Archive: May, 2008
The builders behind Cira 2, like most other projected Philadelphia skyscrapers over the past decade, are counting on disgruntled New Yorkers to fill their proposed tower, not organic growth from Center City like the law firms and investors in the original, more modest Cira tower on the other side of Amtrak's 30th Street Station.
Real estate lawyer and financier Alan Fellheimer learned that recently when, tired of paying Philadelphia’s business privilege tax, he asked his wife and business partner, Judith, to call Brandywine Property Trust about moving Fellheimer & Eichen LLP and a few dozen jobs to the proposed tax-advantaged Cira II tower on Penn’s campus. “They wanted $45 a square foot,” complain Fellheimer. “They plan to keep the entire tax benefit.” It’s a fat premium to the low-$30s asking price of Class A Center City real estate, according to the latest surveys from Studley and Grubb & Ellis.
“There is no question that the rental rates for new construction will exceed those available in the inventory of existing buildings," says Brandywine CEO Jerry Sweeney. Center City landlords can afford to charge less, he notes, cause most of them bought the buildings they own for less than what they cost to build.
But that's not the point, Sweeney adds. He said Cira II isn’t being pitched to the Fellheimers, but to companies outside the city, looking for a new building that would be a relative bargain by Manhattan standards, just over an hour from New York's Penn Station by Acela train, and part of "a world class 'city within a city'" on the Schuylkill.
The stock market’s post-2000 slump has taken a toll on Pennsylvania’s charitable foundations, says a new report from Delaware Valley Grantmakers and Grantmakers of Western Pennsylvania.
Charitable foundation assets rose just 5 percent in 2000-2005, to $28.5 billion, down from a 68 percent jump in the 1995-2000 bull market. That means assets actually declined in the recent five-year period, after inflation.
Blame the stock market, but also credit a rise in donor-advised funds run by Vanguard Group, SEI Corp. and other popular investment firms, as an alternative to traditional charities, said Nancy Lanham, executive director of the Delaware Valley group.
Grantmakers also lists the biggest foundations in the region. Here's the difference five years makes: In 2005 same as 2000, the Pew (funded by Sunoco's founders), Annenberg (TV Guide) and William Penn (the Haases, from Rohm & Haas) foundations topped the list, each giving well north of $50 million/year.
Further down, the Lenfest (cable TV), Sidney Kimmel (Burlington Coat Factory) and Comcast foundations joined the Top 10, displacing the Independence, WW Smith and Arcadia foundations. Comcast was the only active Pennsylvania company to fund a foundation giving away $8 million or more that year.
Kimpton Hotels & Restaurants, San Francisco, says Wachovia Bank has agreed to lend $50 million to turn the Architect’s Building, 117 South 17th St., near Rittenhouse Square, into a 230-room Hotel Palomar, with a ground-floor restaurant and bar, to open in late 2009. Cushman & Wakefield Sonnenblick Goldman, New York, arranged the loan for Kimpton.
Optium Corp., the Horsham optics equipment maker run by JDS Uniphase veteran Eitan Gertel, said today it's agreed to be bought by local-area networks compoment maker Finisar Corp., Sunnyvale, Calif., for around $212 million in a stock deal, pending shareholder approval.
Gertel, a Drexel grad who's raising his family in the area, will run the combined companies as CEO.
There's been no announcement on which town will be HQ, but Optium spokeswoman Veronica Rosa said the deal could mean more work for around 250 programmers, designers and managers in Horsham.
Optium outsources manufacturing, while Finisar still does some of its own, though that's under review, company officials told investors in a morning conference call.
The state expects the highway will fetch $12-18 billion, Financial Times reports here. Gov. Ed "Rendell, a Democrat, is under pressure to produce as high a bid as possible to overcome opposition to his plans." Spain's Cintra and Australia's Macquarie have dropped out of the running after Rendell demanded more money on the table earlier this week, FT adds,
That leaves two remaining contenders: Australia-based Transurban Group, financed by Goldman Sachs Group Inc., and the Spanish-Australian-American combination of Babcock & Brown and Abertis Infraestructuras SA, backed by Citigroup, FT says.
SunGard's agreement to purchase Strohl Systems Group Inc. of King of Prussia marks the Wayne-based financial-software and recovery systems giant's first trip back to the acquisitions market since 2006, according to Bloomberg data. SunGard release here.
UPDATE 5/19: In fact, SunGard has continued to acquire all through that period, notes spokeswoman Valeria Maltoni. Last year alone, SunGard bought VeriCenter Inc. (IT infrastructure outsourcing), GTI Consultants SAS (IT consulting in France), Aspiren Group Ltd. (UK management consulting), Finitix LLC (hedge fund service provider), Energy Softworx (fuels management software), Aceva Technologies Inc. (debt collection software), Maxim Development Software Corp. (insurance billiong systems), and XRT SA's treasury and cash management business.
The Strohl deal - price undisclosed - which comes as Strohl was preparing to roll out a next-generation system, would also end 20 years of competition between Strohl's Living Disaster Recovery Planning System and what's now known as SunGard Availability Services. SunGard says it will support both platforms, and keep Strohl's programmers busy, while selling Strohl clients SunGard products. Strohl fact-sheet here.
Strohlmarks SunGard's first acquisition since the Automated Financial Systems deal in December 2006, according to the Bloomberg M&A database. SunGard bought two businesses in 2006, and five in 2005, the year it was taken private for $11 billion by a group of private equity firms.
Journal Register Co., Yardley, the famously frugal company that owns the Delaware County Daily Times, West Chester's Daily Local News, Norristown Times-Herald, Pottstown Mercury, Trentonian and other local papers, is running low on funds as advertising revenue falls. Thomson story here.
Cleveland activist investor Richard Barone, of Ancora Capital, has bought more than 5 percent of Journal Register Co. and want to buy more, according to this filing with the Securities and Exchange Commission. Filing here.
Barone wants to invest $25 million in Journal Register and restructure its crushing debt, says Reuters. Story here. Former Journal Register Publisher of the Year Kevin Walsh, who ran the company's biggest paper, the New Haven Register, quit last week to work for Yale's hospital. Story here.
One in four CEOs whose company is bought by private equity investors will be replaced, and board turnover is even higher, according to a study of UK takeovers by midmarket accountants and consultants Grant Thornton and director-search firm Directorbank.
Yet, the report ads, CEOs often encourage private equity investments, as do board directors, partly due to the fat payouts. Call it a personal exit strategy. Private Equity Wire article here.