greater philadelphia area - large office insights
DESCRIPTION
Contact Pete Davisson [email protected] Office Insights provides a brief analysis of proposed large office build-to-suite projects in the Greater Philadelphia Area. Jackson Cross Partners - Commercial Real Estate Services http://www.jacksoncross.com – 610-265-7700TRANSCRIPT
APPLIED KNOWLEDGE IN REAL ESTATE
I N S I G H T S
JACKSONCROSS.COM Winter 2015
P A R T N E R S ©
This report and publications discussed are intended solely for information purposes and obtained from sources believed to be reliable.No guarantee of any kind is implied or possible where projections of future conditions are attempted.
© Jackson Cross Partners • 2015 All Rights Reserved
Partner’s Brief.................................................................................3
Greater Philadelphia Proposed Office Projects.......................4 - 5
Philadelphia Area Market: Office Insights.......................................6
Area Transactions & News.............................................................7
About...............................................................................................7
PROCESS | PEOPLE | TECHNOLOGY Winter 20152
PARTNER’S BRIEF
There is a serious issue brewing in the regionalreal estate market. While the economy is doing better, andPhiladelphia is clearly in a recovery, this means the supplyof office space is tightening, rental rates are going up, andtenants with large requirements have fewer and feweralternatives.
For most of the last seven years, the regionalcommercial market has been oversupplied, keeping ratesdown, and developers aggressive. New construction proj-ects were confined to institutional expansions, or municipalprojects, not Class-A office projects. Demand was non-existent thanks to little or no job growth. Suburban Office asan Industry sector is taking its turn at the bottom of theinvestment food chain.
Due in large part to the recovery, vacancy rates incore submarkets are in the single digits. The once plentifullarge blocks of space greater than 50,000 sf are leased.“Densification”, a shift in space design resulting from cultur-al requirements of millennial workers, has rendered muchof the existing inventory functionally obsolete. What wereonce considered Class-A properties, now have a low park-ing ratio, poor window lines, low ceilings, and not enoughbuilding infrastructure to support higher employee counts.Open space planning, like it or not, helps the bottom line.
The short supply of readily available large blocks ofspace has further complicated the process of matching longterm real estate strategy with the vision of leadership.Exciting opportunities exist in building a new facility, orre-purposing existing buildings. The process is complexand time consuming. A successful outcome is the result ofa detailed, collaborative effort, with a strong real estateteam leader.
Feel free to call me directly to discuss our insightsand their impact on your vision. I look forward to the con-versation.
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Jackson Cross Partners never deviated fromtheir commitment to protect our best interest. Theultimate transaction required short term solutions,complicated financial analysis, as well as finesse.Jackson Cross Partners knows how to blend the artand science necessary for creative deal making.
Leo ParsonsPresident and COO
Communications Test Design, Inc (CTDI)
Customer Testimonial
John P. Morrissey, SIORFounding Partner
610.265.7700 ext [email protected]
GREATER PHILADELPHIA PROPOSED OFFICE PROJECTS 100,000 SF
PROCESS | PEOPLE | TECHNOLOGY Winter 20154
Applied Knowledge in Real Estate
Metroplex Corporate Center
Chemical Road, Plymouth Meeting, PAMetroplex Corporate Center I
Class - A Office BuildingYear Built: 2007 Square Feet: 120,877Percent Leased: 100%
Metroplex Corporate Center II12 story - 336,000 SF
Proposed
Metroplex Corporate Center III5 Story - 120,000 SF
Proposed
Metroplex Corporate Center is centrally located inPlymouth Meeting, Montgomery County, PA at theconvergence of I-476, the Pennsylvania Turnpike andthe Northeast Extension. This area is widely recog-nized as a key transportation hub in SoutheasternPennsylvania.
Property Features Include:■ Dramatic lobbies, granite flooring■ Cutting edge design■ Adjacent to Metroplex Shopping Center■ Convenient to hotels, restaurants, daycare■ Minutes from the Plymouth Meeting Mall■ 15 Minutes to King of Prussia■ 30 Minutes to the Philadelphia Airport■ Public Transportation
7
JPC is not the exclusive agent for these properties.
The Navy Yard
ID State Submarket Name Building Park SQ FT
1 PA Navy Yard Navy Yard Corporate Center 95,000
2 PA Market Street West FMC Tower/Walnut St South 830,000
3 PA West Philadelphia 3.0 University Place 189,529
4 PA Conshohocken Tower Bridge 260,000
5 PA Delaware County Ellis Preserve 270,002
6 PA Exton/Whitelands Atwater 1,895,360
Great Valley Corp Center 390,000
* 7 PA Plymouth Mtg/Blue Bell* Featured Property
Bentwood Executive Campus 270,000
Chemical Rd Metroplex 456,000
GREATER PHILADELPHIA PROPOSED OFFICE PROJECTS 100,000 SF
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Applied Knowledge in Real Estate
Brandywine Realty Trust (NYSE: BDN)owns and manages Metroplex Corporate Center.Headquartered in Radnor, PA, they are one of thelargest full-service, integrated real estate companiesin the nation. Organized as a real estate investmenttrust (REIT), Brandywine owns, leases and manag-es an urban, town center and suburban office port-folio.
One of Brandywine’s key strengths is theirBuild-to-Suit project management system. Theyhave been named by Forbes as one of America’s100 Most Trustworthy Companies. Brandywinerealty.com
“This map represents the locations of a subset of the
available or proposed Build-to-Suit sites in the Phila-
delphia region. Developers are entertaining large
requirements two years before actual delivery dates
on a new building, requiring large tenants to establish
relocation strategies well in advance of pending lease
expirations.” John P. Morrissey, SIOR
Owners/Management
Area Tenants■ First Niagara Bank
■ LaSalle University
■ Citizens Bank
■ IMS
■ Mercy Health
JPC is not the exclusive agent for these properties.
15Center City
The Navy Yard
Camden
Meeting HouseBusiness Center
Mid-CountyInterchange
PlymouthMeeting Road
PlymouthMeeting Mall
METROPLEXCORPORATE
CENTER
SQ FT ID State Submarket Name Building Park SQ FT
8 PA King of Prussia/Wayne Renaissance Corporate Ctr 300,065
830,000 500 American Ave 100,000
189,529 9 PA Norristown/Valley Forge 2660 Audubon Rd 127,000
260,000 10 PA Horsham/Willow Grove Keith Valley Business Ctr 108,278
270,002 11 NJ Gloucester County Mullica Hill 225,000
1,895,360 12 NJ North Burlington County Laurel Creek Exec Center: 266,000
390,000 13 NJ South Camden County Independence Blvd 100,000
270,000 14 PA Northeast Philadelphia Eagle Pointe at Byberry 750,000
456,000 15 NJ Camden NJ Gateway Office Campus 1,600,000
PROCESS | PEOPLE | TECHNOLOGY Winter 20156
PHILADELPHIA AREA MARKET: OFFICE INSIGHTS
Year-end 2014 Construction Notes
■ Suburban Philadelphia: 3 buildings to-taling 176,231 SF under construction.
■ Central Philadelphia: 2,166,682 SF ofbuilding space under construction
■ (86.6% pre-leased).
■ Deliveries during the last 7 years weredrastically reduced to below the histor-ical average.
■ Lenders have become more stringentrequiring higher pre-lease percentag-es.
Class-A Office Insights
■ The availability of Class-A Officespace for large users has decreaseddue to lack of construction during therecession, and increased occupancydue to the recovery, leading to un-precedented leasing rates for primespace.
■ Due to a lack of inventory of largeClass-A office buildings, Build-to-Suitsolutions may be the best and onlyoption a large office user has tochoose from in the Greater Philadel-phia market.
■ Developers are not building on spec-ulation but are waiting for a lead ten-ant to pre-lease a large portion of theproject before proceeding with con-struction.
The strategic planning necessary to implement a real estate decision for a large requirement takes time, a significantcommitment of resources, and solid analysis of actionable market data. Jackson Cross Partners has led transitionteams for large real estate requirements regionally and nationally. We custom design a process that will yield the bestpossible alternative from a wide array of possibilities, whether a renewal, downsize or, relocation. Our cross-functionalteams are equipped to help define, and implement your real estate strategy.
About Jackson Cross Partners
■ A partnership between Nightingale Properties and Carl-ton Associates purchased 1835 Market St. in Center Cityfor $100M. *bizjournals.com■ VEVA a 16-acre newly redeveloped office park: 425,000sf Class-A Office Space formerly known as Sentry ParkWest was unveiled in Blue Bell. *Keystone PropertyGroup■ Record-setting price of more than $360 per sf paid forRadnor Court, an office building located in Radnor, Pa.Goldman Sachs bought the property from Equus CapitalPartners of Philadelphia. *bizjournals.com/
■ King of Prussia office building, owned by a fund com-prised of Miller Investment Management and HaydenRealty comes up for sale at 150 S. Warner Road; couldtrade for $200 per square foot. *bizjournal.com■ More than $500M in new development planned forConshohocken with more than 1.27 million square feet ofoffice development. *bizjournal.com■ Subaru of America announced it will relocate its newcorporate headquarters to Camden, NJ from Cherry Hill.*NJBMagazine.com■ Philadelphia to host the 2016 Democratic NationalConvention
A process based, technology enabled approachto real estate portfolio management,
focused on the alignment of real estate objectiveswith the goal of an overall strategic business plan.
Applied Knowledge in Real Estate TM
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RECENT TRANSACTIONS AREA NEWS
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For more information, please contact:Jackson Cross Partners1010 W. Ninth AvenueKing of Prussia PA 19406Attn: John MorrisseyPhone: 610-265-7700 ext. 124www.jacksoncross.com
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