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ISSUE HIGHLIGHTS Volume 31, Issue 3 February 8 - 21, 2019
EW YORK, NY — NCV Capital Part- ners (NCV) , a real es- N Preservation effort will keep rents affordable for tenants at the portfolio NCV, LDG, Mount Hope & CPC close $100 million deal to preserve 515 units in the first quarter of 2019, includes in-place reconstruc- tion of kitchens, bathrooms and energy-efficient upgrades. Yorkers earning 60% of Area Median Income or lower, and will not be changed.
ner withNCVCapital Partners on Mount Hope Renaissance, exemplifies this commitment and is the latest success in our long effort to revitalize the Mount Hope community.” “With the city facing an af- fordability crisis and many struggling to keep pace with the costs of rent, it’s critical to preserve our existing af- fordable housing stock,” said Rafael Cestero , president & CEO of CPC. “We’re proud to be part of this effort to preserve the Mount Hope Renaissance portfolio’s 515 affordable units. The financing will help ensure the buildings will have the resources needed to be in good physical and financial health, and importantly, remain af- fordable to the current and future tenants. My thanks to NCV, Lemor, and HPD, as well as our funding part- ners at Amalgamated Bank and Comptroller Stringer and NYCRS for their support of this project.” access to major interstate and regional road networks via In- terstate 695, which bifurcates the site and encircles the city of Baltimore and connecting the project to I-95, 895, 97, 70 and 83 as well as Rte. 295. Tradepoint Atlantic contains the largest privately owned rail interchange yard on the East Coast and includes a fully op- erational, privately owned and operated short-line railroad with more than 60 miles of track (and plans for expansion) and connections to two Class I railroads, CSX Transportation and Norfolk Southern Rail- way. In addition, Tradepoint Atlantic owns and operates a marine terminal within the Port of Baltimore and offers significant deep-water frontage with deep water berths. HFF’s debt placement team representing the borrower included managing director Cary Abod , director Rob Carey and associate Kevin Byrd .
“We are proud to have provided our expertise and capital to help Mount Hope rehabilitate and reposition these Bronx community as- sets in this rapidly improving South Bronx neighborhood,” said Keith Gordon , manag- ing partner of NCV Capital Partners. “We are grateful to Mount Hope for selecting us as their partner, to LDG for lending their extensive devel- opment experience as our part- ner, and to HPD and CPC for utilizing its preservation tools to ensure the project remains quality affordable housing for decades to come.” “Mount Hope Housing Com- pany is steadfast in our com- mitment to meeting the needs of our community and main- taining affordable housing for our residents,” said Fritz Jean , CEO of the Mount Hope Housing Co. “Choosing to part-
tate advisory and develop- ment firm, in partnership with Mount Hope Hous- ing Compa- ny (Mount Hope) , Lem- or Develop-
Mount Hope Renaissance is financed by equity investments from NCV and LDG. CPC and its lending partner Amalgam- ated Bank are providing a $30 million construction loan. CPC is also providing a SONYMA-in- sured permanent loan through their funding partnership with the NYC Retirement Systems. Additionally, the NYC Depart- ment of Housing Preservation and Development (HPD) is providing a property tax exemp- tion and low interest financing to help ensure the affordability of the portfolio. The property remains sub- ject to a forty-year regulatory agreement through HPD, en- suring all units will remain affordable to the current and future tenants for the next four decades. Ninety-seven percent of the existing rents across the portfolio are affordable to New
Rafael Cestero
ment Group (LDG), and the Community Preserva- tion Corporation (CPC) an- nounced the closing of a $100 million transaction to preserve a 515-unit, 13-building portfolio (Mount Hope Renaissance) in the Mount Hope neighborhood of the Bronx. The Mount Hope Renaissance portfolio includes 515 affordable units spanning between East 175th St. and East Burnside Ave., and ranges from studios to five-bedroom apartments. The comprehensive rehabilita- tion plan, slated to commence WASHINGTON, DC — Holliday Fenoglio Fowler, L.P. (HFF) announces the $135 million financing for two new, build-to-suit, class A in- dustrial buildings fully leased to Under Armour and Amazon. com and totaling 2.2 million s/f within the Tradepoint Atlantic multimodal industrial project
7A
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Tradepoint Atlantic Under Armour facility
in the Baltimore-area com- munity of Sparrows Point, MD. The HFF team worked on behalf of the borrower, Trade- point Atlantic, to place two sep- arate, non-recourse loans with Allianz Real Estate , includ- ing the $71.8 million, 18-year, fixed-rate loan for the Under Armour facility and the $63.2
million, 17-year, fixed-rate loan for the Amazon facility. The Tradepoint Atlantic site covers 3,250 acres on the Spar- rows Point peninsula along the Patapsco River at the gateway to the Port of Baltimore five miles southeast of Baltimore’s Central Business District. The location provides immediate
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Mid Atlantic Real Estate Journal
Mid Atlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Account Executive ........................................Joe Christman Account Executive ........................................... Steve Kelley Account Executive ............................................. Kim Brunet Account Executive ........................................ Marisol Chase Account Executive .........................................Alyson Parker Senior Editor/Graphic Artist ..........................Karen Vachon Office Manager ...............................................Kerrin Devine Contributing Columnists...Silas Chamberlin, PhD, York County EconomicAlliance; Brenner Green, Real Property Capital, Inc.; Marcy Hamilton, Meyer, Unkovic & Scott; Brenda Muller, Asset Preservation, Inc. Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, 350 Lincoln St., Suite 1105 Hingham, MA 02043 USPS #22-358 | Vol. 31, Issue 3 Subscription rates: $99 - one year, $148 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
A Pre-Flight Checklist For A Business In An Airport A Marcy Hamilton s many familiar mall storefronts go dark, it's no secret that brick- and-mortar retailers are in a fight to stay relevant. You wouldn’t know it, however, if you spend all your time in airports, where sales from retail shops and other conces- sionaires continue to increase worldwide. As retailers struggle in the digital economy, airports can represent a rare refuge where a captive audience of travelers is more willing to spend. But before signing a lease in an airport mall, which are similar in many respects to a regular suburban counterpart, busi- ness owners should consider a number of special challenges. Negotiations When negotiating a lease, think about your exit strategy. What happens if sales don’t reach the level you expected? A kick-out clause allows tenants or the landlord/mall developer to terminate a lease early un-
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der specified circumstances. This way, tenants can cut their losses early, and developers can try for a more successful business than waiting out an underperforming one. In the same vein of planning for the unexpected, if a devel- oper is proposing a relocation that could damage sales, a tenant can negotiate up-front the right to reject the proposed space and terminate the lease, or the tenant could accept the space but negotiate a reduction in rent until sales reach the level they were at before the relocation. Similarly, another provision to lower rent can be negotiated to account for a potential scenario in which enplanements fall, lowering
foot traffic. More considerations in a negotiation include pushing for non-disturbance or recognition agreements if the developer operating the mall breaks its lease with the entity or author- ity that owns the airport. Security Airports are hyper-focused on security and, therefore, have certain logistical hurdles to cross concerning supplies and even the products you can sell. With space at a premium, not every store has an equal amount of square footage, so tenants should understand their needs and negotiate additional storage space if continued on page 18A
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M id A tlantic R eal E state J ournal By Brenner Green, Real Property Capital, Inc. The rare instance in CRE lending when things make sense
I
t’s easy to be negative and skeptical in this busi- ness. We live in a world
to the laws of common sense. So, when I encounter some- thing that makes a lot of sense and provides real flexibility, I take note of it. Recently we closed a CMBS loan for a hotel in a major lei- sure market in the U.S. Dur- ing the time period in which we were closing the loan, due to both a September 2017 one- time booking surge as a result of Hurricane Irma and a fall 2018 tech glitch with Expedia, the hotel’s revenue was down on a year-end basis. This rev- enue decrease resulted in the property’s cash flow no longer
complying with the original underwriting requirements in the loan application. Because of the amount of liquidity and efficiency in the capital markets currently, rather than severely cutting the loan amount as would normally be expected in this situation, the lender was able to keep the loan amount nearly the same and close efficiently. The way they did this was to increase the spread over the Treasury rate so as to treat all of the loan proceeds that resulted in the loan fall- ing short of the original debt
service coverage and debt yield metrics as mezzanine financing. In this instance, the Treasury rate had significant- ly decreased from the time of application, so even with the increased loan spread, the overall rate did not change significantly from where we began. While this obviously doesn’t work in every case, over the last several years we have been able to do one or two deals a year where this type of structure has been employed. When achieving the absolute highest loan amount is the
top priority, or when waiting a year for numbers to improve and taking interest rate risk is not an option, it’s reassur- ing to know that we are in an environment where there are options that provide flex- ibility that might allow you to execute on your business plan. Take advantage while it lasts. R. Brenner Green is a 20- year veteran in commer- cial real estate finance and President of Real Property Capital, Inc., a full-ser- vice commercial mortgage banking firm based in the Philadelphia suburbs.
where action and outcome a r e o f t e n driven by a response to Federal and Internation- al financial regulation. T h i s c o n -
Brenner Green
Vantage RES welcomesmarketing coordinator Gerard Bellino MARLTON, NJ — Van- tage Real Estate Services (Vantage RES) announced struct sometimes causes deals to die or at least to be altered outside of what would be the most efficient structure for borrower and lender, and sometimes in the worst case, these structures do not adhere
the addition o f Gerard Bel l ino to the rapidly growing com- mercial real estate firm, which serves S o u t h e r n New Jersey,
Recently Closed Loans
Gerard Bellino
Eastern Pennsylvania and the surrounding area. As the newly appointed marketing coordinator, Bellino will lead the company’s marketing, so- cial media and web presence for both marketing clients’ properties as well as the firm’s services. Bellino is an ambitious marketer, freelance graphic designer, and mobile applica- tion designer. Prior to joining Vantage RES, he was a sales representative at Weichert Realtors. Bellino is extremely excited to apply his business and marketing skills in a practical setting. “I am excited to share my passion (which is contagious) with our clients, and I can’t wait to take the company’s marketing to new heights,” said Bellino. The Vantage RES executive team is thrilled to have someone of Bellino’s background on the team. “Gerard’s larger-than- life personality will be a great asset both to our clients and our internal team as we take our marketing to a new level,” said Leor Hemo , founder and managing principal of Vantage Real Estate Services.
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New assignments and high volume of transactions lead CRE firm to expand further WCRE adds trio of new hires and relocates center city office to Logan Square, Pennsylvania
HILADELPHIA, PA — Wolf Commercial Real Estate (WCRE) announced the expansion and relocation of its Center City Philadelphia office, which in- cludes the addition of three new team members serving southeastern Pennsylvania and Southern New Jersey. WCRE quickly outgrew its original Philadelphia office at 1601 Market St., and has moved to 3 Logan Square, at 1717 Arch St. The new team members are Kevin Coleman , who joins as chief sales officer and P
and partners, and to deepen our commitment to community initiatives.” Coleman is a 15-year in- dustry veteran. His role will include sales management and leadership, and business development throughout the region, with a heavy focus on central New Jersey. Coleman will also play an active part in the recruitment of all new team members. Previously, Coleman served as a vice president of advisory services with Transwestern. During this time, he had the opportunity to work on behalf of office and industrial ten- ants, investors, and developers. On joining WCRE, Coleman said,“Jason has worked very hard to build a strong brand in the region, and I am exited for the opportunity to leverage my diverse background to help the team grow to the next level of performance.” Martin is one of the firm’s two new sales associates. Martin is a former new business develop- ment representative in the fleet management industry who will be a valuable partner to clients seeking expertise in develop- ment and understanding the potential of a space. He will work closely withWCRE’s sales professionals to generate new business relationships and cre- ate opportunities for clients in Philadelphia and the suburbs. In addition to his profes- sional activities, Martin is an attackman for the Hungarian National Lacrosse Team. He competed with the team in the 2018 World Lacrosse Champi- onships in Israel. Scanzano also joinsWCRE as a sales associate. He will focus on the Southern New Jersey market. Scanzano will special- ize in sales and leasing, tenant and landlord representation, investment sales, and multi- family dwellings. Scanzano is an entrepre- neur and former professional athlete. He played six years of professional baseball, ending his career in 2010 with the Camden Riversharks. After baseball, he took a sales posi- tion with the Southern Illinois Miners, an independent minor league team. Since 2015 Scan- zano has been the co-owner of Scanzano Sports in Cherry Hill, a baseball training center. He is responsible for market- ing and business development, building relationships in the community, and overall man- agement.
sell and Joseph Nassib . Each brings a unique skill set, along with energy, passion, and the signature WCRE commitment to the community. Managing principal Jason Wolf and vice president and principal Chris Henderson , also assist the Philadelphia team. “We’ve been serving numer- ous clients in and around Cen- ter City for the past few years, and we have fully committed to expanding our presence here,” said Henderson. “This move will create more opportunities for our Philly team to network and collaborate with clients
Kevin Coleman
Tyler Martin
Mike Scanzano
city. Among them are Brian Propp , director of strategic relationships, Tony Banks , vice president, Anthony Man- nino , senior consultant, and sales associates Mitchell Rus-
executive vice president, and new sales associates Tyler Martin and Mike Scanzano . They join a team that includes several well-known business leaders with deep roots in the
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Lee & Associates | Maryland end-of-year report +5 Million s/f of industrial space leased within Greater Baltimore Metropolitan market in 2018 C OLUMBIA, MD — More than five million s/f of industrial space
Container Store in MRP In- dustrial’s Eastgate 95 busi- ness community in Harford County and the 500,000 s/f lease signed by Best Buy in Chesapeake Real Estate Group’s BrandonWoods III in Anne Arundel County. Ameri- can Sugar Refining also leased more than 300,000 s/f of space in Howard County, in a project owned by Manekin and AEW Capital Management . “There seems to be no end in sight to this unprecedented level of industrial activity in the greater Baltimore metro- politan region, and numerous local development companies and national REITs are mov- ing as quickly as possible to entitle land and construct new projects to keep up with existing demand,” explained Tom Whelan , principal, Lee and located in neighborhoods connected to quality health care, schools, jobs and transit can provide the foundation for better outcomes.” Health Begins with Home draws on Enterprise’s on-the- ground experience and its work in raising and investing capital to further connect health and housing: developing meaning- ful, sustainable partnerships; sharing insights to improve the health of communities; advancing smart policies; ex-
& Associates | Maryland. “This momentum continues to be driven by the expectations of consumers to receive next day or same day delivery of products purchased on-line, coupled with the strong liquid- ity in the capital markets. “The Baltimore-Washing- ton, D.C. region, which is considered the fourth largest Combined Statistical Area in the country with more than ten million people, re- mains among the most active industrial markets in the country. Approximately one- third of all consumers resid- ing in the United States can be accessed within a one-day truck drive and major ports including those in Baltimore, Washington, D.C., Wilmington and Philadelphia service this area,” he added. ploring the link between stable housing and health care usage; and making a compelling, research-backed case for the relationship among neighbor- hood conditions, homes and health. Health Begins with Home also benefits from the expertise of Enterprise’s Health Adviso- ry Council, which is made up of nationally recognized experts who provide academic, clinical, public health and community development insights. platform. The Occupant Experience group leverages research and analytical tools to instill well- ness, comfort, connectivity and innovation in the work envi- ronment. The team’s subject matter experts help business leaders maximize real estate through more informed, data- driven and people-centric de- sign decisions. Prior to joining Savills Studley, Rodriguez worked as a leading member of the Workplace Strategy team at Gensler.
was leased throughout the greater Baltimore metropolitan marketplace in 2018, according to the Lee & Associates | Maryland end-of-year market report that captures data from Baltimore City, as well as Anne Arundel, Baltimore, Carroll, Cecil, Harford and Howard Counties. Baltimore County achieved the highest volume of activity with nearly 3 million s/f of space leased, followed by Harford County (943,000 s/f of space), Baltimore City (696,000 s/f of space) and Anne Arundel County (260,000 s/f of space) Lee & Associates | Maryland is a fully-integrated commer- cial real estate brokerage and management firm and the local affiliate of the international COLUMBIA, MD — Enter- prise Community Partners Inc. (Enterprise) launched Health Be- g i n s w i t h Home, a na- t i ona l i n i - t i a t i v e t o harness the power of af- f o r d a b l e homes to cre- ate healthier families and stronger com- munities. Working with a broad group of partners and guided by data-driven insights, Health Begins with Home will put $250 million to work over five years to promote health as a top priority in the development and preservation of affordable homes and to elevate homes as an essential tool for improv- ing resident and community health. “Health Begins with Home highlights the next frontier in Enterprise’s work: fulfilling the potential of homes to im- prove the health of people and of entire communities,” said Laurel Blatchford , presi- dent, Enterprise Community Partners. “We’ve long seen Laurel Blatchford
Brandon Woods III
Lee & Associates brokerage network. Since first quarter 2014, the overall vacancy rate for indus- trial space in the local region has decreased from 10.6% to the current 7.7% level for the market that includes more than 202 million s/f of class A, B and C space in nearly 3,600 buildings. This positive activ- ity offsets the negative absorp- tion of more than 500,000 s/f the undeniable economic and environmental power of home. We know that bold, focused ef- forts can significantly improve outcomes, as we learned from how our Green Communi- ties Criteria dramatically ex- panded development of green affordable housing.” Health Begins with Home will involve cross-sector part- nerships among health sys- tems, health insurers, hous- ing developers, policymakers, public health associations, community development orga- nizations, social impact inves- tors and foundations. The initiative focuses its ef- forts in four key areas: • Conducting research to learn and leverage the connec- tion between quality, stable, affordable homes and healthier outcomes • Awarding grants to local nonprofits to fund housing and community health programs and to increase partnerships between housing and health- care organizations • Providing technical as- sistance to leverage and align resources with opportunity, use data to strengthen decision making, lift up best practices
of class B space in Howard County in addition to 350,000 s/f of negative absorption for class B space in Carroll Coun- ty. New construction activity remains brisk with more than 4.4 million s/f of space cur- rently underway throughout the region. Significant leasing activity included the cumulative 1.2 million s/f of space signed by Kuehne + Nagel and The and advance smart policies • Connecting capital from healthcare organizations, in- stitutional investors and so- cial impact funds to develop and preserve healthy, well- designed homes that are af- fordable The Enterprise-managed $85 million Housing for Health Fund serving the San Fran- cisco Bay Area and a $100 million national loan fund, both announced jointly with Kaiser Permanente last week, are the types of pioneering investments Health Begins with Home aims to replicate in markets across the country. Each will invest over the next 10 years to preserve and to cre- ate affordable, healthy homes, with the loan fund concentrat- ing on Kaiser Permanente’s service regions in eight states and the District of Columbia. “By bringing together the health and housing sectors, Enterprise can be a catalyst for a seismic shift in the indus- try,” said Brian Rahmer, vice president, Health and Hous- ing, Enterprise. “Our work with communities and part- ners is showing us how homes designed with health in mind
Enterprise launches Health Begins WithHome, a national initiative to harness the power of affordable homes
Savills Studley Occupant Experience Group adds Johanna Rodriguez
WASHINGTON, DC — Savills Studley announced the addition of Johanna Ro-
driguez as a senior man- aging direc- tor, Occupant Experience. Based in the firm’s Wash- ington office, she will be responsible
Johanna Rodriguez
for supporting the Northeast- ern and Southeastern expan- sion of the Workplace Strat- egy and Occupant Experience
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D el M ar V a
Acquires property from the Groome UnitedMethodist Church D2 Org. receives unanimous approval for 292-lot subdivision
EWES, DE — The D2 Organization received Preliminary Plan Ap- proval from the Sussex County Planning & Zoning Commis- sion for a subdivision along New Rd. in Lewes. The subdi- vision, known as Tower Hill, will include 292 single-family units on the 134-acre parcel. D2 is acquiring the prop- erty from the Groome United Methodist Church and church officials plan to use funds from the sale of the property to build a new church in Lewes. Over a 13-month period D2 worked with local zoning and land-use officials as well as environmental and wetland engineers to creatively design and plan the community and secure approvals for the site. D2 also voluntarily spent nearly $350,000 for an archeo- logical study of the parcel in order to search for and pre- serve any Native American or Colonial artifacts. Although no L NORFOLK, VA — Neu- man Commercial Group, LLC has negotiated the sale of Town Point Center, a class A 12-story office building with ground floor retail in Norfolk, Hampton Roads. The property sold for $19.9 million. Located at 150 Boush St. in Norfolk’s central business district on the Elizabeth River waterfront, the 132,000 s/f building is 94% leased to such tenants as BDO USA, The UP Center, Verizon, RCMA Americas and The Vir- ginia Symphony. The transac- tion included the simultaneous sale of the building, the sepa- rately owned ground leasehold
Tower Hill, Sussex County
major artifacts were found, D2 agreed to display a history of the property inside the com- munity’s clubhouse. D2 prides itself on going above and beyond local and state requirements when de- veloping a new subdivision and works closely with the existing community to address concerns. In the past two years alone, D2 has developed and sold interest and a seller-leaseback. Neuman Commercial Group, led by principal, Gil Neuman , negotiated the sale on behalf of the Florida based buyer, The Falstaff Group , from sellers CIG Town Point Center, LLC and The Runnymede Corpora- tion. “Town Point Center is a sta- bilized core-plus asset which directly benefits from and con- tributes to Downtown Norfolk’s continuing waterside redevel- opment and hotel and apart- ment boom,” said Neuman. He added: “We congratulate the sellers for having created value and the buyers for acquiring a
over 275 acres totaling 750 lots within five distinct com- munities. Many of the projects, which are located along Dela- ware’s coast, have earned D2 recognition as a preeminent land developer of high quality planned residential communi- ties. D2 has successfully part- nered with local and national homebuilders for the execution and sale of residential master planned communities. The Hampton Roads region hosts over 96,000 active-duty military personnel and the Norfolk Naval Base, the larg- est naval base in the world. Town Point Center is across the street from The USSWisconsin Battleship and the Hampton Roads Naval Museum, and within walking distance to restaurants, banks and hotels. Major new downtown apart- ment projects include The ICON (275 units), The Edge at 450 Boush (156 units) and The St. Paul’s Apartments (126 units). premiere infill urban commer- cial landmark.”
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Neuman Commercial Group negotiates sale of Town Point Center for $19.9million
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Commercial-Industrial Realty Council Great CRE Events...Cont. Education...Speakers...Networking www.CircDelaware.org
76ers Fieldhouse Develop- ment presented by BPG CIRC members were excited to hear about the development of the 76ers Feildhouse / Delaware Blue Coats practice stadium and all that it will offer to the City of Wilmington as a local entertainment sports facility. Michael Hare and Robert Buccini, of the Buccini/Pollin Group shared a new video "It's a New Day in Wilm- ington" that is sure to help change the narrative to reflect the excitment and reality of all that is happening in the City of Wilmington. 76ers Fieldhouse Facts 161,000 SF 3 Basketball / 4 Volleyball Courts Nemours Ortho Medical Office Titus Strength & Conditioning Full Size IndoorField Full Size Outdoor Field 800 Parking Spaces & Cafe CIRC Photo Sponsor Joe Allen of Sonitrol Security of Del- aware Valley provides a nice service to CIRC with its photo sponsorship. Each month, Pat Forester publishes our events and emails them from the Sonitrol newsletter. Watch for your copy, or paste this URL in your browser: https://sonitrolde.com/commercial-industrial- realty-council-delaware-hosts-january-luncheon/
2018–19 d i r e c t o r s — O F F I C E R S — President Donald Robitzer The Commonwealth Group Vice President Robert Stenta Pettinaro Management, LLC Treasurer Jeremy Abelson MidCoast Community Bank Secretary Bayard Snyder , Esq. Bayard & Associates — D I R E C T O R S — Education Chair Cynthia Fleming Past President Bert Root Benjamin Berger, Esq. Berger Harris, LLC John Birmingham Cushman & Wakefield Carmen Facciolo NAI Emory Hill Michael Hahn 44 Business Capital Jim O’Hara , Jr. NAI Emory Hill-Retail Division Barton L. Mackey, Jr. Patterson-Woods Associates — E X - O F F I C I O — Business Manager Janet S. Pippert Landmark Science & Engineering Legislative Lobbyist C. Scott Kidner C. S. Kidner & Associates Legislative Affairs Chair J. Gregory Ellis , CCIM Patterson-Woods Associates Economic Dev. Liaison - NCCC Robert Chadwick New Castle County Ec. Dev. Council Economic Dev. Liaison - State of Del. Patricia Cannon , MSM Delaware Div. of Small Business, Dev. c o n t a c t u s Janet@circdelaware.org (302) 633-1705 Jones Lang LaSalle Membership Chair James Manna BrightFields, Inc. Program Chair Jay L. White , MAI, CRE® Apex Realty Advisory
SCHEDULE OF EVENTS Lunch Meetings Mar. 13 (Wed.) Dupont Country Club Monthly Membership Lunch (& Cont. Ed.) 11:30 - 1:30 p.m. Cost: $35/members; $45/non-members Topic: New Dot Food Facility - Joe Little, GM Apr. 9 (Tuesday) Dupont Country Club Monthly Membership Lunch (& Cont. Ed.) Register: www.circdelaware.org/meetings/next- Meeting.cfm Continuing Education Instruction by Frederick Academy of Real Estate Register at www.CircDelaware.org Schedule of Classes Classes Accredited for DE*PA*MD*NJ See Online Schedule for Credit Details. Register: www.circdelaware.org/meetings/ nextMeeting.cfm Download PDF: www.circdelaware.org/ userFiles/CE_regForm_2019-2020.pdf Register/pay early for discounts Feb. 13, 2019 *- DE Modules 1 & 6 8:30 a.m. FairHousing, Ag., Ethics DE Mod. 1,MD FairHousing, NJ Mandatory 3.0 hrs., PA Fairhousing 3.5 hrs. 1:30 p.m. Investment Fundamentals DE Mod. 6, MD Elective 3.0 hrs., NJ Elective 3.0 hrs., PA Elective 3.5 hrs. Mar. 13, 2019 * - DE Modules 6* & 3 8:30 a.m. Prop. Mgmt. & Adv.* *PA Mandatory 3.5 hrs. (New Class Approved) * Property Mmt. (2.0)/Advertising (1.5) DE MOD 6, MD Elective, NJ Elective 1:30 p.m. Contracts DE Mod. 3, Contracts 3.0 hrs., MD 3.0 hrs Elec- tive, NJ 3.0 hrs Elective, PA 3.5 hrs Elective Apr. 9, 2019 * - DE Modules 2 & 5 May 8, 2019 *- DE Modules 4 & 7 * see schedule for credits for PA, MD, NJ & DE
Continuing Ed Register for RE continuing ed classes sponsored by CIRC. Get all of your needed credits for DE, PA, MD, NJ - in the same sitting!
New Member (From left) new member Kole Fatunmbi, of Batta Environmental with Jim Manna, Membership Chairman. Welcome to CIRC!
** CIRC would like to start a monthly Member Spotlight article on our page, with a facing page displaying four CIRC Member quarter-page ads. Contact Linda Christ- man (lchristman@marejournal.com ) for our special CIRC pricing!
8A — February 8 - 21, 2019 — DelMarVa — M id A tlantic
Real Estate Journal
www.marejournal.com
D el M ar V a By Brenda Muller, Asset Preservation, Inc.
Tax Deferral & the Wide Range of Like-Kind Investment property
V
irginia business owners and real estate inves- tors who understand
taxation including deprecia- tion recapture at 25%, federal capital gains at 15% or 20%, Virginia state taxes of 5.75% and the 3.8% Net Investment Income Tax, when applicable. The definition of “like-kind” real property is very broad and includes land, single family rentals, commercial and retail, multi-family, farms/ranches, and virtually any type of real property held for investment. In addition, conservation easements, ag- ricultural easements and perpetual communication easements (cell towers) min- eral rights, certain oil/gas of- ferings are generally consid- ered real property and may qualify for 1031 exchange tax deferral. One restriction is that only United States property can be exchanged for other United States prop- erty. Even a property owner who owns a vacation home meeting the safe harbor pro- visions of Revenue Procedure 2008-16 is considered holding for investment and which
provides another opportunity for diversification. The most common exchange variation is the delayed ex- change. In a delayed exchange, prior to closing on the sale of the relinquished property, the property owner engag- es a qualified intermediary (“QI”) who will facilitate the exchange. The QI, in addi- tion to preparing the neces- sary exchange documents and safeguarding the proceeds, provides an important role guiding all parties through the exchange process. The QI, through an assignment of the sale contract, sells the relinquished property to the buyer and instructs the clos- ing officer to directly deed the property to the buyer. The QI then receives the sale pro- ceeds and holds these funds subject to certain restrictions. After this closing, the prop- erty owner has 45 calendar days to identify replacement property (the “Identification Period”) and a maximum of 180 calendar days to close on
the purchase of replacement property (the “Exchange Pe- riod”). The QI then, through an assignment of the purchase contract, purchases the re- placement property from the seller and instructs the clos- ing officer to directly deed the replacement property to the property owner. For full tax deferral, an investor must generally meet two requirements: (1) reinvest the net equity; and, (2) incur the same or greater amount of debt. Investors can opt for full or partial tax deferral and any proceeds received are called “cash boot” and a reduction in BALTIMORE, MD — NAIOP Maryland , the lo- cal association comprised of more than 450 professionals working for real estate de- velopment organizations and affiliated companies including architectural, accounting, law and brokerage firms has elect- ed Nicole Wilhelm Smith ,
mortgage liabilities not offset with the addition of new cash is called “mortgage boot.” Savvy business owners and real estate investors in Vir- ginia should consider using 1031 exchanges to expand their businesses or acquire better performing investment properties while deferring capital gain taxes. Brenda Muller is the division manager in Vir- ginia, Maryland and Mid- Atlantic region with As- set Preservation, Inc., a national qualified inter- mediary with an office in Harrisonburg, VA. business development man- ager for ECS Mid-Atlantic to its Board of Directors. Currently Co-Chair of the NAIOP Maryland Awards and Community Service commit- tees, she also chaired the as- sociation’s ProgramCommittee for more than five years. Smith joined the chapter in 2009.
the benefits of a 1031 ex- change can acquire bet- ter perform- ing proper- ties and de- f er pay ing capital gain taxes. Since
Brenda Muller
1921, IRC Section 1031 al- lows property owners to defer capital gain taxes when real property held for investment or used in a business is ex- changed for other “like-kind” real property. Taxes which would otherwise be due in a taxable sale are deferred until property is sold for cash at a later time. Essentially, a 1031 exchange provides property owners an interest-free loan that can be used over and over to exchange into better per- forming investment properties and build equity. Via a 1031 exchange, property owners can defer up to four levels of
NAIOPMaryland elects WilhelmSmith of ECS Mid-Atlantic to Board Of Directors
Mid-Atlantic 1031 Exchange Experts
Asset Preservation, Inc. (API), is a leader, both in the Mid-Atlantic and nationally, in the 1031 exchange qualified intermediary industry. API is committed to providing investors the highest levels of experience, expertise and security of funds in the industry. API is relied upon by all levels of investors and Corporate America. Take advantage of smart 1031 exchange tax solutions
Brenda Muller Division Manager Asset Preservation, Inc. 540-532-2834 brenda@apiexchange.com
A National IRC §1031 “Qualified Intermediary”
Call for a free consultation
Real Estate Journal — February 8 - 21, 2019 — 9A
www.marejournal.com
M id A tlantic
M id A tlantic R eal E state J ournal
Blau &Berg retains full service commercial construction company to preform interior fit-out Hollister to build 425 Westchester Ave., mixed-used building that will transform Bronx neighborhood
RONX, NY — Hollis- ter has been retained as design/builder by AB Capstone, a real estate invest- ment company, to execute the delivery of a 10-story (plus cel- lar) high-rise building located at 425 Westchester Avenue in the Bronx, NY. "The collaboration between Hollister and Michael Graves Architecture & Design has been exceptional in solving for AB Capstone's needs and pro- viding the best possible design for them, their tenants, neigh- borhood and environment. The collaboration is progressing seamlessly!" said Andrew McLaughlin , project execu- tive at Hollister Construction. The new building will have a total floor area of 144,000 s/f (124,000 s/f above grade and 20,000 s/f below grade.) Michael Graves Architecture & Design will serve as the project architect. The project is scheduled to break ground in the first quarter of 2019. The new building will fea- ture state-of-the-art amenities including: • 85,000 s/f Charter School • 10,000 s/f -12,000 s/f of rooftop play space • 15,000 s/f at street-level / ground floor retail space • 37,000 s/f non-profit office space on upper floors • 20,000 s/f below-grade cellar In other Hollister news, the company was retained by The Blau & Berg Company , a full-service commercial real estate brokerage firm, to per- form an interior office fit-out at Short Hills Executive Center for new tenant, Regus. Located on the fourth floor of 830 Mor- ris Tpke. in Short Hills, NJ, the project encompassed 16,000 s/f and included the demolition of existing space and build out of new, executive office suites. “Hollister’s work is impec- cable. They work closely with the tenant and the landlord on all accounts open book and leaves with a better relation- ship than when they started the project which is evident in the positive feedback we continually receive from each incoming tenant. We are look- ing forward to continuing our relationship with Hollister on future projects,” said Jason Crimmins , president, The Blau & Berg Company. Hollister worked closely with all project partners to deliver the space in time for the sched- B
employees with state-of-the-art amenities including: • Breakrooms • Various private and gen- eral offices • Reception lobby • Boardroom and conference rooms • Business lounge and re- charge bar • Open and dedicated co- working areas Hollister Construction Services (Hollister) is a full service commercial con- struction company with a team of 100+ construction professionals.
Short Hills Executive Center interior
uled December 2018 opening date. We are fortunate to have a strong team of subcontractor partners and internal support
staff serving as the founda- tion for successful fast-track projects. Regus’ new office provides
425 Westchester Avenue
YOUR CONSTRUCTION PARTNER Bringing the Most Value to our Clients and Partners
We pride ourselves on the relationships we build and the facilities we deliver.
We specialize in ground-up construction and renovations across all sectors.
- Corporate - Education - Healthcare - Industrial
- Retail - Residential - Self-Storage - Senior Living
NEW JERSEY NEW YORK PENNSYLVANIA | | hollistercs.com
10A — February 8 - 21, 2019 — M id A tlantic
Real Estate Journal
www.marejournal.com
M id A tlantic R eal E state J ournal
Welsh, Schulz and Kohaut represent Lincoln Property Company Newmark Knight Frank serves as investment advisor on the sale of 9 Entin Rd. in Parsippany P to the Property, and a number of new multifamily develop- ments in the Corridor.
196,894 s/f class A office build- ing that is 72% leased to a mix of corporate headquarters and high credit-quality companies including Tilcon NY, Med Me- trix (31,000 s/f HQ) and HNTB (29,500 s/f), offering stable in- place cash flowwith substantial upside through the lease-up of the 55,514 s/f of vacant space. The property is strategically located directly off I-287 (Exit 40B) in the prestigious Rte. 10 Corridor. This micromarket is evolving into an amenity-rich “live/work/play/stay” environ- ment highlighted by the recent opening of Wegmans adjacent
ARSIPPANY, NJ — Newmark Knight Frank (NKF) an - nounced the sale of The 9 at Parsippany, located at 9 Entin Rd. in Parsippany (“9 Entin”). Kevin Welsh, Brian Schulz, and Chuck Kohaut of NKF’s Tri-State Capital Markets Team represented an institu- tional investor and Lincoln Property Company on the transaction. The team was also responsible for procuring the buyer, American Equity Partners , a private real estate company based in Edison. The 9 at Parsippany is a
“The Property’s durable in- place cash flow and significant upside were appealing to Amer- ican Equity Partners. They are well positioned to benefit from the Rte. 10 Corridor’s ongoing transformation into a dynamic mixed-use environment that will continue to drive tenant demand,” saidWelsh, executive managing director. “We are excited to add 9 Entin to our portfolio of high quality properties,” said David Elkouby, the founder of Ameri- can Equity Partners. “We are looking forward to continuing our mission of providing a first- class experience to our tenants at this building.” In other news, industry vet- erans John Ennis and Brett Lake, MAI have recently joined NKF Valuation & Ad- visory (V&A) as senior vice presidents in the Financial Reporting practice. Ennis and Lake bring more than 45 years of combined industry experi- ence to the Whippany office. “We’re incredibly excited to have these two seasoned finan- cial reporting professionals join our growing V&A team to pro- vide industry-leading services,” said V&A financial reporting practice leader John Corbett, MAI, ASA, FRICS . “NKF’s cli- ents will benefit fromBrett and John’s expertise in navigating complex financial, accounting, tax and regulatory issues.” The NKF V&A Financial Reporting group is a premier service provider, bringing a comprehensive awareness of regulatory standards and prop- erty-specific insights to deliver strategic guidance to multina- tional corporations, public and private REITs, private equity groups and funds. Ennis brings more than 25 years of U.S. and interna- tional experience in real estate valuation and analysis. He has served a wide range of clients, including federal agencies, municipalities, financial insti- tutions, insurance companies, REITs, private and public cor- porations, public utilities and individuals across a full range of property types. Prior to join- ing NKF, Ennis served 12 years with FTI Consulting, a global business advisory firm. Lake brings more than 20 years of industry experience focused on consulting and valu- ation requirements.
9 at Parsippany
WHAT’S NEXT INNEWJERSEY
With 3.5 billion square feet under management, 400 oces in 70 countries, 2017 revenues of $6.9 billion and 48,000 hardworking innovators, this is where the power of real estate is unleashed on behalf of New Jersey’s top owners and occupiers. Our clients benefit from the insight that comes from the perspective of a trusted global leader. Explore what’s next at cushmanwakefield.com .
Andrew R. Judd Managing Principal 201 460 3340 andrew.judd@cushwake.com
Real Estate Journal — February 8 - 21, 2019 — 11A
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M id A tlantic
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