January 29, 2014
The city that once boasted that no building would be higher than William Penn's hat atop City Hall is getting a new skyscraper, to be the city's tallest and more than twice as high as the iconic statue.
Plans for the building, the Comcast Innovation and Technology Center, were announced this month. The design calls for a height of 1,121 feet reaching above central Philadelphia, beyond the existing Comcast Center. The 59-story building, on Arch Street between 18th and 19th Streets, four blocks from City Hall, will be adjacent to the company's current headquarters. It will include some 1.5 million square feet of space for rent, of which 1.28 million will be for offices. Construction is to begin this fall, and it is scheduled for completion in 2017.
Comcast, owner of Comcast Cable and NBCUniversal, will take 75 percent of the office space, which will house technical staff members such as software developers and engineers. The building, designed by the British architect Norman Foster, will be the eighth-tallest in the United States. Its top will be some 650 feet below that of New York's new One World Trade Center which, at 1,776 feet, is the tallest in the United States. (The Penn statue stands just 548 feet above street level.) Some commercial real estate professionals welcomed the project as a major boost for the local office market, and for the city's economy over all. "It just shows there is significant demand in the marketplace," said Michael Silverman, managing director in the Philadelphia office of Integra Realty Resources, a real estate and valuation consulting firm.
Over the last 12 to 18 months, demand has been rising for the 53 million square feet of office space in the Center City area of Philadelphia, pushing rents up and vacancy rates down, said Mr. Silverman, whose company has no connection with the new building. The vacancy rate for Class A office space in the Market West section of downtown Philadelphia, where the new building is to be located, has dropped slightly, to 12.2 percent from 12.7 percent at the end of 2012, Mr. Silverman said. The average asking price for commercial space has risen to $27.84 a square foot from $27.16 in 2012, he said, citing data from CoStar, a commercial real estate information company. He predicted that the large addition of office space would not drive down local office prices, because Comcast employees would occupy three-fourths of the building. But David M. Scolnic, a real estate lawyer with the Philadelphia firm of Hangley Aronchick Segal Pudlin & Schiller, said the new supply would be likely to stabilize or even drive down rents, as well as shift perceptions about what constituted a "trophy" building in the city.
While the new building and the existing Comcast headquarters will be sought after as prestigious corporate locations, others with older facilities are likely to lose their appeal as the most desirable premises, Mr. Scolnic predicted. "Observers believe that there's a shortage of large blocks of space in those buildings," he said. "I think that's exaggerated, and I think this building will bring people back to reality because there is a general contraction still of big users of those spaces and there are now quite a lot of floors being made available." For example, he predicted rents would come under pressure in one building, currently seen as being in the "trophy" category, where Comcast has some of its employees. They will be moving out when the new offices are built. "It's going to put pressure on those landlords to get more realistic about some of their expectations," Mr. Scolnic said.
Still, the influx of young technology employees to a building designed by a prestigious international architect is likely to encourage boosters of a city that has long harbored an inferiority complex because it lacks either the financial power of New York or the political clout of Washington. "This new development really speaks to a more favorable outlook for the city," Mr. Silverman said. The $1.2 billion building will create 20,000 direct and indirect jobs during construction, adding $2.75 billion to the local economy, according to Gov. Tom Corbett of Pennsylvania, who announced the project, along with Comcast officials, on Jan. 15. The project, 80 percent of which will be owned by Comcast and 20 percent by the developer Liberty Property Trust, is expected to create some 2,800 permanent jobs in the city. New York Times
TiVo Inc. agreed to acquire cloud-based media services company Digitalsmiths for $135 million to strengthen its position in the U.S. pay-TV service provider market. Digitalsmiths provides personalized video search, recommendations and browsing, social trending and mood-based discovery for the Pay-TV industry on platforms such as Roku, iOS, Android, Kindle and more.
TiVo, a maker of TV set-up boxes, can use Digitalsmiths to deploy its cloud-based services and technologies to operators, either independently or combined with TiVo's own user interface, Chief Executive Tom Rogers said. As Digitalsmiths has relationships with seven of the top 10 Pay-TV providers, the acquisition will expand TiVo's market within tier-one U.S. service providers, Mr. Rogers added. TiVo said Digitalsmiths is growing rapidly, with transaction volume increasing to 150 million in December from 90 million in July.
The deal, expected to close in the quarter ending in April, is expected to add to earnings before interest, taxes, depreciation and amortization, TiVo said. The company expects Digitalsmiths to post rapid revenue growth and adjusted EBITDA and contribute to TiVo's financials by fiscal 2016. TiVo also boosted its stock repurchase plan by $100 million. In total, the company has $186 million in repurchase authority as of Wednesday.
TiVo has recently seen increased strength in its business, following a long string of lawsuits and struggles to find sustainable consumer adoption. The company made waves with its first products in 1999, but quickly found competition among cable and satellite companies that released similar products. TiVo sued many of them, saying they inappropriately copied its DVR technology, and has since won a series of settlements with large companies including Dish Network Corp. The company reported in November that its revenue jumped as it added more subscribers, though it posted a drop in earnings on litigation proceeds. Wall Street Journal
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