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Monthly Archives: June 2015


International Capital Now Involved In 20 Percent of U.S. CRE Deals

new Jason stats graphic - June 2015The large amount of foreign capital entering the U.S. commercial real estate market is having a major impact, according to a recent report by the CoStar Group.

“Foreign investment in the U.S. commercial property market is soaring,” said Kevin Thorpe, DTZ’s chief economist, whose comments also refer to U.S. commercial property. “International capital is now involved in nearly 20% of total sales volume in the U.S., more than double the (historical) norm.”

Most recently, Brookfield Property Partners sold a 49% stake in a downtown Boston office tower and a Washington DC office portfolio to Australian Super, an Australian super-annuation fund. Net proceeds of the deals total approximately $649 million and values 75 State St. in Boston at $605 million and the eight DC-area properties totaling 2.2 million square feet at $1.32 billion. There currently no numbers available relating to Philadelphia commercial properties or Philadelphia commercial real estate listings or the sale or lease of Philadelphia office space (Philly office space), Philadelphia retail space (Philly retail space) or Philadelphia industrial space (Philly industrial space).

With numerous examples of similar deals, sales of U.S. commercial property are approaching all-time highs. This year total U.S. commercial real estate investment in North America is expected to surpass $390 billion, exceeding the $373 billion investment peak in 2007, according to DTZ.

The reasons why overseas investors find the U.S. commercial real estate market so appealing number almost as much as the countries they hail from.

“Some of it (sales activity) is driven by capital preservation,” Thorpe said. “Some of it is driven by relative yield, which still generally favors the U.S., and some of it is driven by an economic trajectory that is a clear standout on the world stage. Barring something unforeseeable, the U.S. commercial property markets will shatter records this year, both in terms of volume and pricing.”

While Canadian investors have traditionally been the biggest investors in U.S. commercial real estate since 2013, the share of investment capital coming from Asia has continued to increase, according to new data from Morgan Stanley Research.

Chinese institutional investors have studied the market and are now seeking partnerships with U.S. commercial property owners, and some are even considering direct development opportunities, Morgan Stanley analyst Jerry Chen noted last week.

Furthermore, despite U.S. commercial real estate prices rising above 2007 peaks, cap rates here are higher than in many other developed countries, driven primarily by higher benchmark Treasury rates. Similar trends have been seen in U.S. commercial property. This can be interpreted to refer to Philadelphia office space (Philly office space), Philadelphia retail space (Philly retail space) and Philadelphia industrial space (Philly industrial space).

Chen also noted that Morgan Stanley has observed increased demand from Chinese retail investors with both U.S. commercial property and U.S. commercial real estate developers targeting Chinese individuals to fund projects through the EB-5 program, which provides a method of obtaining a green card for foreign nationals who invest money in the United States.

She also said there could be more incentives for foreign investment on the horizon. U.S. House and Senate bills (H.R 2128 and S. 915) recently proposed reforms to the Foreign Investment in Real Property Tax Act (FIRPTA). If enacted, supporters believe the changes to the law would draw substantial new foreign capital into the U.S. commercial real estate market, as well as the U.S. commercial property market, by changing certain exemptions from FIRPTA and clarifying the application of other provisions to REITs and their shareholders.

For more information about Philly office space, Philly Industrial Space, Philly retail space or other Philadelphia commercial or investment properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Leor Hemo(leor.hemo@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker that specializes in Philly office 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 with extensive expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space or new Philly retail space 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 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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After First-Quarter Surge, Commercial Real Estate Price Growth Levels Off

new Jason stats graphic - June 2015National commercial property prices leveled off in April after sales volume and property prices rose in the first three months of 2015, gaining more than 5% in the first quarter. The U.S. Composite Index in the latest CoStar Commercial Repeat Sale Indices (CCRSI) report found that prices dipped slightly in April as gains slowed a bit from a recent robust pace.

Both the value-weighted and the equal-weighted U.S. Composite indices decreased slightly in April, by 0.7% and 0.8%, respectively. Both had risen over the last three months, however, and are up more than 12% for the 12-month period ending in April 2015.

The investment grade segment of the equal-weighted U.S. Composite Index — which weighs each transaction equally and reflects the impact from the more numerous smaller market transactions — decreased by 1% in April. The U.S. general commercial segment of the equal-weighted index, which includes sales of lower-tier properties, declined by 0.8%.

Both indices remain positioned for continued recovery and are trending well above their prior year levels. See the full CCRSI June release and supporting materials.

While sales activity declined in April from the record-setting monthly pace set in the first three months of the year — in which repeat-sale transaction volume logged the highest first-quarter total since the CCRSI began — trailing 12-month pair sales remained strong for the month. April 2015 sales volume was still well above the year-prior monthly total, contributing to the strong annual gains.

In fact, the pair volume of $112.6 billion logged for the U.S. Composite Index during the 12 months through April 2015 constituted a 30% increase from the prior 12-month period, reflecting continued capital flows into commercial real estate.

For more information about Philly office space, Philly retail space or other 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 Philly office 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 with extensive expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space or new Philly retail space 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 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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WCRE APPOINTED EXCLUSIVE LEASING AGENT FOR MONROE OFFICE CENTER AT POST BROTHERS PRESIDENTIAL CITY COMPLEX IN PHILADELPHIA

Monroe Office Center Press Release (PDF)

June 18, 2015 – Marlton, NJ – Wolf Commercial Real Estate (WCRE) is pleased to announce that it has been appointed exclusive leasing agent by an affiliate of Post Brothers for its recently acquired Monroe Office Center located at 1 Winding Drive, Philadelphia, PA. Monroe Office Center is a 71,000 square foot, two-story, elevator served office building within the Presidential City Complex. Post Brothers acquired this property in May 2015 and is planning a complete renovation of the office building to complement their $100 million renovation within the Presidential City.

monroe-office-prThe Monroe Office Center is located on the Philadelphia side of City Line Avenue, directly across from the highly desirable Bala Cynwyd submarket, immediately off the I-76 exit at Presidential Boulevard. Among many desirable attributes, this property features highly efficient suite layouts, secured 24/7 gate access, and ample parking in a 2 ½ level structure. Available suites range in size from 2,000 to 71,000 square feet.

Post Brothers, which is seeking to make aggressive deals, has relocated its headquarters to Monroe Office Center, occupying approximately 15,000 square feet. Having ownership and management on-site will be a great feature for tenants looking for their new business home. The new ownership is committed to making substantial base building improvements and restoring Monroe Business Center and the Presidential City Complex to a Class “A” campus environment that offers great amenities.

“We are excited to be working with WCRE’s leasing team. I am confident they will be very successful in marketing our office building,” said Matthew Pestronk, president of Post Brothers.

Monroe Office Center is located in a highly desirable business corridor that has undergone a massive redevelopment renaissance over the past 15 years. It is adjacent to the Presidential City apartment community, which is currently undergoing a complete renovation and repositioning. Tenants of 1 Winding Drive will be within a premier walkable town center environment with numerous upscale residential communities, retail centers, restaurants, hotels, and other amenities nearby.

A marketing brochure and tenant information package is available upon request.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, medical, retail, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.phillyofficespace.com, www.phillymedicalspace.com, www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyland.com, and www.southjerseyretailspace.com.

About Post Brothers

Post Brothers Apartments (“Post”) was founded in 2007 by Matthew and Michael Pestronk to exclusively focus on creating and operating infill, class-A, “best-in-class” Philadelphia apartment buildings at a superior cost basis.

Post is a vertically integrated operating company, with in-house expertise in leasing, property management, development, construction management, general contracting, transactions, and financing the best apartments in Philadelphia

Post has been one of the top five most active developers of multifamily apartments in Philadelphia over the past four years, and to date has acquired seven properties totaling over 1,000 rental apartment units.

The owners of the Post management company are the controlling general partners in all properties developed by Post, and Post does not perform any third party management.

To learn more about Post Brothers, please visit www.postrents.com.

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Retailers Struggle for Balance between Online Expansion and New Store Openings

new Jason graphic - 6-3-15The new world of retail marketing in the U.S. is proving to be a challenge for retailers as they struggle to find the balance between growth through online expansion and new store openings, a new retail market analysis reports.

Despite solid year-over-year industry performance, positive sales projections, strong consumer confidence and other positive economic indicators, retailers, such as those in the market for Philadelphia retail space, are highly concerned about the best way to invest in their growth, according to BDO USA’s ninth annual analysis of risk factors noted by the 100 largest U.S. retailers in their most recent annual reports.

BDO said 92 percent of U.S. companies identified risks in U.S. growth and expansion this year, an increase from the 56 percent that found risks in this area in 2013. While retailers in the U.S. and Philly retail space markets are moving forward with plans to boost sales and strengthen store brands, they also acknowledge consumers’ growing demand for online shopping choices and the convenience that comes with omnichannel marketing.

Retailers abandoned the approach of investing primarily in new store openings in 2008, BDO noted. As online buying soared in popularity, the return on investment in new stores declined and retailers instead earmarked capital for online sales, supply chain networks and systems implementations, all the while recognizing the increased risk with these new, largely unproven investment strategies.

As they navigate this new world of retail marketing, retailers in the U.S. and Philadelphia retail space markets are in many different stages of funding their growth.

With 4,500 U.S. stores and 2,120 more outside the U.S., Wal Mart Stores devoted nearly 40% ($5.1 billion) of its fiscal year 2014 capital expenditures ($13.1 billion) to new stores (both expansion and relocation). By the 2015 fiscal year that ended January 31, the amount committed to new stores decreased to $4.1 billion or about 34%, BDO reported. While expenditures for new bricks and mortar stores declined, Wal Mart’s investment in information systems, distribution, digital retail and other omnichannel expenses increased from $2.5 billion (20%) to $3.3 billion (27%) over the same time period.

Meanwhile, Macy’s Inc. — the USA’s largest department store, with 823 stores in 45 states — has experienced early stumbling blocks as it starts out on its new omnichannel marketing strategy.

Macy’s sunk about $1.1 billion mostly on new stores, store remodels, store maintenance and the ongoing renovation of it’s flagship Macy’s Herald Square in New York during its last fiscal year. New store openings are still a key element of Macy’s plans for growth. The retailer has announced plans to open eight new Macy’s or Bloomingdale’s stores between 2015 and 2018 from Puerto Rico to Hawaii and three states in between.

Macy’s first quarter 2015 sales were down 0.7% from a year ago, dropping to $6.232 billion, but the retailer’s expenses increased 1.2% at the same time. The company noted that some of the higher expenses were the result of the new major omnichannel initiatives aimed at increasing sales growth and improving consumers’ online, mobile and in-store shopping experiences.

Macy’s remains committed to its new omnichannel marketing strategy, but admits the learning curve was “steeper than we had expected.”

Retailers in nationwide and Philly retail space markets have spent significant capital and devoted extensive time and energy to develop their omnichannel sales potential. But only 16% of retailers can fulfill omnichannel demand profitably, saying the high cost of order fulfillment lessens their margins, according to a new survey conducted by PwC for JDA Software.

Still, retailers ranked omnichannel fulfillment as a high or top priority and committed an average of 29% of 2015’s total capital expenditures on improving omnichannel fulfillment operations.

For more information about Philadelphia retail space 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 with expertise in Philly 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 and services, provides unparalleled expertise in matching companies and individuals seeking Philadelphia retail space 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 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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WCRE FACILITATES MAJOR SALE OF FULLY LEASED CLASS “A” INVESTMENT PROPERTY

402-404 Lippincott Press Release (PDF)

402-lippincottJune 2, 2015 – Marlton, NJ – WCRE is proud to have successfully represented UR Lippincott DST in its acquisition of 402-404 Lippincott Drive in Marlton, NJ. The new ownership group purchased this fully occupied, 53,100 SF single tenant Class “A” office building from Lippincott Real Estate Associates, LLC for $9.5 million. Jason Wolf, managing principal of WCRE, worked closely with both parties in this transaction.

402-404 Lippincott Drive is under a long term lease to Continuum Health Associates, and is located within the Marlton Crossing Office Park, which is also home to many other major companies including Virtua Health, Morgan Stanley, and Friedman, LLP.

 

404-lippincottThis well located office building provides the new ownership with a quality asset in a premier office park that provides direct access to Route 73 and within close proximity to I-295 & NJ Turnpike 402-404 Lippincott is located within a beautifully landscaped environment and is nearby The Promenade at Sagemore, hotels, banks, restaurants and retailers.

“Our buyer was seeking a long-term income producing property with a quality tenant. A deal of this size may be a good indicator that Southern New Jersey is an attractive market for institutional-level investors and lenders are still bullish on stabilized assets in quality markets,” said WCRE’s Wolf.

 

About WCRE
WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter @WCRE1, and on Facebook at Wolf

Commercial Real Estate, LLC. Visit our blog pages at www.marltonofficespace.com, www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, and www.southjerseyretailspace.com, www.phillyofficespace.com, www.phillyretailspace.com, and www.phillyindustrialspace.com.

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