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Office Space Near Philadelphia Independence Hall in Great Demand

Could there be signs the Philadelphia Independence Hall office market is heating up?

Throughout 2015 and 2017 Independence Hall was an outlier with noticeably higher vacancies than other submarkets in and around Philadelphia’s central business district (CBD) such as Market Street West and University City. These higher vacancies were caused by move outs by both government and private sector tenants including the U.S. Navy, the GSA and Dow Chemical.

Independence Hall’s concentration of older office buildings and its distance from key center city regional rail stations are potential drawbacks from many office tenants’ perspective. However, a slew of office renovations, restaurant/bar openings and high-end residential construction throughout the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – are now coalescing in what was once a relatively sleepy submarket.

This report on U.S. and Philadelphia commercial properties, being made available through Philadelphia commercial real estate broker Wolf Commercial Real Estate – a Philadelphia commercial real estate brokerage firm, is part of the Market Insights series from the CoStar Group research organization. These periodic reports provide a snapshot of recent real estate trends. CoStar monitors commercial real estate across 390 metro areas and analyzes the economic trends that move these markets.

Since 2014, Keystone Property Group has re-energized the ground floor of 100 Independence by bringing Independence Beer Garden — which includes outdoor seating and a gaming area — and modernist café La Colombe. One block away, MRP Realty’s newly-renovated Bourse — previously home to the nation’s first commodity exchange — is reopening this fall with an impressive array of new dining and drinking options on the ground floor. Coworking operator Make Offices also recently leased 35,000 square feet on the fifth floor of one of these key national and Philadelphia commercial real estate properties.

More than 850 new, high-end apartment units have either completed or broken ground in the Independence Hall submarket over the past five years. Parkway Corporation recently completed its Civic Design review for a proposed 278-unit apartment tower at 709 Chestnut in this key segment of the national and Philadelphia commercial real estate market. Toll Brothers is also planning an 85-unit condo development on the 700 block of Sansom Street.

These improvements to Independence Hall’s ambience and amenity offerings are beginning to bear fruit for office owners. A handful of large leases including Macquaire Investment Management, Five Below and a few coworking operators have been signed in recent years. These leases, combined with conversions of older office space into apartments, have helped bring Independence Hall’s office space availability rate — the percentage of space being marketed for lease — back in line with other Center City submarkets in 2018.

Given Independence Hall’s complete lack of new office construction, the submarket’s availability rate has nowhere to go but further down if tenants’ interest in these U.S. and Philadelphia commercial real estate listings continues to rebound. It will be interesting to see just how much more tenant interest Independence Hall can garner in the years ahead.

 

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.

Landlords Could Seize Opportunity If Papa John’s Shuts Stores

It’s not often that commercial real estate landlords want to lose tenants, but that may be the case with the criticized pizza chain Papa John’s as it faces the prospect of closing 250 restaurants across the country.

Landlords throughout the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – are concerned the chain’s highly publicized missteps by its former chief executive, who received swift criticism after using a racial slur on a recent conference call, could dissuade shoppers and they may hope the chain shuts stores, an industry spokesperson said recently.

“There’s a need for that size of space in the market and there’s not that much of it,” the spokesperson explained. “They (landlords) may be able to get higher rents from other tenants.”

This report on U.S. and Philadelphia commercial properties from the CoStar Group research organization is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Papa John’s, the country’s third-largest pizza chain, has suffered public blows this past year from, among others, owners of national and Philadelphia commercial real estate properties. Founder and former Chairman and Chief Executive John Schnatter — who still owns about 30 percent of the company — this summer used a racial slur to describe African Americans on a conference call. Last fall, he blamed NFL leadership for allowing players to kneel during the National Anthem and complained the controversy was hurting the chain’s sales. At the time, Papa John’s was an NFL sponsor. It has since been replaced by Pizza Hut.

In a recent earnings call, Papa John’s Chief Executive Steve Ritchie said the chain was struggling and may be forced to close some locations.

“We’re going to evaluate all the options as they’re presented to us, if there is some sort of increase in closures that exist here because of the declines in the sales,” he said.

A Papa John’s spokeswoman declined to comment.

If the chain does close stores, a new commercial real estate report providing insight into the national and Philadelphia commercial real estate market offers clues as to which businesses might replace them. The report said non-retail and non-restaurant space in shopping centers increased to 23.1 percent this year from 19.2 percent in 2012. Forty-four percent of shoppers say they prefer to visit shopping centers that have a wide variety of non-retail tenants.

“The growing focus on experience has led to a rising share in non-retail tenants, including food and beverage, salons, movie theaters, fitness centers and medical clinics,” the report said.

Most Papa John’s stores are in shopping and strip centers, and industry observers believe two popular concepts — Mediterranean or taco restaurants — could backfill the space in these U.S. and Philadelphia commercial real estate listings and drive traffic.

Rival pizza chain Domino’s, the country’s second-largest pizza chain, in particular is taking advantage of Papa John’s woes, said Henry Renaud, president of retail brokerage Renaud Consulting. In contrast to Papa John’s, Domino’s Chief Executive Richard Allison said this summer that the chain was preparing to build about 2,500 restaurants in the next decade or so and two supply chain centers in the next two years to keep pace with growth.

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.

Do You Need A Corporate Move Management Company

Move Management CompanySelecting a move management company that’s right for your business is critical for an office relocation and/or expanding business. Today, companies are so focused on moving into their new space they rarely look at their old or existing space and all the costs associated with it. Moving an office can be a huge undertaking, and move management often despises the thought of relocation due to the disruption and disorganization that often follows. In order to move an office successfully without unnecessary disruption to the daily flow of business, business owners and management should consider hiring a move management company.

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Too often companies don’t have the manpower to dedicate to manage their office relocation. And they often don’t have the time to evaluate the benefits of a move management company. Move management companies are professionals who specialize in office relocation and expansion – and these experts know how to make the process flow smoothly. They understand the process of moving in great detail, and they are able to organize the process effectively, and manage details, budgets, timelines, and people.

Selecting a move management company that’s right for you is critical for an office relocation and/or expanding business. You’ll want to select a company who has expertise in relocation and project management, outstanding planning services, and highly skilled team members to meet the client’s ever changing needs. These experts will work with the client to determine what the office already has in place and what is needed in the new location. They will also implement the plans for specific designs and layout within your new office and set up the layout for your new location with relative ease. They will also handle all of the incidentals that often get put off or forgotten until after the move is complete.

Benefits of Hiring a Move Management Company

• Industry experts who can work with architecture/design firms and construction companies when needed
• Project planners who manage everything for you
• Time savings by avoiding unnecessary delays
• Cost savings
• Flexibility
• Employee satisfaction and productivity

KEEP IN MIND YOUR BOTTOM LINE
Before you decide to tackle your relocation, keep in mind your bottom line. This is the most important reason why you would want to hire a professional move management expert. You will save time and money in the long run which is always good for business.

FOR MORE INFORMATION, CONTACT:
Shawn O’Neil at 609-744-4112 or
Paul Sipera at 609-760-8312

ABOUT ARGOSY MANAGEMENT GROUP, LLC
Argosy Management Group (AMG) is a leader in office relocation and logistics project/move management. AMG services companies throughout the U.S. and worldwide. AMG delivers a wide range of comprehensive services: move management and transition planning, space planning and furniture needs, office and industrial relocation and liquidation, storage solutions and asset management, furniture disassembly and installation, and I.T./data center relocation.

visit www.argosymg.com

Preparing Commercial HVAC Systems for Winter

Preparing Commercial HVAC Systems for WinterWith the fall season in full swing, it’s time to start preparing commercial HVAC systems for winter, well before Ol’ Man Winter comes to town. Hutchinson, a leading energy services and mechanical services contractor serving the region’s commercial customers, offers tips to help add life to your systems, enhance comfort and improve your bottom line.

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Seven Tips for Preparing Commercial HVAC Systems for Winter

1. Use Energy Star Portfolio Manager
Use Energy Star Portfolio Manager to see how your building rates with other similar buildings. If you rate low, there are many things you can do to improve the operation of your building.

2. Check HVAC settings
Check HVAC settings to get maximum efficiency. Set your thermostat at 68°during the day and at 60° at night. You can save approximately 3% on heating costs for every degree under 70.

3. Install a programmable thermostat.
A web and cloud based control system offers peace of mind by keeping settings maintained during and after office hours.

4. Establish a preventive maintenance program.
• Change or clean all air filters, preferably every month.
• Repair leaks in piping, air duct s, coils, fittings and at the unit(s).
• Replace defective equipment insulation, ducting and piping.
• Install/upgrade HVAC controls to include new energy management systems technologies.

5. Clean Heating Ducts
Heating ducts should be cleaned periodically to allow efficient heating and provide fresh, clean air. Also check to make sure the ducts are properly insulated.

6. Take Advantage of Energy Efficiency Programs
Hutchinson is a designated contractor of Direct Install, a program offered by New Jersey Office of Clean Energy. Upgrade to energy efficiency with Direct Install and 70% of the cost will be covered for energy upgrades, including lighting and HVAC equipment. Instead of pumping money into your outdated, inefficient units, why not upgrade to a new, state-of the-art energyefficient system?

7. Conduct daytime/nighttime audits.
Check to see if the lights are on. Is the building comfortable? Make adjustments as needed.

Contact Hutchinson at 888-777-4501 or dicoordinator@hutchbiz.com for help preparing commercial HVAC systems for winter

About Hutchinson
Hutchinson is a leading energy/mechanical service contractor performing energy services, mechanical construction and retrofit installation work in the Greater Philadelphia Tri-State Region. Hutchinson’s
technicians are factory trained, NATE certified and are on-call 24/7 365 days a year. Visit www.hutchbiz.com for more information.

ed-hutchinson

Commercial Real Estate Mortgage Debt Surges to New Record

Mortgage debt underlying offices, apartments, and other non-farm commercial real estate rose the most in any quarter on record to a new high of $3.27 trillion in the second quarter of 2018 as all major investor groups increased their holdings amid strong economic growth.

The $52.3 billion growth in debt on office, multifamily, retail, industrial and hotel properties in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – outpaced the previous record growth from the first quarter by 1.6 percent. This led to the record total debt as of June 30, according to the Mortgage Bankers Association.

This report on U.S. and Philadelphia commercial properties from the CoStar Group research organization is being offered through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

“The four major investor groups all increased their holdings, and multifamily mortgage debt outstanding topped $1.3 trillion for the first time,” Jamie Woodwell, the association’s vice president of commercial real estate research, said in releasing the data.

Overall demand for national and Philadelphia commercial real estate properties is rising, fueled by job growth and early benefits of the new tax law passed in December, as U.S. economic growth rose 4.2 percent in the second quarter, the strongest since 2014. The four major investor groups are bank and thrift; federal agency and government sponsored enterprises; life insurance companies; commercial mortgage-backed securities and other asset-backed securities issuers.

Woodwell added that “strong property fundamentals and values, coupled with still-low mortgage rates and strong loan performance” all support the growth of commercial real estate lending.

Commercial banks hold the largest share of the retail, office, industrial, hospitality and multifamily mortgages in the national and Philadelphia commercial real estate market — $1.3 trillion, or 40 percent of the total. In the second quarter, banks and thrifts had the largest increase in dollar terms in their holdings of commercial mortgage debt – an increase of $23.9 billion, or 1.9 percent.

Life insurance companies hold $486 billion, or 15 percent of the total. Life insurance companies increased their holdings of U.S. and Philadelphia commercial real estate listings by $10.6 billion, or 2.2 percent.

Commercial mortgage-backed securities and other asset-backed securities issuers hold $452 billion, or 14 percent of the total throughout the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space. They increased their holdings by $5.7 billion, or 1.3 percent.

While the major groups were upping their holdings, state and local government retirement funds decreased their holdings about 72 percent, according to the Mortgage Bankers.

Separate data released last week from the Federal Reserve shows that real estate investment trusts also shrunk their share of commercial mortgage debt outstanding by about $3.2 billion, or roughly 1.9 percent.

Multifamily mortgage debt made up a huge chunk of the increase with outstanding amounts rising to $1.3 trillion, an increase of $20 billion from the first quarter of 2018, representing a 1.6 percent increase.

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.

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

 

New Jersey Bill Aims to Help Vacant Malls, Office Parks

New Jersey lawmakers are making a new legislative push to help rid the state of its vacant and half-empty malls and office complexes, properties that have fallen victim both to e-commerce and a new preference in corporate America for urban settings.

Under a bill that recently came out of committee in the state Legislature, “buildings used, or previously used, as a shopping mall, shopping plaza, or professional office park,” that have been vacant or partially vacant in the South Jersey retail space commercial real estate market with less than 50 percent occupancy for at least two years, can qualify to be designated as needing redevelopment.

This report involving South Jersey retail space commercial properties is being made through South Jersey commercial real estate broker Wolf Commercial Real Estate, a South Jersey commercial real estate brokerage firm.

Once a municipality in the South Jersey retail space commercial real estate market designates an area as needing redevelopment, that site becomes eligible for economic incentives from the town – including being able to make payments in lieu of taxes, or Pilot programs. The bill’s goal is to spark the repurposing of such underutilized and sometimes rundown properties by developers.

With the demise of many retail chains among all South Jersey commercial real estate properties – and the rise of online shopping – malls across the nation have struggled with vacancies and closings. New Jersey has been hit particularly hard by office-park vacancies, because of its large supply of suburban office stock at a time when the millennial workforce is favoring downtown workplaces.

“Without the help proffered by this bill, there is good chance that investors will just be unwilling to take on these complex redevelopment projects, and the malls will deteriorate, cease to provide revenue support for the towns in which they’re located and, not least, they will go from being a destination to unattractive and possibly dangerous, lightly occupied, vestiges of a time gone by,” said one industry spokesperson.

The bill, whose sponsors include State Assemblywoman Carol Murphy, a Democrat representing Legislative District 7, basically updates and expands the types of South Jersey commercial real estate listings that can qualify as being in areas in need of redevelopment.

Murphy said she is very familiar with the issue of vacant malls in part because of what has happened within her own area, Burlington County. Earlier this year, Sears, the last retail tenant in the once-busy Burlington Center mall at 2501 Mount Holly Rd. in Burlington, New Jersey, shut its doors in the South Jersey retail space commercial real estate market, leaving a vacant shopping center in its wake.

“What used to be a thriving shopping center, a shopping mall, is now completely closed,” Murphy said. “So that’s sitting there and we’re trying to figure out what we’re going to do with that.”

Real estate firms dealing with South Jersey commercial real estate listings should be financially encouraged to look at existing, empty retail and office properties to redevelop “without having to take up more of our free land and space,” she said.

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

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

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

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

Big Retailers Shrink Stores to Boost Sales

Plans by fast-food chain Taco Bell to open 300 new small-format restaurants across the country in the next four years are the latest being undertaken by a slew of major national brands experimenting with smaller stores to cut real estate costs and cater to urban millennials.

Taco Bell, Nike, Target, and Nordstrom are just a handful of major brands looking to increase market share in the national and Philadelphia commercial real estate market – and, at the same time, wring out more dollars per square foot of space in expensive urban markets – by opening smaller brick-and-mortar stores.

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

The decision reflects a rapidly evolving retail environment in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – that is forcing retailers nationwide to reevaluate their real estate footprints. That scramble for space offers property owners and developers new opportunities to reconfigure properties and reshape their tenant mix.

“It’s not much different from what a lot of office users are doing right now,” said one industry expert. “Everyone is trying to be smarter with their space and realize the savings that comes from that.”

Sales at small-format stores among all national and Philadelphia commercial real estate properties outgrew those at larger stores by almost 400 percent in 2016 and now constitute more than a $1 trillion market, according to a 2018 report by Koupon Media. It added that 51 percent of millennials – those between the ages of 22 and 37 — say a store’s location is the top factor in a purchase decision.

In other words, the success of small-format stores also relies on convenience.

That’s a driver behind fast-food purveyor Taco Bell’s plan to open – in the next five years – 125 mostly small-format restaurants in New York City, instead of utilizing any other available U.S. and Philadelphia commercial real estate listings. The company said it was under-developed in New York and wanted to tap into the city’s thriving urban market.

The Irvine, California-based company’s small-format restaurants — called Urban In-Line and Cantina — are tailored for “highly walkable areas” and have no drive-through windows. The smallest are just 1,200 square feet. The company plans to open 1,000 new restaurants across the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – in the next four years. Thirty percent will be smaller-format concepts.

Many companies opening smaller stores are using technology to capture customer data and personalize the shopping experience.

Nike this year unveiled Nike Live in Los Angeles, a small-format, 4,600-square-foot store that coincides with the release of the Nike app designed to gather customer information and which allows shoppers to reserve items online, scan barcodes for product information, and book personal appointments with in-store experts.

Nordstrom last year launched Nordstrom Local, a 3,000-square-foot store in Los Angeles’ tony Melrose neighborhood with no inventory. Shoppers can pick up items there and even order a drink. It plans to open more.

Target is opening small format stores with an average store size of 50,000 square feet, compared to 170,000 square feet in its larger store, by utilizing both national and Philadelphia commercial real estate listings in urban areas across the country.

The small-store trend “shows no signs of slowing, which will inevitably lead to continued growth of small format in 2018 and beyond,” the Koupon report said.

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.

Tenant Improvements and Betterments

Tenant Improvements and BettermentsLet’s explore how Tenant Improvements and Betterments impact insurance. Suppose that a landlord leases a storefront to a retailer that makes improvements to the facility by adding features to help sell its products. During the lease, a fire breaks out and damages the building, including the features added by the retailer to improve the space. When the insurance claims are made, the following questions arise:

• Who did the improvements belong to?
• Who is responsible for paying the damages?

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Defining Tenant Improvements and Betterments

While legal definitions vary, improvements and betterments are anything that a tenant attaches to the landlord’s real estate that becomes a permanent part of that real estate. Under most leases, such improvements become the property of the landlord and tenants are responsible for repairing or replacing the improvements in the event of loss. However, property policies can be customized to determine whether tenants’ improvements and betterments are covered under the building category or under the contents category.

A Landlord’s View of Tenant Improvements

When a tenant makes substantial improvements and betterments to a building, it adds to the building’s value. In order to realize this added value, the landlord needs to clearly establish who is responsible for damages to that property to avoid insurance complications. In doing so, the landlord typically has to make one of the following decisions:

1. Increase the limits of the property insurance policy to account for this extra value.

2. Add a clause to the rental contract stating that the tenant is responsible for damages to improvements and betterments.

In the absence of one of the aforementioned decisions, the landlord may face penalties in the event that he or she has to make an insurance claim. For example, if a tenant makes $100,000 worth of improvements and betterments to a property that was initially worth $500,000, and a fire destroys the entire building, the insurance adjuster will value the property at $600,000 when processing the claim. But, since most landlords’ property policies consider improvements and betterments as covered property, the landlord may be charged an underinsured penalty if the building’s policy hasn’t been increased to reflect the amount of the improvements
and betterments.

A landlord who does not wish to insure for the values of the improvements and betterments should specifically exclude them.

A Tenant’s View of Tenant Improvements

If the lease requires the landlord to repair or replace tenants’ improvements and betterments that become damaged, the tenant does not need to insure them. In contrast, if the lease does not require the landlord to repair or replace tenants’ improvements and betterments, tenants need to make sure they are covered under their own property policy.

 

Tenant Improvements – Considerations When Entering a Lease

When entering into a new lease or renewal, it is critical for both landlords and tenants to carefully review the terms of the lease to ensure that it adequately delegates the responsibility for insuring tenant improvements and betterments. It is also important to make sure that each party’s insurance policy is adequate enough to properly protect the scope of the tenant improvements agreed upon in the lease. When reviewing the lease, both the landlords and tenants should discuss the following questions:

• Who owns the improvements?
• Who is responsible to replace the improvements if damaged?
• Which insurance policy covers the improvements—the landlord’s or the tenant’s?
• Is the policy adequate?

Insuring Tenant Improvements and Betterments

Tenant Improvements and betterments are not difficult to insure, as a building’s insurance forms automatically cover them. However, many landlords expect their tenants to insure any improvements and betterments that are
made, and some landlords refuse to increase the value of their building policies to reflect the new value of such changes. Therefore, it is important to understand the insurance ramifications of tenants’ improvements and betterments. Hardenbergh Insurance Group can help you identify your exposures and make appropriate recommendations.

For more information on Tenant Improvements and Betterments

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

WCRE EXPANDS REGIONAL TEAM WITH TRIO OF NEW HIRES

WCRE EXPANDS REGIONAL TEAM WITH TRIO OF NEW HIRES

Team Members to Serve Philadelphia and Southern New Jersey Markets; Support Company Marketing

September 5, 2018 – Marlton, NJ – Wolf Commercial Real Estate (WCRE) is pleased to announce the hiring of three new members of our firm serving our southeastern Pennsylvania and Southern New Jersey teams.

April Loomis has joined the WCRE team as a Senior Sales Associate focusing on the Southern New Jersey market.  Loomis brings over 25 years of professional experience with major corporations in the region, having recently served as a Contracts Manager at Lockheed Martin and Comcast Corporation.   She has been licensed as a New Jersey Salesperson since 2012.  April is also active in the local community and has numerous civic and professional affiliations.  She is a member of the National Contract Management Association, the Gloucester County Board of Realtors, and the Witches of East Greenwich Charity Organization.  She serves as Vice President of the Villages of Whiskey Mill Homeowners Association and is a New Jersey State Bar certified Paralegal.

Mitchell Russell has joined WCRE team as the firm’s newest sales associate in Pennsylvania.  Russell will generate and service new business in the office and industrial sectors for clients in Philadelphia and its suburbs.  Russell is a recent Duke University graduate, where he was a member of the Duke University lacrosse team and a proud four-time ACC honor roll member.  As a senior this past year, Mitch helped lead the 2018 Blue Devils to the national championship game.

Nora Farghaly has joined WCRE as a Marketing Coordinator and Administrative Assistant.  Farghaly will bring new ideas to WCRE’s best-in-class marketing team and enhance client service by providing additional broker support.  Nora brings more than five years of experience designing, creating and executing marketing campaigns across various industries through her independent marketing consultancy NF Design.  She has also served in marketing roles at Valley National Bank, Golf Performance Institute, ANCERO, and Compass Group at Rowan University.

“I’m excited to have such talented new team members servicing our clients in Philadelphia and South Jersey,” said WCRE Managing Principal, Jason Wolf.  “Our people have always been our biggest asset and our biggest advantage in the marketplace.”

FULL PDF VERSION OF PRESS RELEASE HERE

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 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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Commercial Building Life Expectancy Isn’t What It Once Was

Commercial Building Life ExpectancyBuilding life expectancy isn’t what it used to be. What to do with obsolete commercial buildings and how to prevent your portfolio from falling into the trap. Buyers, owners, investors and developers of real estate are facing questions regarding how properties are valued in the current market, especially where there are problems appraising a property’s highest and best use. More specifically, this question focuses on reversion value.

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Commercial Building Life Expectancy – Multiple Cases

Recent Class B or lower valuation projects (as well as some lower level Class A properties) have presented serious, widespread questions from a valuation standpoint. The main question is simple: What should be done with “obsolete” buildings?

Historically, such a question became pertinent only after 50-100 years. Buildings were “built to last,” and most were designed to be updated over time. Part of the reason for that long horizon was that ample land was available for expansion. Another was that zoning was very prescriptive and clearly defined in many ways. Lastly, fixed real estate was a capital-intensive asset class.

In the past five years alone, that question, however, is now being asked about buildings that are only 20 to 30 years old. Many buildings that have been constructed in the last 30 years or so, like suburban office buildings and parks, retail centers and malls, some well located industrial parks and even sports stadiums, now face the wrecking ball because they are, effectively, obsolete. Some investors report that many U.S. submarkets, for a variety of uses, are “under-demolished.”

What is driving Decreased Commercial Building Life Expectancy?

The short answer is technology. The longer answer is human interaction with technology.

Historically, most companies had fairly simple operations and spatial needs, so real estate decisions were driven by location and/or resources, with physical building changes limited by cost and location. The current digital revolution, however, is changing that—literally at the speed of light. Locations are not as “fixed” as they were previously, and businesses’ physical space needs tend to change quickly due to technological shifts. Flexibility will be the key to long-term survival in all industries, including real estate.

Traditionally, real estate has been a fixed asset acquired at high prices compared to most assets. Such requirements mandated long lead times, high fixed costs, significant capital resources, segregation of uses, long-term contracts (i.e., leases and mortgages) and zoning. The industry faces the challenge of adapting fixed physical space needs, and all that goes along with it, to meet the new reality of demand for change at the snap of a finger, and how to underwrite office or other spaces that will likely shift to “creative space” when re-financed (at lower rents, not higher).

Possible Solutions to Decreased Commercial Building Life Expectancy

From a valuation standpoint, there are two traditional factors: zoning/legal issues and physical utility. To maintain real estate flexibility, underwriters, analysts, municipalities and all industries will have to consider:

1. Revised zoning codes that stress density/form over use. The economic lives of buildings are getting shorter and it may be necessary to re-configure space more quickly. This change, however, often runs afoul of local zoning ordinances, minimally, as it relates to uses. If structures in the future are more generic in form, site-specific codes may have to be revised to reflect multiple future uses. By “pre-coding” such code requirements, one of the major impediments to re-development (generically, all permitting costs) can be streamlined for material cost savings and faster re-use. Urban areas already have an advantage in this regard due to greater densities and uses. Suburban areas will need to adapt this concept, or face an even stronger “back to the city” trend than currently in the market. Otherwise, suburban office parks and similar “obsolete concepts” could risk vacancy. All jurisdictions, in order to retain and attract industry—their tax base—will have to re-write zoning laws to allow rapid flexibility.

2. In terms of physical utility, architects and engineers will have to design buildings that can be quickly adapted to alternate uses at a reasonable cost. Aesthetics will still be important. Those who are able to successfully design and build the most flexible buildings first will fare the best. Prime locations will also continue to have great importance. These locations, however, will not be limited strictly to traditional site selection parameters. The key will be how flexible the site and/or building improvements are perceived to be for needed changes due to technological shifts that dramatically alter market demand for that space.

The combination of these elements will require a shorter-term view, and investors and municipalities should incorporate some level of alternate use analysis, even from the original construction date. Underwriters would then have the benefit of downside underwriting (to consider future conversion costs)—on a current basis.

For many years, zoning and functional utility have simply been boxes to check during the valuation process. Moving forward, and given the rapid clip of technological change, it is now time to remove it from a box and think about a real exit strategy beyond the end of a lease or mortgage term.

peter-cordua

Commercial Construction Spending Headed to Record High

Spending on hotel, office, distribution, and other commercial and public buildings likely will expand for an unprecedented ninth-consecutive year in 2019, according to a consensus forecast by the country’s top industry economists.

The panel of experts from construction industry analytics company Dodge Data & Analytics, trade organization Associated Builders & Contractors, and others recently surveyed by the professional organization American Institute of Architects raised its prediction for nonresidential construction spending in 2018 in the national and Philadelphia commercial real estate market to increase 4.7 percent, up from the 4 percent increase it forecast in January.

The panel also slightly raised its spending forecast for 2019 to 4 percent at midyear from 3.9 percent in January.

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

“If these projections materialize, by the end of next year, the industry will have seen nine years of consecutive growth,” said American Institute of Architects Chief Economist Kermit Baker. “Much of the optimism in the outlook is coming from the over-performing commercial sector.”

The panel’s consensus is that spending on commercial buildings in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – will increase 6.7 percent this year, up sharply from 4.4 percent projected at the beginning of the year, and 3.4 percent in 2019, up from 2.9 percent in the January forecast.

Total spending by the end of next year in the national and Philadelphia commercial real estate properties market on nonresidential buildings, which includes public safety, health care, education, and religious facilities, is expected to be 5 percent greater than the last market peak in 2008, Baker said.

The bullish forecast is significant because, as recently as a year ago, the same economists warned a construction industry downturn could be on the horizon for U.S. and Philadelphia commercial real estate listings due to a shortage of construction workers, rising interest rates and construction costs, and concerns the economy was slowing. U.S. nonresidential spending increased just 2.2 percent last year, barely outpacing rising inflation in building costs.

One key sign that construction won’t be slowing any time soon is architect workloads in the U.S. commercial real estate market, including Philly office space, Philly retail space and Philly industrial space; these continue to increase. Architecture firms saw healthy growth in billings and new project activity last year, and both indicators remain strong through the first half of 2018.

Billings by design firms are an indicator of hard construction spending a year to 18 months in the future. Architects designing all types of buildings and housing types among current national and Philadelphia commercial real estate listings are reporting average project backlogs of more than six months, the longest since 2010.

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.