The Real Deal New York

Camden gears up for a $1 billion waterfront makeover, Thor bets on Chicago, and more...

National market report
By Fang Block | January 01, 2017 01:00PM

Camden waterfront

Camden, New Jersey

Construction on the first phase of the $1 billion Camden Waterfront project is set to begin now that developer Liberty Property Trust has finished assembling land and development rights at the site, according to the Philadelphia Inquirer. One Water Street, a five-story, 222,376-square-foot office project, will serve as the corporate headquarters of American Water when it is completed in late 2018. The company is the largest investor-owned U.S. water and wastewater utility company. Camden, which once had the highest murder rate in the country, sits across the Delaware River from Philadelphia. The 26-acre project is intended to transform the city’s long-dormant waterfront into a thriving neighborhood. It will include about 1.5 million square feet of commercial space, 200 residential units, a new ferry stop and a hotel. Liberty announced its plan last September and set about acquiring land and development rights from state and local authorities. It has also reached an agreement with Dranoff Properties, which owns a property near the site that will lose an unobstructed view of the Delaware River due to the new development. Liberty was the developer behind Philadelphia’s Comcast Center and that city’s Navy Yard rehabilitation.

Seattle

Seattle’s South Lake Union neighborhood is luring more high-tech companies from Silicon Valley.  Facebook, which just opened a Seattle office this spring, is leasing a pair of new buildings in the area, with the potential to double its presence in the city, according to the Seattle Times. The two buildings are part of the $246 million Arbor Blocks project developed by Paul Allen’s Vulcan Real Estate. The project consists of two six-story offices with ground-floor retail. The offices, which have a total of 383,900 square feet, are adjacent to Amazon’s 12-story Apollo building. Google’s South Lake Union campus, also developed by Vulcan and set to start construction this month, is just a few blocks away. “I think they’re a great fit for the neighborhood and the project,” said Lori Mason Curran, a Vulcan executive. Facebook has about 1,000 employees in Seattle — all of whom last spring moved into a building on Dexter Avenue North that has the capacity to accommodate twice that many people. The new offices are slightly bigger, meaning the company could eventually have more than 4,000 employees in Seattle.

Union Station

Washington, D.C.

With the opening of a huge new REI store, NoMa, a neighborhood in the northeast corridor of Washington, seems to be back on track in establishing itself as a thriving live-work-play district, the New York Times reported. NoMa — north of Massachusetts Avenue NW — began to take shape about a decade ago when city planners and developers envisioned a commercial hub near the city’s main transportation hub, Union Station. The recession derailed the neighborhood’s progress, however, and raised doubts about its future. But REI’s recent decision to open a 52,000-square-foot store there has cast a vote of confidence. “It’s definitely an up-and-coming neighborhood,” said Kevin House, REI’s director of flagship stores and strategy. “It’s one of the fastest-growing in D.C., has a well-organized business climate, and there is lots of potential for development around us.” Currently, more than 3 million square feet of residential, retail and office space are under construction in the neighborhood, according to the NoMa Business Improvement District. Additionally, there are 360,000 square feet of occupied retail space, with more expected in 2018 and 2019. And the district now has a population of about 6,400 people, living in 3,800 apartments — there were none in 2010. Of the 54,000 people who work in NoMa, almost half are employed by federal agencies, including the Consumer Financial Protection Bureau and the Justice Department. Over the last few years, the government started moving more offices there to take advantage of cheaper rents, but now NoMa’s rents are rising, and vacancy rates are at a low 4.5 percent, according to the Times.

Chicago

New York-based Thor Equities just forked over $36.1 million for two properties in Chicago’s Fulton Market, with plans to turn the former beef distribution buildings into office and retail spaces, the Chicago Tribune reported. The firm is already in talks with a variety of retailers about taking space at the buildings, one on North Peoria Street and the other on West Fulton Market. The Fulton Market, a former meatpacking hub on the edge of the city’s downtown, is in the midst of transforming into an office and shopping district. After Google moved its Chicago office from River North to the Fulton Market in 2015, a dozen of other firms followed suit. Now hotels, residential buildings and retailers are starting to find their way to the neighborhood. “It’ll be interesting,” said Mike Rourke, vice president of commercial asset management at the real estate brokerage @properties. “You’re going to have a big work population in the area that will really make that neighborhood very vibrant.” This summer, McDonald’s announced it would build a global headquarters on the former site of Oprah Winfrey’s Harpo Studios, which is expected to bring more traffic and businesses to the area. Thor already owns other properties in the Fulton Market area, including one across from Google that it’s in the process of renovating into retail and office space. Additionally, it owns the Palmer House Hilton in Chicago’s downtown Loop. The seller was beef distributor John R. Morreale Meat Co., which moved to Bedford Park in October.