The Suburbs Aren't Dead
They’re not even undead. That was the message our record-turnout crowd heard at our first-ever Future of the Suburbs Summit in King of Prussia. (Though the thought of undead soccer moms is itself epic.)
For one, the 'burbs are finally shedding their image of sprawl, says Pennoni SVP Joe Viscuso (left, with JLL managing director Mike Morrone, Keystone SVP Rich Gottlieb, and Hayden REI's CEO Tony Hayden). Joe sees more clustering around urban nodes that are transit-oriented, like West Chester to Doylestown, with projects such as the renovations to the Malvern train station having positive impacts on growth.
Gen Xers with kids and downsizing Boomers are the key demographics for these nodes. Rich says Keystone is pursuing mixed-use developments along City Avenue in Bala Cynwyd to give people a live/work/play locale, and rezoning single-use properties will be a necessary component of that. Plus, having restaurants and other retail outside the 9-to-5 window helps a lot in easing traffic congestion.
Hayden Real Estate Investments hosted us at 150 South Warner Rd, in 32k SF of third-floor space. To get it ready for lease, Tony says the floor is getting a full renovation. He and the panelists agree that the new office economy looks a lot different. Tenants are seeking leases for smaller spaces and ditching cubicles for open-floor plans and collaborative spaces. (Mike, our moderator, quipped that this event was the first time brokers were actually paying a landlord to see their property.)
While homeownership dominates, at least a third of the population will continue to rent, Morgan Properties CFO Patrick O’Grady says (left, we snapped him with Liberty VP Tom Sklow). Indeed, Fannie and Freddie have been good for multifamily in the suburbs by providing loans at the same rates as the city. It's true that job growth post-recovery has been less than robust, but Pat believes that long-term population patterns favor a rising tide that will lift all boats. (Double great news for multifamily house boats.)
What about demand for amenities? Tom says it's great for larger developments like Liberty's 700-acre Great Valley Corporate Center, which includes daycare, fitness centers, and shopping to go with over 3MSF of office space. But for buildings under 100k SF, these things may be harder to sustain. Still, Brandywine SVP Jeff DeVuono says people expect a high-end product: “A lukewarm approach to amenities doesn’t have the same payback,” Jeff says. He also sees the end of low interest rates, with Tom predicting more M&A activity before rates angle upward. (It's like junior prom: Everyone looks for a dance partner before they play Green Day's "Good Riddance.")
Hayden acquired 150 South Warner (aka Walnut Hill Plaza) through a partnership with MIM last August. (Pictured: VP Tara Hayden, founder Tony Hayden Sr., CEO Tony Hayden Jr., and Stephanie Hayden.) The four-story building includes over 45k SF in leasing opportunities and is getting brand new elevators, restrooms, and lighting. Located just off the Turnpike and the 202 corridor—not to mention right by a fancy Wegman's—the team sees 100% occupancy as a realistic achievement.
JLL's Center City and suburban offices came out in force. Snapped: Blaise Fletcher, Mike Morrone, Jen Lamprecht, Doug Rodio, Chris Werner, and Patrick Gallagher. JLL just repped COPT, the owner of Arborcrest in Blue Bell, in securing a long-term 150k SF lease, bringing the 656k SF campus to 85% occupancy.
Everyone's a winner at our events, but not everyone gets to go home with a jar of jellybeans. First-time Bisnow attendee Chris Soto, an accountant with Kreischer Miller, posed with our Pat Hanahan to show off his prize: Chris came the closest with his guess of 1,921 jellybeans. Actual count: 1,850. (Seriously, an accountant, who woulda thunk?)
