The distribution building will be constructed between two existing buildings at 1050 Bethlehem Pike and 1350 Welsh Rd., that have a total of approximately 240,000 sf, Corenzwit says. Lou Battagliese, with Jackson Cross Partners, and GVA Smith Mack represented the joint venture in the lease transaction. Fisher and Co. represented FedEx Ground in the transaction.

The estimated cost to construct the building is $8 million, "with all the finishes and specialized equipment," Corenzwit tells GlobeSt.com. Construction financing is being provided by Sovereign Bank, which also provided acquisition financing for the Montgomeryville Business Campus. FedEx Ground is expected to move into the building in September, Corenzwit says. "It will be the principal distribution point for the northeast region of Philadelphia," he says. FedEx Ground chose the location because of "its proximity to all the areas that are going to be served by it. That is what attracted us to the area in the first place," Corenzwit says. The asking lease rate for newly constructed space in the area is $6 per sf, triple net.

The joint venture acquired the property in July 2005 for $13.2 million from Marc, Jeffrey, Fred and David Hoffman, as previously reported by GlobeSt.com. The Bethlehem Pike property was completed in 1968, and the other building was completed in 1973. The property had been owned and occupied by Jetzon Tires for many years which vacated the buildings in 1995 when the business was sold, Corenzwit says. The joint venture spent approximately $2 million on improvements on the two existing buildings, such as replacing the roofs, he says. The property is 100% leased. Major tenants include Verizon, Dealer Tire and Blue Mountain Recycling.