Navy Yard's New Development Team Announces First Projects, Including Spec Lab Building

The new development team in charge of the Philadelphia Navy Yard's future has revealed the first piece of what that future will be.

Mosaic Development Partners and Ensemble Real Estate Investments announced on Wednesday the finalization of their joint venture's agreement with the Philadelphia Industrial Development Corp. to be the exclusive developer for 109 acres at the Navy Yard and the first details of what will ultimately be a $2.5B master plan.

The first projects that Mosaic and Ensemble will undertake as part of the master plan's $400M first phase will be a speculative 100K SF lab and office development and a build-to-suit biomanufacturing facility awaiting pre-leasing that could be as large as 150K SF. The lab/office project is making its way through the entitlement process, but groundbreaking is expected in either the fourth quarter or early 2022, with a 10-to-12-month construction timeline, Ensemble Senior Vice President of Development Mark Seltzer told Bisnow.

The biomanufacturing plant will be built to current Good Manufacturing Practice, or GMP, standards, but little is determined about its design beyond that, as operators require too much specificity in their plants for a speculative building to be feasible, Seltzer said. The requirements for life sciences companies expanding out of incubators and beginning to draw revenue are established enough and in such high demand as to justify a speculative project.

“From the demand standpoint, there are a lot of tenants that want to be at the Navy Yard because they see themselves starting at 5K-10K SF and keeping that for their lab and offices while expanding into some GMP space down the block,” Seltzer said. “And that opportunity to keep things close together is drawing demand from across the region.”

It is that demand, driven by Philadelphia's primacy in cell and gene therapy research and development, that has led to a mad dash among developers to deliver new space, from Brandywine Realty Trust's next phase of Schuylkill Yards to the Discovery Labs' humongous plans in King of Prussia.

Ensemble, which developed the Navy Yard's original hotel components, has been buying up property built by the area's last master developer, Liberty Property Trust, including Wuxi Advanced Therapies' GMP facility that is the only one of its kind within Philadelphia city limits — but not for long. Ensemble is now the largest owner in terms of square footage at the development district even before building any of its own projects.

That ownership will allow Ensemble and Mosaic to modify some of the corporate headquarters and other lab/office facilities to include some ground-floor retail and other forms of placemaking when the latter parts of its Phase 1 begin to deliver, Seltzer said.

“When we think about our retail strategy, we’re not only thinking about what we’re going to build, but what we already own and how we can leverage existing assets to create a better place in total at the Navy Yard,” Seltzer said.

After the spec project and the GMP facility, which will sit at 1201 Normandy Place and 333 Rouse Blvd., respectively, the developers will turn to converting some of the historically protected buildings in what PIDC has called the historic core of the Navy Yard into apartments. As many as 1,500 units can be created from redevelopments, the Philadelphia Inquirer reports.

Before any details about residential development will be released, Ensemble and Mosaic will announce a slew of programs and partnerships to foster diversity and inclusion of women- and minority-owned businesses. Mosaic, a Black-owned developer led by Leslie Smallwood-Lewis and Greg Reaves, has years of experience bringing new mixed-use life to developments in Philly's historically disinvested neighborhoods.

“From the teams we assemble to design and build the buildings, to the projects and people who will occupy them, the Navy Yard will be a more inclusive place for all,” Reaves said in a statement provided with the press release. “Our collective goal is to create a national model that combines institutional development and inclusive strategies in new and exciting ways.”