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Wednesday, January 18, 2012

Germantown Ave. prospers with old landlords gone

Liberty Property Trust is spending $80 million-plus to build 200,000 square feet of new offices down at the Navy Yard. Meanwhile, Germantown Ave.-based developer Ken Weinstein, partners with Stan Smith, Howard Treatman and Bob Kaufman  in Philly Office Retail, says his group has bought around 200,000 square feet of commercial properties in Germantown and Mount Airy in the past two years - for just $1.75 million.

Of course, Weinstein's properties aren't in move-in condition. Instead, he and other developers are using the recession to acquire neighborhood business and institiutional locations from troubled landlords. They're recruiting office, store and restaurant tenants in hopes of reviving what was once a busy shopping district for the adjoining diverse middle-income neighborhoods.

For example, Weinstein and Treatman are foreclosing on a vacant six-acre Germantown Ave. property, once a Catholic parish complex, most recently home to a now-defunct charter school operated by the former state-subsidized Germantown Settlement House, whose dissolution has put dozens of vacant properties the group acquired into play for possible re-use.

It's one of a string of former store, church, school and factory properties he and others are in the process of acquiring, Weinstein told me as we drove down the avenue, counting more than 30 properties, from the end of Chestnut Hill to the north end of Nicetown, that Weinstein already redeveloped since leaving his City Hall job (as chief of staff to then-Councilwoman Happy Fernandez) 15 years ago to open the Trolley Car Diner and go into the real estate business.

Weinstein has been an organizer of the Mount Airy Business Improvement District, which unites Acme Markets and more than 200 other landlords to fund street cleaners and other projects, and of Valley Green Bank, which has expanded from its avenue headquarters to four branches. Valley Green is one of the few community lenders in the city that's been growing its business loan portfolio.

Weinstein is also eyeing a couple of Septa train stations in the area for redevelopment. He already operates a coffee shop and apartment at the Allen Lane train station along with stores in two suburban Septa stations. 

His city government ties help Weinstein navigate Philadelphia's inspections, zoning, back taxes and real estate rules. That complexity rewards insiders but can make it tough for outsiders and new players to remove the many obstacles to rebuilding old properties.

Elsewhere on the avenue, Cira Center-based Iron Stone Strategic Capital Partners has foreclosed the former Asher's chocolate factory, the ex-Germantown Farmers' Market, and other Germantown Ave. properties formerly held by neighborhood landlord Joel Harden, who filed for bankruptcy reorganization last year.

"There's been a lot of demand," Iron Stone partner Matthew Canno told me, citing new tenants Iron Stone has put into the newly-acquired buildings, including a culinary school, a cellphone store, a sound studio, a daycare and a hair-weave studio, and the Germantown Community Development Corp..

"There's a great momentum on Germantown Ave. with what Ken's doing and new buyers," Canno added. "Germantown Settlement owned a lot of property it wasn't able to develop." Harden told me in 2009 about the challenges of raising investment capital in the recession. The new owners, retail-experienced and better-funded, "can attract positive change," Canno told me. "The people are here. There's a positive future." 

 

 
Posted by Joseph N. DiStefano @ 4:25 PM  Permalink | Post a comment
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About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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