PHILADELPHIA | Highrise Development Thread IX

[1487]

Originally Posted by Philly Kid

http://mobile.philly.com/beta?wss=/philly/news/politics&id=367166611

The bloated and unfunded pension obligations are my biggest worry for the city moving forward. I really hope some forward thinking minds can get together on this and work towards a solution. Huge tax increases across the board to cover these obligations are not what's needed right now as the city continues it's revival.

PGW sale would've helped (although it wouldn't have solved it) and we know how that went. This will be major challenge going forward.

[wanderer34]

Originally Posted by 1487

PGW sale would've helped (although it wouldn't have solved it) and we know how that went. This will be major challenge going forward.

I've always felt that what's really holding the city back aren't just the lack of innovative thinkers, the inferiority complex and the high concentration of NIMBYism that's killed projects like the ACC and has stunted SEPTA's transit coverage, but it's the assets like the airport and PGW which has bloated the city's budget.

Considering that energy costs have skyrocketed, it would've been smart to have let go of PGW and the airport decades ago, but for some strange reason, due to the culture of rampant corruption in City Hall, those two assets still remain as city owned and operated property. The airport needs to be independent of the city, in other words, sell it to DRPA, or create an independent airport authority. As fro PGW, sell it to either one of the PA utility companies (UGI or PP&L) or turn PGW into another private company.

With privatization of the two agencies, the city can concentrate fully on education, public safety, infrastructure, sanitation, and quality of life issues rather than allowing the airport and PW to make up a sizable chunk of the city's budget!!!

[PhilliesPhan]

I don't know if this has ever been posted here, but, apparently, the PHA is planning to replace the Norris Homes in North Philly.

http://www.pha.phila.gov/media/101228/att39conceptualdesign.pdf

To me, I think this needs to happen as soon as possible!

[PhillySteaks]

Originally Posted by Cro Burnham

Brickstone's boss John Connors rocks. I met him a few times several years ago and the guy is all about quality as far as I was able to tell. Like some club-wielding mad Celtic warrior fighting for good development, he seems to have fierce pride in his product . . . . unlike, say, a Blatstein or a Caplan.

I've never met Jim Pearlstein, but he also seems like the genuine article based on the work Pearl has done so far. And I think Carl Dranoff loves his buildings too, even though he seems to need a good, strong-willed architect to keep his aesthetic sense in line.

Brickstone isn't the majority equity in any of these deals. The fact that the buildings are of higher quality speaks to the large institutional RE fund that is providing a majority of the equity in all these transactions and has relatively high standards for their developments. They are top 5 RE investment group in the world by AUM and specifically choose to leave their name off of just about everything they are a part of to stay out of the press, etc. Find it funny how they got 1100 Chestnut done with no parking and no one complained? That wasn't a coincidence - they have a lot of sway. Brickstone is probably 15% of these deals, and their partners are happy to have their name all over it and not their own.

[Larry King]

Originally Posted by PhillySteaks

Brickstone isn't the majority equity in any of these deals. The fact that the buildings are of higher quality speaks to the large institutional RE fund that is providing a majority of the equity in the deals and has relatively high standards for their developments. They are top 5 RE investment group in the world by dollars and specifically choose to leave their name off of just about everything they are a part of to stay out of the press, etc. Find it funny how they got 1100 Chestnut done with no parking and no one complained? That wasn't a coincidence - they have a lot of sway. Brickstone is probably 15% of these deals, and their partners are happy to have their name all over it and not their own.

institutional $$ is going into a spec office-retail deal like the hale building? Really?

[PhillySteaks]

Originally Posted by Larry King

institutional $$ is going into a spec office-retail deal like the hale building? Really?

I'm not going to disclose a lot of specifics, but the consolidation of additional properties in the specific submarket, retail specifically, had to do with pushing the momentum to turn the area around quicker. The timelines for the 1100 "original" development were falling out of the timing returns guidelines of the majority partner. Those "add-ons, i.e Hale Building" were incorporated to the original JV since retail tends to be synergistic. The majority partner wasn't pleased about the need for add-ons....or so I hear.

[Larry King]

Originally Posted by PhillySteaks

I'm not going to disclose a lot of specifics, but the consolidation of additional properties in the specific submarket had to do with pushing the momentum to turn the area around quicker. The timelines for the 1100 "original" development were falling out of the timing returns guidelines of the majority partner. Those "add-ons" were incorporated to the original JV. The majority partner wasn't pleased about the need for add-ons....or so I hear.

Cool, i need partners like that!

[summersm343]

University City
The build up of this area in the past few years is amazing.



http://www.searchphillylistings.com/blog/Hard+Hat+Tour+At+Cira+Centre+South

[Cro Burnham]

Originally Posted by PhillySteaks

Brickstone isn't the majority equity in any of these deals. The fact that the buildings are of higher quality speaks to the large institutional RE fund that is providing a majority of the equity in all these transactions and has relatively high standards for their developments. They are top 5 RE investment group in the world by AUM and specifically choose to leave their name off of just about everything they are a part of to stay out of the press, etc.

That makes a lot of sense, I guess. Brickstone is not a giant company as far as I know. It's not surprising most of the equity is coming from a big player. I'm not surprised that they are working with Brickstone, though, if quality is what they are after. I wonder who's backing most of Pearl's stuff.

It's great to hear though, that the international money is finally flowing to this city in what appears to be a pretty big way. I just hope the deals perform to get these companies more interested in what I think many of them have viewed until recently as kind of a sleepy backwater of a city.

[jsbrook]

Anyone have any intel on when the garage at Broad and Locust might come down for Pearl's highrise? I believe the Notice of Demolition said something like on or after 9/30. But here it sits.

[cubanChris]

Originally Posted by jsbrook

Anyone have any intel on when the garage at Broad and Locust might come down for Pearl's highrise? I believe the Notice of Demolition said something like on or after 9/30. But here it sits.

They have been working on it, taking it down piece by piece. So it is likely to be a very very slow process.

[1487]

Originally Posted by jsbrook

Anyone have any intel on when the garage at Broad and Locust might come down for Pearl's highrise? I believe the Notice of Demolition said something like on or after 9/30. But here it sits.

There has been scaffolding up for months. They are doing something inside of the garage, but I can't figure out what. I suppose they will be taking it down floor by floor due to its location, there really isn't much room for demo equipment around this site. I think its going to be a very slow process.

[Parkway]

Originally Posted by 1487

There has been scaffolding up for months. They are doing something inside of the garage, but I can't figure out what. I suppose they will be taking it down floor by floor due to its location, there really isn't much room for demo equipment around this site. I think its going to be a very slow process.

They also had to do asbestos abatement work before they could start.

[summersm343]

Parking Authority and Brickstone in talks for two more buildings in booming Market East

Now, even the Philadelphia Parking Authority (PPA) is getting into the mix. The PPA board authorized ongoing discussions with Brickstone Companies, a real estate developer that has invested heavily around Market East recently, to replace its dilapidated garage at 10th and Chestnut with a pair of new buildings.

PPA owns and operates a 450-spot parking garage at 10th and Ludlow Street; that property includes 60 feet of long-vacant street-level retail at 1023-29 Chestnut Street. Brickstone, which bought neighboring 1021 Chestnut Street in 2014, approached the PPA last year with a development proposal for both properties. The proposed development would include a 650-lot parking garage, first-floor retail, and a to-be-determined mix of residential and commercial space above. The lots are zoned CMX-5, the most permissive designation for high density, mixed use development.

PPA would run the new garage, and Brickstone would manage the buildings above and street level retail, which PPA Deputy Executive Director Richard Dickson admitted, “we’re not good at.”

“Our primary focus is not retail,” said Dickson. “We provide parking. But related to parking, we really need to make sure that the street presence, where that retail is, is something that attracts people.”

Last week’s PPA board vote only approved continued negotiations and due diligence with Brickstone—nothing will be set in stone unless both sides enter a contract, which would require additional formal authorizations by the PPA board—but Dickson told PlanPhilly that he hopes that construction could begin before the end of 2016.

http://planphilly.com/articles/2016/02/0...wo-more-buildings-in-booming-market-east

[Knight Hospitaller]

^^^ I hope that the wrecking ball takes a wide swing toward that block along Market. It does seem like the pressure is on those decrepit parcels adjacent to East Market, the renovated Gallery and Brickstone's projects.

[PhillySteaks]

Originally Posted by Cro Burnham

That makes a lot of sense, I guess. Brickstone is not a giant company as far as I know. It's not surprising most of the equity is coming from a big player. I'm not surprised that they are working with Brickstone, though, if quality is what they are after. I wonder who's backing most of Pearl's stuff.

It's great to hear though, that the international money is finally flowing to this city in what appears to be a pretty big way. I just hope the deals perform to get these companies more interested in what I think many of them have viewed until recently as kind of a sleepy backwater of a city.

When a large fund doesn't invest in a city like Philadelphia, it doesn't necessarily mean that the city isn't any good. Most larger funds invest for state pensions, or sovereign funds, which require a low amount of volatility and purely core class A assets, think 3-4% returns. That being said, large funds targeting core assets are generally looking for office buildings, etc. north of $100M in valuation. Philadelphia doesn't have too many of these types of buildings (think liberty 1 & 2), they also don't trade that often, hence a large institutional fund if present may only own 1 or 2 buildings here as opposed to say Manhattan where they may own 10-15 Class A buildings that could rise up over $1B in valuation a piece. They have a lot of capital to deploy for their investors and strict requirements on what they can do with it - Philadelphia doesn't have the constant pipeline for acquisitions in that range so large money stays away for the most part. They may rear their head when something big comes on the market. Value Add funds and smaller core players, or opportunistic players have definitely been more involved in this cycle than in previous ones. So still a good sign for Philly.

Now if we can solve the trash issue. Was walking past the art museum on sunday and it looked like a dump truck unloaded a dumpster at the foot of the steps. Looks like it sat there for days. Very sad that tourist attractions look like that.

[shadowbat2]

Originally Posted by summersm343

Parking Authority and Brickstone in talks for two more buildings in booming Market East



http://planphilly.com/articles/2016/02/0...wo-more-buildings-in-booming-market-east

YES!!!
I was thinking the other day about how someone should redevelop that cement turd. Brickstone also owns the library shell next door I believe....

[jsbrook]

Originally Posted by 1487

There has been scaffolding up for months. They are doing something inside of the garage, but I can't figure out what. I suppose they will be taking it down floor by floor due to its location, there really isn't much room for demo equipment around this site. I think its going to be a very slow process.

Yes, I see the scaffolding. But it's been unchanged visually for months. But if it's just a slow process and has begun as you and cubanChris say, that is good.

[ePlanningPhila]

Here is the full rendering for The Beacon, Pearl's latest project at 16/Walnut.



Mixed Use Project.
100 Apartments.
14 Story.
10,000 Square Foot Under Amour Store to anchor first floor.
Pearl says it is their most ambitious project yet.

Anyone want to guess what a one bedroom will start here??

My guess is around $2500. Maybe more.

Also what does everyone think about compromising the architectural integrity of the Brown Brothers Harriman building? I have mixed feelings. Good to see this location utilize the highest form of land use with the added density, but I am not sure this is a precedent we should set for historic buildings, especially since the design is nothing exemplary.

[Larry King]

I think the design is really cool, we'll see on execution but the design itself is fine. I personally have no problem with building above historic structures as long as the historic portion is respected and the design is tasteful.