A Brooklyn real estate company has picked up a three-building portfolio in the Parkside area of West Philadelphia for $15.37 million.

Leser Group bought the properties from Rockland Capital, a Philadelphia real estate company that assembled and developed the buildings that have a mix of retail and office space.

The portfolio totals 97,200 square feet. The sale breaks down to about $158 per square foot.

The sale included:

• 4952-64 Parkside Ave., an 11,898-square-foot building developed in 2019 that is fully occupied by Santander Bank and DaVita Inc.; 5050 Parkside Ave., which is a 29,576-square-foot building occupied by Oak Street Health and Goodwill Industries; and
• Parkside Lofts, a five-story, 36,720-square-foot office building at 4946 Parkside Ave. that is fully occupied with 12 tenants. 

Listed for sale but didn’t sell was 4942-44 Parkside Ave., a vacant 18,982-square-foot building. That remains on the market.

Rockland assembled and developed these properties over several years and decided it was time to sell, said Derrick Dougherty.

What made the transaction unique at this particular time is it was the first deal Dougherty and his team closed on during the last three months that involved a lender, he said. In contrast, the previous five deals they have recently completed were all-cash transactions. Dougherty took that as a good sign.

“The world is starting to normalize and lenders are starting to have more appetite for retail and office properties,” he said.

American Heritage Federal Credit Union was the lender in this transaction and the financial institution has had a long-standing relationship with the buyer, Dougherty said. In addition, the properties in the portfolio have performed well during the pandemic with tenants paying rent and was unscathed by recent protests, all of which helped the deal get done.

Many of the retailers were deemed essential and remained open during the coronavirus. The office space is occupied by home care, government and local professional tenants.

The portfolio came on the market during the latter half of last year and was put under agreement in December.

*Article courtesy of Philadelphia Business Journal

For more information about Philly 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.

The Barer Institute, a collaborative cancer drug development initiative started by Rafael Holdings, Inc., intends to lease space at the planned 3.0 University Place development in University City.

The institute signed a non-binding letter of intent to occupy 2,500 square feet on the fifth floor of the building that will feature 10 other suites totaling 2,500 square feet each and dedicated to startup companies. The developer refers to these spaces as “Growth Pods.”

The Barer Institute is a subsidiary of Rafael Holdings (NYSE: RFL) of Newark, N.J. The company owns commercial real estate properties in North Jersey and Israel and also owns interests in two clinical-stage pharmaceutical companies focused on the development and commercialization of oncology drugs.

The pending lease helps fill some of the space at the proposed $100 million, 250,000-square-foot building that is being developed at 41st and Market streets by University Place Associates, a Philadelphia real estate company that has built two other buildings in the vicinity of 30th and Market streets and has plans to build a bigger campus there. In April, the Wistar Institute, a nonprofit research organization, entered into a long-term lease on 8,000 square feet for up to 10 years. Wistar has an option to take additional space in the future.

Other tenants that have committed to the building include Ben Franklin Technology Partners and Fulton Bank. In all, 80,000 square feet is leased so far.

Barer taking space in the building is a testament to leveraging Wistar’s presence as an “anchor-collaborator and strategic tenant,” said Anthony Maher, president of UPA. “We think it’s a powerful narrative and we think there will be more,” he said.

UPA is marketing the remaining space to tenants and there has been interest, Maher said. The second floor is the biggest at 39,000 square feet, and the company is dedicating that to cell-gene companies who want to manufacture in University City.

UPA expects to have its permit in June and to break ground on the project soon afterward, Maher said. It is finalizing financing now between two groups, he said.

“There is a lot of dry powder on the sidelines interested in our project,” Maher said. “They are now calling the life science-lab market the hottest and most preferred asset class that will lead coming out of Covid.

*Article courtesy of Philadelphia Business Journal

For more information about Philly 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.

Given the city’s notorious wage tax and slow-but-steady pace of office leasing, Center City Philadelphia office owners aren’t used to seeing their market listed at the top of the charts in national rankings. This is particularly the case given that the list of office tenants moving into Center City, while growing, is still somewhat limited.

However, Center City Philadelphia’s office market does stand out nationally for its low average vacancy, minimal new construction and a surge in college-educated residents moving into the Philadelphia area’s urban core. These trends are providing local office landlords and brokers the pricing power they need to raise asking rents at some of the fastest rates of any major central business district in the U.S.

The chart above draws on more than 5,400 office space listings with asking rents that have been posted on CoStar since the beginning of 2019. In order to provide a clearer picture of where office landlords are more bullish versus more bearish, this analysis focused on office listings that either increased or decreased their asking rent. Other changes in term or service types, for example from gross rent to triple net, were excluded.

The key takeaway: Office landlords and brokers have raised asking rents by 5% or more on a third of the office space listings in Philadelphia’s Market Street West and Market Street East submarkets since the beginning of last year, while almost no landlords lowered listed rents. The strong average increases in asking rents outshine central business districts in many of the country’s largest cities including New York, Washington, D.C. and San Francisco.

This is one of the factors that appealed to investors who made large Center City Philadelphia office acquisitions over the past two years.

Manhattan-based Silverstein Properties and locally based Arden Group were responsible for last year’s largest Center City office acquisition, with their joint-venture purchase of the trophy-class BNY Mellon Center for $451.6 million, or $351 per square foot.

“When we acquired 1735 Market we knew that we were getting the premier multi-tenant office building in the city in the best location at 18th & Market St. directly across the street from the Comcast world headquarters,” Arden Group CEO Craig Spencer said in a statement provided to CoStar. “Combining the iconic trophy quality of the property with Philadelphia’s dynamic job growth, millennial population growth and residential migration into Center City has created an exciting environment where we have been able to grow rents much faster than we initially anticipated.”

Silverstein’s Executive Vice President of Leasing Jeremy Moss echoed those sentiments.

“We and our partners at Arden Group and Migdal love Philadelphia for a lot of reasons,” he said. “The city has a fantastic lifestyle that is attracting young, creative people to live and work here. It has some of the country’s top colleges and universities and is strategically located between Washington, D.C. and New York City. The bottom line is that Philadelphia is a global destination that continues to attract leading businesses and their employees. Growth in office rents is a natural byproduct of the city’s continued growth and success.”

Meanwhile, Philadelphia’s notoriously high construction labor costs have helped to keep the amount of new office space coming to market to a minimum. This restrained growth in new office supply is likely another key contributor to rising asking rents.

However, high construction costs also mean increased tenant improvement allowances, which have partially offset the market’s recent rent gains.

“Five years ago, the average 10-year Class A office deal was getting around $50 per square foot in tenant improvement allowances, ” said Lisa DeNight, Newmark Knight Frank’s research manager for the Greater Philadelphia Region. “Now, that figure is looking more like $65 to $80 because of rising construction costs and sophistication of desired tenant build-outs. While we’ve seen great rent gains across the city’s office inventory, effective rates – what landlords are taking in after TI and concessions have been factored out – have seen more muted growth.”

*Article courtesy of CoStar News, Adrien Ponsen

For more information about Philly 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.