ISSUE HIGHLIGHTS Volume 31, Issue 5 March 15 - 28, 2019 1031 EXCHANGE SPOTLIGHT 8-14A GREENSPRING REALTY PARTNERS ACQUIRES 68,000 S/F INDUSTRIAL BUILDING IN BALTIMORE COUNTY FOR $4.37M
CBRE Group prepares comprehensive marketing portfolio MandelbaumSalsburgreps.Rubenstein Props. in $197M national portfolio sale
practices to ensure a successful portfolio sale for Rubenstein Properties, a long-standing client,” said, Barry Mandel- baum, a founding member of the firm and chairman of the board. “The transaction involved complex contract negotiations, title and survey issues, property condition dili- gence, tenant issues, bulk sale and environmental compliance activities and negotiation and procurement of environmental insurance.” A comprehensive market- ing portfolio was prepared by CBRE Group on behalf of Rubenstein Properties. The company’s team consisted of Brian Fiumara, Michael Hines, Brad Ruppel and Lauren Dawicki from CBRE Capital Markets’ Institutional Properties, Bill Waxman and his team from NJ along with Kyle Roberts (CT), Morey Knutsen (IA), Tom Cooler (IN), John Reed (MA) and William Wolf (PA).
EW JERSEY, CON- NECTICUT, MASSA- CHUSETTS, IOWA,
INDIANA AND ALABAMA — Mandelbaum Salsburg P.C. , represented Rubenstein Properties of Little Falls, NJ on the sale of a national port- folio comprised of 28 properties to the Silverman Group of Basking Ridge, NJ for a sum of $183 million. The portfolio consisted of more than five million s/f of leasable space for industrial distribution and warehouse use. The properties span across NJ, CT, MA, IA, IN and AL. In addition, Ruben- stein Properties sold a property located at 1055 Crossroads Blvd. in Muhlenberg Twp., PA, to the tenant occupying the property for the sum of $14 million. Among the properties in the portfolio are 10 Park Pl., But- ler, NJ; 20-21 Wagaraw Rd., Fair Lawn, NJ; 39 Avenue C, Bayonne, NJ; 101 East Main St., Little Falls, NJ; 114 Beach
$197 million national portfolio sale
St., Rockaway, NJ; 1578 Sus- sex Tpke., Randolph, NJ (units two through five). Mandelbaum Salsburg’s team, consisted of senior mem- bers Barry Mandelbaum and Owen Hughes and a team of attorneys and support personnel from the Real Es- tate practice. Gordon Duus
of the firm’s Environmental Law Practice group provided assistance on securing envi- ronmental liability insurance policies that would protect both the seller and purchaser after closing. “We’re proud of the team effort by the members of our real estate and environmental
UPCOMING CONFERENCES March 20, 2019 Philadelphia Office & Industrial Conference
Progress Capital’s Domenico secures $60M formultifamilyportfolio inHudsonCounty
April 9, 2019 New Jersey CRE Forecast Conference For speaking and sponsorship information, please contact: Lea at 781-740-2900 or firstname.lastname@example.org
HUDSON COUNTY, NJ – Brad Domenico , partner at Progress Capital , negotiated a $60 million acquisition loan for a portfolio of 18 multifam- ily buildings located in Hudson County, NJ. The portfolio was purchased for $75 million. Niko Nicolaou of Gebroe-
Hammer represented both the buyer and the seller in the transaction. Domenico
s e c u r e d a 4 . 14% rate f i x e d f o r 7-years based on a 30-year a m o r t i z a - tion with two years inter- est only. The
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non-recourse loan represents 80% of the subject properties total value. Financing was provided by John Darrow of RED Capital . Hudson County is one of the fastest-growing counties in New Jersey due to its proximity to NYC. It has become a desired place to live for those who work in Manhattan, especially with the recent build-up of its larg- est city, Jersey City. As these towns and cities keep develop- ing, we’ll see more multifamily properties manifest and more
$60 million multifamily portfolio
people flock to these areas for lower cost of living as an alter- native to Manhattan. Progress Capital is a com- mercial mortgage banking firm specializing in arranging debt for commercial real estate own- ers and residential developers. Since 1990, Progress has suc- cessfully closed in excess of $40 billion in commercial loans
and directly funded over $150 million. Gebroe-Hammer is a mul- tifamily focused investment sales brokerage firm through the New Jersey/Pennsylvania/ New York area with a focus on suburban garden-style, hi-rise and townhome communities as well as urban low and mid-rise buildings.
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B U I L D I N G R E L AT I ON S H I P S T H R OU G H T H E P OWE R O F P E O P L E
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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 Senior Editor/Graphic Artist ..........................Karen Vachon Office Manager ...............................................Kerrin Devine Contributing Columnists .........Christopher Allison, NJ State Appraisers; Rich Sarkis, Reonomy 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 5 Subscription rates: $99 - one year, $148 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion 781-740-2900 | Fax: 781-740-2929 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
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Attention: NJ Property Owners and Investors Appeal Your Greatest Expenses Real Estate Taxes Before April 1st W Christopher Allison hen property owners receive their annual property tax assess- ment card in the mail, majority of tax payers do not under- stand how the assessment even equates to the “true value” of their home or building. There are other factors that come into play such as equalization rates and tax rates that are directly related to the assessment (con- veniently, this information is NOT on your tax bill). The only variable that you can change is your property’s assessment, because the equalization rates and the tax rates are consistent throughout the municipality for all properties within the municipality. The general idea is to create “equality” based on your existing improvements and land based on a price per square-foot basis. The only thing that can be changed is your assessment that will be directly related to you benefit- ing from tax relief which lasts a period of three years because
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margin of error of 15% for “mass appraisal techniques” used for “Ad Valorem” tax purposes. If they are allowed a margin of error of 15% how much do you think that property assessments are inflated for a much greater percentage? Especially because most people do not understand how these formulas work or even relate to property value. It is imperative to have your application filed by April 1st. Which is an easy process. Be- cause we believe the tax relief should go directly to the prop- erty owner. We will provide you easy instructions with this easy process. In situations were an attorney will be required in addition to our services, which continued on page 15A
of New Jersey’s “freeze act” which gives property tax relief for a period of three years un- less a revaluation were to occur within the municipality. Without boring you with the specifics give our firm a call with some basic information includ- ing: the address, a description the property, copy of your most recent tax bill, prior sales price and year purchased. Let our experienced professionals that specialize in these areas give you a free consultation and an estimate of about how much tax relief you look to save for the next three years. Typically, we save property owners usu- ally over 10%-15% annually and many cases much greater relief. The state of New Jersey allows a
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www.marejournal.com Real Estate Journal — March 15 - 28, 2019 — 3A Rise Partners purchases 126,650 s/f grocery-anchored neighborhood center on 18.37 acres Stape & Lupo of KLNB completes $13 million sale of Easton Marketplace in Easton, MD E ASTON, MD — KLNB Retail Investment Sa l es Group an - M id A tlantic
it with nationally recognized junior anchors. Deals like this present a tremendous up-side and our knowledge of the mar- ket, coupled with terrific client relationships, were key to the success.” “Easton Marketplace pro- vided us with an excellent chance to enter a market with high barriers to entry, that has the added benefit of serving a large second home market, with additional drive- through traffic from theWash- ington DC metro en route to the Atlantic beaches”, said Greg Wilson , a Rise partner. Founding partner Geoff Smith added, “Easton is such a beautiful and historic com- munity, with easy access to Washington DC and Balti- more. We are all excited to spend time there working to enhance Easton Market- places’ longstanding position within the market.” our core approach of value add investments,” Flamholz added. “Our team remains ex- tremely bullish on the ware- house/industrial real estate category in the Baltimore- Washington, D.C. region, and we will continue to pursue opportunities that leverages our ability to retrofit and lease properties.” Highlights of last year’s acquisition activity include The Kirby Industrial Center in Prince George’s County featuring 75,000 s/f of small bay warehouse space, a liquid terminal transfer site at 6101 Pennington Ave in Curtis Bay and 6101 Falls Road, which is located at the entrance to Lake Roland. “Among our objectives in 2019 is to continue our pur- suit of value-add properties that satisfy our acquisition criteria, with a focus on flex / industrial assets, as we look to expand our portfolio in response to the strong funda- mentals of our marketplace,” Flamholz added.
nounced the sale of Easton Marketplace, a 126,650 s/f grocery-anchored neighbor- hood center on 18.37 acres in Easton for $13 million. Andy Stape and Vito Lupo of KLNB investment sales represented the seller, Mears Properties, LLC/Easton Marketplace, LLC , on the transaction, and also procured the buyer, Rise Partners . KLNB Management was se- cured as property manage- ment for the center. Easton Marketplace is currently anchored by Weis supermarket with junior- anchors Aaron’s and Cato Fashions. The sale also in- cluded five subdivided parcels comprising two ground leases – McDonald’s and Ruby Tues- day – Pier 1 Imports, Hair O’ The Dog liquor store and BALTIMORE, MD — Greenspring Realty Part- ners, Inc. (GRP) , a Bal- timore-based commercial real estate and investment company, has acquired 4801- 4825 Benson Ave., a 68,000 s/f single-story industrial and warehouse building for $4.37 million from Green Hill Partnership . This rep- resents the first 2019 acquisi- tion for the company following a year in which GRP acquired nine buildings comprising more than 225,000 s/f of space in the greater Baltimore/ Washington metropolitan region. The GRP portfolio now comprises more than two million s/f of rentable space. 4801-4825 Benson Ave. was 45% leased when GRP placed the building under contract and, despite a rela- tively short study and close period, was able to achieve 100% occupancy at the time of closing. The company suc- cessfully secured leases with 1st Choice Services and Won- derfly Events, representing
inline vacancies totaling 6,120 s/f. The center also benefits from being shadow-anchored by Lowe’s Home Improve- ment and Kohls, which are separately owned. This is the first acquisition in the Mid-Atlantic region by Rise Partners. “There was a tremendous Easton Marketplace aerial
amount of interest in Easton Marketplace due to the sup- ply-constrained market and the terrific redevelopment potential of the center,” said Lupo. “Rise Partners will im- mediately capitalize on the value-add opportunity by sub- dividing the previous JC Pen- ney space and redeveloping
Snifter’s Tasting Room, and a 0.76-acre undeveloped pad. The property represented a value-add opportunity for investors to immediately in- crease cash flow through the lease up of a vacant 33,796 s/f junior-box, an 8,450 s/f space occupied by Sears that is month-to-month, and two-
Greenspring Realty Partners, acquires 4801-4825 Benson Ave., 68,000 s/f industrial building in Baltimore County for $4.37m
Flamholz , principal and co- founder of GRP. “We were at- tracted to this building based on its excellent condition and strategic location near I-695 and I-95, including roadside visibility from the Baltimore Beltway. The existence of unused acreage provides the opportunity for a future build- ing, outside storage, or addi- tional parking.” 4801-4825 Benson Ave. is positioned approximately 4801-4825 Benson Ave.
37,000 s/f of space, during the due diligence period to elevate the project to full occupancy. The building is contained within the Beltway Corporate Center. “Our goal with every ac- quisition we pursue is to add significant value to the asset with an aggressive leasing or re-tenanting strategy, in addition to the execution of a property upgrade program when necessary,” said Dan
seven miles from Baltimore- Washington International Airport and 13 miles from the downtown business district of Baltimore. The Halethorpe Commuter Rail Station (Penn Line) is less than one-half mile away and the St. Denis Commuter Station (Camden Line) is three miles from the site. “We achieved our 2018 goal of adding assets to our port- folio that are consistent with
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CRE Tech helps investors stay ahead As demand for opportunity zone investments climbs in DE
ince its inception in 2017, talk of the Opportunity Zone program has rippled
Reonomy. By diving deeper into individual asset details, users can explore physical, transac- tional and owner information to help decide if the asset is worth pursuing. Potential Paramount in Dover The city of Dover is also ideal for Opportunity Zone invest- ment. On top of Opportunity Zones, Dover is also home to various Downtown Develop- ment Districts that offer ad- ditional financial incentives from the state, county and city. Three of these qualified Downtown Development Dis- tricts overlap with Opportu- nity Zones, giving investors a chance to completely maximize their ROI. According to Reonomy data, there are 1,608 commercial as- sets situated in Dover’s Oppor- tunity Zones. Approximately 770 of these properties are cat- egorized as vacant land, mak- ing up the majority of Dover’s diverse asset spread. Rather than focusing only on land or property listed as “for sale”, this expansive scope increases the chances developers will find a property they’re interested in. As the race for Opportunity Zones wages on, investors in Delaware and throughout the nation will need to elevate their efforts with CRE technology. From sourcing through deal- making, off-market data plat- forms enable a simpler, savvier strategy. Rich Sarkis is CEO and co-founder of Reonomy, a commercial real estate data and analytics company. a section of the MARE Real Estate Journal 350LincolnStreet, Suite1105 Hingham, MA 02043 P: 781-740-2900 Fax: 781-740-2929 www.marejournal.com DELMARVA
they’re interested in to analyze building characteristics and transactional data, and in turn, determine if the property is worth pursuing. Investors and developers can also use individual asset intel to facilitate smarter, more cus- tomized deal-making. Rather than getting stonewalled by gatekeepers and opaque LLCs, accurate owner information al- lows users to go straight to the decision-maker of a property. Then, by leveraging the power of nuance, professionals can approach Delaware property owners with the knowledge they need to make an offer that benefits both parties. Wilmington’s Office Outlook While CRE technology can help simplify the search across all of Delaware’s Opportunity Zones, Wilmington and Dover have the most areas of poten- tial. In fact, 19 of the state’s 25 designated census tracts are lo- cated between New Castle and Kent counties. With the ma- jority of potential distributed in both cities, local developers should consider these metros in their Opportunity Zone search. Wilmington, particularly, is on the rise, and Mid-Atlantic investors shouldn’t overlook it. The largest city in the state is situated just 30 miles southwest of Philadelphia and its surrounding suburbs, making it attractive to inves- tors and developers. Office space, specifically, should be closely examined, as the city is relatively more affordable than its neighbor in Pennsylvania. Technical.ly recently reported that rent prices in Wilming- ton were cheaper at $25 psf compared to Philadelphia’s $31. Wilmington’s wage tax is also considerably lower at 1.25% compared to 3.89% in Philadelphia. Current Reonomy data in- dicates 4,071 different com- mercial assets located in Wilm- ington’s Opportunity Zones. Of these 4,000+ properties, more than 1,600 are categorized as general commercial and, while they aren’t exclusive to office space, include a myriad of asset types including office, hospitality, and mixed-use. Our platform also indicates there are 1,226 vacant land plots pep- pered throughout Wilmington’s Opportunity Zones. Developers looking for lucrative land deals can explore these parcels fur- ther by utilizing a commercial real estate data platform, like
t h r o u g h - out the real estate com- muni ty . In D e l a w a r e , particularly, investors and de v e l ope r s are tuning in, eager to
capitalize on the substantial tax breaks the program prom- ises. But while interest in these incentivized properties has increased, supply is limited- -there are only 25 designated census tracts across the state, making competition for invest- ment more fierce compared to other regions. To navigate the nuances of Opportunity Zone supply and demand, Delaware’s real estate community needs commercial real estate (CRE) technology now more than ever. Platforms powered by off-market data are especially advantageous, as they provide the necessary tools for investors and developers to efficiently locate potential properties. In the state’s major metros where demand is most notable, like Wilmington and Dover, CRE technology offers a birdseye view of the entire Opportunity Zone market--not just those listed “for sale”--and enables indispensable insights to strike better deals. Surpassing the Competition With the emergence of tech- nology, the days of manual sourcing for properties and strategizing are fading away. Still, many investors and devel- opers are hesitant to adopt new tools--in Delaware and across the country. Unfortunately, this creates a gap--those who continue to rely solely on these antiquated strategies can’t compete with those who use CRE tech. Why? It streamlines the search experience and pro- vides the details needed to ana- lyze and create stronger deals, especially in Opportunity Zones where return-on-investment (ROI) can be maximized. Technology like Reonomy lets users find property in Delaware’s Opportunity Zones with the click of a button. Compared to scouring listings for potential properties, these platforms serve up a simpli- fied search experience that can be customized to the users liking. From there, users can explore the individual assets
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GREENSPRING REALTY PARTNERS
Greenspring Realty Partners (“GRP”) is a full-service commercial real estate company specializing in the acquisition of opportunistic real estate investments. We selectively advise and provide sophisticated and comprehensive brokerage services including investment sales, landlord and tenant representation and development consulting services. The GRP portfolio is a diverse mix of industrial, flex,office, retail, and entertainment properties providing above market returns for their principals and investors through the diligent work of GRP in creating value add after the initial acquisition.
Dan Flamholz, Principal P: 410 977-4738
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HFF arranges financing for Embassy Suites hotel
Crotts, Zang & Ein orchestrate transaction Marcus &Millichap arranges the sale of a 62,118 s/f SC
BALTIMORE, MD — Hol- liday Fenoglio Fowler, L.P. (HFF) has arranged financing for the acquisition of Embassy Suites by Hilton Baltimore at BWI Airport, a 251-room, Hilton-branded, all-suite hotel near Baltimore/Washington International Thurgood Mar- shall Airport in the Baltimore- area community of Linthicum Heights. The HFF team worked on behalf of TCORHotel Partners (TCOR) to arrange a joint ven- ture equity partnership with Dallas-based TriGate Capital, LLC. Additionally, working on behalf of the new partnership, the HFF team placed the five- year, fixed-rate loan with a local bank. Loan proceeds will be used to fund the acquisition of the hotel. Embassy Suites by Hil- ton Baltimore at BWI Air- port opened in 1987 and just completed a comprehensive multi-million-dollar renova- tion in 2016 with additional improvements planned with renovation of the bathrooms, wet bar area of the suite and WASHINGTONDC — The Hampshire Companies, (Hampshire) and Harrison Street announced a joint ven- ture partnership to develop institutional-quality self-stor- age facilities along the I-95 Corridor fromWashington D.C. to Boston. Hampshire and Harrison Street also announced the first investment of the program- matic joint venture, which will be the ground-up development of a seven-story self-storage facility along Interstate 95 in Providence, R.I. and is expect- ed to break ground in the first quarter of 2019. Providence’s high population density, supe- rior accessibility, and lack of institutional quality facilities align well with The Hampshire Companies’ rigorous, time- tested site-selection criteria. Over the next several months, The Hampshire Companies and Harrison Street plan to announce several self-storage development projects as the firms continue to grow their self-storage portfolio. For decades, The Hampshire Companies has been one of the nation’s premier self-storage developers, delivering modern, institutional-quality facilities to underserved, high-barrier- to-entry markets throughout the Eastern United States. Leveraging a time-tested and
the meeting space. The hotel features a multi-story atrium, fitness center, business center, meeting rooms, complimen- tary appetizers and beverages at the nightly evening recep- tion, lounge, complimentary cooked-to-order breakfast, indoor pool and the BISTRO One restaurant. The hotel is situated on 7.15 acres at 1300 Concourse is in Linthi- cum Heights, Maryland, an unincorporated community in the Baltimore/Annapolis area eight miles from Baltimore Inner Harbor, less than 20 miles from Annapolis and 25 miles to downtown Washing- ton, D.C. Embassy Suites by Hilton Baltimore at BWI Air- port is proximate to Baltimore/ Washington International Thurgood Marshall Airport, which welcomes more than 26.4 million passengers a year and is among the top 25 busi- est airports in the country. The HFF debt placement team representing the bor- rower was led by senior di- rectors Pete Fehlman and Chris Hew. data-backed site selection and due diligence process along with a highly-experienced project management team, Hampshire has repositioned or developed 33 self-storage facili- ties with an aggregate value of over $440 million since 2012. Presently, Hampshire has 12 self-storage development projects underway aggregat- ing $217 million of investment across the eastern United States and is targeting another 12 additional projects with an aggregate value of over $215 million in the pipeline. Harrison Street has sig- nificant experience investing in storage facilities across the United States. Since inception in 2005, Harrison Street has invested $2.0 billion across 223- storage properties and has sold 137 self-storage properties for a gross transaction value of $1.0 billion. Bringing together one of the nation’s most experienced self- storage development teams and a leading alternative in- vestment firm, the program- matic joint venture partner- ship will allow Hampshire and Harrison Street to successfully develop modern, institutional- quality self-storage facilities strategically located in a major transportation corridor along the East Coast of the United States.
AMBRIDGE, MD — Marcus & Millichap announced the sale of Shoal Creek Shopping Center, a 62,118 s/f retail property lo- cated in Cambridge, according to Matthew Drane , regional manager of the firm’s Washing- ton, D.C. office. The asset sold for $8,225,064. David Crotts , senior associ- ate, and Dean Zang , senior managing director investments in Marcus &Millichap’s Wash- ington, D.C. office, had the list- ing to market the property on behalf of the seller, an affiliate of The Nightingale Group of New York . The buyer was a west coast based private entity represented by team member Josh Ein , senior associate in Marcus &Millichap’sWashing- ton, D.C. office. Shoal Creek Center is located at 620 Sunburst Hwy. in Cam- bridge. The shopping center was built in 1977 and reno- vated in 2013 when Walgreens C
Shoal Creek Shopping Center
acquired the property to build a store on the parcel. Subse- quently, Walgreens completed a portfolio sale leaseback of many properties in its real estate portfolio which was acquired by the Nightingale Group. The 62,118 s/f shopping center was 90% occupied at the time of sale and featured national brands such as, Advance Auto Parts, Save-A-Lot, and a freestanding Walgreens. background with a diverse set of companies in the farming, landscaping and construction industries. Du Pont is engaged in several professional and community organizations, including the Brandywine Red Clay Alliance (Board of Directors), Ducks Unlimited Brandywine Chap-
“Our team’s depth of relation- ships with shopping center and net lease buyers alike allowed us to source a California-based buyer in a 1031-exchange that had never acquired a shopping center in Maryland previous- ly,” added Zang. The team has been active in the Delmarva region with two other shopping centers for sale presently and this representing their second recent closing in the area.
WILMINGTON, DE — Pat- terson-Woods hired Brent W. du Pont to their commercial real estate team. Du Pont has previous experi- ence in residential real estate and has been a realtor with Brandywine Fine Properties, Sotheby’s International Re- alty since 2015. He also has a ter Committee (Treasurer), and the Longwood Fire Com- pany (Board of Directors, Vice President). He has also served as a volunteer firefighter at Longwood Fire Co. since 2010. Du Pont graduated with a degree in Agricultural Sciences from The Pennsylvania State University. Patterson-Woodswelcomes duPont toCRE team FirstService Residential Welcomes The Easton Club Community Association to its MarylandManagement Portfolio Federal Realty announces corporate office in Tysons Corner “We couldn’t be more excited about forming a partnership with The East Club,” said Trent Harrison , market president, FirstService Resi- dential. “FirstService Residen- tial’s emphasis on communica- tion and focus on exceptional customer service are just two of the reasons that the board selected us and we look for- ward to making a marked difference in the community.” The community features a mix of single-family homes and townhouses. It boasts numerous community amenities including a pool and tennis courts.
Hampshire announce development of self-storage properties across East Coast
TOWSON, MD — F irstSer- vice Residential , one of the leading property management company in North America, recently contracted to provide property management services to The Easton Club Community Association, a 241-unit commu- nity located in Easton. ROCKVILLE, MD — Fed- eral Realty Investment Trust announced plans to dedicate resources to its existing Virginia assets and to grow its presence in the region with its commit- ment to open its first full-service corporate office in Northern VA. “Our company has grown significantly in the last decade, yet real estate remains, first and foremost, a local business,” said Donald Wood , president and CEO of Federal Realty. “While we have long been a significant player in retail real estate in Northern VA, we see opportunities for incremental
development and previously Forest City’s The Yards; and VP of leasing Rich Abruscato , a 30-year industry veteran with nearly 8 million s/f of leasing transactions on behalf of the Trust under his belt. “We are thrilled with the opportunity of getting closer to the real estate we own in Virginia, further leveraging our proven experience in delivering the right consumer experience and environment to meet the demands of the local commu- nity and region,” said Deirdre Johnson , regional portfolio manager.
investment that can only be addressed with a local, full- service development, leasing and asset management office filled with some of our most experienced and talented real estate professionals.” The executive team entrusted to run the company’s Northern Virginia office brings more than 90 years of combined experience and includes VP of asset man- agement Deirdre Johnson , with 30 years in the industry.; Ramsey Meiser , senior VP of development responsible for the execution of mixed-use projects such as the Trust’s Pike & Rose
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Real Estate Journal
1031 E xchange
By Alan Fruitman, 1031tax.com The NNN Triple Net Property Book By Alan Fruitman, 1031tax.com e ri le et r perty Book
Y ou will experience tre- mendous enjoyment owning NNN proper- Y ou will experience tre- mendous njoyment owning NNN property
own a NNN property, your monthly income stream will be quite good; it will also be 100% predictable. To complete the analogy, let’s associate chocolate ice cream with a multi-tenant prop- erty with short-term leases. Examples of multi-tenant property include apartment buildings, shopping centers, or office buildings. Income from a multi-tenant prop- erty will vary each year and it will take a signifi- cant amount of your time to manage and maintain the property. Again, some people cream would be reasonable. For example, when you take a bite of vanilla ic cream, you know it will taste good, even predictable. When you own a NNN property, your monthly inc me stream will be quite good; it will also be 100% predictable. To com- plete the analogy, let’s associ- ate chocolate ice cre m with a multi-tenant property with short-term leases. Examples of ulti-tenant property in- clude apartment buildings, shopping centers, or office buildings. Income from a ulti-tenant property will
prefer vanilla, others prefer chocolate. It’s nice to have options. Here’s why many investors enjoy owning single-tenant NNN property. NNN is a type of lease in which the tenant maintains and pays for all property maintenance, taxes and insurance. Ten- ants include Walgreens, CVS Pharmacy, Chase Bank, Wells Fargo, Chipotle, Pane- ra, McDonald’s, Dollar Gen- eral, Home Depot, Wal-Mart, AutoZone and almost every other national retailer you see while driving through the most prime retail corridor near your home. Landlords are mostly individual real es- tate investors, just like you. Here’s the best part – These Fortune 500 tenants sign long-term leases that range from 10 to 25 years. The price to purchase a NNN prop- erty begins at approximately $1,000,000. To make a long story really short, owning a NNN property gives you the freedom to work on your day job, travel or do things other than worry about your real estate investment. The reason you are reading this article is because you want to learn more about NNN property. There are random articles and piec- es of information scattered throughout various news- papers and websites. The reason I wrote The NNN Triple Net Property Book is to provide concise and qual- ity information to real estate investors like you. Chapters in The NNN Triple Net Property Book range from Passive vs. Ac- tive Income, Location Mat- ters, Two Happiest Days of Owning a NNN Property, Build a Diversified Portfo- lio, High Leverage = Risk, Which States Should You Target or Avoid, Is an Envi- ronmental Problem a Deal Breaker, The Process & the Property, Franchise vs. Cor- porate Lease, Pros and Cons of a Ground Leased Property, What Is a Letter of Intent, Four Reasons Why Investors Utilize 1031 Exchange, and References Matter. Visit the 1031tax.com web- site or call Alan Fruitman at 1-800-454-0015 to receive a list of available NNN prop- erty and a complimentary copy of The NNN Triple Net Property Book. n vary each year and it will take a significant mount of you time to manage and maintain the property. Again, some people prefer v illa, othe prefer chocolate. It’s nice to have o ti ns. Here’s why many investors enjoy owni g single-ten nt NNN property. NNN is a type of lease in which the tena t maintains and pays for all property maintenance, taxes and insurance. Tenants in- clude Walgreens, CVS Phar- macy, Chase Bank, Wells Fargo, Chipotle, Panera, McDonald’s, Dollar General, Home Depot, Wal-Mart, Au- toZone and almost every other national retailer you see while driving through the most prime retail corridor near your home. Landlords are mostly individual real estate investors, just like you. Here’s the best part – These Fortune 500 tenants sign long-term leases that range from 10 to 25 years. The price to purchase a NNN prop- erty begins at approximately $1,000,000. To make a long story really short, owning a NNN property gives you the freedom to work on your day job, travel or do things other than worry about your real estate investment. The reason you are reading this article is because you want to learn more about NNN property. There are ran- dom articles and pieces of in- formation scattered through- out various newspapers and websites. The reason I wrote The NNN Triple Net Property Book is to provide concise and quality information to real estate investors like you. Chapters in The NNN Tri- ple Net Property Book range from Passive vs. Active In- come, Location Matters, Two Happiest Days of Owning a NNN Property, Build a Di- versified Portfolio, High Le- verage = Risk, Which States Should You Target or Avoid, Is an Environmental Problem a Deal Breaker, The Process & the Property, Franchise vs. Corporate Lease, Pros and Cons of a Ground Leased Property, What Is a Let- ter of Intent, Four Reasons Why Investors Utilize 1031 Exchange, and References Matter. Alan Fruitman is presi- dent & managing broker of Real Estate Foundation, Inc.
(having year-to-year leases and fixing roofs, plumbing and toilets), reading The to-year leases and fixing roofs, plumbing and toilets), rea ing The NNN Triple Net
be plain and perhaps bor- ing, they still enjoy it. As- suming this analogy is true, are top sellers. Even though p o le consider vanilla to be plain and perhaps bor-
ty and ben- efit greatly by reading T h e NNN Tr iple Net P r o p e r t y Book if your goal is to re- ceive passive income (no and benefit great l y by reading The NNN Triple Net Property Book if your g o a l i s t o receive pas- sive income (no property
“The reason I wrote The NNN Triple Net Property Book is to provide concise and quality information to real estate investors like you” “The reason I wrote The NN Triple Net Property Book is to provide concise and quality information to real estate investors like you”
NNN Triple Net Property Book would be a waste of your time. There is a reason both va- nilla & chocolate ice cream are top sellers. Even though people consider vanilla to Property Book would be a waste of your time. There is a reason both va- nilla & chocolate ice cream
comparing a single-tenant NNN property to vanilla ice cream would be reasonable. For example, when you take a bite of vanilla ice cream, you know it will taste good, even predictable. When you ing, they still enjoy it. As- suming this analogy is true, comparing a single-tenant NNN property to vanilla ice
property management or vacancy) from your real es- tate investments. However, if managing your apartment building is still enjoyable management or vacancy) from your real estate invest- ments. However, if managing your apart ent building is still enjoyable (having year- Alan Fruitman Alan Fruitman
Real Estate Journal — 1031 Exchange — March 15 - 28, 2019 — 9A
M id A tlantic
1031 E xchange
By Jefferson F. Riddell, U.S. 1031 Exchange Services, Inc. 1031 + DST
investment real estate to their investment portfolios. Jefferson F. Riddell is a Florida Board Certified Real Estate attorney with over 40 years of experi- ence assisting people with a variety of residential and commercial real es- tate matters. U.S. 1031 Exchange Services, Inc. is a 1031 exchange quali- fied intermediary (QI). As president of U.S. 1031 Exchange services Jeff has been facilitating 1031 exchanges for more than thirty-five years.
the co-owners. Although DSTs may sound like partnerships, they are not-partnership in- terests and do not qualify for 1031 exchange. Also, DSTs (single properties) are not the same as REITs (multiple properties). Like partnership interests, REITs also do not qualify for 1031 exchange. Any person or entity that can own real estate can own a DST interest. Although they are designed as convenient replacement properties in 1031 exchanges, others may choose to purchase one or more DSTs in order to add passive
f you are an investment real estate owner who would prefer not to pay
typical first year cash-on-cash return for a DST property investment (depending upon the particular property) is between 4 1/2% and 7%. DST investments are pack- aged by real estate companies called sponsors. There are about 80 active sponsors in the United States. The busi- ness plan of most sponsors anticipates resale of a DST property within ten years, but some have sold earlier. The Purchase Agreement signed by all of the DST co- owners contains the rules gov- erning the relationship among
Formerly a licensed se- curities registered rep- resentative, real estate broker, Jeff is uniquely qualified to assist those who wish to avail them- selves of 1031 and 1031 exchange tax savings and also guides investors in diversifying their port- folios with nonpublicly traded REIT, LP and LLC real estate investments. Jeffs book, 21st Century Real Estate Investing Fea- turing 1031 has been pub- lished and is available at Amazon.com.
tax on sale, you need to know about 1031 + DST. The process is simple-sell in a 1031 ex- change and p u r c h a s e D S T r e -
placement property. A DST (Delaware Statutory Trust) replacement property is a fractional interest in a large rental property such as an office building, shopping cen- ter, apartment complex, in- dustrial property, senior housing, student housing or hotel-even golf courses have been offered. DSTs are much like professionally managed whole ownership rental prop- erties. Most whole ownership properties are too small for professional management but DST properties justify professional management because the value of the property typically exceeds $20 million. In addition to 1031 ex- change tax deferral, DSTs have all of the benefits of rent- al real estate ownership in- cluding cash flow from rents, depreciation deductions and potential profit on resale. Along with the benefits, DSTs are subject to the standard risks of rental real estate ownership, but the risks are mitigated by professional ac- quisition analysis and evalu- ation (due diligence) at the sponsor, lender, broker-dealer and securities registered rep- resentative levels and ongo- ing professional management. DST properties are not speculative to-be-built prop- erties or properties for which tenants need to be found. Instead, DST properties tend to be relatively new properties with tenants in place under typical length leases for the type of property involved. Of course some properties like hotels and golf courses are an exception because their “tenants” change daily. Since DSTs are deeded interests in real estate, they are not as liquid as stock market invest- ments so those who may have an immediate need for their funds should not buy DSTs. Each DST investor is a co- owner of the property along with other investors. The
SELL INVESTMENT PROPERTY TAX FREE
Learn about 1031 exchanges VISIT OUR WEBSITE > US1031.COM
Jefferson F. Riddell President Phone: (941) 366 -1300 Fax: (941) 366 - 6973 E-mail: firstname.lastname@example.org
Board Certified Real Estate Attorney has been facilitating 1031 exchanges for over 30 years. Learn how a 1031 exchange may help you defer taxes, save money and maximize your investment dollars. Visit our website or call for a FREE consultation.
21 ST CENTURY REAL ESTATE INVESTING available on Amazon
U.S. 1031 EXCHANGE SERVICES, INC.
3400 South Tamiami Trail, Sarasota, Florida 34239
10A — March 15 - 28, 2019 — 1031 Exchange — M id A tlantic
Real Estate Journal
1031 E xchange
By Edward Fernandez, 1031 Crowdfunding, LLC Investing into assisted living facilities using 1031 Exchanges
n recent years, assist- ed living facilities have gained popularity among
steps. 2 The boomer generation is rapidly approaching the age that uses the bulk of healthcare services in our country. As se- niors grow old, many move into assisted living facilities to ac- cess a higher level of care that would otherwise be unavailable at home. In an asset class that could be poised for long-term growth, some investors may be interested in rolling their cur- rent real estate investments into assisted living facilities through a 1031 exchange. Assisted Living Facilities Assisted living facilities are designed for those who are dis- abled or unable to live on their
own. They provide services to assist with activities of daily living (ADL). These services can include anything from bathing, grooming, eating, to managing money or providing medication. The level of care offered from one facility to the next could differ because these are regulated at a state level, not a federal level. Before investing into any asset class, it's key to have a thorough understanding of what you are buying into. While assisted living facilities may seem similar to investing into multifamily, they are actually quite different. When you are
investing in assisted living fa- cilities, you aren't just investing in the real estate, but the oper- ating company tied to the real estate as well. Therefore, the acquisition of assisted living facilities is highly specialized. You are basically underwrit- ing the business operating the facility. It's important that both the acquisition team and the operator both have a high level of expertise in this industry. 1031 Rules The 1031 exchange allows real estate investors to take gains in properties and roll them into another property while deferring their taxes.
That means that even if the in- vestment property you are sell- ing has appreciated in value, you will not have to pay poten- tially massive capital gains tax on your return. The rules are fairly straight- forward but must be strictly followed to accomplish a suc- cessful exchange. For instance, in order to qualify, you must identify the replacement prop- erty within 45 days of the sale of your initial property. You also must complete the transac- tion within 180 days of the sale or sales of your initial proper- ties. During the time that you are identifying the property and closing the sale, the funds should be held in escrow with a qualified intermediary, also known as an accommodator. Utilizing a DST in Your 1031 Exchange A Delaware Statutory Trust (DST) is a separate legal entity created as a trust under Dela- ware statutory law. Investors in a DST own a pro rata inter- est in the trust and have the right to receive distributions from the operation of the trust, either from rental income or from the eventual sale of the property. For the purposes of a 1031 tax-deferred exchange, the purchase of a beneficial interest in a DST is treated as a direct interest in real estate, thus satisfying that require- ment of IRS Revenue Ruling 2004-86. An advantage of DSTs is they are a turn-key solution to a 1031 exchange. There is no need to qualify for the debt on the property, you are simply assigned your pro rata share. The property is already closed, eliminating the closing risk. Another advantage is that in some instances, the real estate is purchased on favorable terms that would be unavailable to the everyday real estate investor. E dw a r d F e r n a n d e z is Founder/CEO of 1031 Crowdfunding, LLC based in Orange County, CA. 1. https://www.institutionalinvestor. com/article/b14z9tcwzg45rc/taking- the-risk-from-longevity-low-rates-and- high-premiums 2. http://www.pewsocialtrends. org/2010/12/20/baby-boomers-ap- proach-65-glumly/ While the information provided above has been researched and is thought to be reasonable and accurate, it's important to understand that all investments, including real estate, are speculative in nature and involve substantial risk of loss. Addition- ally, private placements of securities are not publicly traded, are subject to holding period requirements, and are intended only for accredited investors who do not require a liquid investment.
institutional i n v e s t o r s . We believe impr e s s i ve demographic f undamen - tals will drive the demand for these fa- cilities in the coming years. 1
In 2011, the oldest Baby Boomers began turning 65 years old. For the next 19 years, roughly 10,000 people per day will follow in their foot-Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72
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