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Real Estate Bisnow
   
January 11, 2013 
 
 
This Hospital Is
Not What It Seems

 
The Skanska-built Nemours/Alfred I. DuPont Hospital for Children in Wilmington, Del., is one of the largest new construction jobs in the state. But how it was built is attracting more attention. Skanska USA’s Ed Szwarc, GM for the Philadelphia region, revealed the magic word: prefab.
 
Ed says more clients are interested in prefabrication/modular construction these days, which Skanska believes is more efficient and safer for workers. The hospital is prefabricating many of the internal features: above-ceiling mechanical racks, patient and treatment headwalls, medical gas zone valve boxes, work stations, and bathroom pods. It's designed by FKP Architects. Prefabricating an entire building is also possible. (It's the opposite of David Copperfield making one disappear.) Skanska’s New York office recently broke ground on B2, the tallest modular residential building in the US, with Forest City Ratner Cos.
 
In general, more buildings will be built in greater Philadelphia than last year, Ed tells us. Unsurprisingly, multifamily projects will continue to be hot, but demand will also be strong for various structures associated with higher education, Ed tells us. Student enrollment is high, and so is tuition, giving institutions money to work with. Skanska USA is working on the first phase of a three-part major expansion to the University of Delaware’s East Campus Residence Hall Complex, to be ready this fall.
 
Chima (flames) MPHI

Most Office Markets in Expansion Mode
 
At Integra Realty Resources' annual forecast this week at NYC’s Harvard Club, IRR Philly head Joe Pasquarella told us that half the 65 US office markets IRR tracks are in recovery or expansion mode, and only 10 are in full-blown recession, including Baltimore, Atlanta, and Northern New Jersey. Philly has the lowest vacancy (9%), but that’s because no new office has been built in four years (other than Comcast’s build-to-suit).
 
Bisnow (PropManage)

Tenants Pay For a Little Flare
 
Also in demand: apartment space that’s had some nips and tucks. The Solomon Organization’s Marshall Rosen tells us that even though rents are rising on the whole, tenants are now willing to spend more on apartments. Owners willing to refresh their holdings could capture a piece of that interest, especially in markets containing mostly older housing stock. Toward that end, the company recently acquired Chesterfield Gardens at 210 Harding Rd in Freehold, NJ.
It’s a cycle the company has been through before, Marshall says. In the mid-2000s, Solomon sold multifamily properties that it had owned and renovated over previous decades, especially in New Jersey, and used the proceeds to expand into parts of Pennsylvania and NY. The company will spend as much as $3M to renovate the newly renamed Chesterfield at Freehold Township, redoing kitchens and bathrooms and adding double-hung thermally insulated windows in all apartments as they turn over. (As far as pauper symbolism goes, having a single-hung window is the new pockets turned inside out.)

High School Becomes Retail
 
Complex financing is in place for the $12.8M first phase of the Edison Square retail redevelopment of a unused high school at Eighth and Lehigh. (We won't know if it's a Class-A building until report cards are issued.) Mosaic Development Partners principal Greg Reaves tells us that there’s value in investing in disenfranchised neighborhoods to spur economic development. “If gap financing dollars aren’t available for projects like Edison Square, they wouldn’t go forward and these communities will only fall further behind in job creation and quality of life.” Mosaic partnered with Orens Brothers Real Estate to do the redevelopment, which is being funded by the Reinvestment Fund, Wells Fargo, the Philadelphia Industrial Development Corp, the state Dept of Community and Economic Development, and HUD.

Upcoming Bisnow Events!
 
Tuesday, Jan. 29, 7am-10am. Bisnow's Philadelphia 2013 Economic & Real Estate Forecast. Join some of the most influential business and CRE leaders as they discuss the dramatic decisions that the region will face in the upcoming year. Register here.
 
It's better to swallow words now than to have to eat them later. Send ideas and suggestions to dees.stribling@bisnow.com.
 
 
 
 
Indulgence Cupcakery
 
Drinker Biddle (value) PH
 
South NJ Dev (Jan)
 
Chima (steak/flames) PHI
 
NewAcre (300k) PHI
 
Bisnow (Sales)
 
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