Tag Archives: Philadelphia industrial buildings


Market Value and Replacement Cost

Market Value and Replacement CostDo you know the market value and replacement cost of your commercial building? In today’s article we discuss market value and replacement cost and obtaining the best insurance policy.

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If you own commercial property, choosing a property insurance policy that fits your specific needs is important. A wide variety of policy options are available at different prices that cover an assortment of reimbursement options. Although there are policies that offer a large amount of financial coverage, depending on the type of property that will be insured, it may make more financial sense to pick a policy that still offers adequate coverage while having lower premiums. Commercial properties can be covered in a variety of ways, and a number of factors can determine whether your property’s value goes up or down each year. Knowing how much your property is worth, market value and replacement cost, and obtaining the insurance policy that both protects you and suits your financial needs is important. The following are descriptions of common types of policies and valuation, and the costs that they generally cover.

MARKET VALUE

Simply put, market value describes the estimated amount that a property would sell for on the date of valuation. Any land included in a commercial property is also a part of its market value. The term market value can be used interchangeably with open market value, fair market value or fair value. A number of factors are considered when a property’s market value is appraised, some of which cannot be influenced by the buyer, seller or appraiser. These include the location of the property, capitalization rates, rent growth rate, the general state of the real estate market and more. Market value is most often used when buying or selling a property. However, it may also be examined when determining the type of insurance policy to place on a property, or the amount of compensation in the case of a loss.

REPLACEMENT COST

Replacement or reconstruction cost is a type of insurance that covers the cost to replace or repair a building with materials of the same or comparable quality. For the purposes of coverage—and unlike market value—replacement cost policies do not include the value of any land and is determined based on the amount needed to hire contractors and purchase materials to repair a building or construct a replacement.

Functional replacement cost coverage can also be used to repair a partially damaged property with less expensive materials, such as replacing a wall with drywall instead of plaster. The main reason for using functional replacement cost coverage would be to save money with lower premiums, so it may be a good option for properties that use expensive materials that are not necessary to the function of the property or for buildings with intangible value that is not relevant to their commercial function.

WHICH TYPE OF COVERAGE BEST FITS YOUR NEEDS?
The value of any piece of commercial property changes constantly. Knowing your property’s value and obtaining the policy that best suits your needs will safeguard your current and future assets. Contact Hardenbergh Insurance Group today to appraise your property’s value and learn more about which type of policy is best for you.

For more information, contact:

Brian Blaston
Partner
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955
email: brianb@hig.net
www.hig.net

 

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WCRE SECOND QUARTER REPORT: SOUTHERN NEW JERSEY OFFICE LEASING TAKES A NOTICEABLE DIP, BUT INVESTMENT AND SALES REMAIN STRONG

Retailers Lose Ground to Online Stores while the Industrial market has stayed strong

DOWNLOAD Q2 2016 COMMENTARY PRESS RELEASE AS PDF

July 11, 2016 – Marlton, NJ –  Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the slow-down in commercial leasing activity in Southern New Jersey that began late last year may have been the beginning of a trend. Office leasing totals were down significantly compared to the same period last year, and were lower than the already slower first quarter. Mixed with this bad news were positive signs in the continued high level of activity in the investment and sales market, and an uptick in leasing in Cherry Hill and Voorhees. Overall, caution and uncertainty seem to be guiding factors.

“Several unknowns began influencing the markets during the second quarter – from the possible impact of the Brexit vote to the coming U.S. presidential election,” said Jason Wolf, founder and managing principal of WCRE. “Businesses are trying to figure out how their plans may be impacted by the uncertainties, but we still believe the overall outlook is still strong.”

There were approximately 252,121 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents a drop of +/- 23 percent compared with the first quarter of the year. The quarter saw an increase in prospecting, with about 250,000 SF of lease deals in the pipeline and expected to close in the near term. Still, the trend of positive absorption continued – and improved over the previous quarter – making up approximately 206,000 square feet of total activity. Vacancy rates posted slight increases, but several large assets changed hands as owners repositioned and new investors entered our market.

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 11.85%.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.00/sf NNN or $20.00-$24.00/sf gross for the deals completed during the quarter. This is essentially unchanged from the previous two quarters.
  • All of the major private owners and REITS showed moderate leasing and prospect activity for the quarter – with Burlington County vacancies tightening up, many larger vacancy opportunities are also shifting towards Camden County, which is not controlled by these ownership entities.
  • New Jersey’s unemployment rate moved higher for the first time in more than a year, coming in at 4.9 percent. Like the national economic recovery, the New Jersey recovery appears to be experiencing a slight pause.

WCRE has expanded into southeastern Pennsylvania, and the firm’s quarterly reports now include a section on transactions, rates, and news from Philadelphia and the suburbs.  Highlights from the second quarter in Pennsylvania include:

  • Although not as pronounced as other “gateway markets”, the Philadelphia CBD office market is attracting attention from international institutional investors. Notable investments include the Korean Investment Fund’s acquisition of Cira Square at 2970 Market Street for $354 million from Brandywine Realty Trust  and 1700 Market Street from Shorenstein Properties for $195 million. Other transactions in progress are commanding all-time-low capitalization rates from some Middle East equity investors.
  • Beyond the CBD, the suburban market has been extremely active, including Saint Gobain’s Headquarters facility, which sold for $123 million at a sub-6% capitalization rate. Additionally, Liberty Property Trust announced a plan to redevelop in the City of Camden, which includes a master plan involving 1.75 million SF of office, parking garages, hotel, and apartments.
  • There has been a flurry of favorable retail activity in the regional market in 2016. Some major projects include PREIT’s sale of three core CBD retail properties to Post Brothers for $45 million at a sub-4% capitalization rate, RIOCan REIT’s announcement to sell 49 retail properties located throughout the Northeast, with many in the Philadelphia region, for $1.9 billion. In addition to these core assets, there is significant development of net leased properties, including Wawa/Sheetz/Royal Farms convenience stores, as well as a variety of other retailers. Finally, retail is filling in many of the ground floor spaces of multi-use properties and commanding some of the all-time highest rental rates seen thus far.
  • The industrial market is still experiencing strong activity, with increases in pricing and rental rates. One of the most significant transactions of the second quarter was the Target E-Commerce Distribution Center in York, PA, which fetched $60 million or $76/SF. While the appetite for core Class A assets continues to be strong, pricing for multi-tenanted flex assets is demonstrating great appeal and marketability.

WCRE also reported on the Southern New Jersey retail market, noting mixed results there, as well. Highlights from the retail section of the report include:

  • Overall retail sales and spending dropped during the second quarter, after an already underwhelming performance in the first quarter.
  • Retail vacancy in Camden County stood at 10.5 percent, with average rents in the range of $11.89/sf NNN.
  • Retail vacancy in Burlington County stood at 14.8 percent, with average rents in the range of $12.21/sf NNN.
  • Retail vacancy in Gloucester County stood at 6.4 percent, with average rents in the range of $12.00/sf NNN.

The full report is available upon request. 

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 & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at ww.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com,  www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

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Philadelphia Industrial Space Deliveries, Construction and Inventory

research information graphicThe Philadelphia industrial space market grew by 327,200 square feet in the fourth quarter 2014 with the completion of three Philadelphia industrial buildings, a new market trend report from the CoStar Group says.

In comparison, four Philadelphia industrial buildings were delivered in the third quarter 2014, adding 906,337 square feet to the Philly industrial space market, according to CoStar’s Fourth Quarter 2014 Market Report. 

Among the notable deliveries of Philly industrial buildings in the year 2014 were:  West Hills Business Center – Building A, a 980,000-square-foot project that delivered in the second quarter and is fully occupied, and Berks Park 78 – Dollar General, a 906,919-square-foot facility that also delivered in second quarter 2014 and also is now 100% occupied, the report said.

Another 16,734,334 square feet of industrial space in Philadelphia was still under construction at the end of the fourth quarter, according to the report.

The largest of the Philadelphia industrial buildings still under construction at year end were Liberty at Shippensburg – Building B, a 1,700,000-square-foot facility with 100% of its space pre-leased, and Majestic Bethlehem Center – Site 2, a 1,644,450-square-foot project that also is fully pre-leased, CoStar said in the report.

Total inventory of industrial space in Philadelphia equaled 1,030,722,790 square feet in 20,377 Philly industrial buildings as the fourth quarter ended, CoStar noted.  The Philadelphia flex space sector comprised 85,676,583 square feet in 3,312 projects and owner-occupied Philly industrial buildings totaled 2,650, accounting for 241,093,478 square feet of Philadelphia industrial space,  the report said.

In comparison to fourth quarter results from the Philly industrial space market, 240 new industrial buildings were delivered to the national industrial market, representing 41.79 million square feet, Costar reported, adding that construction was underway on an additional 164.7 million square feet of industrial space at quarter’s end.

Among the significant deliveries to the national market in 2014, CoStar said, were:  South Washington Park – Building 2, a 227,000-square-foot industrial project in the Northern New Jersey market, and 2150 Opdyke Road, a 168,000-square-foot facility in the Detroit industrial market.  CoStar also noted that 3507 Pasadena Boulevard, a 600,000-square-foot facility in the Houston industrial market, remained under construction at the end of the quarter.  Total U.S. industrial inventory at quarter and year end equaled nearly 21.15 billion square feet in more than 623,000 buildings, of which approximately 90,000 were flex buildings.

For more information about Philadelphia industrial space, Philadelphia flex space or any Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com), 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 with expertise in Philly industrial space and Philadelphia flex space.

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

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new industrial space in Philadelphia 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 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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Philly Industrial Space Deliveries, Construction and Inventory

magnifying glassThe Philly industrial space market saw the completion of eight Philadelphia industrial buildings in during the second quarter of 2014, bringing 3,127,992 square feet of Philadelphia industrial space to the market, according to a new CoStar report.

In comparison, the first quarter 2014 saw three Philly industrial buildings equaling 214,056 square feet completed in the Philadelphia industrial space market, said CoStar’s Second Quarter 2014 Market Report. 

Among the second quarter’s most notable deliveries of Philadelphia industrial buildings were:  9645 West Hills Court, a 980,000-square-foot building, and 30 Martha Drive, a 906,919-square-foot facility building, the report stated.  Both of these newest Philly industrial buildings are 100% occupied, CoStar said.  An additional 8,276,767 square feet of industrial space in Philly was still under construction at quarter’s end the report noted.

Liberty at Shippensburg on Olde Scotland Road, a 1,700,000-square-foot project, and 3215 Commerce Center Drive, a 1,644,450-square-foot building, were the largest of the Philly industrial buildings remaining under construction at the end of the second quarter, according to the report.  Both of these Philadelphia industrial buildings have 100% of their space pre-leased, CoStar said.

Total inventory of industrial space in Philadelphia reached 1,021,212,845 square feet in 20,149 Philadelphia industrial buildings by quarter’s end, the market report said.  The Philadelphia flex space sector consisted of 84,692,787 square feet in 3,265 facilities, CoStar stated.  Owner-occupied Philly industrial buildings in the Philadelphia industrial space market numbered 2,617, encompassing 239,826,483 square feet of industrial space in Philly.

Compared to the second quarter 2014 results from the market for industrial space in Philadelphia, the national industrial market saw 229 projects completed in the second quarter 2014, representing 28.56 million square feet, according to Costar.  Another 119.7 million square feet of industrial space was still underway at quarter’s end.  The 2.1 million-square-foot 4500 S. Dobson Road facility delivered in the Phoenix market in the second quarter 2014, while the 1.8 million-square-foot D1X Mod 2 project remained in progress in the Portland market.  Total U.S. industrial inventory equaled 20.96 billion square feet in more than 618,000 buildings at the end of the second quarter.  More than 69,000 of these were owner-occupied Philadelphia industrial buildings.

For more information about industrial space in Philly, Philadelphia flex 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 that specializes in industrial space in Philadelphia and Philadelphia flex space.

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

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly 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 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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