When Vince Brust started searching for a new home for his dance studio a decade ago, he told his real estate agent he needed a big empty space.
“Like a factory,” he remembers saying.
What he found was something far more divine.
Posts Tagged ‘Scranton Real Estate’
Churches Born Again
Sunday, March 25th, 2007Detter Helps Mental Health Clinic Relocate to Montage
Saturday, March 17th, 2007A growing mental health provider with offices in Kingston and Dunmore will consolidate into a new facility in Moosic, having purchased a building on Montage Mountain Road for $1.4 million.
The psychiatric practice of Matthew Berger, M.D., and Danilo DeSoto, M.D., plans to invest another $800,000 into the former State Farm Insurance building to remodel and expand the existing 15,000-square-foot, one-story structure.
The practice, which includes 15 clinicians and 40 other workers, will move into the building in the fall, after initial renovations. Easy to find and easy to get to, the building was a good choice for the practice, Dr. Berger said.
Northeastern Pennsylvania To Make Its Debut
Sunday, November 26th, 2006Like an off Broadway play that finally makes it big time, Northeastern Pennsylvania is on stage.
Those people and businesses moving into the region prior to 2000 could be considered like early adapters who are usually the first to try anything new. The slow trickle developed into a robust stream of real estate users. It seems like overnight people came for second homes and the price of lakefront cottages took off. Farms, second homes followed.
Soon real estate investments followed. The biggest turnover occurred in retail investments. The regional malls and most of the neighborhood shopping centers have changed ownership.
A tremendous increase in the building of every retail type has occurred, are planned or are under construction. Investors are calling us every day looking for these type of properties to buy or to develop new ones.
The same is true of industrial real estate. The Interstate 81 corridor is considered the distribution and logistics corridor for the Northeast. That hastened sale, lease and construction activity in Northeastern Pennsylvania since 2000.
New to the rush has been the office market. Much slower from the start, office sales and leasing just increased over the last year. Many buy for their businesses and a significant number buy for investment. Leasing activity has accelerated in the last eight months with demand from both regional and national firms.
Location, location, location. We are at the edge of the western migration from New York and New Jersey. The recession of 2000 fueled interest in real estate investment. Northeastern Pennsylvania real estate looked like a bargain when compared to metropolitan markets. The cost of living was lower here, and the beginning of the boomer retirement wave increased the local demand for homes.
What happens next? Usually when investors buy anticipating a higher yield they will raise rents. You see this in everything from the little cottage at the lake you used to rent for a few weeks or the apartment in a two-family home to the office space or the storefront in the local shopping center.
Where are we going? Like it or not, the region is changing. What needs to be done for the future is commitment. A renewed focus on creating a higher level of jobs to bring home the children and grandchildren.
That involves a focus on education from pre-school through high school. The model is Raleigh, N.C., that bore the research triangle.
One difference between here and there is that they have one school district for all of Wake County, our counties have several school districts.
We also need to work on our infrastructure.
Why not a commuter line from Scranton, Glenmaura, and the airport, East Mountain Business Park, the Arena, downtown Wilkes-Barre and Pittston? Why not redo the interchanges in Dupont and Clarks Summit and make that part of turnpike toll-free and a bypass.
Why not get Luzerne County with Pike, Wayne and Wyoming to join the transportation authority recently created between Monroe and Lackawanna counties and push for regional initiatives from freight and passenger rail to highways, the airport and bus transportation.
Our region has a history of taking on initiatives. Our business parks, Montage, the stadium and the arena show we can do it.
-John Cognetti
- Courtesy of The Times-Tribune
CPG Move Stalled Over Stalls
Saturday, November 4th, 2006John Loyack thought the second floor of the Glenmaura Plaza building would make a good headquarters for local plastics manufacturer CPG International Inc., except for one problem: the bathrooms.
Specifically, it was the bathroom stalls and partitions made of metal. CPG is the nation’s leading producer of plastic bathroom partitions, which, of course, company president Mr. Loyack believes are superior to metal.
“We worked it into the lease agreement that we wanted our partitions,” Mr. Loyack said. “We’re proud of what we make, and after all, it is our office.”
The retrofitting wasn’t a problem for Glenmaura Plaza owner Sordoni Construction Services Inc. CPG provided the partitions at no charge and Sordoni’s crews customized the offices.
CPG, formerly called Compression Polymers Holdings Inc., moved its corporate headquarters into the building this week as it shuffles production and offices to accommodate growth.
About 50 people moved, and Mr. Loyack anticipates that employment will increase to 90 as it adds to its financing and technology staff.
From the west side of the office building, Mr. Loyack and employees can see where they came from, the sprawling 801 Corey St. plant about a mile away in Scranton.
The corporate employees had to make room for more production at the Corey Street site. CPG is selling its Winfield Avenue facility, and plans to move that to Corey Street.
In April, the company bought the product line of competing local plastic fabricator Santana Products for $34 million, doubling production of CPG’s prized bathroom partitions and lockers. At Corey Street, people were practically sitting on each other’s laps, Mr. Loyack said.
The Winfield Avenue facility has generated some interest, said listing agent John Cognetti of Hinerfeld Commercial Real Estate. He said serious inquiries have come from a manufacturer and an investor. While the 220,000-square-foot building is older, it has been upgraded and well-maintained, he said, with a large open space suitable for a range of uses.
CPG International has been a standout in the manufacturing sector in Northeastern Pennsylvania. Developing innovative plastic products used in laboratories, salt water, playgrounds and other places has positioned the company in a variety of potential markets. The company’s most successful foray has been into the construction market with Azek trimboards, a millable and paintable substitute for wood trim that resists damage from weather, insects and rot.
The 275,000-square-foot former Anemostat building on Keyser Avenue, purchased by the company in 2005, is dedicated to Azek and continues to increase production.
CPG added a 25,000-square-foot structure for an anticipated 11 production lines. So far, it has six.
CPG employs more than 400 people at its three facilities. Last year, the company reported revenue of $223 million.
The company is owned by a prominent New York City-based private equity firm, AEA Investments.
- Courtesy of The Times-Tribune
Office Space in Demand
Sunday, October 29th, 2006Building 52 at Glenmaura Plaza couldn’t have cut the ribbon at a worse time — 2000, start of the dot-com crash.
But now, the third office building erected by Sordoni Construction Inc. in Moosic is nearly fully rented for the first time.
The demand for office space in Northeastern Pennsylvania is the strongest it’s been since the late 1990s, when the dot-com crash emptied offices and the Sept. 11, 2001, attacks gave office-based companies second thoughts about expanding.
“The market moves in 10-year cycles, and we are moving out of the trough,” said John Cognetti of Hinerfeld Commercial Real Estate.
Companies that would have purchased or built their own buildings when interest rates were rock bottom are looking to rent now that rates inched up, Mr. Cognetti said.
With the exception of a 5,000-square-foot corner section, the Sordoni building is nearly full thanks to Compression Polymers Group renting an entire floor for its corporate headquarters, Lehigh Valley Physicians Group moving in, and the expansion of existing tenant Deluxe Digital Studios.
There are still big vacancies — even at Glenmaura Corporate Center, the region’s premier suburban office park. The Bank of America building has 20,000 square feet for rent and the former State Farm building has 15,000 square feet.
Large tracts still wait for development, but empty lots are moving to private hands. In recent weeks, two local private developers made moves to buy more property although neither had immediate plans. Sordoni purchased land near its other office buildings. Mericle Commercial Real Estate Services exercised an option on property owned by the Scranton Lackawanna Industrial Building Co.
Building 52 is a microcosm for the nation, where office space has been filling up from coast to coast. This year office building construction slowed and higher interest rates made purchasing property more expensive. Companies who needed space looked for leases.
“We see vacancies decreasing across the board and rental rates gaining strength,” said Brain Velky, vice president of the Chicago-based Real Estate Research Corp.
In Wilkes-Barre, a 47,000-square-foot, one-story office building near the Wachovia Arena that had been occupied by the state has generated interest from two companies looking for a call center, said John Augustine, vice president at the Greater Wilkes-Barre Chamber of Business and Industry.
The Jewelcor Building, one of Wilkes-Barre’s newer privately-owned office buildings, is just about full.
In Wilkes-Barre, office space inquiries increased three-fold over the last three years, Mr. Augustine said, mostly from technology, service firms or computer operations.
The shiny glass fortresses in suburban office parks have an advantage over older downtown buildings.
Companies looking for downtown office space usually want free, contiguous parking, which makes leasing space in parking-challenged buildings such as the Wilkes-Barre Center difficult.
Even buildings that have parking, such as the Citizens Bank building, face an uphill battle as potential tenants look to suburban plazas for offices. The professional offices that provided the bread-and-butter of downtown landlords have migrated to suburban strip plazas and medical complexes.
Building office space without a ready tenant is risky. For one, office space costs about three times as much to build as warehouse or factory space. The average construction cost for Class A office space is more than $100 per square foot. Other types of commercial real estate cost about $50.
After an office building is up, it could sit empty. Sordoni got burned by putting its third building up just before the office space market collapsed. Unlike office space, which is limited to office or service uses, other commercial space is more flexible. For example, a 150,000-square-foot industrial building could be used for manufacturing, distribution, even retail.
“Building office space is a chicken-egg thing,” Mr. Augustine said. “You don’t want to stick your neck or your money out there.”
The region could benefit from being isolated from major metro areas.
Risk of natural disasters in the South and West and of terrorist attacks in places such as New York City and Washington, D.C., has prompted huge increases in insurance costs there, in some cases as much as 300 percent, Mr. Velky said.
- Courtesy of The Times-Tribune
Hinerfeld Announces Sale of Valmont Park Property
Friday, October 27th, 2006Hinerfeld Commercial Real Estate announced the sale of 10 Jaycee Drive in the Valmont Industrial Park in West Hazleton, Luzerne County, Pennsylvania to MBC Hazleton, LP. for $1,100,000. Built in the 1960s with additions in the ‘70s and ‘80s, the 199,000 square foot building on ten acres formerly was recently used for the processing of foam rubber.
The building had been unoccupied for a few years. The new owners plan renovations for use as a multi tenant warehouse/distribution facility. John T. Cognetti, SIOR of Hinerfeld Commercial Real Estate located in Scranton, has represented MBC in other real estate projects in Luzerne and Lackawanna Counties and said that MBC has had great success in buying, renovating and leasing older industrial properties similar to this. GFC-Foam was represented by John Van Buskirk, SIOR of NAI/CIR of Harrisburg, Pennsylvania.
- Courtesy of The Times-Tribune
Hinerfeld Commercial Leases 35,000 SF at Glenmura
Wednesday, October 25th, 2006John T. Cognetti, SIOR of Hinerfeld Commercial Real Estate announced the leasing of 35,000 square feet of Class A office space at Glenmaura Plaza in the Glenmaura Corporate Center. The Corporate Center is located at the Montage Road exit of I-81 between Scranton and Wilkes-Barre, Pennsylvania. Glenmaura Plaza consists of three buildings totaling approximately 185,000 square feet.
CPG International Inc leased 22,000, the entire second floor, of Building 52. CPG will consolidate several of their office functions at this location to become their corporate headquarters. Deluxe Digital Studios will expand absorbing 10, 100 square feet on the first floor. Also on the first floor Lehigh Physicians Group will occupy 3,500 square feet.
Mr. Cognetti represented the owners of the Plaza, Tier II Properties, L.P. The Physicians Group was represented by Mike Tamarelli of the Markward Group. Mr. Cognetti said that with these leases the Plaza is 92% occupied with serious interest in the remaining suites. He attributes this increase in demand to the fact that Glenmaura has been recognized as the place to be for regional and national office tenants looking for a presence in Northeastern Pennsylvania.
Glenmaura is a 1000 acres planned unit development. Since its inception, it has grown to become the center of Northeastern Pennsylvania for living, working and play. The combination of ski slopes, a Triple A baseball stadium (the home to the Yankees triple A team), a nationally rated golf course, exceptional residential communities, the Corporate Center, and the soon to open lifestyle center will continue to draw major office tenants to the area. Mr. Cognetti said.
- Courtesy of The Times-Tribune
Hinerfeld Handles Specialty Defense Sale
Saturday, August 19th, 2006The pending closing of a longtime manufacturing plant that will shifts jobs elsewhere spells a loss of tax revenue for the cash-strapped borough of Dunmore.
Specialty Defense Systems is scaling back operations at its plant at 530 Sherwood Ave. and will shut the 65,000-square-foot facility within months, general manager Bill Trainor said.
“We anticipate moving out of the building probably by the end of October,” he said.
Specialty Defense, which produces military helmets and gear including ballistic vests, opened a manufacturing facility in March at a 100,000-square-foot building in Jessup at the Valley View Business Park. The company, which has had a presence in Dunmore since 1969, was acquired by Armor Holdings Inc., a Jacksonville, Fla.-based defense contractor, for $92 million in 2004.
About 100 company employees continue to manufacture helmets at the Dunmore plant, Mr. Trainor said, and another 150 sew military field equipment items and make helmets at the Jessup site. Peak employment at the Dunmore plant was about 180 people, he said, and the employees and plant equipment will be relocated to the Jessup facility.
Dunmore officials lamented the job loss and the negative effect the move will have on borough finances.
Dunmore’s current debt is about $15.3 million.
“The loss . . . of $19,000 in (Emergency Municipal Tax) along with ancillary spending in Dunmore will have a negative impact on economic conditions in the borough,” borough manager Joe Loftus said.
The company is closing the plant, a former glove-manufacturing facility, because it needed a larger, more-efficient location, Mr. Trainor said.
“It’s a very old building that wasn’t very efficiently laid out for manufacturing,” he said. “It’s not in a good location. Basically, we outgrew it and outlived it.”
The 1.25-acre property, which is surrounded by a residential area, has been for sale for several months and the company is asking $499,000 for the five-building complex, said John Cognetti, president of Hinerfeld Commercial Real Estate, which is handling the sale.
Specialty originally manufactured plastic gift items for sports teams.
It converted exclusively to military equipment manufacturing in 1978.
- Courtesy of The Times-Tribune
Detter Negotiates Lease for Maines Paper & Food Service
Wednesday, August 16th, 2006A food service company known for delivering to businesses and restaurants is looking for walk-in customers as it opens two retail stores in Northeastern Pennsylvania.
Maines Paper & Food Service Inc. will open stores in the fall at the former Scranton Fabric Center, at Oak Street and Keyser Avenue, and in a former industrial site at Rutter Avenue in Forty Fort.
Selling bulk and fresh food items, janitorial supplies and paper products to institutional customers, restaurants and the general public, Maines will compete with retail stores such as Keyco Distributors Inc., Schiff’s Cash & Carry and, to a lesser extent, Sam’s Club.
The Conklin, N.Y.-based company calls the stores MaineSource and plans to open 20 retail stores in the next five years. Maines Vice President Steve Ross said the stores primarily will serve existing Maines customers between deliveries who need food or supplies immediately, or don’t meet the $500 cutoff for delivery.
“The last thing we want is to have our existing customers go somewhere else,” Mr. Ross said. “This is another level of service, a natural extension of what we already do.”
In all, the store will stock about 6,000 items, but customers can order from 29,000 items offered by Maines for next-day pickup at the store.
The stores will have walk-in coolers for fresh produce, dairy and meats, and a freezer section.
Maines wanted about 10,000 square feet of space in both the Scranton and Wilkes-Barre areas, said Michael Detter of Hinerfeld Commercial Real Estate in Scranton, who helped Maines find the sites and negotiate the leases.
The Forty Fort site at 900 Rutter Ave. is 11,000 square feet and had been a meat packing facility, cigar factory and a print shop. The building is owned by Wilkes-Barre businessman David Koral. The MaineSource store is scheduled to open in early October.
The Scranton storefront had been vacant since 2002, when Scranton Fabric Center closed after six years at the plaza owned by Millett Real Estate, Clarks Summit. That store is expected to open in late September. Each store will employ about 10 people, Mr. Ross said.
Maines Paper & Food Service is a privately held, family-owned company with annual revenue in excess of $1.6 billion. Two of its largest customers are Burger King and Wendy’s restaurant chains.
- Courtesy of The Times-Tribune
NAR Wants Checks on Seizure of Business Records
Tuesday, August 1st, 2006Business associations find the Patriot Act may result in some burdensome regulations threatening their ability to do business. These groups endorsed amendments limiting the federal government’s ability to access confidential business records. One of the organizations to sign the endorsement was the National Association of Realtors (NAR).
NAR says that real estate corporate profits and agent revenue in second-home and vacation communities have dropped off due to new government security policies.
In a letter to U.S. Senator Arlen Specter (R-Pa.), who chairs a committee reviewing the Patriot Act, NAR and other business groups complained that confidential records about customers and employees, trade secrets and other proprietary information can be obtained too easily by government officials.
NAR identified two specific areas of concern for the real estate industry.
First, the definition of “financial institutions” includes “persons involved in real estate settlements and closings” and is too broad.
The other concern is that Patriot Act provisions for access to business records are vague and can result in unwarranted seizures.
Real Estate settlements and closings may eventually be regulated under anti-money laundering rules and the federal government may seize records with little state jurisdiction, NAR warns.
NAR outlines several points of which real estate practitioners should be aware.
Although the Patriot Act focuses on money laundering activities, there is no need for real estate professionals to implement anti-money laundering programs at this time, NAR says. Financial institutions will be required to implement a customer identification program and may ask a real estate professionals client for personal information to complete a financial transaction.
Both NAR and PAR (Pennsylvania Association of Realtors) acknowledge realtors have responsibilities under the Patriot Act. Their responsibilities, however, differ depending on the type of transaction and the level of involvement by the broker or agent they say.
John Cognetti, president of Hinerfeld Realty Company in Scranton and active member of several industrial realty organizations, says the real estate sales process will get more sophisticated, requiring more controls, but he does not feel real estate business is threatened.
Pennsylvania is already on the forefront of regulating real estate transactions as part of consumer protection efforts, Cognetti says, so many of the safeguards of the patriot act are already in place.
Cognetti does not hear many complaints by real estate professionals concerning the Patriot Act at this time. He adds that may support it.
One area that will be an immediate concern, Cognetti says it will become necessary to define, in detail, where to place the responsibility off all the stakeholders involved in the real estate trade. Banks, realtors, local governments, buyers, sellers and title companies will all have to evaluate their responsibilities.
Cognetti does not for see the cost of businesses rising – only the stack of necessary paperwork. This change is just another in a long list of changes over the last 10 to 15 years.
- Courtesy of the Northeastern Pennsylvania Business Journal
