By Paul Schwedelson – Reporter, Philadelphia Business Journal

May 13, 2024

The new owners of the Bala Plaza office campus are eyeing seven new developments on the sprawling City Avenue property, including a hotel, apartment buildings and a retail center.

The redevelopment joins a handful of large projects along City Avenue, which is poised to undergo significant change in the coming years.

New York’s Adjmi family and Eatontown, New Jersey-based FLD Group acquired Bala Plaza for $185 million from Tishman Speyer late last year with redevelopment approvals in place. The new owners have taken the past six months to evaluate Tishman Speyer’s plans. Bala Plaza has an existing 1.1 million square feet of space across four office towers and a Saks Fifth Avenue department store.

“We are sitting on a gold mine,” Harry Adjmi said.

Harry Adjmi and his son Bobby Adjmi told the Business Journal they plan to move ahead with the new developments on the Bala Plaza campus in the next three to five years. They anticipate starting with a hotel from an undetermined brand and then two multifamily residential buildings as part of a second phase. Later, a retail center could be another new development on the site.

“Within this complex, there is a tremendous amount of upside,” Harry Adjmi said. “There are developments that will take place in the years to come, we’re sure of that. But there are time issues and constraints that need to be looked at. We’re not rushing.”

The plans resemble what Tishman Speyer had proposed, but the new owners are putting their own spin on the Bala Cynwyd property. Tishman Speyer previously had a master plan approved by Lower Merion Township for 2.1 million square feet of new development featuring multiple retail sites, a 168-room hotel, approximately 750,000 square feet of office space and 750 residential units.

“Driving home that real live, work, play campus environment where people can come here, live here, work here, shop here, go to restaurants here,” Bobby Adjmi said, “and really breathe life into everything that surrounds us by just doing what we’re supposed to be doing, which is improving the value of our asset. I think that’s very important.”

The 61.4-acre property includes office buildings One Bala Plaza, Two Bala Plaza, Three Bala Plaza East and Three Bala Plaza West. Saks Fifth Avenue has a long-term lease in a free-standing building off City Avenue near Monument Road, less than a mile from I-76. The development projects would take place on surface lots surrounding the existing buildings.

The Adjmi family declined to share further details on the size of each piece of the development plans. The Adjmi family founded A&H Acquisitions and has been a New York real estate investor for several decades. The family has developed buildings in Manhattan’s Meatpacking District and has a portfolio of more than 100 properties in New York and elsewhere.

Harry Adjmi complimented Tishman Speyer for the way the New York company oversaw the property and handed it over in good condition after the sale. Tishman Speyer spent more than $56 million on capital investments in the property since 2017.

The purchase was one of the largest multi-tenant suburban office sales in the country in 2023, according to the buyers. Harry Adjmi was drawn to the rare opportunity to acquire a property as large as Bala Plaza. And Bobby Adjmi was drawn to the redevelopment opportunities.

“The future potential of what this could become and what it already is, there’s so much room for growth,” Bobby Adjmi said. “I love the layers of growth that we can peel off here and enhance this. Just keep going. It’s the gift that will keep on giving.”

Bala Plaza had an average occupancy of 91% from 2007 to 2022, according to CBRE, which represented Tishman Speyer in the sale. Tenants’ weighted average lease term is seven years. The property’s two largest tenants, Tokio Marine and Philadelphia Insurance Cos., both have leases through 2035.

Nearby, several other developments are in the works totaling more than 1,700 residential units. Federal Realty Investment Trust is under construction on a six-story, 217-unit apartment building at the site of a former Lord & Taylor store at 121 E. City Ave. Keystone Development & Investment’s One Belmont project features 270 apartments and Hanover Co.’s project at 111 Presidential Blvd. calls for 400-plus apartments.