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Monthly Archives: December 2014


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Commercial Property Pricing and Property Sales Activity Still Rising

magnifying glassProperty pricing trends continued their upward climb in October, according to a new report from the CoStar Group.

The CoStar Commercial Repeat Sale Indices (CCRSI) said commercial property values, including those for Philadelphia office space and Philadelphia retail space were enhanced by minimal speculative construction, a more established economic recovery and the combination of rising rental rates and low benchmark interest rates, such as the 10-year Treasury.

CoStar noted increases in the CCRSI’s two broadest measures of aggregate pricing for commercial properties — the value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index.  The two measures rose 0.8% and 0.9%, respectively, in October 2014.

With steady gain in recent months, the value-weighted U.S. Composite Index now stands at a record high 3.9% above its 2007 prerecession peak.  This achievement reflects strong competition among investors for large, high-end commercial properties, including Philly office space and Philly retail space.

The equal-weighted U.S. Composite Index experienced solid gains that returned it to 2005 levels.  However this index, which is influenced by smaller property sales, is still 15% below its 2007 prerecession high, according to CoStar.  The improvement in the equal-weighted index stems from investors’ search for higher yields in secondary markets and property types after pricing for commercial property in core markets rose above pre-recession levels, CoStar said.

The U.S. Investment Grade segment of the equal-weighted Index grew by 15.8% for the year ending October 2014, while the U.S. General Commercial segment, which is comprised of lower-tier properties, increased by a strong 14.6% during the same 12-month period, CoStar noted.

For the 12 months ending October 2014, CoStar’s repeat-sale index tracked composite pair volume of nearly $78 billion, a notable 23% upsurge from the same 12-month period a year before.   This acceleration in property sales comes on the heels of similar composite pair volume increases of 22% in 2013 and 25% in 2012, a clear indication that investment flows into real estate remain strong, CoStar said.  The General Commercial segment’s repeat sale pair volume rose 27% for the year ending October 2014, edging out 21% growth in the Investment Grade segment as capital continues to move out on the risk spectrum, according to CoStar.

For more information about Philadelphia office space, Philadelphia retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak to Jason Wolf (215-588-8800-cell; jason.wolf@wolfcre.com), Leor Hemo (215-514-1750-cell; leor.hemo@wolfcre.com) or Lee Fein (215-206-5580-cell; lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate brokerage firm that specializes in Philly office space and Philly retail space.

Wolf Commercial Real Estate is a Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia office space or Philadelphia retail space with the Philadelphia commercial properties that best meets their needs.  As experts in Philadelphia commercial real estate listings, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space or Philly retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

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

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Commercial Real Estate Lending Soars at U.S. Banks

magnifying glassCommercial real estate lending has ballooned at U.S. banks with more than $100 billion in new loans added to the books in the past four quarters, up 6.6% to a total of more than $1.65 trillion (excluding farming), according to a CoStar Group report based on the newest FDIC numbers.

The increase in commercial real estate lending bodes well for new construction projects getting underway nationwide, including those that will bring new Philly office space and Philly retail space to Philadelphia.

The fastest-growing category in commercial real estate lending remained the multifamily lending sector, which rose 14.5% during the past four quarters to a total of $289 billion, Costar said.  Banks are again favoring construction and development lending with activity in this sector up 11.9% in the past four quarters to a total of $230 billion, CoStar said.

Other nonresidential commercial real estate lending increased 6% to $654.5 billion, CoStar reported.  The only other category the FDIC breaks out in bank lending is owner/occupied properties, which remained mostly flat, rising less than one percent to $478.7 billion and reflecting banks’ wariness regarding small business lending, CoStar said.

CoStar also noted that the quality of commercial real estate loans currently on the books continues to strengthen with the amount of past due loans held by banks shrinking to less than $30 billion at the end of the third quarter 2014, a drop of 6.6% in the past year and down approximately $119 billion from the height of the Great Recession five years ago when banks held almost $149 billion in delinquent commercial real estate loans.

As the quality of loans of loans continues to improve, more banks are willing to approve commercial real estate lending for major projects such as the Philadelphia office space and Philadelphia retail space construction projects currently underway in Center City Philadelphia.

CoStar also reported, the amount of charge-offs on real estate loans secured by nonfarm nonresidential properties declined 61.1 percent or $360 million.

The number of foreclosed properties held by banks dropped dramatically again, down 22 percent from a year ago to $13.1 billion.  The drop in the past year — $3.78 billion — represents a rate twice as fast as the four previous years combined.

For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak to Jason Wolf (215-588-8800-cell; jason.wolf@wolfcre.com), Leor Hemo (215-514-1750-cell; leor.hemo@wolfcre.com) or Lee Fein (215-206-5580-cell; lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker with extensive expertise in Philadelphia office space and Philadelphia retail space.

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

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space or Philly retail space with the Philadelphia commercial properties that best meets their needs.  As experts in Philadelphia commercial real estate listings, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philadelphia office space or Philadelphia retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

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

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Young Clientele Drives Market for Center City Philly Retail Space

magnifying glassMillennials, young families, office workers and tourists are driving the increasingly vibrant Center City Philadelphia retail scene, sparking renewed interest in Philly retail space among local and national retailers.

A new report by Center City District and the Central Philadelphia Development Corp. said the demand and buying power of this group of young consumers has attracted a diverse variety of retailers to the market for Philadelphia retail space.  The Center City area currently features 250 apparel stores, 133 food and drink establishments and 444 full-service restaurants, according to the report.

In addition, national retail chains — including Forever 21, Nordstrom Rack, Uniqlo, Michael Kors, Timberland and others — have been drawn into the market for retail space in Philly, with each of these brands opening new downtown stores in 2014, the report noted.  But even with this influx of national names, fully 77 percent of Center City retailers are the typical boutiques, independents and regional firms, the report said.

The renewed optimism in the Philly retail space market can also be seen in the inclusion of new  Philadelphia retail space in plans for larger mixed-use projects, the report said.  These include:

  • Midwood Investment & Development’s 60,000-square-foot multi-level building at 15th and Walnut Streets, which will be anchored by a Cheesecake Factory restaurant and will include multiple floors of retail space in Philadelphia.
  • Pennsylvania Real Estate Investment Trust’s 30,000-square-foot development at 15th and Walnut, which has the recently renovated Club Monaco already in place as a tenant and is looking to attract additional tenants to its retail space in Philly.
  • The major renovation plans for The Gallery shopping mall to bring Philly retail space and restaurants back to the ground level, street side of the mall.
  • Brickstone Realty’s Chestnut Street redevelopment plans that call for Philadelphia retail space with attached luxury apartments.
  • National Real Estate Development’s transformation of the former Girard Square into the new East Market, a full city-block project that will include a 17-story tower with 160,000 square feet of retail space in Philadelphia in phase one.

The growing demand for retail space in Philly should continue to strengthen so long as these variables remain stable, the report noted.  “With more than $4.7 billion in development projects and residential population increasing, Center City’s retail footprint continues increasing as demand and rents rise,” the report said.

For more information about retail space in Philadelphia or any Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Leor Hemo (leor.hemo@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker that specializes in Philadelphia retail space.

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

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new retail space in Philly with the Philadelphia commercial properties that best meets their needs.  As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for retail space in Philadelphia for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philly retail space for lease or sale through our Philadelphia commercial real estate brokerage firm.

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