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Tag Archives: Philadelphia commercial real estate broker


Retail Vacancies Spike in South Jersey as Prospective Tenants Remain Skittish on New Leases

Retail vacancies are rising across South Jersey as ripple effects of Covid-19 continue to grow nearly a year after the pandemic first hit the region. 

A new report from Wolf Commercial Real Estate on the South Jersey market found that Burlington County’s retail vacancy rate jumped to 10% in the fourth quarter, up from 7.6% in the prior three-month period. The increase marks the largest consecutive quarter-to-quarter jump in the past three years. 

At the same time, Camden County hit 10.5% retail vacancy, up from 9.7% in the third quarter. It started 2020 at about a 6% retail vacancy rate. 

In Gloucester County, the rate is up to 13.7%, from 11.7% at the start of last year. 

The rising number of vacancies in the region reflect the financial hardships many businesses, especially independently owned restaurants, faced earlier in 2020, said Jason Wolf, managing principal of Wolf Commercial in Marlton. 

“We’re finally starting to see the true numbers come to light,” he said. 

While South Jersey saw an impact from big-name retail store closures, Wolf said it’s the closure of small “mom and pop” operators driving the vacancy increase. 

Throughout 2020, South Jersey lost independent restaurants like Collingswood staple El Sitio Grill & Cafe, Haddonfield’s Villa Rosa pizzeria and Vitarelli’s Italian restaurant in Cherry Hill. The Smith restaurant group, which operates five concepts across New Jersey and Pennsylvania, permanently closed its Brickwall Tavern in Burlington City. Charlie Brown’s last two South Jersey locations also shut down in Woodbury and Westampton.

“My heart bleeds right now for these restaurant operators,” Wolf said, adding the ones still holding on are struggling to survive. “These people all had thriving business and they’re all on the verge of going out of business, battling revenues being down 50%, 60%.” 

Clothing stores have also suffered. One operator of a men’s clothing store told Wolf that “suits are the new tuxedo,” as demand for professional attire sank during Covid-19.

When retail vacancies are filled, Wolf said it’s often with an alternative usage like a health care office. Empty big-box stores are being used for warehouse and distribution space. While not filling a vacancy, the Moorestown Mall’s owner, Pennsylvania Real Estate Investment Trust, also recently secured approvals to build more than 1,000 apartments and a hotel at the shopping center.

“I think you’re going to see these retailers evolve into a more diverse strategy,” he said. 

Wolf is cautiously optimistic about what 2021 has in store for the South Jersey commercial real estate market, especially later in the year when there’s more clarity into the future of the pandemic. People are calling, he said, but they’re just not ready to make a move just yet. 

“The demand is there, we just have to get people through making decisions,” he said. “There’s a lot of tire-kicking going on.” 

On the retail side, he said quality retail locations in high-visibility areas will come out fine on the other side. Mom and pop retail fronts in peripheral areas Wolf believes may face more of a challenge. 

“I worry, yes,” he said. 

*Article courtesy of Philadelphia Business Journal

For more information about New Jersey or Philadelphia office space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia industrial space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

A New Jersey and Philadelphia commercial real estate broker with expertise in New Jersey and Philadelphia commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, or New Jersey and Philadelphia industrial space with the New Jersey and Philadelphia commercial properties that best meets their needs.

As experts in both Philadelphia and New Jersey commercial real estate listings and services, the team at our commercial real estate brokerage firm provides ongoing detailed information about Philadelphia and New Jersey commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for New Jersey or Philadelphia office space, Philadelphia or New Jersey retail space, or New Jersey or Philadelphia industrial space for sale or lease, Wolf Commercial Real Estate is the New Jersey and 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, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Exeter Property Group to be Acquired by EQT AB in $1.9B Deal

Exeter Property Group, a global industrial property behemoth started by Ward Fitzgerald in 2006, has entered into a deal to be acquired for $1.9 billion. 

EQT AB, a Stockholm private equity firm, will buy Conshohocken-based Exeter in a transaction that involves $1.07 billion in cash including $300 million to refinance existing debt and $800 million in EQT shares. 

Exeter has $10 billion in assets under management and, for 2020, it is expected to generate $135 million in revenue and $80 million in earnings. While the bulk of Exeter’s portfolio consists of industrial properties, the company has expanded into life science, suburban office and other real estate throughout the United States and Europe. 

Under terms of the agreement: 

    • EQT will acquire 100% of Exeter’s management company;
    • Fitzgerald and other Exeter management shareholders will receive 65% of their consideration in newly issued EQT shares and 35 percent in cash;
    • Fitzgerald and other Exeter management shareholders to join EQT and enter into lock-up agreements; and
    • Funds managed by TA Associates, which own roughly 40% of Exeter, will receive 25% in newly issued EQT shares and 75% cash. 

Fitzgerald had been with Liberty Property Trust prior to forming Exeter 15 years ago with Tim Weber. The focus for Exeter was industrial real estate. The two figured a confluence of variables including technology, e-commerce, bar codes that allowed a faster and more efficient movement of goods and a rise in disposable income would eventually lead to an evolution in modern big box warehouses. Industrial properties constructed three decades ago were functionally obsolete, providing an opening for companies such as Exeter to swoop in, build new ones, lease them up and make their mark by accumulating a portfolio of modern warehouse-distribution centers.

The gamble paid off as e-commerce began to dominate retail, logistics continued to expand and demand for industrial real estate grew globally. Exeter continued to evolve as a company.

In 2010, Exeter went out to raise its second fund and closed in 2011 on $615 million. That money was spent building up its core investment properties. A third fund totaling $400 million was raised in 2014 and deployed to help secure long-term leases and modernize the portfolio.

 

By 2015, Exeter had built up its portfolio to 209 properties totaling 58 million square feet in 25 markets. In its first big transaction, Exeter sold the properties for $3.1 billion to a joint venture of Henley Holding Co., a subsidiary of the Abu Dhabi Investment Authority, and the Public Sector Pension Investment Board, a Canadian pension investment manager.

The deal didn’t stop Exeter from continuing execute on its original strategy. The company deployed a value-add fund totaling $832 million that was focused on big box warehouses and multi-tenant logistics facilities throughout the U.S. Exeter used another $600 million fund to acquire core assets as well as a fund totaling 300 million euros to buy warehouses throughout Europe.

Exeter eventually became not only one of the leading players in industrial real estate in the U.S. and Europe but one of the largest private equity firms in Philadelphia. By the end of 2017, it had $6 billion in assets under management and grew that to $10 billion in 2020. 

Exeter is vertically integrated and controls every aspect of its work whether it’s constructing, leasing or managing a property. It has 37 offices. 

The deal is expected to close in the second quarter of the year. Upon completion, Exeter will be rebranded as EQT Exeter and operate independently.

“The transaction is part of EQT AB’s strategic growth ambitions within real estate and creates a scaled thematic investment platform across North America and Europe,” EQT said in a statement. “It also provides Exeter management with the ability to continue their track-record as a top performing real estate investment manager.”

*Article courtesy of Philadelphia Business Journal

For more information about New Jersey or Philadelphia industrial space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia office space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

A New Jersey and Philadelphia commercial real estate broker with expertise in New Jersey and Philadelphia commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, or New Jersey and Philadelphia industrial space with the New Jersey and Philadelphia commercial properties that best meets their needs.

As experts in both Philadelphia and New Jersey commercial real estate listings and services, the team at our commercial real estate brokerage firm provides ongoing detailed information about Philadelphia and New Jersey commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for New Jersey or Philadelphia office space, Philadelphia or New Jersey retail space, or New Jersey or Philadelphia industrial space for sale or lease, Wolf Commercial Real Estate is the New Jersey and 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, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Brandywine CEO Jerry Sweeney Sees Signs of a Big Year for Owners of High-End Commercial Real Estate

Covid-19 sent shockwaves through the commercial real estate market in 2020. Jerry Sweeney now sees opportunity. 

“I think everybody who’s in our business should be incredibly enthusiastic about what could happen in 2021,” said the CEO of Brandywine Realty Trust, the largest landlord of Class A office space in the Philadelphia region. “The greatest economy in the history of the world was on hold for 10 months. We’re beginning to creep our way back. I think there will be a lot of pent-up demand. I think the standards will be even higher. So if you’re a very high-quality landlord, I think you’re going to benefit from the emerging trend lines.” 

Brandywine’s (NYSE: BDN) footprint totals more than 24 million square feet of space across the Philadelphia, Washington, D.C., and Austin, Texas, markets. Local properties include Cira Centre, 1900 Market St. and the Radnor Financial Center. The company is also spearheading the proposed $3.5 billion Schuylkill Yards development in University City. 

Sweeney, who describes real estate as a business “where you’re always focused forward,” recently sat down for an interview with Philadelphia Business Journal Reporter Natalie Kostelni as part of the 2021 Economic Forecast series. 

Below are Sweeney’s views on the future of offices, shifting tenant needs, demand for space and what a new White House administration could mean for real estate. The interview has been edited and condensed for clarity.

On Brandywine’s 500,000 square feet of early renewals

A lot of those renewals were essentially two- to three-year deals. Our approach was really, with a lot of things happening in everybody’s business, not everybody thinks about real estate every day like we do. They’re actually running businesses. Our approach was to make sure that they knew that we were willing to do short-term accommodations to help them really think through the impact of the pandemic, not just on their physical platform but also on their business. And we had a lot of tenants respond very favorably to that. They all renewed in the same amount of square footage at very good economic terms for us and for the tenant. And again, that’s part of that granting and earning of trust that basically we weren’t going to wait until the last minute to jam somebody on a renewal. We were proactive in getting out there and talking to them. 

On the future of the workplace

I think what the pandemic really did was accelerate this trend line that’s been going on for 20 years about the impact of technology on the workplace. Companies really start to recognize that the office isn’t a finished product. It’s a work in progress. It’s where things happen. And I think it’s where you celebrate, where you collaborate, where you learn, where you grow, you celebrate birthdays, you plan. A lot of the feedback I’ve gotten from kind of the C-level executives from many of our larger tenants is 2020, and going into the early part of 2021, has really been a year of business triage. They’re jumping back and forth. The Zoom calls – they’re walking around with the dress shirts on, but pajama bottoms. They’re kind of managing projects, but I think there’s a real growing expectation with the economic recovery underway and hopefully accelerating. It’s really a time to get back to business, and the ability of a physical platform to be a springboard for business growth I think is really going to come home as a point of focus for a lot of our tenants as 2021 progresses. 

On the state of the downtown office market vs. the suburbs

It’s not a big difference at this point. You know the public policy guidelines are different in the city than out in the suburban counties in terms of return to work. As you would expect, activity levels are lower than they would historically be. Although I will tell you our pipeline of deals is still north of 1.5 million square feet. So while it’s been slow, there have been a lot of tenants in the market and their decision timelines have become more protracted. But we’ve certainly seen an uptick in activity even within the last couple of weeks. But we haven’t really seen a big divergence of the main drivers between the city and the suburbs. I think that was part of the national pundit view: The urban areas will suffer. The suburban areas will prosper. And honestly, I don’t know if they will or not. But I think from what we’re seeing, it’s simply too early to tell. We’ve not had any tenant in our portfolio say, ‘Hey, I want to leave the city.’ We haven’t had any tenants in the suburbs saying, ‘Hey, I want to move into the city.’ I think people are just really focused more on their short-term horizons. 

On if tenants are seeking to sublease portions of their space

We’ve always seen that throughout the different cycles. And each market is different. In Philly where it’s more of a slower growth, moderate paced, financial service, law firm, consulting service-type of environment — a lot of those companies really haven’t been high-growth in terms of dramatically expanding their square footage requirements. As a result, I think the subleased inventory really is tracking still below 3% in the Greater Philadelphia area. And we really haven’t seen a big push to put space back on the market. Where we actually have seen that, they’re not even sure the tenure in which they want to sublease. So I have a lease that goes out through 2025, I don’t think I need 10,000 square feet, let me put that on the market, but I’m not sure where that will be, I’m not sure what deal I want for that. 

Conversely in Austin, Texas, where we have a lot of inventory, that market’s dominated by high-growth tech companies. And a lot of those companies have tremendous expansion plans, both near-term and longer-term. So a lot of those companies did take down a lot of space that they were anticipating to grow in very quickly. And with the pandemic, some of those growth expectations have been a bit tempered. In Austin we have seen a larger uptick in sublease space, particularly in the Central Business District market. But again, a lot of that space is available for a year or two; not sure what the tenant improvement allowances will be. So whether it’s actually translatable into executed subleases I think remains to be seen. 

On the demand for office space going forward

There’s a general expectation that at least short term there’ll be lower demand for office space. Those numbers range from anywhere from 10% to 15%. I think it’s going to be geographically unevenly distributed, and I think it’s going to be a function of individual market conditions. But that being said, we’ve seen a couple of trend lines that I think are very positive. One, there is no question that there’s going to be a push toward higher quality office buildings. I think Brandywine is really well positioned for that. We’ve invested a lot of money in our buildings. We have great HVAC, fresh air — all the things that used to be on page 27 of a brokerage RFP are now page one. I think we fare very well in that. We’ve certainly pivoted our marketing platform to amplify that competitive advantage we have. So I think to some degree whatever demand decline we may see market-wide, the owners of higher quality space will be able to have a move up addition to their inventory.

On planning out space for tenants 

We’re definitely seeing a reversal of the densification of previous years — many more requesting for partition walls, higher profile workstations, reducing density of conference rooms, reconfiguring the stairwells to provide for easier access between floors. I think it really is a mixed bag. What’s going to be interesting as we think about it is as the work-from-home dynamic continues, what will be the overall demand impact there? 

We’re really going through a lot of post-Covid design issues, which I think generally could have the impact of requiring more space per employee, greater circulation areas, maybe instead of one kitchen, a couple of satellite kitchens, more conference rooms, more private work areas. But honestly I think that’s all kind of to be determined. You’re going to see larger companies deal with it differently than smaller companies. And until the next couple of months go by, I think it’s still going to be a question more for all of us in this business. 

On the biggest difference between Austin and Philadelphia

Well, I don’t think it’s just necessarily the weather because I will tell you having been in Austin it gets awfully hot down there in July and August as well. So they tend to be more temperate. Look, I think a lot of it relates to the the tax structure, the political leadership. I think that’s one of the great reasons why Austin, Texas, is now known as Silicon Valley East. They had a very dynamic group of business leaders working hand-in-glove with the local political leaders to create Opportunity Austin, which is a business development arm that has done an amazingly effective job of attracting businesses. So I think that’s one of the macro trend lines you’re seeing nationally where you’re seeing projected higher growth rates in the Sunbelt markets, primarily driven by affordability, job growth, political climate. More jobs will be migrating from kind of the Northeast and the West Coast to some of these Sunbelt markets.

On what the Biden administration may mean for the Philadelphia real estate market

I think it’s too early to tell. One of the brokerage firms did a great report, and this is out of Washington, showing that at a time when the executive and the legislative branches are aligned with one party, that tends to be good for real estate. So the fact that everyone’s aligned right now, I hope is good for real estate and I don’t know what the political dynamics will be. I certainly think the new administration is going to be much more amenable to providing federal financial support to Northeast cities and states who tend to have the highest level of budget disequilibrium. One of the things I’m really hopeful for is from a mass transit standpoint. Leslie Richardson and her team at SEPTA are doing an absolutely amazing job of maintaining the health and safety of that system under very difficult challenges. Their revenue stream has disappeared. They need help. And my hope is that the Biden administration will be much more responsive to addressing the needs of mass transit systems around the country. If that’s the case, I think that could be a big catalyst for the reopening of the city of Philadelphia, which certainly should be a near-term objective of everybody.

On the long-term impact to Class B and C properties

I think it’s going to be a challenge, I really do. Not that I think some of those buildings aren’t beautiful architecturally, they just don’t have the superstructure capability on a cost-effective basis to retool to meet the demands of today’s tenants — at least from what we’re seeing at this stage. I think the impact you’ll see, as Philadelphia has always seen, is a number of those buildings will get converted to residential. They’re talking about doing a lot of that up in Midtown Manhattan for a lot of buildings. I think that trend line will continue, so I hope the residential market remains fairly strong. And I think that there will probably be a cost imbalance in some of those buildings that may create opportunities for repricing. We don’t really own any B-quality space. It’s a market segment we moved dramatically out of in the last 10 years. I do think they’ll face more margin squeeze than the Class A trophy office buildings.

*Article courtesy of Philadelphia Business Journal

For more information about New Jersey or Philadelphia office space, New Jersey or Philadelphia retail space, and New Jersey or Philadephia industrial space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

A New Jersey and Philadelphia commercial real estate broker with expertise in New Jersey and Philadelphia commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, or New Jersey and Philadelphia industrial space with the New Jersey and Philadelphia commercial properties that best meets their needs.

As experts in both Philadelphia and New Jersey commercial real estate listings and services, the team at our commercial real estate brokerage firm provides ongoing detailed information about Philadelphia and New Jersey commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for New Jersey or Philadelphia office space, Philadelphia or New Jersey retail space, or New Jersey or Philadelphia industrial space for sale or lease, Wolf Commercial Real Estate is the New Jersey and 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, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Developers Want Malls to Become Warehouses or Offices. It Is a Slog.

Potential land mines await those seeking to raze and redevelop a space that spans dozens of football fields

Many developers look at failing malls and envision modern office campuses, bustling warehouses or residential buildings. But some are finding that converting these shopping centers isn’t so easy.

Repurposing a mall is expensive. New owners typically need to shell out hundreds of millions of dollars on construction and labor, developers and brokers say.

Continue reading at The Wall Street Journal.

For more information about New Jersey office space, New Jersey retail space, and New Jersey industrial space or other New Jersey commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey commercial real estate broker that specializes in New Jersey office space, New Jersey retail space, and New Jersey industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier New Jersey commercial real estate brokerage firm that provides a full range of New Jersey commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey commercial properties for buyers, tenants, investors, and sellers.

A New Jersey commercial real estate broker with expertise in New Jersey commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new New Jersey office space, New Jersey retail space, or New Jersey industrial space with the New Jersey commercial properties that best meets their needs.

As experts in New Jersey commercial real estate listings and services, the team at our New Jersey 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 New Jersey office space, New Jersey retail space, or New Jersey industrial space for sale or lease, Wolf Commercial Real Estate is the New Jersey 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, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

 

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Air Cargo Construction is Booming, Thanks to Amazon

Since the pandemic started nearly a year ago, 15,000 fewer people arrive and depart daily from the Cincinnati/Northern Kentucky International Airport, known as CVG. Yet the 60% drop in passenger traffic is not so apparent on the airport’s four runways, which are handling a record amount of air cargo — nearly 4,000 tons a day.

Ranked by the Federal Aviation Administration as the nation’s sixth-largest cargo airport, CVG’s standing is about to climb higher.

Amazon Air, the e-commerce giant’s 5-year-old cargo airline, is completing a 798,000-square-foot sorting center, seven-level parking structure and acres of freshly poured concrete to accommodate 20 aircraft. The new facility, under construction on a 640-acre site along the airport’s southern boundary, is scheduled to open in the fall. It represents about a third of the $1.5 billion, 3-million-square-foot air cargo hub Amazon is committed to building at CVG.

“This hub is going to let us to get packages to customers faster,” Jeff Bezos, the Amazon founder and chief executive, said during the groundbreaking ceremony at CVG in May 2019. “That’s a big deal.”

By far the largest air cargo construction project in the airport’s 74-year history, the mile-long facility will be the center of Amazon Air’s national air transport network, which now has more than 70 aircraft and hundreds of daily flights to 35 other cities in the United States. Last week, Amazon announced the purchase of 11 Boeing 767-300 aircraft as part of an effort to expand its fleet.

The new building is a signal measure of Amazon’s influence as the largest online retailer and its dedication to fast delivery. Both have helped generate a wave of air cargo construction at airports across the United States.

FedEx, the world’s largest air cargo carrier, handled an average of 6.2 million air packages a day last year, a 48% increase over 2016. The company just opened a $290 million, 51-acre project at the Ontario International Airport in Southern California. It features a 251,000-square-foot sorting facility, spacious concrete ramps, nine gates, 18 truck loading docks and the capacity to handle 12,000 packages an hour.

UPS and Amazon also operate out of older buildings at the airport, which is handling 30% more cargo than it did in 2019. “There is a lot of consumer behavior that permanently changed in 2020,” said Mark A. Thorpe, the airport’s chief executive. “We’re seeing levels of cargo today that were expected in 2028.”

Ted Stevens Anchorage International Airport, the second-largest air cargo airport in the United States after Memphis International Airport, is planning for $500 million in new freight and package handling and sorting facilities. The demand for more space by the airport’s cargo companies — among them Alaska Cargo & Cold Storage, 6A Aviation, FedEx, UPS and Amazon — is soaring. As of the end of September 2020, the airport reported that 2.3 million tons of cargo had touched down in Alaska, a 9% increase over the same nine-month period in 2019.

At Chicago Rockford International, plans are underway to build a 90,000-square-foot cargo facility. As soon as it opens in the spring, the airport will start another 100,000-square-foot cargo project for DB Schenker, Emery Air and Senator International. Last year, Rockford completed a $22.3 million, 192,000-square-foot facility for Amazon, along with $14 million in concrete aprons sturdy enough for Boeing 747 aircraft.

“The traffic in cargo is responsible for all the new demand at airports now,” said Rex J. Edwards, an industry analyst and vice president of the Campbell-Hill Aviation Group, a Northern Virginia consulting firm. “The cargo carriers want more airport space. They need room to park planes and facilities that meet next-day delivery requirements. That is the evolution of the business now.”

Before the pandemic, e-commerce sales were growing more than 10% annually, pushing total air cargo to 12 million tons last year, according to the Bureau of Transportation Statistics, a unit of the Transportation Department. Federal analysts project that air cargo will reach 45 million tons annually by midcentury. But executives at big air shippers, airports and airplane manufacturers say that the pandemic altered online commerce so substantially that the industry will hit that mark a decade sooner.

Three years ago, Philadelphia International Airport paid $54.5 million for 135 undeveloped acres next to the airfield. The airport is now developing a master plan for the ground that includes 1.5 million square feet of cargo handling facilities. “We knew, prepandemic, that cargo was only going to increase,” said Stephanie Wear, the airport’s director of air service development and cargo services.

For the time being, Amazon is the largest influence in new airport cargo construction.

To serve the 14 immense fulfillment centers it built in California near San Bernardino and Riverside, Amazon established a western hub at San Bernardino International Airport. This month, it is finishing a 658,000-square-foot handling and sorting center and two smaller 25,000-square-foot buildings at the 79-year-old airport, which started as a World War II military airfield. The $300 million project includes parking and gates to handle 14 aircraft and 26 flights daily, said Mark Gibbs, the airport’s director of aviation.

No airport is receiving more attention from Amazon Air than Cincinnati/Northern Kentucky. The company liked what it heard from airport executives, who spent the last decade diversifying CVG’s revenue and recovering from a fiscal catastrophe by recruiting air carriers and related companies to its 7,700-acre airport.

In 2008, in the midst of a deep recession, Delta Air Lines unexpectedly shut its regional hub at CVG, halting more than 500 flights a day, closing terminals and throwing the airport into a panic. Executives countered by marketing CVG’s location, a half-day drive or a short flight from most of the major metropolitan regions in the East, Midwest and South. CVG had plenty of space for development, and it is close to important interstate highways and to Cincinnati’s renovated Ohio River shoreline and city center.

The German carrier DHL became interested straightaway and arrived in 2009. Four years later, it completed its 1-million-square-foot North American hub. Amazon arrived in 2017 and contracts for loading and sorting at the DHL facility. FedEx also operates out of the airport.

The air cargo activity generates its own momentum. Five years ago, Wayfair, the online décor and home furnishing company, completed a 900,000-square-foot logistics center at the airport. Last year, FEAM Aero, an aircraft maintenance company, opened a $19 million, 103,000-square-foot aircraft service hangar on an 8-acre site.

Amazon Air’s strategy for cargo routes and ground facilities differs substantially from that of other carriers. Its cargo is composed of goods sold on its own online market. Its airport facilities are close to Amazon’s network of fulfillment centers.

That formula fits Amazon’s decision to settle at CVG, on the Kentucky side of the Ohio River across from Cincinnati. Since 2010, according to the company’s data, Amazon has spent more than $15 billion in Kentucky, much of it on 10 fulfillment and sorting centers, two delivery stations, a customer service center and two Whole Foods Markets. The company says it employs 14,500 people in the state. Its air cargo hub will add 2,000 jobs.

The cargo strategy was essential to keeping CVG operating since March 2020, when the pandemic took hold, said Candace S. McGraw, CVG’s chief executive, who led the work to recruit Amazon and the other carriers.

Air cargo grew 14% in 2020 at CVG and is expected to grow at least 10% more in 2021 and 2022, when Amazon’s new facility is fully operational. Cargo now accounts for 75% of the more than $25 million in annual revenue from landing fees, the second-largest source of CVG’s income after parking.

“We learned the lesson to diversity from Delta,” McGraw said. “We’re grateful for the cargo business.”

*Article courtesy of Philadelphia Business Journal 

For more information about New Jersey office space, New Jersey retail space, and New Jersey industrial space or other New Jersey commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey commercial real estate broker that specializes in New Jersey office space, New Jersey retail space, and New Jersey industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier New Jersey commercial real estate brokerage firm that provides a full range of New Jersey commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey commercial properties for buyers, tenants, investors, and sellers.

A New Jersey commercial real estate broker with expertise in New Jersey commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new New Jersey office space, New Jersey retail space, or New Jersey industrial space with the New Jersey commercial properties that best meets their needs.

As experts in New Jersey commercial real estate listings and services, the team at our New Jersey 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 New Jersey office space, New Jersey retail space, or New Jersey industrial space for sale or lease, Wolf Commercial Real Estate is the New Jersey 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, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Apartment Rents, Occupancies Stabilizing in Center City Philadelphia

Philadelphia proved to be one of the most stable major apartment markets in the U.S. during 2020, with rents in many of its suburban submarkets ending the year up more than 4%.

But owners of Center City apartment towers had a much rockier year than their suburban counterparts. Shuttered restaurants and new, work-from-home requirements for downtown office workers meant far fewer renters chasing small but pricey units that make up the bulk of Center City’s apartment stock.

The good news heading into 2021 is that rent and occupancy losses among Center City properties are finally beginning to cease. This sets the stage for a rebound in 2021, although the recovery will likely be gradual, given the large number of projects still on track to begin lease-up in, and around, Center City over the next several months.

*Article courtesy of CoStar

For more information about Philadelphia office space, Philadelphia retail space, and Philadelphia industrial space or other Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philadelphia office space, Philadelphia retail space, and Philadelphia industrial space.

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

A Philadelphia commercial real estate broker with expertise in Philadelphia commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new Philadelphia office space, Philadelphia retail space, or Philadelphia industrial 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 Philadelphia office space, Philadelphia retail space, or Philadelphia industrial 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, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Eight Ways the Pandemic Changed Commercial Real Estate

The coronavirus pandemic has forced the commercial real estate market into a series of seismic shifts, accelerating some trends and bringing others to a complete halt. 

It wasn’t so long ago that everyone talked about the importance of shared workspaces, community amenities in apartments and how modern-day consumers preferred experiences over stuff. Those concepts look much different in a world where social distancing is a health imperative.

The public health crisis sparked renewed interest in the suburbs, rendered in-person entertainment and travel businesses impractical and created hot commodities out of dull industrial buildings, now the nerve centers for seemingly anything that can be delivered to a doorstep. 

With 2020 now in the rearview mirror, it would be difficult to overstate how surreal this past year has been. It may, however, have a very real influence on the future.

Here are eight trends of the past year that could have lasting effects on where and how people use space:

8. Telework Accelerates As Employers, Led by the Tech Giants, Shift Workforces Out of the Office

Large technology companies including Facebook and Google emptied their offices long before any shelter-in-place orders were issued, sending employees home. As cases spread, the companies were first to extend their work-from-home policies. They began by pushing deadlines through summer 2021 and, in some cases, indefinitely. 

San Francisco-based Twitter and Square both decided in May that employees would have the chance to permanently work remotely, a shift that triggered a series of smaller companies to follow suit. 

According to CoStar data, most major U.S. cities still report less than 20% physical occupancy of office space as employees remain at home.

The bet among real estate experts is that many employers will retain flexible work-from-home policies even after workers return to the office.

7. Global Tourism Shutdown Strangles Hotel Industry

Travel bans, canceled flights, shelter-in-place orders and strict capacity limits gave the hotel industry little to celebrate in 2020. 

CoStar’s hotel research and analytics company, STR, estimates it could take up to five years for the hospitality sector to fully recover. Revenue per available room, a key metric for hotels, bottomed out after an 80% drop this spring, and average daily rates are estimated to be down by about 21% compared to last year for the remainder of 2020 for hotel properties across the country. 

While recent developments for a COVID vaccine have provided a glimmer of hope for operators, the recent surge in cases across the United States means the industry is far from any semblance of a recovery. Many expect leisure travel to boom once the virus is brought under control and people are freed from their homes but businesses could be slower to send workers back on the road now that many have become accustomed to video and online meeting options. 

6. Nation’s Most Expensive Housing Markets See Renter Exodus 

The country’s multifamily market was suddenly split between expensive urban areas and quiet suburban towns at the onset of the pandemic. As work-from-home trends evolved and renters looked to move out of costly and cramped spaces, crowded downtowns faced a drain in occupancy. 

In the nation’s most expensive apartment housing market, San Francisco, the fallout from the pandemic’s outbreak drove the multifamily vacancy rate up to a historical high of more than 11.5%, according to CoStar data. Comparatively, the national vacancy rate is 6.8%. 

Rents, especially for those among some of the high-end apartment properties, nosedived by as much as 18.3% in the tech-heavy bay city. Landlords have had to respond by offering steep concessions, with some property owners touting perks including as many as three months in free rent, internet credits, personal training sessions and allowances toward moving expenses.

Many will be watching to see if renters re-embrace downtowns once the pandemic subsides or whether the move to less crowded spaces becomes a more durable trend.

5. Companies Pause Development, Expansion Plans 

Search engine giant Google, one of the largest occupants of office space in the country, hit the pause button on operations including data centers, hiring, marketing, travel and real estate investments as pandemic-related uncertainty climbed early this year.

The move was emblematic of a slowdown in the tech industry’s rapid acceleration and leasing activity. As the healthcare and financial crises wore on, companies became increasingly prudent about their future space needs, and many decided to shrink their office footprints, put their space up for sublease or shift entirely to a remote-work model in an effort to curb costs. 

Like other tech companies, Google has started to put its foot back on the gas for development, though the new activity is still below its pre-pandemic level.

4. Biotech Growth Fuels Shift to Life Science Development 

The COVID-19 pandemic has driven historical gains in the biotech sector, pushing fast-growing companies to gobble up space and drive most of the leasing activity for markets across the country. Throughout 2020, rents for lab space rose, vacancies plunged and employment figures climbed. 

The phenomena inspired big-name developers such as Boston Properties to say they would pivotoffice development plans into new life science projects, as leasing from most office users dwindles.

According to a recent report from brokerage CBRE Group, about 14 million square feet of lab space is under construction nationally, but demand among biotech tenants outpaces what’s in the pipeline by almost 2 million square feet. 

In the nation’s top life science markets such as Boston or South San Francisco, lab space vacancy is at a historic low of less than 8%, which has given landlords the chance to drive rental rates even higher. 

3. Trophy Skyscrapers Sell At a Discount

The clearest sign of how some of the leading office sales got done in premier markets this year is the delayed and discounted sale of the Transamerica Pyramid in San Francisco, the nation’s most expensive office market. 

After years of growth driven by the city’s tech sector, San Francisco’s office market was in for a rude awakening as the pandemic spread a wet blanket over previously white-hot demand for space among both tenants and investors. In a sign of the times, the anticipated sale of the Transamerica Pyramid office complex was delayed by several months and eventually sold in late October for $650 million, the priciest workspace sale in the city for the year. 

While the price tag was high, it represented 10% off the $711 million purchase price that was originally agreed upon in February. Debate has now begun over whether demand will ever reach as high as it once did for space accessible only by elevator. 

One sign of hope: Facebook’s surprise decision to sign New York City’s largest office lease of the year. The social media giant agreed to move into all 730,000 square feet of office space in the Farley Building at 390 Ninth Ave., which is located in Vornado Realty Trust’s Penn District redevelopment in Manhattan next to the nation’s busiest transportation hub — this after it said in May it would transition its workforce to a remote-work model. 

2. Landlords and Tenants Spar Over Who Should Pay, And How Much

The pandemic split the brick-and-mortar retail world, showing the durability of businesses that provide essential goods such as groceries and pharmaceuticals and rendering uncertain those who products and services could be delivered online or to the home. 

Some sectors found themselves on both sides of the divide: Starbucks and many fast food establishments found their footing by focusing on takeout food while many mom-and-pop restaurants struggled to adapt to ever-changing restrictions.

The crisis left many to reevaluate their real estate footprints, sparking growing tension between landlords. Some decided to take the matter to court as part of attempts to recoup unpaid rent, fight over lease negotiations or break rental agreements entirely. 

One of the more closely watched battles involved the nation’s largest mall property owner, Simon Property Group, who sued the nation’s largest retailer, Gap Inc., over $66 million in unpaid rentstemming from forced store closures across the country. 

The legal tussle escalated with Gap later suing the landlord over failed attempts to renegotiate leases, setting the stage for similar lawsuits among struggling landlords and retailers fighting to protect their businesses in the face of massive drops in business. The pandemic is likely to lead to new lease language in the future.

1. Amazon Expands Mammoth Footprint Even Further With New Leases, Acquisitions

If e-commerce conglomerate Amazon was already on the fast track to growth at the start of this year, the pandemic strapped a rocket pack to its ambitious plans and fueled millions of square feet of new leases and commercial real estate acquisitions. 

According to CoStar analysis, the retailer was on track to expand its fulfillment capacity by 50%, or 300 million square feet, before the end of 2020, a massive spike that drove it to snap up swaths of available industrial space across the country. 

In this year’s second quarter, other retailers were facing steep revenue declines and serious headwinds. However, Amazon invested more than $9 billion in fulfillment, transportation and Amazon Web Services capital projects in that period, according to company SEC filings. 

The company is even willing to throw serious money at plans to open in premier markets including Los Angeles. The strategy is marked by its recent $200 million purchase for the site of a future e-commerce center in San Francisco.

*Article courtesy of CoStar

 

For more information about New Jersey office space, New Jersey retail space, and New Jersey industrial space or other New Jersey commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey commercial real estate broker that specializes in New Jersey office space, New Jersey retail space, and New Jersey industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier New Jersey commercial real estate brokerage firm that provides a full range of New Jersey commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey commercial properties for buyers, tenants, investors, and sellers.

A New Jersey commercial real estate broker with expertise in New Jersey commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new New Jersey office space, New Jersey retail space, or New Jersey industrial space with the New Jersey commercial properties that best meets their needs.

As experts in New Jersey commercial real estate listings and services, the team at our New Jersey 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 New Jersey office space, New Jersey retail space, or New Jersey industrial space for sale or lease, Wolf Commercial Real Estate is the New Jersey 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, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Scranton’s Industrial Market Holds on Strong Through 2020

With just a few weeks left in the year, it appears increasingly likely that Scranton will be crowned the 2020 Queen of Pennsylvania logistics.

Her ascension to the throne is somewhat surprising. There were some troublesome signs within the market at the onset of the pandemic. And for years, Northeast Pennsylvania has played second fiddle to Lehigh Valley, which offers better access to New York and Philadelphia.

But CoStar data shows industrial net absorption, the difference between move-ins and move-outs, in Scranton totaled nearly 4 million square feet over the past 12 months, more than every other market contained within the North Atlantic trade corridor.

This region runs from Scranton down to Hagerstown, Maryland, and over the past decade, nearly every serious player in e-commerce has moved into at least one of its small markets. That’s because from them, every major city along the northeastern coast can be reached within hours.

Even with this strong demand, it appeared Scranton was possibly in for some short-term pain the second quarter.

No one had a clue how leasing any commercial property type would function at the onset of the pandemic, and Scranton had millions of square feet of speculative industrial space nearing completion. There was also a concentration of tenants that appeared to be at risk of downsizing within the market.

This could’ve compounded the disruption the new supply would create, and with a surplus of projects set to come online in nearby Lehigh Valley, the competition for new tenants looked like it would be fierce.

Instead, local demand spiked.

The exposed tenants have not downsized their local presence, and most of Scranton’s industrial tenants remain in place. Additionally, major leases were signed by Geodis, Kane Logistics and Lowe’s. Even with millions of square feet in speculative space arriving, the market’s overhead vacancies actually trended down over the second half of the year.

This bodes well for Scranton’s future. There’s still about 2.5 million square feet of logistics space under construction; much of it is speculative. Given the market easily filled this amount of space throughout this turbulent year, it looks likely that demand will keep up with the new supply through 2021.

Experience with creative development might be a plus in the near future as developers look to rapidly adapt to the e-commerce boom. Empty shopping malls, vacated department stores and even repurposed mines are being sought after across the state for redevelopment and expansion.

There are more than a few high-vacancy shopping malls in Scranton and quite a bit of empty shopping centers, too. It probably won’t come to this, but there’s plenty of abandoned coal mines here as well.

Scranton’s reign might be brief; there’s a lot of space in Lehigh that could lease any day. Regardless, her future looks quite promising.

*Article courtesy of CoStar

For more information about Scranton office space, Scranton retail space, and Scranton industrial space or other Scranton commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a leading Scranton commercial real estate broker that specializes in Scranton office space, Scranton retail space, and Scranton industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Scranton commercial real estate brokerage firm that provides a full range of Scranton commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Scranton commercial properties for buyers, tenants, investors, and sellers.

A Scranton commercial real estate broker with expertise in Scranton commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new Scranton office space, Scranton retail space, or Scranton industrial space with the Scranton commercial properties that best meets their needs.

As experts in Scranton commercial real estate listings and services, the team at our Scranton 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 Scranton office space, Scranton retail space, or Scranton industrial space for sale or lease, Wolf Commercial Real Estate is the Scranton 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, Philadelphia, and Scranton commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Murphy USA’s $645 Million QuickChek Deal Shows Growing Convenience Store Demand

The purchase of QuickChek, a family-owned regional chain with stores in New Jersey and New York, for $645 million by Southern-based gas-and-convenience-store giant Murphy USA spotlights how demand is rising for this type of commercial property in the pandemic.

The buyer, based in El Dorado, Arkansas, said it reached an agreement to buy QuickChek, which is based in Whitehouse Station, New Jersey. The Garden State-based company operates 157 stores, including 89 locations with fuel in North and Central Jersey, New York’s Hudson Valley and Long Island.

Murphy USA’s deal for QuickChek is part of a trend of ownership consolidation in the U.S. gas-and-convenience store sector this year in the pandemic and its restrictions on indoor restaurant dining. Contrary to other retail categories during the COVID-19 outbreak, convenience stores look like attractive investments to a growing number of investors because restrictions on sit-down dining have prompted some consumers to instead seek grab-and-go food and beverage options.

Last month, Israel-based Arko Holdings said it was acquiring 60 self-operated convenience stores, which also sell gas, in the Midwest for $100 million. And in August, the Japan-based parent of 7-Eleven stores announced it will pay $21 billion for 3,800 Speedway gas stations in the United States and Canada. When that sale closes, 7-Eleven will be expanding its North American presence to more than 14,000 sites.

Murphy USA will use its QuickChek purchase to diversify beyond its current locations, which are now typically in front of Walmart Supercenters.

“QuickChek fulfills the very high aspiration we set when thinking about what an industry-leading position looks like,” Murphy USA President and CEO Andrew Clyde told analysts on a conference call. “In making the acquisition, we not only secure one of the industry’s leading food and beverage C-store operators with its own very attractive growth plans, we greatly accelerate and de-risk the opportunity to transform our existing growth plans for new stores, raze-and-rebuilds and upgrades.”

Publicly traded Murphy USA is a gas station and convenience-merchandise retailer with nearly 1,500 sites located primarily in the Southwest, Southeast and Midwest. Its purchase for QuickChek is an all-cash transaction, which includes expected tax benefits valued at $20 million for a net after-tax purchase price of $625 million. The transaction will be financed with a combination of cash on hand, existing credit facilities and new debt. Murphy USA has obtained committed financing from the Royal Bank of Canada.

QuickChek was founded in 1967 as an extension of Durling Farms, a door-to-door milk and dairy products delivery service that originally opened in 1888. It offers quick-serve restaurant-style food alongside convenience items.

The chain has “per-store per-year merchandise sales of $3.5 million, combined merchandise margins of 38% with [food and beverage] representing over 50% of the mix, and per-store per-year fuel gallons of 3.8 million,” according to a statement from Murphy USA.

“Additionally, QuickChek has a proven history of same-store-sales growth and a rich real estate pipeline to sustain unit growth within its existing footprint,” the statement said.

Clyde said in a statement that in October the company outlined an updated capital allocation strategy and “committed to improving our food and beverage offer at existing and future sites.” 

Now, the QuickChek deal “accelerates those efforts and benefits, and is expected to provide reverse synergies across our network, while enhancing future returns on new stores,” Clyde said. “The transaction is also expected to create direct synergies that leverage our enterprise scale and our distinctive capabilities in fuel, tobacco and loyalty.”

The sale is expected to close in the first quarter.

Murphy USA has nearly 10,000 employees who serve an estimated 1.7 million customers each day through its network of gas stations in 25 states. The majority of Murphy USA’s sites are located near Walmart stores. The company also markets gasoline and other products at stand-alone stores under the Murphy Express brand. 

*Article courtesy of CoStar

For more information about New Jersey office space, New Jersey retail space, and New Jersey industrial space or other New Jersey commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey  commercial real estate broker that specializes in New Jersey office space, New Jersey retail space, and New Jersey industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier New Jersey commercial real estate brokerage firm that provides a full range of New Jersey commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey commercial properties for buyers, tenants, investors, and sellers.

An New Jersey commercial real estate broker with expertise in New Jersey commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new New Jersey office space, New Jersey retail space, or New Jersey industrial space with the New Jersey commercial properties that best meets their needs.

As experts in New Jersey commercial real estate listings and services, the team at our New Jersey 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 New Jersey office space, New Jersey retail space, or New Jersey industrial space for sale or lease, Wolf Commercial Real Estate is the New Jersey 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, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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More Positive Developments in Allentown’s Neighborhood Improvement Zone

It was a busy week for the commercial property market in downtown Allentown, Pennsylvania.

For those tracking the growth and development occurring within the unique tax-incentive program contained entirely within Pennsylvania’s third largest city, the past 10 days have offered plenty of reasons for optimism.

The biggest news is the Jaindl Group’s announcement that it will be proceeding with construction on a 125,000-square-foot Class A office on Allentown’s riverfront before the end of the year.

Last week, the local developer told the Neighborhood Improvement Zone authority it would soon break ground on the first project on its long-planned Riverfront development.

Jaindl, one of the region’s largest land owners, has long had big plans for the riverfront, but redevelopment proved trickier than anticipated. It has put more than $18 million into getting the infrastructure set in the 26-acre site, which sits alongside the Leigh River.

If Jaindl fully follows through with its current plans, it will put more than $425 million into the Waterfront development before it’s all said and done. That would bring 690,000 square feet of premium office space, 165,000 square feet of retail and more than 550 units of four-star multifamily to Allentown’s 6th Ward.

Jaindl will have some help from the state of Pennsylvania. The entirety of the Waterfront is contained within Allentown’s “Neighborhood Improvement Zone,” which incentivizes developers to build within the city by offsetting the financial risk of doing so.

So far, only one group has taken advantage of this plan. City Center, another local developer, has put more than $700 million building modern offices, apartments, and retail in the Hamilton District. These projects have been largely successful at lease-up, and the firm recently notched up another pair of wins.

In the past 10 days, the group has filled nearly 20,000 square feet at Five City Center, its newest four-star office. One of those firms to take space, Raymond James and Associates, consolidated three regional offices across the Lehigh Valley for city space.

*Article Courtesy of CoStar

For more information about Allentown office space, Allentown retail space, and Allentown industrial space or other Allentown commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Allentown commercial real estate broker that specializes in Allentown office space, Allentown retail space, and Allentown industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Allentown commercial real estate brokerage firm that provides a full range of Allentown commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Allentown commercial properties for buyers, tenants, investors, and sellers.

An Allentown commercial real estate broker with expertise in Allentown commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new Allentown office space, Allentown retail space, or Allentown industrial space with the Allentown commercial properties that best meets their needs.

As experts in Allentown commercial real estate listings and services, the team at our Allentown 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 Allentown office space, Allentown retail space, or Allentown industrial space for sale or lease, Wolf Commercial Real Estate is the Allentown 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, Philadelphia, and Allentown commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Gap Inc. to Close 350 Stores by 2023 as Clothing Retailer Retools Real Estate Footprint

Iconic retailer Gap Inc. said it would close 350 stores by 2023 across its namesake and Banana Republic brands, a decision that is expected to reduce its mall-based locations by an estimated 80%. 

The nation’s largest apparel retailer said Thursday at least 225 of those locations are expected to close before the end of the year, with an additional 75 closures scheduled for 2021. As the company pulls back on locations for its unprofitable brands, it said it plans to move forward with openings for its successful ones — Athleta and Old Navy — as the two steadily contribute a larger portion of the company’s total revenue.

The drastic changes to its brick-and-mortar footprint, which were announced at a virtual investor event, come as the San Francisco-based company scrambles to retool its real estate portfolio amid a yearlong slump in sales and the ongoing coronavirus pandemic. 

“We were overly reliant on low productivity, high-rent stores,” Mark Breitbard, Gap’s new president and CEO, told investors. “We will be shrinking our North America footprint and getting out of mall-based locations, and by 2023, we will have reduced our store fleet by 35%. The goal is to create a new operating model in a cost-effective way, and all of the changes will help us become a digitally-led brand.”

Gap Inc. oversees brands including Gap, Banana Republic, Athleta, Old Navy, Janie & Jack, and Intermix. Its latest announcement is the retailer’s most aggressive push in its decades-long history to shift its Gap and Banana Republic business away from brick-and-mortar stores. The company had been struggling long before the pandemic against steep revenue declines, rising e-commerce competition, and declining mall traffic, which sent the number of Gap and Banana Republic stores nosediving over the past half-decade.

The company has shrunk Gap and Banana Republic’s footprint to what is expected to be fewer than 1,420 by this year’s end, from 1,843 stores in 2018. At the beginning of this year, the company had planned to close 90 Gap and Banana Republic locations. 

The firm’s dramatic increase in closings for those brands is another sign of how much retailers nationwide are struggling right now. The industry is responding to the financial distress of the pandemic by cutting back on real estate expenses and closing locations at a pace that is expected to make 2020 a record year for store closings, according to a CoStar Market Analytics report on the national retail real estate market. 

Gap’s retreat from mall-based locations could be a hefty blow for retail landlords already struggling with declining foot traffic. 

The chain plans to use the current healthcare and financial crisis as a springboard for its real estate restructuring plans. 

Gap Inc.’s Chief Financial Officer Katrina O’Connell told investors that the brand had “not had great execution over the past several years,” but the company will use current market conditions to reallocate its fixed expenses in rent and shift its resources to the retailer’s growing digital operations. 

Retool, Reset Future Growth

In the early stages of the virus’ outbreak across the United States, the retailer said it was forced to push most of its business to digital operations as a result of lockdowns and in-store restrictions. Most of the company’s 3,000 stores have since reopened, but after reporting a 165% leap in e-commerce sales compared to last year, Gap Inc. plans to continue to shift most of its future growth to expanded digital operations. 

A majority of Gap Inc.’s anticipated closures will be timed with lease expirations, but the retailer estimates it will have to spend about $210 million to buy out some of those agreements. O’Connell said the company is also aggressively renegotiating lease terms for stores that will remain open, a move that will save the company about $45 million annually. 

“Lease buy-out costs and rent reductions are all specific to our real estate restructuring efforts,” the CFO said, adding that the company is also exploring whether it should exit the European market entirely or shift its locations there over to a franchise model. 

But the company’s plan to shrink its real estate costs has already hit a few brick walls. The company has been tangled in several lawsuits over the past five months with prominent landlords including Simon Property Group, which is Gap’s largest landlord, and Brookfield over its rental obligations. Simon is suing for $65.9 million in unpaid rent and has countersued Gap’s request for renegotiated rental terms for “taking opportunistic advantage” of the coronavirus’s devastating economic effect.

Gap’s store closure roadmap has already resulted in permanently vacating its 29,043-square-foot San Francisco flagship at 870 Market St. Back in August, the company confirmed it had emptied more than 47,230 square feet of retail space in the city after closing the flagship as well as other locations at the outdoor Embarcadero Centre and indoor Stonestown Mall

Gap Inc.’s shift from physical space to stronger e-commerce growth will coincide with another transition over the next three years: Old Navy and Athleta’s increasing prominence as the company’s most profitable brands. 

Since the pandemic’s outbreak in March, Old Navy has benefited from customers looking for lower price points, while Athleta’s athleisure and loungewear clothing has fueled the brand’s plan to more than double its current $1 billion in annual revenue by 2023. 

Shawn Curran, the retailer’s chief operating officer, said Thursday that the company would be shifting its brick-and-mortar footprint to more Old Navy and Athleta locations over the next several years. By 2023, the two companies will make up about 70% of Gap Inc.’s total revenue, a significant increase from their current 55% annual contribution. Revenue from all of the company’s brands last year totaled $16 billion. 

While the pandemic has slowed down Old Navy’s store expansion plans, the brand expects to open about 30 to 40 new stores each year through 2023. It currently operates about 1,200 locations. 

“Stores matter and will remain an important underpinning to our business,” Old Navy CEO Nancy Green said, adding that “current market conditions will slow the brand’s opening pace. We’ll target new stores in smaller markets as an alternative to big-box competitors, and opening in smaller markets will minimize cannibalization of other locations.”

Athleta, which currently operates a “highly profitable fleet” of 200 stores,” will also continue to expand its brick-and-mortar footprint. 

Mary Beth Laughton, the brand’s CEO, didn’t include details as to where and how many, but said physical locations were “top customer acquisition and brand-awareness vehicles that serve as an important role in local communities,” adding that the brand has an “under-penetrated real estate footprint.”

*Article Courtesy of CoStar

For more information about Philly office space, Philly retail space, and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.

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

A Philadelphia commercial real estate broker with expertise in Philadelphia commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new Philly office space, Philly retail space or Philly industrial 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, Philly retail space or Philly industrial 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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Despite Bleak Near-Term Outlook, Philadelphia Economy Should Survive Coronavirus

The coronavirus spread has reintroduced factors absent from in the national and Philadelphia commercial real estate markets economy for almost a decade: widespread fear and uncertainty.

As we are early in the onset, and short on government data points collected after the virus’ spread, any market analyst in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space –  worth his or her salt will admit there will be a deluge of question marks hanging over the economic outlook during the next month or two.

However, it’s still constructive to take stock of what we do know, in order to build up as clear a picture of the road ahead as possible for U.S. and Philadelphia commercial real estate listings.

This CoStar Realty Information Inc. report involving U.S. and Philadelphia commercial properties is being made available through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

First off, a painful near-term decline in Philly’s economic figures in relation to national and Philadelphia commercial real estate properties is all but certain for this spring. To curb the virus’ spread and prevent hospitals from being overwhelmed with patients, Pennsylvania and New Jersey governors both ordered all nonessential businesses to close on March 16.

How long are these monumental measures likely to stay in place? China’s aggressive lockdown measures lasted about two months. The CDC recently recommended cancelling or postponing any gatherings of 50 scheduled through mid-May. Johns Hopkins University School of Medicine’s infectious disease expert Morgan Katz expects meaningful improvements by early May.

Meanwhile, Treasury Secretary Steven Mnuchin is at the center of the White House’s economic response to this crisis and says Republican senators’ proposed Coronavirus Relief Bill, now under debate in the Congress, aims to cushion businesses for 10-12 weeks of serious disruption. That would take us through early- to mid-June.

Regardless of how long these shutdowns last, the leisure/hospitality sector and retail trade sectors in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – will likely be some of the worst-affected major industries. They represent 10 percent and 8 percent of Philadelphia total employment, respectively.

Hit by department store closures and the shift to automated or online checkout, Philadelphia’s retail employment already was on the decline before the onset of the virus. Considering how many national retailers’ balance sheets had already been eroding prior to the onset of this crisis, the road ahead looks like a painful one for the retail markets related to national and Philadelphia commercial real estate listings.

Leisure and hospitality employment, supported mostly by restaurants, bars, and hotels, had been one of the metropolitan area’s fastest-growing employment sectors. Center City’s blossoming nightlife has been a key ingredient to Philadelphia economic revival over the past 15 to 20 years. The fact that the industry is now at such high risk is probably the biggest existential threat posed by the coronavirus to Philadelphia’s ongoing revival.

But overall, the coronavirus and its accompanying economic shock do not pose major threats to the fundamental drivers of Philadelphia’s economic renaissance over the past 15 to 20 years.

Philadelphia’s industry mix positions it better than most major U.S. cities to weather the negative economic impact of the coronavirus. Very few major U.S. markets have higher concentrations of the sector including healthcare, professional and business services which will likely remain most resilient in the months ahead.

Meanwhile, Philadelphia has relatively lower concentrations of the sectors now most at risk such as leisure and hospitality, retail and oil and gas extraction.

The city’s status as a powerhouse of healthcare innovation only gains renewed importance as a result of the current tragedy and will be a key economic benefit as the number of U.S. residents aged 70 and older grows by 40 percent over the course of this new decade.

Meanwhile, the cost of living differential between Philadelphia and its nearby competitors, New York, Boston and Washington, D.C., remains massive. Philadelphia will continue to attract large net inflows of college-educated young adults moving from these places in search of more spacious housing and higher savings/disposable income.

In other words, for firms able to remain on offense during what will undoubtedly be challenging months ahead, Philadelphia remains an attractive destination for real estate investment capital seeking stable long-term growth, especially when stacked against other major metropolitan areas in the U.S. uncertainty. – By Adrian Ponsen, CoStar Analytics.

For more information about Philly office space, Philly retail space, and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and 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 Philly office space, Philly retail space or Philly industrial 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, Philly retail space or Philly industrial 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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