Philadelphia Commercial Real Estate Wrap-Up – July 2020

The Navy Yard Mustin District. Image courtesy of DIGSAU

Philadelphia moved into the next phase of its reopening in early July, following a downward trend in new COVID-19 cases in the metro. However, following a major uptick in cases statewide, Governor Tom Wolf put new restrictions into place on July 16, once again reducing bar and restaurant capacities and requiring companies to allow remote work when possible.

Even with restrictions in place, the metro pressed onward with development work, particularly in the office and industrial sectors. While the pandemic has made a mark on nearly all asset types, industrial space has largely remained unscathed due to the explosive growth of e-commerce users. Read our selection of Philadelphia’s must-knows:  

1. DEVELOPMENT – Navy Yard expansion gets development team.

PIDC selected Ensemble Real Estate Investments and Mosaic Development Partners for the next 109-acre phase of the 1,200-acre redevelopment, which currently includes some 7.5 million square feet of office, retail, industrial, R&D and institutional properties. The next stage will focus on additional office, R&D and residential developments, with additional retail and makerspace components. Predevelopment work is slated to begin next year, and the overall phase is expected to generate up to $2.6 billion in new private investments.

2. DEAL – Brandywine Realty lands $115 million in preferred equity for Commerce Square.

The REIT sold a 30 percent stake in the 1.9 million-square-foot, two-building office asset in the Center City District, according to Philadelphia Business Journal, with the transaction subject to a $222 million loan. Commerce Square consists of two nearly identical, LEED-certified towers at 2001 and 2005 Market St. Brandywine and its new partner, a global institutional investor, will invest $20 million in the property as part of the deal.

3. FINANCING – Joint venture gets $103.5 million for Logan Township industrial development.

Advance Realty Investors and Greek Development received construction financing for the first phase of the 3.2 million-square-foot Class A Logan North Industrial Park, a 10-building master-planned development along Route 322 near Interstate 295. Wells Fargo provided $69 million for the 1.1 million-square-foot Building H, which is fully leased to Target. Building E, a build-to-suit cold storage facility for future tenant Lineage Logistics, received $34.5 million from Provident Bank.

4. DEAL – Angelo Gordon pays $47.5 million for Exton industrial park.

A joint venture between Goodman Properties and E. Kahn Development sold the Class A, 423,217-square-foot 101 Gordon Drive. The 36.6-acre property includes a 240,000-square-foot headquarters and manufacturing building and a 183,217-square-foot warehouse. Located just south of the Pennsylvania Turnpike, the property is fully leased to United Safety and Survivability Co. Newmark Knight Frank represented the seller. 

5. LEASING – Colliers arranges Pureland Industrial Complex full-building lease.

Champion Services leased 151,600 square feet at 1 Warner Court, a logistics facility completed in 1990. The 14-acre property is less than 1 mile from Interstate 295 and 16 miles from Philadelphia International Airport. Colliers Senior Managing Director Marc Isdaner negotiated on behalf of the landlord, GFI Partners, while NAI Mertz President Scott Mertz assisted the tenant.

6. DEAL – Adler Realty buys Bensalem retail asset.

The 67,215-square-foot Bensalem Crossing traded for $11.5 million, with Nationwide Life Insurance providing the buyer with a $7.1 million acquisition loan, public records show. Located on 9 acres at 2200 Bristol Road, the property comprises two single-story buildings completed in 1999. The center was fully leased at the time of closing. JLL represented the seller, a private investor, and arranged the financing for Adler.