PHILADELPHIA | East Market | 284 & 248 FT | 24 & 20 FLOORS

[Redddog]

Originally Posted by Londonee

Really, why? The thing is under crazy construction right now.

As an aside, I think Iron Hill is a perfect tenant. It's local, Philadelphia-enough - and will be a nice draw for tourists. It will be activated outdoors during warmer months and provide a fun backdrop for the pedestrian shopping stretch. Now, as a joint for locals, like me? Not so much.

Still looking forward to more resident-oriented lifestyle shops like Crate + Barrell, Container Store, Home Goods, etc.

Agree. I won't go there but it's a draw to the area for a lot of other people. There's still so much more available space but someone putting "their first urban location" in that space shows that there will be a nice pull in the area.

[1487]

Originally Posted by Londonee

Really, why? The thing is under crazy construction right now.

As an aside, I think Iron Hill is a perfect tenant. It's local, Philadelphia-enough - and will be a nice draw for tourists. It will be activated outdoors during warmer months and provide a fun backdrop for the pedestrian shopping stretch. Now, as a joint for locals, like me? Not so much.

Still looking forward to more resident-oriented lifestyle shops like Crate + Barrell, Container Store, Home Goods, etc.

I mean with opening set for summer 2018 I don't expect a major announcement of signed tenants in the near future. The East Market project has yet to do a major multi-tenant press release and it's supposed to open this summer. It seems most PREIT info is learned from the investor conference calls they do and they aren't big fans of announcing stuff directly to the public.

[jsbrook]

Honeygrow is moving to the ground floor of the Steele Building on 11th (next to CVS and across from the tower).

[Urbanthusiat]

^^Another awesome Philly-based store

[New2Fishtown]

Originally Posted by 1487

I mean with opening set for summer 2018 I don't expect a major announcement of signed tenants in the near future. The East Market project has yet to do a major multi-tenant press release and it's supposed to open this summer. It seems most PREIT info is learned from the investor conference calls they do and they aren't big fans of announcing stuff directly to the public.

They've yet to do a Q4 2016 earnings call (to my knowledge), so perhaps we could expect or at least hope for some spilling of the beans at that point. They've taken pointed questions about progress on the project in the last several consecutive calls, so it would seem prudent to throw out a bone now that there's visible progress being made. My understanding is that they have several dozen commitments already, some of which seem like big news to me. Then again, they may be waiting for a very particular piece to fall into place, or perhaps a previously committed tenant has pulled out, putting them back into a precarious position.

I think it's safe to assume we'll hear more retail announcements from both of these projects during the course of 2017.

[1487]

Originally Posted by New2Fishtown

They've yet to do a Q4 2016 earnings call (to my knowledge), so perhaps we could expect or at least hope for some spilling of the beans at that point. They've taken pointed questions about progress on the project in the last several consecutive calls, so it would seem prudent to throw out a bone now that there's visible progress being made. My understanding is that they have several dozen commitments already, some of which seem like big news to me. Then again, they may be waiting for a very particular piece to fall into place, or perhaps a previously committed tenant has pulled out, putting them back into a precarious position.

I think it's safe to assume we'll hear more retail announcements from both of these projects during the course of 2017.

I hope someone can do a photo update on the FOP because the physical changes are immense even though construction has only been underway for a few months. Every aspect of the exterior of the building is being changed visibly as we speak. On the inside they have blocked off everything adjacent to Jefferson Station for construction.

[Londonee]

Originally Posted by New2Fishtown

They've yet to do a Q4 2016 earnings call (to my knowledge), so perhaps we could expect or at least hope for some spilling of the beans at that point. They've taken pointed questions about progress on the project in the last several consecutive calls, so it would seem prudent to throw out a bone now that there's visible progress being made. My understanding is that they have several dozen commitments already, some of which seem like big news to me. Then again, they may be waiting for a very particular piece to fall into place, or perhaps a previously committed tenant has pulled out, putting them back into a precarious position.

I think it's safe to assume we'll hear more retail announcements from both of these projects during the course of 2017.

Sounds like you have inside knowledge. Why not share? Perhaps cryptically?

For example - they've signed a tenant that rhymes with Bucci. Or, what store is directly correlated to High Store. Or what do you get when you merge Eat with Italy?

[shadowbat2]

Originally Posted by 1487

I hope someone can do a photo update on the FOP because the physical changes are immense even though construction has only been underway for a few months. Every aspect of the exterior of the building is being changed visibly as we speak. On the inside they have blocked off everything adjacent to Jefferson Station for construction.

Here's my album for the Gallery:
page one (construction starts towards the bottom)
page 2 (start of exterior work)
Hopefully I can get a February update this weekend....

[Nova08]

Unfortunately I do not have pictures when I passed by a week ago, but there was a considerable amount of exterior work. Lot's of heavy machinery breaking concrete on the corners of 10th/Filbert & 10th/Market

[New2Fishtown]

Originally Posted by Londonee

Sounds like you have inside knowledge. Why not share? Perhaps cryptically?

For example - they've signed a tenant that rhymes with Bucci. Or, what store is directly correlated to High Store. Or what do you get when you merge Eat with Italy?

My primary reason is superstition if I'm being totally honest. I do work in real estate (nothing retail related), so I've seen how fragile and tentative most leases are. A deal that seems simple can get drawn out for months in negotiations and then fall apart at the last minute because the parties couldn't agree on a really minor thing like whether the rent increases by 2% or 2.5% a year. Many retailers also sign leases contingent on co-tenancy (e.g. Target will only locate in a shopping center if Starbucks and Petco join them), and so there's the possibility that if they lose one, they actually lose the three adjacent to it, and vice versa, which would make everything I saw completely outdated. Thirdly, brokers take confidentiality seriously, and so if any of them somehow made their way to this page and saw that something had leaked, that could impact negotiations and even jeopardize the presence of a tenant all because I opened my fat mouth. I'm too eager to see this project succeed to do anything that might jinx or jeopardize its progress.

Allll that said, here's some vague additional info that feels ok to share: the plans I saw did include Primark in the Burlington space (as folks have speculated based on the Primark-colored renderings that have circulated). Burlington remained part of the complex, but was relocated to a different block. I saw only concourse and street level plans, so I know nothing "Bucci" and other high-end outlets which are supposed to be going on the 2nd floor. On the main level, there was a food hall concept in the Strawbridge's space, and then four major street-facing retailers cut into the facade of the 900 block. Of these, two were stores that do not exist in Philly now, one was a flagship version of an existing store, and one was not claimed. Two of these stores were multi-level. There were 4-5 restaurant spaces designed to face Filbert from 8th to 10th, only one of which had a named tenant (a mid-price point chain that will be popular with tourists). There was a Filbert Street-facing elevator lobby that was labeled "theater vestibule and elevators to Level 3," which sounds awfully promising. As for the smaller and interior facing stores, there were some pleasant surprises that are decidedly middle of the road, but great additions to a downtown shopping environment: some kid-oriented stores/experiences, several brand-specific shoe stores and one larger shoe emporium, clothing stores that might be popular with teens/tweens, and a kitchen-oriented store. The concourse-level food court options were an appealing and mid-to-upscale mix of familiar names, many of them local mini-chains. There were many double and triple-labeled spaces which implied that they were in negotiations with competing concepts for many slots. That's all I got for now on FOP.

Back to East Market: an article in today's PBJ (paywall) describes the project as follows: "Of the retail space, tenants have committed to roughly 80 percent with just half of those retailers announced. There are a flurry of deals in the works -—Wawa has reportedly signed on to be a tenant — and should soon shore up all of the space." If we take that statement literally, then there are only 3-4 additional retailers TBA that will bring the project to 80% leased. This implies that each of these retailers is on the larger side, which makes sense given that several of the spaces appear to have street-level entrances that would lead up to large open floors on the second level. It does call into question if and how they will break up the interior facing streets with smaller eateries, though it could mean that 6 or 7 large tenants occupy 80% of the project, and then the final 20% is made up of little guys to fill in the gaps.

Exciting times. Construction is now at a point here and at FOP where Market East's resurgence is palpable and real. It seems it's reasonable to hear more details soon.

[Redddog]

Wow. That was awesome.

[summersm343]

Originally Posted by New2Fishtown

Allll that said, here's some vague additional info that feels ok to share: the plans I saw did include Primark in the Burlington space (as folks have speculated based on the Primark-colored renderings that have circulated). Burlington remained part of the complex, but was relocated to a different block. I saw only concourse and street level plans, so I know nothing "Bucci" and other high-end outlets which are supposed to be going on the 2nd floor. On the main level, there was a food hall concept in the Strawbridge's space, and then four major street-facing retailers cut into the facade of the 900 block. Of these, two were stores that do not exist in Philly now, one was a flagship version of an existing store, and one was not claimed. Two of these stores were multi-level. There were 4-5 restaurant spaces designed to face Filbert from 8th to 10th, only one of which had a named tenant (a mid-price point chain that will be popular with tourists). There was a Filbert Street-facing elevator lobby that was labeled "theater vestibule and elevators to Level 3," which sounds awfully promising. As for the smaller and interior facing stores, there were some pleasant surprises that are decidedly middle of the road, but great additions to a downtown shopping environment: some kid-oriented stores/experiences, several brand-specific shoe stores and one larger shoe emporium, clothing stores that might be popular with teens/tweens, and a kitchen-oriented store. The concourse-level food court options were an appealing and mid-to-upscale mix of familiar names, many of them local mini-chains. There were many double and triple-labeled spaces which implied that they were in negotiations with competing concepts for many slots. That's all I got for now on FOP.

Superb information! Thank you for sharing!

[summersm343]

How East Market's retail strategy targets residents, out-of-towners & more

“We couldn’t be happier with the team at Iron Hill and what they are going to do,” Killinger said. “It will be perfect to have people sitting outside, having a burger and beer.”

Iron Hill will also serve another important role. It will stand out and be the “face” of East Market, Killinger said.

“It’s really about the mix,” he said. “We wanted to have great food, be accessible, and create a great atmosphere that can be an anchor for local residents, can be the neighborhood spot and a spot for people coming in from out of town.”

Mom’s Organic Market and Design Within Reach Inc., a high-end furniture retailer, are the other retail tenants that have been announced for the project. The furniture store will occupy 11,000 square feet at the corner of 11th and Ludlow streets and be the "perfect compliment" to the Marketplace Design Center that leased 48,000 square feet at 34 S. 11th St., Duffy said.

“They play off of each other,” he said.

Mom’s, which leased close to 20,000 square feet, and Design Within Reach are scheduled to open this spring. Of the retail space, tenants have committed to roughly 80 percent with just half of those retailers announced. There are a flurry of deals in the works -—Wawa has reportedly signed on to be a tenant — and should soon shore up all of the space.

“We set a vision a long time ago of what we wanted to do and it’s coming together,” Killinger said. “This project isn’t an island and needs to integrate with every thing around it.”

http://www.bizjournals.com/philadelp...chinatown.html

[reparcsyks]

Originally Posted by New2Fishtown

Exciting times. Construction is now at a point here and at FOP where Market East's resurgence is palpable and real. It seems it's reasonable to hear more details soon.

I need a cigarette now. Thanks!

[Human Scale]

Tenants will be those that cater to: conventioneers, basic bitch tourists (Marriott right there), and people coming into the core just to shop.

My money is on:

Some type of luggage store like the old Robinson Luggage. Or upscale like Tumi, but we already have one of those on Walnut.

Some type of last minute work clothes place like White House-Black Market (female), BOSS Hugo Boss (male). Perfect for the 3,000+sq.ft. spaces.

Some type of non-offensive American Fare that also happens to be elevated enough to garner respect in the core. Oh wait, that's Iron Hill.

Some type of large anchoring brand house that will occupy the other half of the tower 2 podium. Like the new Under Armour store. I'm thinking Levi's.

Some type of elevated coffee shop that won't compete with Wawa, Mom's, or Iron Hill. I'm thinking Green Line Cafe, Green Street Coffee, The Coffee Beanery, Teavana.

Let's see who can predict the future.

[hammersklavier]

Let's see what we can suss out from this information:

Originally Posted by New2Fishtown

Allll that said, here's some vague additional info that feels ok to share: the plans I saw did include Primark in the Burlington space (as folks have speculated based on the Primark-colored renderings that have circulated). Burlington remained part of the complex, but was relocated to a different block. I saw only concourse and street level plans, so I know nothing "Bucci" and other high-end outlets which are supposed to be going on the 2nd floor.

Based on this, we know that (1) Burlington must be relocated to either the 800 or 900 block of Market, and (2) that it must be on the concourse or street level.

This strongly implies to me that it would occupy the Strawbridge's bargain basement (the largest space that would fit those two constraints). Another possibility may be that the old food court will be hollowed out and refitted for it, although I don't think that would offer enough space.

On the main level, there was a food hall concept in the Strawbridge's space,

Strawbridge's main floor was broken into four sections. Century 21 currently occupies the old store as well as a sliver of the main hall (where their shoe section is); Franklin Flea sets up in the old main hall; behind that was the elevator court and on the Filbert Street side, the food hall.

If the food hall is being reused, then what about the main hall?

and then four major street-facing retailers cut into the facade of the 900 block. Of these, two were stores that do not exist in Philly now, one was a flagship version of an existing store, and one was not claimed. Two of these stores were multi-level.

Since you mentioned you have only seen the street and concourse level plans, would I be correct in assuming that the two multi-level stores would have the bulk of their selling space on the concourse level? Four stores along with the HPP lobby would be quite crowded, with lots of doors on the street.

There were 4-5 restaurant spaces designed to face Filbert from 8th to 10th, only one of which had a named tenant (a mid-price point chain that will be popular with tourists). There was a Filbert Street-facing elevator lobby that was labeled "theater vestibule and elevators to Level 3," which sounds awfully promising.

All of this put together makes me think they're imagining the entire Filbert Street side as a dining and entertainment area. The clearly marked theater space dovetails nicely with the rumors of a first-run facility in the complex. Since the Gallery complex lines the 900 block of Filbert (due to the parking garage), they have total control over what they want to see there.

Mentioning the 800 block also raised an eyebrow. This was clearly Strawbridge's receiving bays (although I'm not sure whether they got new ones as part of the original Gallery). If they're punching out that warehouse space, then they can expand the food hall back to Filbert, which in turn gives it a separate street entrance and frees up the main hall space.

Since you clearly said this only extended between 8th and 10th, and the Philly Media offices are in Strawbridge's third floor (spilling across the skybridge) this also clearly implies the movie theater lobby will be on the 900 block of Filbert. My first reaction was that it would be in the Gimbels third floor, although this may not be the case; a 3rd floor movie theater could be allowed to sprawl over a large portion of the facility.

As for the smaller and interior facing stores, there were some pleasant surprises that are decidedly middle of the road, but great additions to a downtown shopping environment: some kid-oriented stores/experiences, several brand-specific shoe stores and one larger shoe emporium, clothing stores that might be popular with teens/tweens, and a kitchen-oriented store.

I'm reading this as implying that there will be separate blocks of street-fronting and concourse-fronting spaces, which suggests that Gallery 2.0 has been blocked into about four different spatial areas:

1. Major/flagship retail facing Market
2. Lifestyle/entertainment area along Filbert
3. Mall retail along the concourse
4. High-end retail on the 2nd (and possibly part of the 3rd) floor(s)

The concourse-level food court options were an appealing and mid-to-upscale mix of familiar names, many of them local mini-chains.

Will the food court be moved? Even if it remains on the concourse, it seems to me that placing the food court around Market East and the 11th Street stations would be a more successful concept than retaining the current food court setup.

There were many double and triple-labeled spaces which implied that they were in negotiations with competing concepts for many slots. That's all I got for now on FOP.

That sounds like good news -- it suggests there are more concepts that want to be there than spaces to be had there. Hopefully it'll drive development of other PREIT sites in the area.

[summersm343]

2/23/2017

[Parkway]

It's been said before but, out of all the projects to come out of this development cycle this is the most important. CTIC is cool because it will be our new tallest but this project is a turning point for the entire area.

[PhilliesPhan]

Originally Posted by Parkway

It's been said before but, out of all the projects to come out of this development cycle this is the most important. CTIC is cool because it will be our new tallest but this project is a turning point for the entire area.

Agreed! Even though I feel the same way about FMC, this project gets the edge for me because of the potential investment that introducing vibrancy to Market East will attract for the next cycle. Between this, FOP, and the potential for 1300 Market (I'm fairly confident that it will break ground), Market East will be continuous from City Hall to 11th Street. I would love to see Brandywine capitalize on the opportunity to develop the garage that they own on 7th and Market, as well as PREIT capitalize on the parcel they own along the 1000 block of Market; if these two pieces fall, that will bring us even closer to developing the Disney Hole due to a scarcity of developable lots on Market!

[McBane]

Originally Posted by PhilliesPhan

Between this, FOP, and the potential for 1300 Market (I'm fairly confident that it will break ground), Market East will be continuous from City Hall to 11th Street.

I agree with all of this but can you tell me why you are so confident about 1300 Market? Do you have inside information or are is it more of a gut feeling you have?