Philadelphia Metropolitan Area Real Estate Law Blog

The rapid expansion of Comcast’s media empire over the past few years has caused their downtown Philadelphia headquarters to fill up quickly. The company’s growing workforce has included adding thousands of employees through their acquisition of NBC Universal. As a result, there is talk around town about a new tower the company may build in Center City. 

If the commercial real estate market has seen any gains since the recession, they have not been in the suburban Philadelphia office market. As far as rents are concerned, the slowdown started before the recession: To keep tenants in their buildings, landlords have held rents steady for 10 years or more. With hiring in a slump, more employees working at home and businesses opting for more shared space, office leasing has all but ground to a halt. 

When the Court of Common Pleas reinstated their permit in June, it looked as though the owners of a new business would finally get to open their doors. The two have been fighting for two years to open a methadone clinic in Philadelphia’s Holmesburg neighborhood, facing staunch opposition from other businesses in the area.

There is a great Shirley Temple movie called “Stand Up and Cheer.” The year is 1934, and the country is in the depths of the Great Depression. President Roosevelt creates a Department of Amusement and gives the top job to a theatrical impressario. His job is simple: Cheer up the nation. The movie ends with a news flash: The Depression is over! Banks are opening up again! “We’re out of the red!” A musical number follows, and we all, yes, stand up and cheer.

Real estate investor Howard Lutnick, known for rebuilding Cantor Fitzgerald after his brother’s death in the 2001 World Trade Center attack, has reportedly been doing a lot of investing in commercial real estate lately, betting that the slow economy will not prevent property deal from thriving on low-interest money.

It has been a relatively decent year for commercial real estate in Philadelphia this year according to the Federal Reserve Board, and the latest numbers show that the year will finish by continuing its trend of modest gains for the city’s market.

In our previous post, we began looking at ways landlords can raise the value of commercial real estate. So far, we’ve mentioned raising rent, lowering operating expenses, upgrading the property, changing the use of the property. In addition to these possibilities, it is also possible to upgrade the physical structure of the property, such as adding services like a cleaning company, conference rooms, a fitness center, and so on.

One of the interesting aspects of commercial real estate, when compared to residential real estate, is that it is relatively easy to increase its value. This means that commercial property owners have more control over creating value in their property than homeowners do. So what are some ways commercial property owners can raise the value of their property?

According to a recent study, faulty property appraisals-thought to be behind excessive purchase prices in various markets-may be a common occurrence in the commercial real estate market. The study, which used data from thousands of securitized real estate bonds in which properties were foreclosed and liquidated, found a substantially wide discrepancy between appraisal values and sales prices on properties examined.

It isn’t often that a national perspective on the real estate market is offered. For the most part, those in the profession tend to focus on commercial, construction, residential or some other specialized market.