson Tract, which the City previously acquired for the cargo terminal project.
Philadelphia is aiming to claim a larger share of the estimated $50 billion in air-freight activity generated in the region. Airport officials have begun preparing plans related to federal environmental reviews and wetland mitigation.
PICA Board Approves City’s Revised FY2019-FY2023 Plan
The Pennsylvania Intergovernmental Cooperation Authority has unanimously approved the City of Philadelphia’s Revised Five Year Financial Plan for FY2019-2023. A collective bargaining reopener agreement with AFSCME District Council 33 resulted in $28 million in additional costs, requiring the submission of a Revised Plan under PICA rules.
PICA’s approval noted that those additional costs can be absorbed by the City’s projected $368.7 million fund balance for FY2018 in the Revised Plan. However, PICA stated that it continues to be concerned about potential risks overall, “such as the possibility of declines in economic growth, School District funding, real estate transfer tax projections, or rising pension costs.”
PICA: $752M In Q1 FY2019 General Fund Revenue Collections
A new PICA analysis of the Quarterly City Managers Report (QCMR) for the first quarter of fiscal year 2019 (July 1 – September 30, 2018) shows the city’s General Fund revenue collections were $752 million, $10.1 million less than the first quarter of FY2018. General Fund obligations totaled $1.33 billion, an increase of $82.5 million over the first quarter of last year. In its report, PICA noted that many of the major tax collections occur in the spring.
The QCMR projects year-end revenues and obligations to increase, by $44.7 million and $68.6 million respectively, compared to the projections found in the City’s Revised Five Year Plan.
New Issue Of CCD/CPDC’s Quarterly Digest Out Now
The new issue of Center City Digest reports on the results of CCD’s just-completed annual customer satisfaction survey, in which 79% of the 4,640 respondents say downtown is headed in the right direction. Only 3% feel it’s on the wrong track, while 18% don’t sense things trending significantly either way. But, there are caution flags amid this continued optimism.
While 79% indicate they feel safe most of the time or always in Center City, 20% say they often, or occasionally, feel unsafe. Fifty-nine percent say panhandlers who confront pedestrians cause the greatest insecurity; 47% are concerned about people sleeping on the sidewalks and in building entrances; and 31% worry most about the absence of uniformed police officers or other public safety professionals. These concerns have more than doubled from similar surveys in the last five years. This increased anxiety reflects less a shift in public attitudes than changing realities on the street, documented by censuses CCD has conducted within District boundaries for more than two decades.
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 by December 13 to Romina Gutierrez at email@example.com or 215.440.5543.