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Capital from two REIT funds helping Lubert-Adler make a mark in Center City If there's anyone in Philadelphia's real estate market having more fun than Dean Adler and Ira Lubert, [...]

Law firm runs into trouble in moving to its new office space Morgan, Lewis & Bockius, one of Philadelphia's more prestigious law firms, has found itself in one of the [...]

Just a month ago, real estate investment trust watchers were shaking their heads, wondering when share prices would move up to where they thought REITs belonged. They were wondering aloud, [...]

Out-of-town real estate developers and investors have seemingly fallen in love with Center City. A raft of private and public real estate firms from New York, Washington, Boston, Chicago and [...]

Editor's note: The following is the first in a year-long project aimed at spotlighting the changing face of the many towns of the Delaware Valley. For the next 12 months, [...]

Thirty hotel developers have held discussions with the Philadelphia Industrial Development Corp. In order to land one of the national political conventions, city officials hope about 2,200 rooms can be [...]

PLYMOUTH MEETING - A building boom is under way in this Mongomery County crossroads, with more than 2 million square feet of office space and about 1,500 hotel rooms either [...]

Raytheon Engineers & Constructors International Inc. has left a lease gap in the United Engineers Building in Philadelphia, PA, with its move to Princenton, NJ. The Lexington, MA-headquartered Raytheon that occupied four floors at the building cut 80% of its 1,250 employees at the Philadelphia facility. The 20-story United Engineers Building, owned by Japanese conglomerate Shuwa, is now on sale and being marketed by Eastdil, a real estate firm in New York. The building, which generates $10.9 million in gross income having current per sq ft rates of $18.35

The apartment market in University City, PA, is seeing increased activity due to the expansion of graduate school programs, more nightlife, safer and cleaner streets, and shortage of apartments in Center City, PA. One apartment owner in University City said that the most significant change he can see in the area is that there is a market for graduate students and professionals and that there are many people who want these apartments. Paul Steinke, University District executive director, said that housing abandonment rate in the area is under 2%. One developer said that every apartment in the area is full and that there is a very high demand for housing.

Hillier Group's historic preservation division in Philadelphia, PA, has received the contract to renovate and upgrade the US Supreme Court building. The project will also include the services of engineering companies Joseph R. Loring & Associates and Robert Silman Associates and will have primary focus on the building's systems as well as space management. Hillier's Philadelphia team leader, George C. Skarmeas, stated that the study of the building is already being done, but the full decision on the renovation would not be ready until early 1999.

The Vitetta Group, a Philadelphia, PA-based architectural firm, is set to relocate from its current office in The Wallace Building on North Broad Street into the 88-year-old former Marine Corps barracks on Broad Street in the former Naval Shipyard. The firm, which has 80 architects among its 145 local workforce, is leasing the three-story brick building for five years and holds the option to renew or buy should the city obtain the deed to the former base before the five years ends. The building, which is currently undergoing renovations, is among the prominent structures on the base. Vitteta intends to restore all the building's steel beams and woodwork to its original form, along with clay tile roof and primordial windows.

Philadelphia is close to obtaining part of the former U.S. Naval Shipyard as the Navy recently presented two key documents indicating its consent to deliver 650 acres at the center and northeast sections of the base as well as the former Naval Hospital site. The Office of Defense Conversions, the branch of the Philadelphia Industrial Development Corp., states that with the documents in tow, it can now begin leasing procedures. Norwegian shipbuilder Kvaerner ASA is one of the major companies that are interested in occupying portions of the 1,100-acre Navy base. Meanwhile, the Navy itself will remain at the yard for an indefinite time and eventually become the city's tenant.

Prudential Realty Group Inc. and CB Commercial Real Estate (CB Richard Ellis) have been ordered by a Delaware County judge to settle $30 million in a lawsuit that accused the firms of deliberately misleading real estate brokerage GMH Associates in the $108 million sale of Bala Cynwyd office park. The companies must pay $20 million in compensatory damages to GMH, with the figure based partly on the amount the firm would have earned had it acquired the property. Punitive damages amounting to $10 million have also been awarded to the brokerage firm. Prudential, meanwhile, announced its intention to appeal the decision.

First Chesapeake Financial Corp., the mortgage company that moved its headquarters from Richmond, VA, to Philadelphia, PA, earlier in 1998, is seeking to raise $2 million via a private 'junior' debt offering. First Chesapeake's filings with the Securities and Exchange Commission stated the company already raised $550,00 as of August 1998, with $350,00 of it coming from the members of the company's board of directors. First Chesapeake Chief Financial Officer Mark Glatz said the debenture offering is part of the company's efforts to recapitalize and reestablish the company as a viable business.

Tower Realty Management of Redwood City, CA, is seeking a buyer for its 20-story Four Penn Center building at 16th and John F. Kennedy Boulevard in Philadelphia, PA, despite previous denials that it would sell the property. According to Joe Grubb, regional general manager for Tower Management, the company was prompted to put the 500,000-sq-ft building on sale following numerous offers to buy the property. The building's location at 1600 JFK Blvd. is seen as the major reason for its broad appeal to buyers, since the site is directly connected to the below-ground concourse that leads to Suburban Station. The property is being offered to law firms and other large corporate users.

Realen Properties, an Ambler, PA-based company, plans to construct a multiscreen theater and a 270-room budget hotel in Philadelphia, PA. Dennis Maloomian, president and CEO of Realen, said that he has signed deals with Columbus, OH-based hotel company Red Roof Inn and Regal Cinema. He said he is looking for an appropriate restaurant to complete the development. The predicted cost of the hotel alone is over $20 million. The theater company is dedicated to construct a 16-screen complex. The completion of the project will increase the activity in Vine Street between 15th and 16th.

Vacancy supply of more than six million sq ft in 1999 will favor tenants in the real estate market of Philadelphia, PA, according to Wayne Fisher, senior vice president of Grubb & Ellis Co. Fisher said that although they anticipate an increase in leasing activity due to the termination of more leases in 1999 and 2000, there is a minimum projection of two to three years before the market starts to have a more manageable vacancy rate. Sublease space arising from merger activity to come on the real estate market in 1998 amounted to 900,000 sq ft, but the figure was countered somehow by the elimination of Five Logan Square from the inventory.

L.F. Driscoll Co. is a construction management firm that was able to succeed in business by building and nurturing relationships. Jack Donnelly, company president and CEO, said that L.F. Driscoll is the best-prepared construction group in the industry, very accurate on budgets and able to meet completion schedules. An observer noted that there is much dialogue in L.F. Driscoll and much room to operate within budget and still build an attractive structure. The company's success is mainly due to the control it exercises over the projects that carry its name.

Pierce Leahy Corp., a record storage company, plans to move from the King of Prussia Business Park to an 80,000-sq-ft building at the Providence Corporate Center in Collegeville, PA. Construction of the $13.6 million building is set to start on or before the end of 1998, with relocation scheduled for summer 1999. The company, which went public in July 1997, has been expanding fast due to the acquisition of several small record storage companies across the US. At the new site, Pierce Leahy will be adjacent to two large clients, Rhone-Poulenc Rorer Inc. and SmithKline Beecham.

Kvaerner Philadelpia Shipyard Inc., a shipbuilding division of a Norway-based firm, has forged an initial agreement with its unionized workers to operate in the Philadelphia Naval Business Center. The deal involves a five-year contract with the Metal Trades Council, which will construct the company's facilities in the Philadelphia, PA, site. The operation is expected to generate as much as 1,000 jobs in the following years. Kvaerner will also train some of its operators in Germany by 1999 and send up to 200 workers overseas for training at random schedules, according to unit president Harald Rafdal.

Lockheed Martin Corp. has sold its PRICE Systems to the unit's management team. The sale followed days after the New Jersey Economic Development Authority reported that PRICE will get $1.6 million via the state's new Technology Funding Program, becoming the first beneficiary of the state's new financing package designed to give financing money to technology companies. The company has 150 employees across the US and 35 in New Jersey. Its name stands for Parametric Review of Information for Costing and Evaluation.

Realen Properties Associates plans to purchase a location on Manayunk, PA's Main Street from Connelly Containers Inc. where it plans to start a $75-million residential and commercial development project. Plans call for the construction of riverfront apartments, a hotel and restaurant and shops. Realen emerged as winner in the bidding competition to develop the place. The plans foresee four elevated buildings that will merge street-level shops with several floors of luxury garden-style apartments. Plans for the buildings expect a tree-lined thoroughfare between them.

SJS Realty Management Inc. has purchased eight retail and office properties in three states amounting to more than 250,000 square feet of space for over $22 million. The firm bought five properties in South Jersey and the remaining in Maryland and Florida along with three partners of varying real estate background. SJS partner Stephen Cravitz said some of the properties were owner-occupied and dealt on a sale-lease-back arrangement, while the others were owned by private investors.

Union League of Philadelphia in Pennsylvania has disclosed plans to renovate its members-only inn at a cost of $5 million that calls for an addition of 40 rooms. The four-star establishment is aimed at establishing the 136-year-old historic club as a hotel business and deemed a preparation for the 21st century. Union League also decided to renovate the facility to help broaden the membership of the club and eliminate its reputation as a old boys' club of the past.

The Polaris Group, a two-year-old Wayne, PA-based real estate investment trust, recently acquired the Terrace East Apartments in Vineland, NJ, for $2.6 million and Ambit Court for $1.3 million. The purchases are part of the company's strategy to acquire apartment complexes in the 150- to 300-unit range, with middle-income tenants. The REIT will upgrade the Terrace East, but will overhaul and rename the Ambit Court to Springfield Green. The deals mark the trend of several REITs scrambling for properties in the region.

The DePaul Group, a Blue Bell, PA-based developer, wants to constuct a 16-story, 195-unit apartment building, with two or three levels of parking, on Piers 9 and 11 on Delaware River in Philadelphia, PA. The project, which will be adjacent to Penn's Landing, is estimated to cost between $15 million and $40 million. The development has received tentative approval from The Penn's Landing Corp., the non-profit entity that manages the development of Philadelphia's central waterfront on behalf of the city. Construction should start within a year or two should the developer wins the contract.

Brinton Land Development Associates LP has purchased a 76-acre property for more than $10 million in Concordville, PA, that will be renamed the Concord Business Park. The proposed mixed-use business park in Delaware County could include 550,000 square feet of office space and 150,000 square feet of retail shops, plus a hotel. Brinton purchased the site, which includes an 80% leased 75,000-sq-ft office building, located on Route 1 near Routes 322 and 202 from Brandywine Realty II Inc. The retail portion of the planned business park will have upscale specialty shop, high-end grocery store, a 120-room extended stay hotel and bank, rather than any 'big box' development.

W.A. Schmidt Inc. has initiated its relocation into 94,000 square feet of space at the former 900-acre Naval Air Warfare Center in Warminster, PA. The five-year lease is at what is now called the North American Technology Center and the move is expected to take several months. W.A. Schmidt is a producer of mezzanines, barrier rails, stacking cradle systems and custom support facilities for conveyer systems. The company's facility at the former naval facility comprised of corporate office space, production and inventory operations that are all housed in two adjacent plane hangars that were renovated. W.A. Schmidt intends to launch new engineering and design services for materials handling products, plus hire additional skilled employees.

Switzenbaum Realty Capital, a hotel developer based in Philadelphia, PA, has entered a deal to build a $100-million mixed-use facility in Baltimore, MD. The company is working with partners The Parkway Corp. of Philadelphia, The Kravco Co. of KIng of Prussia, PA, and A.R. Development of Baltimore for the project. The development, located at the former Lockwood Baltimore Community College, involves an eight-floor, 200,000-sq-ft office structure and a 200-room Hawthorn Suites Hotel as well as retail space of 100,000 sq ft and a car park for 700 cars.

American Real Estate Investment Corp. (AREIC), a publicly traded real estate investment trust, has raised $18 million from the sale of 1.1 million shares of its stock to several institutional investors. AREIC used the net cash proceeds of the private placement to repay a portion of its outstanding debt under its revolving credit facility and to partially finance previously announced acquisitions in Ohio and New York. On Jul. 10, 1998, the date when the private placement was completed, AREIC filed a shelf registration with the Securities and Exchange Commission to sell up to $500 million in common and preferred stock.

Philadelphia Suburban Water Co. (PSW) has signed a letter of intent to sell 33 acres of its property at the intersection of Old Welsh and Terwood roads in Lower Moreland, PA, to the Pennypack Ecological Restoration Trust, an incorporated nonprofit since 1970, for $900,000. PSW will get a charitable deduction for the balance of the property's appraised value of about $2.2 million. To preserve the property as open space, Pennypack Ecological Restoration Trust will place a perpetual conservation easement on the land once the sale is finalized.

One Penn Center at Suburban Station in Philadelphia, PA, is reportedly being sold by a consortium of of Japanese banks led by Asahi Bank of Tokyo, Japan. Australia-based Lend Lease Real Estate Investments Inc., a big mortgage brokerage house, is interviewing brokers as it weighs options. One Penn Center in Center City is known as an air-rights building, which means that the building itself is a separate entity from Suburban Station. Known for its spacious hallways and beautiful mosaics in its lobbies, One Penn Center is mostly occupied.

Arden Group has sold the 50,000-sq-ft Jacob Reed Building on Chestnut Street in Philadelphia's Center City to real estate investment trust City Center Retail Trust of Chicago, IL, for $4.75 million. The owner of Jacob Reed Building is 13 Corp., which is a partnership backed by Arden Group. In 1995, Arden acquired the building when four upper floors of office space of the property were empty and as Barnes and Noble was preparing to leave its space on the bottom floors. Since then, Community Legal Services and an affiliate occupy the office space and a CVS drugstore has occupied the former Barnes and Noble space.

ECS Underwriting of Exton, PA, will provide $40 million in coverage as part of the five-year customized environmental insurance policy that was recently acquired by Philadelphia Shipyard Development Corp. (PSDC). PSDC is a newly created company that is responsible in the facilitation of the arrival and funding of Kvaerner Inc., a shipbuilder based in Norway. ECS Underwriting's environmental policy covers Kvaerner's 114 acres, on which the firm has forged a lease for 99 years. PSDC was required to purchase an environmental insurance policy as stated in its agreement with Kvaerner.

Delta Organization of Valley Forge, PA, is converting the former location of Phoenix Iron & Steel into a campus of office towers, a potential extended-stay hotel and possibly, a museum. The Phoenixville, PA, development project, which will be called French Creek Corporate Center, would cost from $130 million to $250 million, according to Walter Logan, who is Delta Organization's president. Delta Organization is nearing to finalize a contract with a health-care firm that could occupy a space of over 1.3 million sq ft. Realty Group Inc. of Bala Cynwyd, PA, is in charge of leasing for the development project.

Resource Asset Investment Trust (RAIT), a real estate investment trust headquartered in Philadelphia, PA, issued additional shares of common stock totalling 2.8 million shares at $15.75 a share to generate $45 million. In its initial public offering effected earlier in 1998, the company generated $49.3 million. After the secondary offering, the share value of RAIT gained by approximately $2 per share, partly because of the company's sound performance in its first two quarters and the potential to declare a second-quarter common stock dividend of 48 cents a share.

Philadelphia Management Co. president Ron Caplan has quietly become one of the biggest landlords in Center City, PA. Caplan reportedly owns more than 50 buildings in Center City, several of them are old office structures that he has refurbished and transformed into apartments. Caplan is a mid-1970's graduate of Northwestern University, holds a reputation among colleagues and brokers as a niche developer of small buildings. His low-profile has been raised lately due to his partnership with a couple of financiers who have created a real estate fund, with a target capitalization of $500 million in property assets.

Resource Properties Inc. of Philadelphia, PA, has paid $3.6 million for the Sheridan building at Ninth and Sansom streets in Center City. The company bought the mortgage and the note of the building but not the real estate, stated an investment broker with CB Richard Ellis. The company reportedly saw strong potential in the area, where Jefferson University Hospital is one of the major tenants. Resource Properties is a specialty finance company that focuses on equipment leasing and real estate financing. The outfit, a wholly-owned subsidiary of Resource America Inc., purchases a lot of mortgages and loans.

Independence Blue Cross has placed its 45-story tower measuring 761,000 square feet up for sale and is currently soliciting bids for the structure build for $190 million in 1989. The building is the latest in a series of Class A office structures in Center City, PA, to go on the block. Independence Blue Cross, the sole tenant of the office tower, is said to have decided to sell its building to raise capital for growth and was prompted by the availability of cash and low interest rates. The company is not expected to relocate once a sale of the tower is completed, optimizing its asset through a sale lease-back.

Equis Corp. of Chicago, IL, has opened an office at Center City in Philadelphia, PA, as part of an effort to enter the regional markets and better serve clients. The real estate services firm offers tenant representation, construction management, finance and workplace productivity consulting for the real estate end-user. Equis, which created a Center City office for its outsourcing client CDI Corp., measures cost as a function of goods and services expenses and the return on net assets for owned properties. Equis currently has six real estate representatives in Philadelphia, a number expected to reach 15 by the end of 1998.

Kranzco Realty Trust of Conshohocken, PA, and Highstown, NJ-based New America International (NAI) have formalized an alliance enabling the latter to go public. The deal calls for NAI to undergo a two-stage recapitalization in which Kranzco will retain around 9% of ownership. Kranzco is required to first perform an exchange bid for 80% of NAI outstanding common stock, issuing convertible subordinated notes in the swap slated in a decade. Kranzco will then spin off approximately 88% of its estimated 12 million shares that account for 70.2% of all outstanding NAI stock to its shareholders on a one-to-one basis.

JeffBanks Inc. inked a letter of intent to purchase Pioneer Mortgage for undisclosed terms, and make it a wholly owned mortgage lending subsidiary. The acquisition proposal involved exchanging Pioneer stock with JeffBanks common stocks for the stockholders of the mortgage lender specializing in government-backed home loans. JeffBanks CEO Betsy Z. Cohen said that Pioneer's expertise in the Federal Housing Authority and Veterans Administration mortgage lending areas attracted the Downingtown, PA, operation.

Acorn Development Co. owner Donald Resnick revealed two projects in Plymouth Meeting and in Oaks are scheduled for construction later in 1998 and that his huge Four Falls II project is under soft marketing. Resnick is expected to build twin 36,000-sq-ft office buildings in the Oaks Corporate Center on spec with longtime partner, David Gardner. Meanwhile, Four Falls II is a two-phased undertaking for the north of the original Four Falls complex. The development projects indicate that the company is pushing forward even after most of its portfolio was acquired in 1997.

Eastern Environmental Services Inc. increased its number of board of directors to five members from three and issued 7.5 million new shares in stock at a May 21, 1998 secondary offering. The shares during the recent offering were priced at $26.38 each. These are some of the moves the fast-expanding nonhazardous solid waste management firm made in an effort to maintain its growth. Eastern Environmental also bought six new firms in its continuing buying spree including Regional Recycling Inc. and Allegro Transportation and Recycling of New York.

Connelly Container Corp. intends to shut down its Manayunk paper mill in Venice Island in Philadelphia, PA, in early July 1998. Connelly Container has already sent notices to the mills' 50 workers early May 1998 regarding their forthcoming termination. Connelly Chairman Tom Connelly stated that the mill has become uncompetitive brought about by modifications in the paper manufacturing industry in the last years. Several real estate developers are already eyeing the mill site for a possible redevelopment.

Chrysler Corp.'s planned consolidation with Daimler-Benz AG of Germany increases profits for financial institutions and other investors brought about by a boost in Chrysler's stock prices. Chrysler immediately experienced a 25% boost in its shares after the Wall Street Journal published an article about its proposed merger with Daimler-Benz. The proposed merger, which is being treated as a stock swap, requires each share of Chrysler stock be worth 0.547 shares of Daimler stock, or $58.80 per share.

Nine Penn Center Associates has allegedly sold the mortgage on the Mellon Bank Center on West Market Street in Philadelphia, PA, for an undisclosed amount. Neither the company nor its parents, the Rubin Organization and the Equitable Property & Casualty Co., will comment on the rumored divestiture. The 53-floor, 1.2-million-sq-ft, pyramid-capped building, which was built in 1990, has been hit with the decline of the real estate market in the 1990s that resulted in lower than expected rates for its office spaces.

The Blackstone Group of New York and the The Rubenstein Co. of Philadelphia, PA, are selling the One and Two Logan Square office towers in downtown Philadelphia. The prime Class A office buildings, which were acquired in 1997 by the New York merchant bank and the Philadelphia REIT, are included in a package that is being marketed by the Blackstone Group. The package include 13 other office buildings located in New York, San Francisco, CA, Chicago, IL, Washington DC, Cleveland, OH, San Diego, CA, Sacramento, CA, Dallas, TX, and Austin, TX.

Never mind the Allegheny layoffs. Forget about those lost First Union jobs. The Philadelphia job market nowadays reflects the dilemma facing many employers and those seeking work nationwide: Thanks to [...]

Shifting direction, the Girard Estate has now decided to sell its string of abandoned and deteriorating warehouses in Old City. The move comes after years of neglect and speculation on [...]