Commercial Real Estate Finance

Mensch:

Noun, informal. A decent, upright, mature and responsible person.

Schlemiel:

Noun, slang. An awkward, clumsy, or unlucky person whose endeavors tend to fail; a loser.

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Mensch of the Week:

Robert A.M. Stern, FAIA

Llenrock’s Mensch of the Week is often a newcomer to the industry spotlight, perhaps a successful dealmaker or newly promoted executive. But today’s Mensch, Robert A.M. Stern, is already a fairly illustrious figure thanks to numerous industry awards, a nationally recognized architecture firm, and his role as dean of the architecture school at some place called “Yale.”

So, being our Mensch of the Week isn’t exactly Mr. Stern’s big break. Even so, his integral role in designing the Philadelphia Navy Yard development, a sprawling mixed-use campus in South Philadelphia, deserves recognition.

The Navy Yard has been a much-needed success story for Philadelphia’s generally stagnant office market. This enormous, ultra-modern, sustainability-focused project has weathered a recession, real estate downturn, and resulting challenges in the investment world. Still, it has succeeded in drawing out-of-town companies like Urban Outfitters to the city. Years later, the project continues to grow.

To a great extent, the office/industrial/flex campus has succeeded because of the adaptability of its development partners–the Philadelphia Industrial Development Corp. (PIDC), Liberty Property Trust (NYSE: LRY) and Synterra Partners.

Without this flexibility, the Navy Yard may have faced the same fate as numerous other projects throughout the country, which were stalled, canceled, or reduced in scope due to the recession’s challenging fundamentals. Many once-promising projects couldn’t adjust to the very different CRE market that emerged from the economic downturn.

The tenant list and layout of the Navy Yard are quite different from those of the original design. The Inquirer’s Linda Loyd explains, 

With the recent transfer of 200 acres at the east end to the Philadelphia port for a proposed Southport marine terminal, and with the Navy’s desire to expand its machinery research and engineering facilities at the Navy Yard, architect Robert A.M. Stern went back to the drawing board to tweak the 2004 master plan for 1,200 acres at the southern end of Broad Street.

1,200 is a lot of acreage to tweak, especially as the Navy Yard is becoming a city within a city. It features

• office properties hosting a wide range of tenants, including pharmaceutical, food production, and manufacturing firms, as well as remote facilities for area universities
• a large portion remains in use by the Navy, the property’s original tenant
• a 172-room Courtyard by Marriott hotel (under construction) and plans for a restaurant
• instead of a single-family development–which was part of the original design–multifamily developments look likely for the campus

Schlemiel of the Week:

The Superdome

I wasn’t able to watch the Superbowl (I had to catch up on the last few weeks of Cougar Town I TiVo’d), but I hear there was a power outage. While the 33 minutes of semi-darkness didn’t disrupt the Ravens’ game  enough for the 49ers to overtake them, it did create a bit of an embarrassment for the operators of the Mercedes-Benz Superdome in New Orleans.

Some may say Beyonce’s light-intensive halftime show was the cause. Maybe so, but either way, the local energy provider reports the “power issue at the Superdome appears to be on the customer’s side.” The rest of the city went unaffected.

The enormous Superdome, famous for both high-profile sporting events and its important role in the aftermath of Hurricane Katrina, is getting old. This blackout suggests it’s time the Dome’s operator, SMG (owned by private equity giant American Capital), explores a serious rehab of the stadium’s electrical system.

And while they’re at it, perhaps SMG should consider some of the smart grid technology now finding its way into new properties and energy-conscious communities. Given the amount of energy an event like the Superbowl demands, a more efficient electrical system could shave an enormous amount from the venue’s operating budget.

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