From large publicly traded companies to mid-size tech companies and small professional services firms, companies are taking notice of the office development and vibrant live-work communities being built in the Lehigh Valley. Located one hour north of Philadelphia and 90 minutes west of New York City, the Lehigh Valley is a two-county region in eastern Pennsylvania consisting of 62 municipalities and the cities of Allentown, Bethlehem, and Easton. It is the 69th largest metropolitan region in the United States, with a $39.1 billion GDP larger than that of both Wyoming and Vermont. The Lehigh Valley’s total office market inventory currently stands at 26.8 million square feet. There have been 281,250 square feet of office market deliveries in 2018 so far, and another 329,000 are currently under construction. A total of 669,832 square feet of office space was under construction in the Lehigh Valley as of the first quarter of 2018, with the majority of that development in the region’s urban centers. Ninety-six percent of the office buildings constructed in the Lehigh Valley so far this year have been built in either Allentown, Bethlehem, or Easton and all of the 329,000 square feet of office space currently under construction are in …
STATE COLLEGE, PA. — HREC Investment Advisors has arranged the sale of the 149-room Atherton Hotel in State College. The sales price was not disclosed. Ketan Patel of HREC represented the seller, Atherton Street Partnership, in the transaction. The buyer was AJ Capital Partners, a Chicago-based real estate developer, owner, and operator. The property is located in downtown State College, one block from Pennsylvania State University. AJ Capital plans to renovate the hotel and convert it to Graduate State College, part of the Graduate Hotels collection.
Apartments in Philadelphia’s urban core command premium rent, prompting more renters to consider living in the surrounding suburbs. Rising demand for apartments in submarkets both near and far from Center City have helped lower vacancy and improve rent growth. Southwest Philadelphia, in particular, has exhibited these trends despite elevated construction activity. The combination of favorable property fundamentals amid supply additions draws strong investor interest, leading to increased transactions and higher sales prices. Multifamily properties in Southwest Philadelphia are outperforming those in Center City. Over the past four years, apartment inventory in both submarkets rose by almost proportional amounts, 10 percent versus 14 percent, respectively. Yet, over that time, vacancy in the suburban submarket dropped 100 basis points to a rate of 4.2 percent while the downtown rate went up 70 basis points to 5.3 percent. Rent growth showed a similar disparity. In the same four-year span, average effective rent appreciated 18 percent in Southwest Philadelphia but only 6 percent in Center City. The steep decline in vacancy and strong rent growth during this construction wave have demonstrated a healthy amount of demand in the submarket as residents seek more affordable housing options. As of June 2018, the average apartment in …
EASTON, PA. — Markward Group has brokered the sale of a 20,096-square-foot industrial building in Easton. The sales price was undisclosed. The property is located at 1298 Spruce St. Matt Macdonald of Markward Group represented the seller, Ealer Realty Corp., in the transaction. VM Realty Group represented the buyer, GLCJ Holdings LLC. The building was the former location of Ealer Electric and United Electric Supply.
BETHLEHEM, PA. — Onyx Equities LLC and PCCP LLC have acquired the Westgate Mall, a 270,000-square-foot enclosed mall in the Lehigh Valley community of Bethlehem. The sales price was undisclosed. Situated on more than 22 acres on Schoenersville Road, Westgate Mall is anchored by Weis Markets, Rite Aid and Sky Zone. Steven Klein and Ryan Ade of HFF secured acquisition financing for Onyx Equities LLC and PCCP LLC. Chris Munley and Michael DiCosimo of HFF represented the undisclosed seller in the transaction.
MALVERN, PA — Marcus & Millichap has negotiated the $5.7 million sale of Montgomery County Intermediate Office – Unit 23, a 40,000-square-foot, net-leased office building in Malvern. Located at 333 Technology Drive, the office is used for educating and training public school employees. Eric Grad and Alex Mobin of Marcus & Millichap represented the seller, a developer and property owner, in the transaction. The seller purchased the building in 2006. The buyer was in a 1031 exchange.
PHILADELPHIA — Binswanger has negotiated the $1.2 million sale of a 91,000-square-foot industrial facility in Philadelphia’s Fairhill neighborhood. Located at 3000 C St., the five-story property features two loading doors, a dry sprinkler system and also includes 2,000 square feet of office space. Mike Torsiello and Chris Pennington of Binswanger’s Philadelphia, office represented the seller, 3 S Properties, in the transaction. When Opportunity Knocks LP purchased the property.
During the first half of 2018, the Eastern Pennsylvania industrial market has been anything but quiet. Fueled by occupier demand and the institutional capital community’s perpetual appetite for industrial product, there has been unprecedented activity on the transactional front, which is up significantly year-over-year. From a pure volume perspective, the market is on a trajectory to make this the most active year on record. Unlike prior years where product starved capital markets would see less than a dozen quality trades in Pennsylvania, this year has proven to be more plentiful, with year-over-year sales volumes almost doubled for one-off offerings. Meanwhile, the mega transactions continue with pending portfolio and company sales like DCT to Prologis and GPT to Blackstone. Connected Markets While activity in specific submarkets ebbs and flows, the synergy between them is greater than ever before. In fact, the trend towards considering the Eastern Pennsylvania industrial market as a whole continues to gain traction. Whereas in the past, a tenant or investor may have been interested in evaluating a particular geographic region, today the various submarkets are providing equally viable options for those seeking to expand and new occupiers looking to open facilities. One exception to the rule is …
BRISTOL TOWNSHIP, PA. — Herring Properties has announced it will break ground on a new 248,500-square-foot speculative industrial facility in Bristol Township. The facility will be located on 20 acres in the Bristol Commerce Center and will feature clear heights of 40 feet. The property is expected to be ready for occupancy by the second quarter of 2019. Herring Properties is the developer of the Bristol Commerce Center. Current tenants at 81-acre industrial park include XPO Logistics, AirGas Corp., Goodyear and PetValu.
PITTSBURGH — Greystone has provided $19.5 million in bridge financing for the acquisition of Squirrel Hill Center for Rehabilitation and Health in Pittsburgh. The borrower is Squirrel Hill PA Realty LLC. The property is an eight-story, 178-bed skilled nursing facility, and will be renamed The Squirrel Hill Wellness & Rehabilitation Center. It was originally built in 1964 and is currently undergoing refurbishing and improvements. Fred Levine of Greystone originated the non-recourse, floating-rate loan. The financing features a 24-month term, two six-month extension options and interest-only payments for the life of the loan. The borrower intends to refinance the bridge loan with a fixed-rate, HUD-insured permanent takeout loan.