The Wanamaker building is facing 500,000 square feet of vacant space after Children’s Hospital of Philadelphia exercised an option to terminate its lease at the building and two other tenants decided to move out.

The 1.4-million-square-foot building at 100 Penn Square East in Center City has 950,000 square feet of office space and the remainder is retail space occupied by Macy’s. With those tenant defections, the building faces having more than half of its office space vacant.

The vacancies come at a point when corporations are reevaluating their office space needs during the pandemic and delaying decisions on long-term leases. In spite of those challenges, there is hope that demand for space by life sciences companies may fill some of gaps left in Wanamaker and other Center City buildings.

Life sciences companies are increasingly in the market looking for office-lab space and the conversion of existing office space to accommodate these tenants is being considered by many downtown landlords. Though expensive, the cost to convert space is less and faster than ground-up development.

A recent report pegs the amount of space being sought by life sciences companies within Philadelphia at nearly 725,000 square feet, which is roughly double the amount since the beginning of the year.

CHOP occupies 300,000 square feet at the Wanamaker and expanded by more than 50,000 square feet last year.

CHOP said it is reevaluating its office space in preparation for a post-Covid world and is in discussions to “identify new lease terms.”

“We are committed to creating work environments that advance our mission, make the best use of our resources and enable our employees to meet and collaborate according to their needs,” CHOP said in a statement.

CHOP has several development projects in various stages that could eventually shift employees from Wanamaker closer to the hospital’s main campus in University City.

Two agencies within the General Services Administration were the other defections from Wanamaker. The Army Corps of Engineers, which had 113,000 square feet, and Housing and Urban Development, which occupied 119,000 square feet, have signed a lease to occupy the former Environmental Protection Agency space at 1650 Arch St.

Wanamaker was purchased in 2017 in a $200 million deal, the company was aware of the potential for CHOP and the GSA to move on from the building. That risk corresponded with the company’s plans to move forward with a $30 million renovation of the building that included updating the lobby and other common areas, improving the courtyard and adding several amenities including Mindspace, a coworking operator that signed a lease on 42,000 square feet.

The strategy involved completing those improvements in an attempt to bring Wanamaker up to Class A space and increase rents by $10 a square foot.

The space will come available between 2021 and 2023, which will purportedly be post-pandemic. By then, most companies will return to making long-term decisions on their office space needs and providing some wiggle room before the space no longer has a tenant paying rent.

The size of the floorplates, ceiling heights and other characteristics appear to accommodate such conversions. The company also needs to consider how that might work with other tenants in the building.

*Article courtesy of Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

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A Charlotte real estate firm has paid $9.45 million for a 78,000-square-foot building at 1400 N. Howard St. in Philadelphia and plans to invest another $8 million to redevelop it.

While the Charlotte real estate firm owns several High Street retail properties near Rittenhouse Square including 1704 Walnut St., it also has a growing presence in the area around the South Kensington neighborhood where it bought the vacant North Howard Street property.

So far the firm spent a total of $31 million buying properties in the Kensington and Fishtown sections of the city. The company owns the building at 1002 Canal St. that housed the now closed Goose Island Brewhouse, 1100 N. Front St. where Love & Honey Fried Chicken is located, and a commercial condominium at 1405 Frankford Ave.

The company prefers to buy in well-established neighborhoods and acquire properties in which it can launch adaptive reuse projects. In April 2019, the company closed an $800 million fund that is being deployed to buy urban and infill neighborhood locations across the country.

Philadelphia is among those cities it is targeting and, aside from Rittenhouse Square, it’s drawn to the Fishtown-Kensington area.

The Howard Street property is a single-story building that encompasses an entire city block. Though it has an industrial past, the building was rezoned for residential use. At one point, a townhouse development was proposed by the previous owner but that never materialized.

The firm was granted new commercial zoning by the Philadelphia Zoning Board of Adjustment that will allow for the company to follow through on its plan to redevelop the building into retail and office space. The office portion would take up about 80% of the building, leaving the remainder for retail use.

While the restaurant and retail scene has grown in recent years along Frankford Avenue, the office market in that area is nascent. The company encouraged by the presence of companies such as La Colombe and Honeygrow, which not only have retail operations in the area but also their respective corporate offices. Kracke believes there are companies like La Colombe and Honeygrow that would prefer to have their offices be in a neighborhood rather than Center City.

Rents for the office space are projected to range from the high $20s a square foot to the low $30s.

The Charlotte Firm plans to begin construction next summer and expects to complete the project in 2022.

*Article courtesy of Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

Axlata Coating Systems Ltd. plans to close its Center City global headquarters office and move out of the 36,000 square feet it has occupied at Two Commerce Square for the last seven years.

Employees working out of Philadelphia will relocate to either its 55,000-square-foot North American headquarters off Applied Bank Way in Glen Mills or its 175,000-square-foot research facility at the Philadelphia Navy Yard.

The decision to close its Center City office comes after the company went through a restructuring over the summer that led it to realign its real estate and other operations. The restructuring will result in 550 job cuts over the next two years as part of plan to generate $50 million in savings amid economic pressures.

The move out of Center City veers from Axalta’s (NYSE: AXTA) original plans when it spun out of DuPont Inc. in 2013 and moved out of Delaware and deliberately split its global and North American headquarters into two locations.

The company said at the time it wanted to have a distinct location for its global and North American headquarters.The company then decided to place its global headquarters in Commerce Square, saying at the time it preferred an urban setting near mass transit as well as the Philadelphia International Airport. The company then moved its North American headquarters to Glen Mills, contending it was closer to where most employees, who had previously worked at DuPont, live and from where they had been commuting for years.

In that time, the company, which makes coatings that go into paint used on vehicles and other products, went from being privately owned to publicly traded.

Axalta announced in late March that it ended a review of strategic alternatives it began in 2019 to explore a potential sale of the company, saying the impact of the coronavirus on markets was to blame.

Philadelphia office shifts will be completed in mid-2021.

*Article Courtesy of Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier  Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

As many as 85% of tenants in one office landlord’s buildings across the country are still working from home, and its executives say large employers are realizing they may have more of a struggle on their hands in getting everyone back than first anticipated.

Brandywine Realty Trust executives are finding that even as some tenant employees are growing annoyed with full-time remote working, the big companies have a laundry list of concerns that they are finding that they can’t manage away.

“The longer this has gone on, the more we are hearing consistently across our office base that they can’t wait to return to the office,” said Jerry Sweeney, CEO of the real estate investment trust, during a conference call to discuss its most recent earnings. However, public policy, mass transit and concerns about liability for employers are holding many companies back, particularly larger firms such as Comcast and Lincoln Financial in Philadelphia, he said.

Seven months into the pandemic in the United States, office landlords with buildings spread across different regions of the country are providing an across-the-board glimpse into the way tenant companies are dealing with having their workers outside the office. As new confirmed coronavirus cases reach daily records around the country, more top executives are facing talking with their landlords about the worsening conditions that are forcing them to write rent checks for buildings they mostly aren’t filling up right now.

Brandywine, which owns about 15 million square feet of space located mostly across Philadelphia, Washington, Virginia and Austin, Texas, reported that just 15% of its U.S. office tenant base has returned to the office. But that percentage is noticeably lower in Austin, where it is one of the city’s biggest office landlords.

Only 8% of Brandywine’s office tenant base in Austin has returned to work in person at the office a full seven months after the pandemic started, according to the office REIT. That percentage is being held down because one of its major office tenants in Austin, IBM, doesn’t plan to send its employees back to its north Austin campus until early next year, Sweeney said.

Without IBM, Brandywine’s Austin’s percentage of office tenants back at the office would be somewhere in the “mid-teens,” Sweeney said. Across its portfolio, the Washington area is seeing the highest percentage of tenants going back to the office at 25%.

Construction on the 25-story 405 Colorado in downtown Austin is expected to be complete early next year. (Brandywine).

Public health guidelines in cities like Philadelphia, where Brandywine is based, are still requiring employees to work remotely when feasible, though Sweeney said about 18% of its tenant base in Philadelphia’s suburbs are back at the office.

Meanwhile, Texas health officials are also encouraging remote work when possible, though the governor has allowed offices to operate at 75% capacity since September.

“Austin, I think, wound up being one of those cities that had opened up early then had some surge issues reduced or retracted back some of that progress and now is on the way back,” Sweeney said.

Even with 85% of its office tenant base mostly still working remotely, tenants are still paying rent. Brandywine collected 99% of its expected office rental income in the third quarter and 97% of its expected rental income in October so far, Sweeney said

Building projects are still moving forward. Brandywine is on track to complete construction of its $116 million office tower in downtown Austin called 405 Colorado early next year. DLA Piper law firm backed out of a lease in the project earlier this year, leaving the tower now just 18.3% preleased months away from delivery. However, Sweeney said there is nearly 200,000 square feet of potential deals in the leasing pipeline for 405 Colorado.

Elsewhere in Austin, Brandywine expects to receive final approvals from the city of Austin for Block A within its broader redevelopment of the 66-acre Broadmoor campus, where IBM is located not far from The Domain, the company said. Block A is expected to consist of a 350,000-square-foot office building and 340 apartments. Overall, the Broadmoor plan calls for a massive mixed-use hub with up to 3.2 million square feet of office space, 2.9 million square feet of residential space, 382,000 square feet of retail space and 284,000 square feet of hotel space.

Brandywine is continuing to develop Schuylkill Yards in Philadelphia with a new life sciences focus. (Brandywine)

In the Philadelphia area, its major development project in the works is Schuylkill Yards, a multiphase, 5.1 million-square-foot mixed-use development. Brandywine completed construction of the Bulletin building there in the second quarter, and it has acquired the leasehold land to develop two mixed-use buildings totaling 1.3 million square feet at 3025 JFK and 3001 JFK, according to its latest earnings update.

Also in Philadelphia in July, Brandywine sold its 30% equity stake in One and Two Commerce Square to an institutional investor for $115 million.

In the Arlington, Virginia, area outside D.C., Brandywine expects to complete construction on a $224 million mixed-use tower, 4040 Wilson, in the first quarter through a joint venture with Shooshan Co. The 22-story building is 62% preleased.

Overall, Brandywine saw its net income spike to $274 million in the third quarter from $6.7 million during the same time last year because of significantly less expenses, but its revenue in the third quarter fell 13% to $126 million compared to $145 million for the quarter last year.

*Article Courtesy of CoStar

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier  Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

Imvax expected to host an event in April or May to unveil its new headquarters at The Curtis in the Old City section of Philadelphia, but the ongoing pandemic scuttled those plans.

“Covid-19 clearly got in the way,” said John Furey, the former Spark Therapeutics executive who was hired as CEO of Imvax last year. “Once we see the light at the end of the tunnel with all of this, we’ll do something” to show off the new space.

The company previously operated out of a small office in Chestnut Hill and took the 17,000 square feet of space at the iconic Curtis building to keep up with its expansion.

Imvax currently has a staff of 18 and expects to get to 25 by year’s end, Furey said, adding he expects that figure to double in 2021.

“We are in a rapid expansion mode,” he said.

Imvax was founded in 2015 Dr. David Andrews, a Thomas Jefferson University Hospital neurosurgeon; Craig Hooper, a professor in the department of cancer biology at Jefferson; Pete Corr, a former Pfizer executive; and journalist-turned-entrepreneur Arthur W. Howe IV.

The company has raised $152 million from investors since its inception.

Andrews, the company’s chief medical officer, has spent the past two decades leading a team of researchers and clinicians at Thomas Jefferson University working on an immunotherapy treatment for a rare and lethal type of brain cancer known as glioblastoma multiforme.

The treatment involves creating a tumor vaccine made from patients’ tumor cells, and combining it with what is known as an antisense molecule. The combination produces a personalized immune response that works in conjunction with the standard treatment for glioblastoma: surgery, chemotherapy and radiation.

Imvax posted positive interim results from early-stage testing that showed the vaccine, IGV-001, outperformed the standard of care treatment and produced prolonged overall survival and progression-free survival in patients with newly diagnosed glioblastoma multiforme.

Furey said the company expects to begin a mid-stage clinical trial of IGV-001 in newly diagnosed glioblastoma patients by the middle of next year. Imvax has an exclusive license agreement with Thomas Jefferson University granting it the right to develop and market the medical technology.

Furey said he was recruited to Imvax by Dr. Steven Altschuler, who was CEO of Children’s Hospital of Philadelphia when it spun out Spark Therapeutics in 2013. Altschuler is managing director for health care ventures at Ziff Capital Partners, one of Imvax’s investors.

This year, Imvax added Mark Exley as its chief scientific officer. He was previously vice president of cellular Immunology at AgenTus Therapeutics in Lexington, Massachusetts. Another new hire is Iphigenia Leonidou Koumenis, who joined ImVax as head of clinical operations in June. She was previously senior vice president of clinical operations at Wilmington-based Orsenix Inc.

Furey said the company will be adding staff in all areas including drug development, clinical operations and manufacturing. Imvax is finalizing plans to take another 3,000 square feet of adjacent space at The Curtis to expand its manufacturing capabilities at the site, he said.

The Curtis is located at 601 Walnut St. and owned by Keystone Property Group. The site once served as the headquarters for Curtis Publishing Co. and was where the Saturday Evening Post and a variety of other magazines were printed.

Key building features— such as reinforced floors that once supported larger printing presses, high ceilings and a structural design that allows venting to the roof — made it an ideal choice for an immunotherapy company conducting drug development research.

Scheer Partners, the specialty scientific real estate firm that recently opened a Philadelphia office, has a representation agreement with Keystone Property Group for The Curtis and is marketing the site to other life sciences companies. Robert Scheer said his firm is in negotiations with several prospective life sciences tenants, and expects to soon sign leases totaling upwards of 100,000 square feet of space in the building.

Imvax will act as an example when luring other biotech firms to the building, Scheer said.

Added Furey: “I wonder if Mr. Curtis could have imagined his building would be repurposed for this kind of next-generation technology.”

*Article Courtesy of Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier  Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.