2012 year-end office market report

2012 Greater PhiladelphiaYear-End Offi ce MarketReport and Outlook

February 1, 2013

Dear Friends,

We hope your new year is off to a strong start as we share our 2012 Greater Philadelphia Year-End Of ice Market Report and Outlook.

This year we’ve made a change in our methodology to better re lect market conditions. While ourstatistics are still based on igures provided by CoStar Group, Inc., the leading provider of commercialreal estate information in the United States, we have adjusted them where necessary to betterre lect actual market conditions. These adjustments have been made based on our experienceworking in this market. We have eliminated buildings, for example that we know are no longercommercially available.

You rely on SSH’s 60 years of experience and insight into the Philadelphia market, and our marketreport re lects the attention to detail that distinguishes our irm and demonstrates its commitmentto our shared business community.

You’ll still ind statistics, news and trends clearly laid out, from major real estate transactions to developments to watch throughout both the city and suburbs.

We welcome your feedback and look forward to speaking with you personally about the real estate needs of your business or organization in the months ahead.

Best wishes for a prosperous 2013,

123 South Broad | 8th Floor | Philadelphia, PA 19109 (215) 893-3000

Two Radnor Corporate Center | 100 Matsonford Road | Suite 107 | Radnor, PA 19087 (610) 995-1010

www.sshrealestate.com

Jeffrey Seligsohn Doug NewbertPeter Soens

1

2012 Philadelphia CBD Year-End Offi ce Market Report and Outlook

Major Tenants in the Market

Pepper Hamilton – 250,000 SF

FMC Corp. – 200,000 SF

Pennsylvania Health Management Corporation – 100,000 SF

Benefi cial Savings Bank – 100,000 SF

BDP International – 70,000 SF

Signifi cant Lease Transactions

Morgan Lewis & Bockius – 300,000 SF1701 Market Street – Renewal

Cozen O’Connor – 200,000 SFOne Liberty Place – New Lease

Ballard Spahr – 189,481 SF1735 Market Street - Renewal

Drexel Nursing – 186,000 SFThree Parkway – New Lease

Drinker Biddle – 155,000 SFOne Logan Square – Renewal

GSA – 138,443 SF801 Market Street – Renewal

Temple University – 127,866 SF1515 Market Street – Renewal

Glenmede – 92,352 SFOne Liberty Place – Renewal

Philadelphia Parking Authority – 77,000 SF701 Market Street – New Lease

Represented by SSH Real Estate

Philadelphia

Overall Central Business District

Inventory

Class A Class B Total

Square Feet 25,180,053 23,735,781 48,915,834

Buildings 36 107 143

Rental Rate

Class A Class B Average

Year-End 2012 $29.57 $22.00 $25.90

Vacancy Rate


Year-End 2012 9.94% 11.21% 10.56%

2012 Signifi cant Sale Transactions

2000 Market Street665,649 square feet, sold for $110 million or $165 per square foot.

1900 Market Street456,922 square feet, sold for $34.7 million or $75.94 per square foot.

260 South Broad Street320,705 square feet, sold for $27.5 million or $86 per square foot.

1515 Market Street514,000 square feet, note sold for $56.85 million or $110.60 per square foot.

Two Penn Center502,531 square feet, sold for $66 million or $131 per square foot.

901 Market Street427,600 square feet, sold for $60 million or $140 per square foot.

*

*

2


Outlook

Rental RatesRates should continue to gradually increase as the economycontinues to improve and the supply of Class B offi ce spacecontinues to shrink.

VacancyVacancy rates should also continue to gradually decrease as the supply of offi ce space continues to decrease and the economy continues to improve.

Sublease ActivityShould remain the same.

Investment SalesThe Philadelphia CBD is hotter than it’s been since 2006. This trend will continue in 2013 as private equity, institutionalinvestors, and foreign funds will look to Philadelphia for acombination of safety and yield that is hard to fi nd elsewhere. Industrial, multi-family, and retail should be strong in 2013throughout the region. Suburban offi ce is poised to gaintraction in the second half of the year as it follows upticksin absorption currently underway.

New DevelopmentThe CBD’s offi ce market has seen decreasing vacancies and alimited number of large blocks of trophy offi ce space availablefor large tenants in the market. We believe this could lead tonew offi ce development in the coming the years.

Apartment development continues to thrive as developers seek good returns in stable markets that are reporting low vacancy and increasing rents. The supply of developer owned condo units has also decreased greatly over the past year. This could lead to new condo development in the near future.

Chestlen Development has reportedly secured a $400 millionconstruction loan for a 50-story hotel project. The project willinclude a W Hotel and Element hotel by Westin at 1441 ChestnutStreet on the Northeast corner of 15th and Chestnut Streets. Construction is expected begin on the 500-room hotel complex by the summer.

Toll Brothers Inc. has partnered with Neal Rodin to develop a mixed-use project on the Best Western site at 22nd Street and Pennsylvania Avenue. The project is expected to include 300 rental units and ground fl oor retail. It is rumored that Whole Foods will relocate from its current location at 21st andPennsylvania Avenue.

Brandywine Realty Trust is currently going through the approval process for its mixed-use project at 1919 Market Street. There are 293 rental units planned for the site above two stories of retail. The 24th fl oor is planned to include a green roof.

The Sansom is currently under-construction on the 16th block of Sansom. The project will contain 104 new apartments and ground fl oor retail. Developed by Peal Properties, The Sansom is expected to open in the summer 2013.

Liberty Property Trust is seeking a lead tenant to kick-off a new offi ce tower on the northwest corner of 19th and Arch Streets. Liberty is proposing a 22-story, 370,000 square foot building on what is currently a parking lot.

Three Logan, 1717 Arch Street

3


Multifamily Activity

Philadelphia has the third largest residential population among Central Business Districts in the Country. Approximately 180,000 people live in the CBD, this represents a 10% increase from 2000*. According to the 5-year Estimates from the American Community Survey for the period 2006-2010, 57.4% of Center City residents are renters. The high demand for rental units in Center City is supported by low vacancy rates andincreasing rents. The Class A apartment product in Philadelphia’s CBD has a vacancy of 1.9%. Low vacancy and high demand has led to ayear-over-year rent growth of 8.9%.

Center City continues to see the trend of Offi ce-to-Apartment conversions as well as a signifi cant amount of new construction. Over the past 20 years 47 Center City offi ce buildings have been converted to apartments. This has resulted in a reduction of 7,685,000 square feet of offi ce space from the market. As the Offi ce-to-Apartment trend continues, the shrinking supply of Class B offi ce space in Philadelphia’s CBD, should lead to decreases in vacancy rates resulting in future increases in offi ce rental rates.

The second half of 2012 saw several apartment conversion projects brought to market. In August, Federal Capital Partners in partnership with 806 Capital delivered 110 units at The Arch, formerly The Robert Morris Building. PMC Property Group recently completed the redevelopment of 2040 Market Street, the former AAA headquarters, has been converted into 281 apartment units and is approximately 82% leased. Tower Investments has recently opened Tower Place, the former State Offi ce Building at Broad and Spring Garden Streets. These three projects have decreased Class B offi ce space in Center City by approximately 566,000 square feet and have added 595 units to the apartment inventory.

Other Offi ce-to-Apartment conversions currently under way include The Atlantic Building at 260 South Broad Street. The Atlantic Building was purchased by Post Brother’s over the summer and is planned for 200 apartments. All but one of the more than 100 tenants have been relocated from 1616 Walnut Street. Work on converting the building into 207 apartment units is scheduled to begin within the next few weeks.

SSH is currently tracking 18 new apartment projects in various stages of development. These projects will add over 2,700 new units over the next two years to the current rental unit inventory of approximately 40,000 units.

* November 2012, Center City District’s Center City Housing: The Rebound Continues

2040 Market Street

4


Market Street West

Statistics

Inventory


Square Feet 19,096,644 9,419,706 28,516,350

Buildings 24 50 74

Rental Rate


Year-End 2012 $29.60 $22.62 $27.30

Vacancy Rate


Year-End 2012 10.41% 10.43% 10.42%

News

Drinker Biddle & Reath has extended its lease at One Logan Square, 130 North 18th Street, through 2029. The law fi rm has reduced its space to 155,000 square feet from 206,0000 square feet.

Ballard Spahr has inked a 15 year renewal for 189,481 square feet at Mellon Bank Center, 1735 Market Street. The fi rm gave back 2 fl oors, shrinking its space by 45,000 square feet. Renovations to the space are expected to be completed by May 2014.

In August, Marshall Dennehey Warner Coleman & Goggin moved into 131,000 square feet at 2000 Market Street after 21 years on Walnut Street.

2000 Market Street is under agreement to sell to Rosemont Realty out of Santa Fe, New Mexico. The 29-story 665,649 square foot offi ce building traded for approximately $110,000,000 or $165 per square foot.

1900 Market Street has been sold to Brandywine Realty Trust. The 8-story 456,922 square foot offi ce building traded for $34,700,000 or $75.94 per square foot.

ASI Management has purchased Two Penn Center. The 20-story; 502,531 square foot offi ce building traded for $66 million or $131 per square foot.

The $70 million dollar note on 1515 Market Street was purchasedby Boston based Winthrop Realty Trust for $56.85 million.

Glenmede has renewed its lease at One Liberty Place for 92,352 square feet of offi ce space.

1735 Market Street

5


Market Street East

Statistics

Inventory


Square Feet 2,056,961 5,011,063 7,068,024

Buildings 2 26 28

Rental Rate

Class A Class B & C Average

Year-End 2012 $27.03 $21.35 $23.00

Vacancy Rate


Year-End 2012 2.36% 15.07% 11.37%

News

The Philadelphia Parking Authority has signed a long-term lease for 77,000 square feet of offi ce space at the former Lit Brother’s department store at 701 Market Street.

PREIT’s redevelopment of The Gallery at Market East is expected to commence soon. An announcement should be made in the coming months.

PREIT has placed 901 Market Street under agreement to purchase from Vornado Realty Trust, the 427,600 square foot offi ce and retail building for $60 million this represents $140 per square foot.

In October, Marshall’s opened a “fl agship” store at 1046 Market Street.

Independence Mall

Statistics

Inventory

Class A Class B & C Total

Square Feet 1,739,626 5,199,233 6,938,859

Buildings 2 12 14

Rental Rate


Year-End 2012 $26.03 $21.35 $22.52

Vacancy Rate


Year-End 2012 15.50% 11.24% 12.31%

News

Penn Medicine and Liberty Property Trust are nearing completionof a new offi ce building at 8th and Walnut, the 153,000 SF building will be leased entirely by Penn Medicine for 20 years.

In October, the Hotel Monaco, a Kimpton hotel opened on the Northeast corner of 5th and Chestnut overlooking Independence Mall. This adds 268 hotel rooms increasing inventory in the city to approximately 11,427 rooms.

Penn Mutual Towers at 510-530 Walnut Street has been placedin receivership.

701 Market Street

6


South Broad Street

Statistics

Inventory

All Classes

Square Feet 2,995,810

Buildings 9*

Rental Rate

All Classes

Year-End 2012 $21.90

Vacancy Rate

All Classes

Year-End 2012 8.49%

*260 South Broad Street has been removed due to the pendingconversion to apartments.

News

260 South Broad sold to Post Brothers for $27.5 million or $86 per square foot. The developers plan on converting the 320,705 square foot building into approximately 200 apartments and 110,000 square feet of retail over seven fl oors.

South Broad Street has the lowest overall vacancy rate in the Central Business District at 8.49%. The impending conversion of 260 South Broad will result in 320,705 square feet of offi ce space eliminated from the supply. This will result in a continued tightening of the South Broad Submarket.

The Avenue of the Arts Inc. is going through the RFP processto select an architecture fi rm to create a plan to update theentertainment and arts district along South Broad Street. Thenew plan will help further the development along South Broad Street, highlighting its potential as a 24/7 environment.

260 South Broad Street

University City

Statistics

Inventory

Class A Class B & C Total

Square Feet 2,286,822 1,109,969 3,396,791

Buildings 8 10 18

Rental Rate


Year-End 2012 $34.25 $23.13 $30.62

Vacancy Rate


Year-End 2012 8.61%* 7.57% 8.27%

*Currently includes 3737 Market Street

News

Rental Rates in University City remains the highest of the Philadelphiasubmarkets. This is fueled by the growing “Eds and Meds” sectors. *Vacancy remains one of the lowest of the submarkets despite the upcoming delivery of 3737 Market which will add about 82,910 SF of vacant square feet to the market.*

The University City Science Center and Wexford Science + Technologybroke ground in September on 3737 Market Street. The 272,700 square foot building is expected to deliver June 2014 with the goal of achieving LEED Silver certifi cation. Penn Presbyterian MedicalCenter will anchor the project with a 155,700 square foot orthopedicsand outpatient medical facility.

Chestnut Square, is currently being constructed between 32nd and 33rd Streets along Chestnut Street on Drexel’s campus. Chestnut Square will include 361,200 square feet of student housing and retail space.

7

Inventory includes all Class A and B offi ce properties greater than 20,000 square feet. Vacancy rates do not include space available for sublease or occupied space which is being marketed for lease.

Rental rates are gross, net of electric/utilities.

2012 Suburban Philadelphia Year-End Offi ce Market Report and Outlook

Major Tenants in the Market

Ally - 100,000 SFHorsham / Fort Washington

Mercy Health System - 80,000 SFPhiladelphia Suburbs

Telefl ex - 80,000 SFKing of Prussia

URS - 80,000 SFFort Washington

Willis - 60,000 SFRadnor

Berkadia - 50,000 SFNorthern Suburbs

CBIZ - 50,000 SFBlue Bell / Plymouth Meeting

ImpactRx - 38,000 SFHorsham

AAMCO - 30,000 SFHorsham

Overall Suburban Philadelphia

Overall

Inventory


Square Feet 42,621,735 32,214,920 74,836,655

Number of Buildings 462 594 1,056

Rental Rate


Year-End 2012 $24.23 $18.72 $21.86

Vacancy Rate


Year-End 2012 12.72% 14.69% 14.13%

Signifi cant Lease Transactions

State Farm - 72,880 SF2 Braxton Way, Concordville - new lease

Abington Health - 50,454 SFArborcrest, Blue Bell - new lease

Integrated Project Services - 51,080 SFArborcrest, Blue Bell - new lease

Shire plc - 600,000 SFAtwater, Malvern - new, build-to-suit

Healthcare Solutions - 57,055 SF2500 Monroe Boulevard, Norristown - new lease

Main Line Health Center at Ellis Preserve, 3855 West Chester Pike

8




Outlook

Rental RatesSuburban rental rates continue to increase gradually, increasing $0.47 per square foot since mid-year 2012. Expect rents to climb gradually in 2013.

VacancyVacancy rates remained constant in the third and fourth quarters of 2012. Landlords will be challenged to continue this trend as several hundred thousand square feet will become available due to new build-to-suit developments.

Leasing VelocityLeasing velocity was steady in the latter half of 2012.Expect that trend to continue in 2013.

Investment SalesMost sizable transactions occurred at the polarized edges of the market; either 1.) distressed assets such as Time Equities pur-chase of 900 and 1210 Northbrook in Trevose for $11.42 million and MIM-Hayden Real Estate Funds acquisition of Walnut Hill in King of Prussia for $71 per square foot, or 2.) institutional assets, including LaSalle Investment Management’s purchase of the Main Line Health Center at Ellis Preserve for a suburban record $388 per square foot. One transaction contradicting this trend though, was Brandywine Realty Trust’s sale of its 11 building portfolio inExton to MIM-Hayden Real Estate Funds.

New DevelopmentWhile speculative development is still not occurring, there are a handful of build-to-suit and redevelopment projects in progress.

MIM-Hayden Real Estate Funds has landed an anchor tenant at CrossPoint at Valley Forge - the redevelopment which willcombine 530 and 580 East Swedesford Road has commenced, with completion expected in February 2014.

Build-to-suit projects at Atwater in Malvern are underway. Shire plc will move into 600,000 square feet and Endo Pharmaceuticals will occupy 320,000 square feet.

CrossPoint at Valley Forge, 530 and 580 East Swedesford Road

9




Radnor | Main Line

Statistics

Inventory


Square Feet 2,726,088 1,650,823 4,376,911

Number of Buildings 33 43 76

Rental Rate


Year-End 2012 $30.11 $20.61 $26.53

Vacancy Rate


Year-End 2012 5.90% 9.00% 7.07%

Malvern | Exton | West Chester

Statistics

Inventory


Square Feet 6,809,708 4,648,959 11,458,667


Rental Rate


Year-End 2012 $21.48 $19.50 $20.68

Vacancy Rate


Year-End 2012 14.30% 14.2% 14.25%

News

BioMed Realty Trust is contemplating construction of 900,000 square feet of offi ce and lab space on King of Prussia Road. The project would involve tearing down existing structures on the site.

Essent US Holdings, Inc. relocated to Two Radnor Corporate Center, signing a lease to occupy 26,874 square feet.

Class A asking rents exceed $30.00 per square foot as vacancycontinues to fi ll.

News

MIM-Hayden Real Estate Funds acquired 11 buildings consistingof 466,716 square feet in Oaklands Corporate Center in Extonfrom Brandywine Realty Trust for $52.7 million.

Shire plc will be relocating from Chesterbrook to Atwater inMalvern. A 600,000 square foot facility will be constructed forits North American headquarters.

CubeSmart is constructing an 86,000 square foot facility inMalvern. Approximately 46,000 square feet will be used forits headquarters, with the balance to be self-storage.

Ricoh Americas Corp renewed its 107,000 square foot lease at70 Valley Stream Parkway.

429 Creamery Way, Oaklands Corporate Center

10




Conshohocken

Statistics

Inventory


Square Feet 3,447,844 881,745 4,329,589


Rental Rate


Year-End 2012 $28.93 $21.49 $27.41

Vacancy Rate


Year-End 2012 10.00% 5.30% 9.04%

Norristown | Valley Forge

Statistics

Inventory


Square Feet 2,579,503 1,891,358 4,470,861


Rental Rate


Year-End 2012 $19.66 $16.77 $18.44

Vacancy Rate


Year-End 2012 15.30% 9.60% 12.89%

News

Integrated Project Services relocating to Blue Bell. They will bevacating their current 28,000 square foot building and have putit on the market for sale.

Mercy Health System, currently located at 1 West Elm Street, is in the market looking for 80,000 square feet.

News

Healthcare Solutions signed a 57,055 square foot lease at2500 Monroe Boulevard.

Highview I & II in Collegeville have been put on the market forsale. The two buildings developed by BPG Properties, Ltd. total 183,363 square feet.

Highview I, 400 Campus Drive

11




King of Prussia

Statistics

Inventory


Square Feet 7,973,444 4,352,783 12,326,227


Rental Rate


Year-End 2012 $23.90 $18.98 $22.16

Vacancy Rate


Year-End 2012 11.30% 20.70% 14.62%

Bala Cynwyd

Statistics

Inventory


Square Feet 2,255,183 661,812 2,916,995


Rental Rate


Year-End 2012 $29.24 $26.63 $28.65

Vacancy Rate


Year-End 2012 13.30% 10.30% 12.62%

News

Auxilium Pharmaceuticals, Inc. signed a 74,516 square foot leaseto relocate its headquarters from Malvern to 640 Lee Road inChesterbrook.

MIM-Hayden Real Estate Funds acquired the 155,073 square foot 150 South Warner Road from CW Capital for $71 per square foot.

Vertex signed a 30,000 square foot lease at 1500-1550 Liberty Ridge.

Susquehanna Bank renewed and expanded into 22,000 square feet at Walnut Hill.

News

Brotech Corporation renewed their 8,200 square feet lease at150 Monument Road.

Class A asking rents in Bala Cynwyd continue to be some of the highest in the Philadelphia suburbs.

Chesterbrook Corp Center , 1500-1550 Liberty Ridge Drive

12




Delaware County

Statistics

Inventory


Square Feet 4,356,844 3,798,562 8,155,406


Rental Rate


Year-End 2012 $24.12 $17.86 $21.20

Vacancy Rate


Year-End 2012 7.70% 16.40% 11.75%

Fort Washington | Springhouse

Statistics

Inventory


Square Feet 1,721,006 2,012,517 3,733,523


Rental Rate


Year-End 2012 $22.41 $18.64 $20.38

Vacancy Rate


Year-End 2012 8.30% 20.90% 15.09%

News

My Alarm Center signed a lease for 32,526 square foot lease atEllis Preserve in Newtown Square.

Keystone Mercy Health Plan leased an additional 30,297 squarefeet at 2 International Plaza.

State Farm signed a 72,880 square foot lease at 2 Braxton Wayin Glen Mills.

LaSalle Investment Management acquired the 130,000 square foot Main Line Health Center at Ellis Preserve for a suburban record high $338 per square foot.

News

Shidler Group purchased 1005 and 1015 Virginia Drive. The two buildings totalling 108,000 square feet sold for $53 per square foot.

SeaChange International renewed its 14,000 square foot lease at 1075 Virginia Drive.

URS is out in the market looking for 80,000 square feet. Currently, they are at 335 Commerce Drive.

2 Braxton Way

13




Lower Bucks County

Statistics

Inventory


Square Feet 3,460,834 4,125,599 7,586,433


Rental Rate


Year-End 2012 $25.21 $16.50 $20.47

Vacancy Rate


Year-End 2012 24.90% 17.40% 20.82%

News

101-163 County Line Road in Hatboro is being marketed for sale. The 426,384 square foot project consists of fi ve interconnected buildings of offi ce and industrial space.

Time Equities, Inc. acquired 900 and 1210 Northbrook Drive inTrevose. The two buildings totalling 161,170 square feet werepurchased for $11.42 million.

Harte Hankes renewed its 45,000 square feet at 777 Township Line Road in Yardley.

International SOS renewed and expanded into 75,000 square feet at 3600 Horizon Drive.

Horsham | Willow Grove

Statistics

Inventory


Square Feet 3,870,422 5,106,607 8,977,029


Rental Rate


Year-End 2012 $21.86 $18.68 $20.05

Vacancy Rate


Year-End 2012 5.80% 16.00% 11.60%

News

Liberty Property Trust sold 1 Walnut Grove to First Trust Bank.The 66,732 square foot building was purchased for $3.2 million.

The Class A vacancy rate of 5.8% in Horsham continues to beone of the lowest in the suburbs.

777 Township Line Road

14




Plymouth Meeting | Blue Bell

Statistics

Inventory


Square Feet 3,420,859 3,084,155 6,505,014


Rental Rate


Year-End 2012 $23.91 $18.99 $21.58

Vacancy Rate


Year-End 2012 22.90% 18.30% 20.72%

News

Integrated Project Services has signed a lease to occupy 51,080 square feet at Arborcrest.

Abington Hospital signed a 50,454 square foot lease atArborcrest.

Liberty Lutheran Services purchased a 25,000 square foot building in Whitemarsh Corporate Center. Keystone Property Group was the seller.

Arborcrest Corporate Campus, 721 Arbor Way

15

Company News Year-End 2012

Recent SSH Transactions

SSH represented Cozen O’Connorin a long-term lease transactionat One Liberty Place to occupyapproximately 200,000 square feet. Peter Soens and MichaelKennedy of SSH served as tenant representatives for the law fi rm.

Peter Soens and Peter Shrier represented Children’s CrisisTreatment Center (CcTC) for a long-term lease transaction tooccupy 43,673 square feet of space at the Waterview CorporateCenter, 1080 North Delaware Avenue, Philadelphia, PA.

Doug Newbert represented a 1031 exchange investor in thepurchase of two net-leased buildings totaling 77,626 square feet. The properties consisted of a Fedex Ground warehouse in Erie and a CVS located in Harrisburg.

123 South Broad Street has leased 25,880 square feet to bring occupancy to 92%.

SSH represented the Arthritis Foundation in their lease renewal at the Bourse Building as well as Clean Water Action in their lease renewal at 1315 Walnut Street.

SSH News

SSH celebrated its 60th anniversary in 2012. A supplementto the Philadelphia Business Journal tells the story of our evolution from the Harold B. Hess Company in 1952, to one of the largest full-service commercial real estate fi rms in the Greater Philadelphia region.

Visit www.sshrealestate.com to download the supplement.

SSH was selected as a “Best Places to Work” from thePhiladelphia Business Journal.

In October, SSH competed in the Philadelphia International Dragon Boat Festival. Despite a slow start in the fi rst heat, the team reorganized and strategized resulting in a fi rst place fi nish in their second race. SSH capped off the day’s festivities with a 2nd place fi nish in their division.

Anniversaries:

10 Year Anniversary- Denise Byrnes Senior Property Manager

15 Year Anniversary- Marian Felder Accounts Payable Supervisor

Investment Services News

SSH’s Investment Services Division is focused on selling investment real estate in the Mid-Atlantic region on behalf of third party clients. SSH’s Investment Services Division is marketing for sale the following income producing properties:

Crozer-Keystone On-Campus Medical Offering – a 45,758 SFmedical offi ce building on the campus of the Crozer-Chester Medical Center, a 424 bed hospital in Delaware County, PA.The building is currently 95% leased to seven medical tenants.

The XL Building – a 152,345 SF trophy, LEED Gold Certifi edoffi ce building with a long-term net lease with XL Insurance. The XL Building is located within the prestigious Eagleview Corporate Center in Exton, PA.

The Main Line YMCA – a 1.8 acre parcel adjacent to SuburbanSquare Shopping Center in Ardmore, PA. The in place zoningallows for the redevelopment of the site into 31 residentialapartments or condominiums or 66 senior beds.

Sentry Park East – Two offi ce buildings totaling 47,137 SFcurrently 55% occupied allowing for future upside upon lease up. The buildings are located near the convergence of I-476 and the Pennsylvania Turnpike in Blue Bell, PA.

The Investment Services Division fi nished a successful 2012 by sellinga 98-unit apartment project in Center City Philadelphia, representing BPG Properties in the successful sale of a single-tenant, 172,759 SFindustrial complex, recapitalizing a 178,000 SF fl ex portfolio in DelawareCounty with The Davis Companies, and acting as listing broker on the sale of a 89 lot housing development for SunTrust Bank. For more information on how SSH’s Investment Services Division can help you sell, buy, or fi nance a property, please contact Dan Mayock at(267) 546-1562 or [email protected].

Property Management News

SSH was awarded receivership of 370 Reed Road, a 70,000 square foot building located in Broomall, PA.

SSH’s construction management team has been working to restore the Lubavitch House at the University of Pennsylvania, 4037 Pine Street.

SSH has been awarded the construction management assignment at 1524 Chestnut Street, the former GAP Outlet. Renovations are currently underway to make it available for new retail tenants.

For more information regarding Property Management services, please contact Phil Rosen at (215) 732-9010 or [email protected].

About SSH Real Estate www.sshrealestate.com

Center City Offi ce:123 South Broad Street8th FloorPhiladelphia, PA 19109T (215) 893-3000 F (215) 893-1466

Jeffrey R. Seligsohn, SIOR, Partner(215) 825-1500

Peter C. Soens, Partner(215) 825-1510

Suburban Offi ce:Two Radnor Corporate Center100 Matsonford Road, Suite 107Radnor, PA 19087T (610) 995-1010 F (610) 995-1017

Doug Newbert, Partner(610) 995-1010 ext. 100

SSH Real Estate Services

In 2012, SSH Real Estate celebrated 60 years of service to Greater Philadelphia. Through hard work and an entrepreneurial spirit,we’ve grown to become one of the largest full-service commercial real estate fi rms in the region, the only one with our size and scope of experience in brokerage, property management and investments. Knowing the market as we do, we believe the best real estate advisors are those who work in all aspects of the business, with an understanding of all interests involved. Our 360-degree perspective gives our clients an edge in an increasingly complex market. Our 75 professionals, experienced in all facets of the business – brokerage, management, fi nance, construction, and space planning -- provideclients with outstanding results in the full complement of commercialreal estate services:

Tenant RepresentationSSH Real Estate’s 25 brokers provide strategic tenant representation to clients in the Philadelphia area and throughout the country. With an average of 20 years experience, our brokers draw on extensive knowledge, resources and expertise to provide each client with exceptional service and results.

Landlord RepresentationRepresenting approximately two million square feet of offi ce space in Philadelphia and more than 900,000 square feet in the suburban market, SSH is a recognized leader in landlord representation. Our buildings consistently retain high occupancy due to aggressive and creative marketing.

Investment ServicesSSH’s Investment Services Division focuses on investment property sales in the Philadelphia region. Our team has represented owners in the sale of over 24 million square feet of income-producing real estate worth more than $2 billion. We also provide capital market services for income-producing real estate including multi-housing, industrial, offi ce, retail, as well as developable land sites.

Non-Profi t ServicesSSH has cultivated an expertise in working with non-profi torganizations to ensure that their real estate choices are fi nancially sound and meet the specifi c needs of their constituents. Clientsinclude associations; educational, health, social service, religious, legal, arts and cultural organizations; and government agencies.

Property ManagementSSH manages approximately six million square feet of offi ce space in the Greater Philadelphia region. As property owners ourselves, we manage our clients’ assets as we do our own. Our staff of 50 combines experience and innovative approaches to maximize our clients’ cash fl ow while maintaining the highest quality service to our tenants.

Construction ManagementSSH performs construction management for core and shellcapital improvement projects, and new tenant improvement fi -outs.

Receivership ServicesAs an appointed receiver, SSH provides services to banks, loan servicers and fi nancial institutions in need of help managing defaulted real estate assets for all commercial property types.

2012 year-end office market report

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