PHILADELPHIA-Welcome to the Philly 411, our monthly column on real estate happenings in the Metro area supplied with intel from David Jacobs, a director at Llenrock Group, a local commercial real estate investment-banking firm. You can also follow their blog here. Opinions are the author's own.

We are 45 days into the new year and already we have seen signs that 2011 is poised to be the year commercial real estate finally rebounds.  Lenders have ramped up their lending efforts, deals are closing, and benchmarks are being set for pricing expectations.  So how has Philly been different?  Developers have reemerged, looking to revitalize prime sites left for dead in the wake of the financial collapse.

We have seen two Center City sites trade hands, another take a giant leap towards breaking ground, and just last week heard news of two dominant Philadelphia players teaming up to vertically develop an existing site.  First, we saw Brandywine Realty Trust outbid O’Neill Properties, among others, for what is likely the last premier downtown development location at 1919 Market St. The site, previously owned by now defunct Opus East, has a long history of failed development plans. When its neighbor, the 45-story Blue Cross tower was built in 1991, the site was set aside for a companion building of up to 760,000 square feet.  UFJ Bank of Tokyo, through a subsidiary, then acquired the site in 1996 through a foreclosure proceeding, and development was held up by over 20 separate lawsuits.  In 2005, the litigation finally came to an end. Opus bought the parcel for $9 million and was to develop a 38-story high rise comprised of 393 condos and a 500-vehicle garage with ground floor retail space. While Brandywine has not yet revealed its specific plans for the site with regard to size, cost and ground-breaking, it has indicated that the development will be mixed-use.

Another dogged site just across the street and one block west at 2040 Market St., had a year-end buyer as well. PMC Property Group, the predominant center city apartment landlord run by Ron Caplan, acquired the site from NorthStar Realty Finance, who had foreclosed on the previous owner, World Acquisition Partners, in April 2010. PMC is planning an adaptive re-use of the current 5-story, 150,000-square-foot structure, looking to add both additional stories as well as apartment units to the Market Street skyline. With the purchase, PMC also obtained approvals to expand the building and build an underground parking garage. By right, PMC could build up to 750,000 square feet on the site.

PMC also took another step forward in a joint venture development with Eric Blumenfeld of the Biberman Building, a 97-unit apartment development on the old Wilkie Buick dealership at the 600 block of North Broad Street. At a $43 million dollar total project cost, the developers were successful in obtaining $18 million of government subsidies.  $11 million of federal tax credits will be provided, along with a $2 million dollar RCAP grant and a $5 million HUD 108 loan through the Philadelphia Industrial Development Corporation. The project, which will continue Blumenfeld’s vision of connecting North Broad Street to Center City, will feature dining concepts by two of Philadelphia’s premier restauranteurs, Marc Vetri and Stephen Starr. Philadelphia Mayor Michael Nutter was on site last week to announce the government related details of the capital stack, along with boasting the 150 construction jobs and dozens of permanent jobs that the development will provide.

Lastly, just last week, Joe DiStefano of the Philadelphia Inquirer broke news that Liberty Property Trust, developer of the Comcast Center, and Parkway Corporation, the parking garage king, have teamed up to vertically develop the existing parking garage owned by Parkway Corporation at 8^th and Walnut. Plans are for a $48 million dollar, 260-foot, 12-story medical office tower for the University of Pennsylvania. While details are still being planned and a special ordinance would be required , this project would change the landscape of Washington Square West, which has few high-rise buildings.

While these four high profile development projects provide hope for Philadelphia’s commercial real estate future, they also provide a referendum on the current state of the capital markets and economy.  While all three owners are well-heeled financially, and thus have broader access to capital, it indicates that demand drivers are in place to support the decision to acquire property and develop. Jobs still dictate demand for new housing stock, and despite unemployment figures remaining in the 9% range, industry leaders are clearly bullish on the Center City apartment market. Furthermore, while debt for existing multi-family buildings is readily available through Fannie and Freddie, development capital has been an entirely different animal. The speculative nature of new construction projects in general has led private equity and debt providers alike to shy away from the risk-laden world of construction finance in the last few years.  While strength of sponsorship of any deal is key, the fact that capital has shown a willingness to invest in these projects suggests that the worst, finally, may truly be behind us.