Demolition Paves Way for 500,000-SF Shopping Center at Former Arsenal in Philly
- Jul 28, 2010
July 28, 2010
By Barbara Murray, Contributing Editor
The walls of building number 149 at the former Frankford Arsenal in Philadelphia have come down, making way for The Shopping Center at the Arsenal. Hankin Management Co. is behind the 500,000-square-foot retail project, which carries a development price tag of $50 million.
It was the War of 1812 that led to the original development of the Frankford Arsenal in 1816, and today, the site is still home to a bevy of historic buildings, a great number of which will remain as the property undergoes redevelopment. After serving predominantly as a small arms production facility during the Civil War, World War I and World War II, the U.S. Department of Defense shuttered the arsenal in 1977. Hankin acquired the property in 1983 and reinvented it in 1984 as the Arsenal Business Center, which now houses two charter schools and approximately 1.4 million square feet of office and light industrial space in over 100 buildings.
The structure that was recently demolished is the first of 40 buildings–once utilized for military research, heavy manufacturing, munitions manufacturing and munitions storage–that will be removed from the northern section of the former arsenal to accommodate the new shopping destination. Once completed, The Shopping Center at the Arsenal will occupy 40 acres and will feature a wide range of both large and small retail shops and a broad selection of restaurants. With a location easily accessible by rail and bus transportation, I-95 and the Betsy Ross and Tacony-Palmyra bridges, the new retail property will be well positioned to attract not only Philadelphians, but shoppers from neighboring suburbs and the State of New Jersey as well.
With a 9.3 percent vacancy rate in the first quarter, Philadelphia’s retail market fared better than most major metropolitan markets during the recession, according to a mid-year report by Marcus & Millichap Real Estate Investment Services. “A combination of relatively low vacancy, a steady and recovering local economy, and modest construction of retail space has made Philadelphia one of the best performing retail markets in the country,” the report notes. While the vacancy rate is expected to reach 9.9 percent this year, “vigorous economic recovery” in Philadelphia is expected to take hold later this year and into 2011.
The Shopping Center at the Arsenal will certainly benefit from the impending recovery of the Philadelphia retail market, but it has a couple of other advantages that the developer believes will help facilitate the property’s success. “We think demand for The Shopping Center will be quite strong,” Mark Hankin, president of Hankin Management, told CPE. “It is in a good area with a large, strong population within five miles, and there aren’t a lot of shopping centers with half-a-million square feet that have just about everything you would want in one center. And the retail options will be unique compared to what is in the city.” Hankin also pointed out that many retail destinations in the area do not provide the easy access from a variety of points that the Arsenal project will offer.
Development of the Shopping Center at the Arsenal will result in 250 temporary construction jobs and, upon its scheduled completion for the holiday season in 2011, approximately 1,000 permanent retail positions. Once the center opens its doors, a portion of the rent payments will benefit the historic buildings in the southern section of the site. “It will give us continuous cash flow to help maintain these historic buildings,” Hankin said.