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

[Londonee]

Originally Posted by Parkway

Wasn't Iron Hill also in the first tower? I would expect both of those business to take up a significant amount of space. Total we have: Wawa, City Fitness, The furniture store, Iron Hill, and Mom's.

Remember, Moms is not part of the towers but the stand alone rehabbed building at 34 S. 11th Street. Same "project" but different building. Iron Hill, WaWa, and City Fitness are all apart of Tower 2. The only store announced for Tower 1 is the DWR.

2 Pages ago we even broke down how much sf was left to lease in the new construction Towers:

Originally Posted by Londonee

Some? Someone did the math upthread - they have tens of thousands of square feet still to fill here. If your retail mix is a WaWa, a Microbrew chain, a gym, and a DWR - none of which are actual retail - you're not going to be very successful.

Edit. I just did the math. The two building's have 105,000 sf of retail.
Iron Hill - 8,450
Wawa - 6,200
DWR - 15,000
City Fitness - 27,000

Total left: 48,350

Which can be something like 10-15 smaller retailers, or 3-5 fast-fashion type places.

Edit to add: observationally the national retailer market for Philly has really hit the skids. My assumption has been that retailers are in a wait-and-see mode with Market East (Fashion Outlets/THe Gallery and East Market). If you're French Connection, why commit to $100/sf rent on Walnut, when you may be able to land a spot in the Gallery or East Market for half that? Maybe some other retailers who were thinking of opening a full store, are now hitting pause and considering opening up a cheaper/less visible Outlet store in the Gallery. But Walnut has quite a few long-standing vacancies on prime blocks with little movement in a while and I don't think it's a coincidence. Which begs the question can Philly sustain 2 large, but separate retail corridors just half-a-mile apart?

[1487]

Originally Posted by Londonee

Remember, Moms is not part of the towers but the stand alone rehabbed building at 34 S. 11th Street. Same "project" but different building. Iron Hill, WaWa, and City Fitness are all apart of Tower 2. The only store announced for Tower 1 is the DWR.

2 Pages ago we even broke down how much sf was left to lease in the new construction Towers:



Edit to add: observationally the national retailer market for Philly has really hit the skids. My assumption has been that retailers are in a wait-and-see mode with Market East (Fashion Outlets/THe Gallery and East Market). If you're French Connection, why commit to $100/sf rent on Walnut, when you may be able to land a spot in the Gallery or East Market for half that? Maybe some other retailers who were thinking of opening a full store, are now hitting pause and considering opening up a cheaper/less visible Outlet store in the Gallery. But Walnut has quite a few long-standing vacancies on prime blocks with little movement in a while and I don't think it's a coincidence. Which begs the question can Philly sustain 2 large, but separate retail corridors just half-a-mile apart?

well 2 leases were just announced for Walnut including a big one in the 1400 block. I assume whatever goes in FOP is generally going to be lower end than Walnut. I also assume FOP is going to rely heavily on non retail tenants like restaurants and a movie theater. Overall though its an interesting time to be debuting so much new retail space due to the fact many familiar names are downsizing or going out of business. The advantage the potential spaces have on the east side is they are much closer to the convention center and can easily tap that market. Also, more modern and constraint free spaces for rent vs older buildings on Chestnut or Walnut.

[Londonee]

Originally Posted by 1487

well 2 leases were just announced for Walnut including a big one in the 1400 block. I assume whatever goes in FOP is generally going to be lower end than Walnut. I also assume FOP is going to rely heavily on non retail tenants like restaurants and a movie theater. Overall though its an interesting time to be debuting so much new retail space due to the fact many familiar names are downsizing or going out of business. The advantage the potential spaces have on the east side is they are much closer to the convention center and can easily tap that market. Also, more modern and constraint free spaces for rent vs older buildings on Chestnut or Walnut.

Yeah Untuckit i could take or leave, but CB2 is a great addition especially for locals. Ironically, I feel like CB2 would have been better served in a location like East Market in a newer fit-out, larger footprint, and cheaper rents for their second-tier line.

[Jawnadelphia]

From BLT Architects - Instagram:






Iron Hill - Instagram:

https://www.instagram.com/p/BQMMbJ4j...ronhillbrewery

The brewery at the beginning of the walk between the two buildings- off of Market Street should be a hit. I imagine outdoor seating in the spring/summer... looking forward to it.

[3rd&Brown]

Originally Posted by Londonee

Yeah Untuckit i could take or leave, but CB2 is a great addition especially for locals. Ironically, I feel like CB2 would have been better served in a location like East Market in a newer fit-out, larger footprint, and cheaper rents for their second-tier line.

I agree.

With the Design Center going there and West Elm being East of Broad, it seems like there would have been more synergy going east of Broad, not West.

But happy to have a productive use for those store fronts on the 1400 block.

[summersm343]

7/27/2017

[Yurkek]

Can't wait for this block to be transformed! I can't image what it would feel like to walk by storefronts in the renovated Gallery and have lunch in the Market East food court (if there will be one).

[The 700 Block]

I noticed they opened the sidewalk along the south side of the buildings to allow access to the northern entrance of 34 S 11th. The pedestrian area in the middle of the block is starting to take shape.

[GtownFriend]

Nice pics all! Thanks.
It looks from the web cam that they are laying rebar for the pedestrian area. Perhaps a pour this week?

[mcgrath618]

West Tower is now about 5 floors. This one is going up fast

[Jawnadelphia]

[1487]

I just want to see SOMETHING open in phase 1. The progress on the lower retail levels has been painfully slow. I used to think the retail base would open before any residential tenants moved in but I think I'm wrong.

[New2Fishtown]

Received confirmation from a broker familiar with the project that Design Within Reach is no longer coming to East Market. A huge loss, in my opinion. No further details given, so I have no idea what caused them to pull out and why we haven't heard about it. Construction delays? The general retail environment? I'd be curious for others in the biz to dig around more or maybe see if we can get some reporting on this from PBJ or the Inky.

A marketing flyer being circulated is marketing the space as office, medical, or retail, which seems like a very bad sign for the amount of retail demand they're seeing for this location. The floorplan from this flyer is attached: http://sshrealestate.com/files/build...0Floorplan.pdf

This pretty much kills the whole "we're having a design/furniture/home goods-oriented angle for the retail scene" argument that was originally described with DWR's lease in early 2016. It also means that there are zero confirmed retail tenants for the first retail podium. With DWR as a leading tenant to indicate the caliber of tenants at the location, it seems doubtful tome that we're likely to get a great mix here. I imagine the Gallery's pivot is also problematic for them, as East Market cannot market their adjacency to any known quantity. If they could say, "the gallery definitely has these dozen retail tenants and this specific movie theater", they could claim some co-tenancy, but instead they have to say that they're down the block from an enormous H&M, an unnamed theater, and several hundred thousand square feet of question mark.

I guess as long as MOM's still opens, at least we have that....?

[Redddog]

This is imploding.

Thanks a LOT, Amazon.

[Knight Hospitaller]

Doesn't encourage me about future phases.

[phlmatt]

Well, in slightly more positive news... I've noticed over several days an inspector (?) in a bucket checking the first tower and correcting a lot of those misplacements of pieces and shoddy work from the initial construction on Tower 1 has been fixed. Whew!

[Milksteak]

I wouldn't lose faith yet. Once people start moving in and injecting more life into the area, I think it will start getting some attention from retailers. It really is a prime location with the train station, convention center, and Reading Terminal across the street...I have a feeling the billion news articles about how Amazon is going to put retailers 6 feet under is giving people cold feet.

[Knight Hospitaller]

Bigger and better cash for gold shoppes!

[summersm343]

Retailers across the country are struggling right now... this is not just a Philly phenomenon.

With that said, most of the space in East Market is leased. I wouldn't worry too much about it. There are still a few announcements to be made. I'm sure Design Within Reach's space will be back-filled pretty quickly if they are indeed backing out.

[New2Fishtown]

Originally Posted by summersm343

Retailers across the country are struggling right now... this is not just a Philly phenomenon.

With that said, most of the space in East Market is leased. I wouldn't worry too much about it. There are still a few announcements to be made. I'm sure Design Within Reach's space will be back-filled pretty quickly if they are indeed backing out.

The fact that I received a flyer marketing their space as medical/office is not hugely inspiring or encouraging. While it's fair for a landlord to explore all avenues and open up a space to all interested users, the fact that they've expanded the marketing to non-retail doesn't say anything great about the demand they're seeing from retailers. It's also not likely a pivot to raise NOI as office/medical users would likely contribute less in rent than a major retailer.