Commercial Real Estate – BuxMontLocal

Commercial Market Insights, October 2021

The following information is provided by the National Association of Realtors Research. View the full report on Commercial Market Insights, October 2021 here.

Amid an improving economy, the commercial real estate market continues to recover, marked by rising occupancy across all commercial property markets.

In the office market, occupancy increased by another 1.8 million square feet on a quarterly basis as of October 23, following a quarterly increase of 8 million square feet in September. However, the recovery process has a long way to go, with 128.4 million square feet of office space released back to the market since 2020 Q2. Multifamily demand remains robust, with positive net absorption of 1.06 million apartment units since the second quarter of 2020 and asking rents rising further to 11.4% year-over-year on average across 390 markets tracked by CoStar®. The industrial market is another strong leg of the commercial real estate market, with 654 million square feet of industrial space absorbed since 2020 Q2.

Assuming there is no big resurgence of the Delta variant, improving economic conditions, the lifting of the international travel ban in the coming months, and more business and personal travel and recreation in the coming months, all lead to the sustained recovery of the commercial real estate in 2022 and beyond, with the office market having the longest time to recover.

Life Time Athletic Building in King of Prussia Sells for $42M

An affiliate of Life Time Group Holdings sold its 150,000-square-foot building in Tredyffrin Township to a New York firm. Natalie Kostelni reported the $42 million transaction for the Philadelphia Business Journal.

Pan Am Equities bought the nearly 15-acre property, located off Swedesford Road at Old Eagle School Road.

The facility is often identified as a King of Prussia fitness center, owing to its proximity to Upper Merion Township. In fact, together with the King of Prussia Town Center and Village at Valley Forge, it has helped turn Swedesford Road into a highly desirable office submarket for tenants and investors alike.

Before opening the facility in June 2017, Life Time spent $30 million developing the resort-style Athletic fitness center.

This entity will continue to operate even after the sale is finalized.

Minnesota-based Life Time has been selling and leasing back its facilities throughout the country as part of its business plan. This became a bigger part of its strategy after the company went public earlier this month.

Life Time is also the owner of a 5.38-acre parcel at 750 East Swedesford Road, but this does not seem to be part of the sale.

Read more about the sale in the Philadelphia Business Journal.