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ISSUE HIGHLIGHTS Volume 33, Issue 6 July 23 - Aug. 19, 2021
F Danielson completes sale of a Wells Fargo ground lease in Falls Church, VA Horvath & Tremblay completes the sale of five retail properties for $15,843,846
the sale of a Wells Fargo (Con- dominium Interest) in Largo, MD. Horvath & Tremblay rep- resented the seller to complete the transaction at a sale price of $3,990,000, a 5.63% Cap Rate. Wells Fargo is located at 9800 Apollo Dr. in Largo, MD. The retail branch consists of a 3,876 s/f building with four dedicated drive through lanes and a drive-up ATM lane on a corner parcel. Danielson and Spillane also facilitated the sale of an Out- back Steakhouse in Gaines- ville, VA. Horvath & Trem- blay represented the buyer in this transaction at a sale price of $3,653,846. Outback Steakhouse is located at 4995 Wellington Rd. The build- ing was constructed in 2007 and completely remodeled in 2020, the property consists of a 5,942 s/f building with an outdoor patio area on a 1.07- acre parcel. Outback signed a 15-year Absolute NNN Lease with four, five-year renewal options. MAREJ been the desirability of the suburban multifamily mar- ket,” said Espenshade. “Today, even as restrictions are being lifted and vaccination rates continue to climb, there is still a robust demand for this type of product offering owners con- sistently strong rent growth.” According to Newmark Re- search, the Washington area’s multifamily market tradi- tionally had led the nation out of recessions, as it did in 2010 when absorption was a robust 14,000 units, thus enhancing the resilience of local apartment assets and attracting potential renters from other metro areas. Sub- urban locations such as Bowie, equidistant from Baltimore, Washington, and Annapolis, are extremely popular with multifamily investors given limited supply and access to excellent employment and retail. MAREJ
ALLS CHURCH, VA — Horvath & Tremblay has completed the sale of five retail properties for $15,843,846. Kyle Danielson of Horvath & Tremblay has successfully completed the sale of the Wells Fargo ground lease in Falls Church. Horvath & Tremblay represented the seller to com- plete the transaction at a sale price of $3,300,000, a 4.57% Cap Rate. Wells Fargo is lo- cated at 1000 W BRd. St. in Falls Church. Rob DiFranco and Mike Lombardi of Horvath & Tremblay have facilitated the sale of McDonald’s in Linden, NJ. Horvath & Tremblay rep- resented the seller to complete the transaction at a sale price of $3,125,000, a 3.84% cap rate. McDonald’s is located at 107 West Edgar Rd. in Linden, NJ. McDonald’s signed a new 20-year lease for the property that commenced in 2016. The absolute NNN ground lease has 15+ years of term remain-
SPOTLIGHTS
TAX ISSUES/ ACCOUNTING
7-12A
COMMERCIAL BROKERAGE DIRECTORY
1000 W BRd. St. in Falls Church, VA
ing plus four, 5-year renewal options. The lease calls for 8% rent increases every five years throughout the base term and 10% rent increases in the re- newal options. Horvath & Tremblay’s Kyle Danielson and Justin Spill- ane have successfully com- pleted the sale of a Starbucks in Fredericksburg, Virginia. Horvath & Tremblay exclu- sively represented the seller and procured the buyer in this transaction at a sale price of $1,775,000. Starbucks is located at 5811 Plank Rd. in
Fredericksburg, Virginia. The property was constructed in 2007 and consists of a 1,863 s/f building with a dedicated drive through lane and an out- door patio area on a 0.67-acre parcel. Starbucks originally signed a 20-year ground lease with four, five-year renewal options with rent increases of 10% every five years through - out the base term and option periods. The next rent increase is scheduled for 11/1/2022. Starbucks is situated on a pad site within Harrison Crossing Danielson also completed
Section D
NAI Michael’s Schwarz and Burleigh lead acquisition/sale of Muirkirk Business Center
Lance Schwarz Peter Burleigh
Espenshade & Garrish of Newmark brokers suburbanDCmultifamily property sale for $91.7M
13A
UPCOMING CONFERENCE September 30, 2021
BOWIE, MD — Newmark announced the $91.7M sale of Heather Ridge Apartments, a multifamily asset at 16021 English Oaks Ave. in Bowie. The 324-unit property was sold by a joint venture partnership of funds managed by the real estate group of Ares Manage-
7th Annual NJ Apartment Multifamily Conference For speaking & sponsorship info., please contact: Lea at 781-740-2900 or lea@marejournal.com
Directory ROP (Front Section) ........................................... Section A Contributing Columnist: Steve Haskell ..........................2A Retail Development Reimagined . ..............................3-5A Financial Digest ....................................................... 7-12A DELMARVA. .......................................................... 13-15A CIRC........................................................................... 15A Business Card/Billboard Directory ............................IBC-A New Jersey.............................................................. 1-12B Pennsylvania ........................................................13-BC-B Owners, Developers & Managers ....................... Section C Commercial Brokerage Directory ....................... Section D www.marej.com
Heather Ridge Apartments
in the United States, manag- ing an estimated $220 billion of real estate in nearly 200 markets. The acquisition of Heather Ridge will allow for new ownership to implement a light capital improvement program to upgrade the rental units. “The extreme disruption we felt across the country due to the pandemic was quite severe; however, one bright spot has
ment and LCOR to Greystar . Newmark’s vice chairmen Christine Espenshade and Robert Garrish represented the seller in the transaction. The new owner, Greystar, is a leading fully integrated real estate company offering expertise in investment man- agement, development, and management of rental hous- ing properties. Greystar is the largest apartment operator
Inside Cover A — July 23 - August 19, 2021 — M id A tlantic Real Estate Journal
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M id A tlantic Real Estate Journal — July 23 - August 19, 2021 — 1A
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Shoppes of Southland Orlando, FL $3,775,000 Starbucks Fredericksburg, VA 1
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M id A tlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Publisher ........................................................Joe Christman Editor/Graphic Artist ......................................Karen Vachon Contributing Columnist ..... Steve Haskell, Kay; Tom Miller, CPA, CITP, CISA; Withum 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. 33, Issue 6 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 www.marej.com
By Steve Haskell
The Case Study of a 1031 DST Specialist
here are various strate- gies when using DSTs (Delaware Statutory Trusts) in a 1031 exchange. Some investments are as easy as a simple exchange from one property into a single DST. Other times DST’s are used to invest leftover equity from an exchange so the investor is not taxed on leftover funds, called “boot”. Investors will routinely use DSTs as a backup ID in case their target replacement property doesn’t work out. And occasionally, Kay Properties will assist an exchanger to uti- lize all said strategies in one sophisticated effort to mitigate risk and defer as much tax as possible. Read on for the expe- rience of a highly skilled 1031 DST specialist. A real estate investor sold an investment property for approximately $2M. Roughly 25% of his property was lever- aged. Therefore, $1.5M was sitting in his qualified inter - mediary account. He then contacted Kay Properties to
pursue a partial 1031 DST ex- change. The exchanger wanted to purchase a property on his own, but something smaller and easier to manage than the property he recently sold. He wanted to put part of his exchange into a completely passive DST option that would require no management on his part. The DST part was rela- tively easy. However, he was having a hard time finding a replacement property to own outright, and the 45-day clock was ticking. Kay Properties created a multifaceted strat- egy that supported the inves- tor from a variety of angles. First, the exchanger used the debt built into the DST
to replace his mortgage. The Kay Properties representative created a DST portfolio for the investor with a loan-to- value of approximately 50% to match the exact debt required to satisfy the 1031 exchange regulation. The debt was non- recourse, meaning the investor did not need to apply or sign for the loan, nor did it show up on his personal balance sheet. This freed him up to purchase a smaller property to own outright without taking out a mortgage, which increased his probability of closing. Next, the exchanger used a DST as a backup ID in case the target property did not work continued on page 16A
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R etail D evelopment R eimagined
M id A tlantic Real Estate Journal — Retail Development Reimagined — July 23 - August 19, 2021 — 3A
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Levin’s Vasconcellos III arranges 3,400 s/f lease at Middlesex County, NJ retail property Burlington Stores now open at Mill Creek at Harmon Meadow in Secaucus, New Jersey
S
E C A U C U S A N D NORTH BRUNSWICK, NJ — Burlington Stores
is now open at Mill Creek at Harmon Meadow i n S e c a u c u s . The 306,000 s/f power cen- ter, for which Levin Man- a g e m e n t C o r p o r a - tion (LMC) s e r v e s a s p r o p e r t y manager, is part of the 2 0 0 - a c r e m i x e d - u s e H a r m o n Meadow de- velopment.
Sidney Singer
Burlington Stores is now open at Mill Creek at Harmon Meadow in Secaucus, NJ.
North Village Shopping Center in North Brunswick, NJ
Burlington occupies the big box retail space formerly oc- cupied by sporting goods chain Sports Authority. “Off-price brands are among the strongest Avison Young brokers sale of retail center in Alexandria, VA for $14.2M Shanghai Dumpling House at North Village Shopping Center. North Village Shopping Center is anchored by Bed Bath & Beyond and Michaels Arts & Crafts and is home to a popular Trader Joe’s location. Other retailers at the property sub-sectors in retailing today,” said LMC vice president of leasing Sidney Singer , who arranged the lease transaction on behalf of the property owner, an institutional client of New York Life Real Estate Inves- tors (NYLREI) . “Burlington is a quality addition to Mill Creek’s tenant lineup, which also includes Kohl’s, T.J.Maxx, and Bob’s Discount Furniture.” In North Brunswick, LMC leasing representative Ed Vas- concellos III arranged the 3,400 s/f long-term lease toWu’s Ed Vasconcellos III
include Staples, Ulta Beauty, Panera Bread, Smashburger, Chili’s and Lux Nails. North Village occupies a prime loca- tion on a main thoroughfare boasting a traffic count of more than 100,000 vehicles per day. MAREJ The property area has excel- lent traffic flow, with nearby retailers including Walmart and Kohl’s. It is ideally located adjacent to Kingstowne Towne Center, a vibrant live-work- play center in one of the most coveted areas near Washing- ton, DC. This centralized town center is Kingstowne’s core, with a wide variety of stores, restaurants and high-quality office buildings. The thriving area continues to grow quickly. More than 600 new multifamily units are scheduled to be completed in Kingstowne Towne Center. The influx of young, affluent renters will give another boost to this micro market’s retail economy and bodes well for the future of the property’s tenants. “This property is situated in a beautiful area that is extraordinarily popular with residents,” Ryan said. “Kings- towne’s appealing blend of homes, offices, restaurants and stores makes it one of Northern Virginia’s best plac- es to live.” MAREJ
ALEXANDRIA, VA — Avison Young’s Capital Markets Group announced that it has brokered the sale of a top-tier retail center in Alexandria, VA. A private buyer purchased 6001 Kingstowne Village Parkway from The Halle Companies for $14.2 mil- lion. The property, which is adjacent to Kingstowne Towne Center, is 100% leased to an ALDI supermarket, a La-Z-Boy furniture store and a newly opened Ashley Furniture HomeStore. An Avison Young Capital Markets team, led by Jona- than Hipp , principal and head of the U.S. Net Lease group; richard murphy , senior vice president; Chip Ryan , principal; and Matt Weber , senior vice Presi- dent, represented the seller. “This premier retail cen- ter in an unrivaled location represented a tremendous opportunity to purchase a generational -qual ity as- set,” Hipp said. “Thanks to strong demographics, the
Added Murphy: “This prop- erty represented an ideal combination of both a strong infill DC MSA location and 6001 Kingstowne Village Parkway
100%-leased, high-quality retail will continue to pro- vide stable income for years to come.”
an extremely high-quality rent roll. It’s a combination you don’t often see come to the market.”
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4A — July 23 - August 19, 2021 — Retail Development Reimagined — M id A tlantic Real Estate Journal www.marej.com
R etail D evelopment R eimagined Boyer’s FoodMarkets nowhas 19 locations in Central &NEPA CAMPBELLcoordinates30,000 s/f sale for Berger’s & Boyer’s 700,000 s/f f transactio s & new agen y assignments among 2020 Levin Mgmt. ushers in 2 21 with a l ok back on progr s R etail D eve R eimagineD
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CHUYLKILL & CUM- BERLAND COUNTY, PA — Boyer’s Markets, headquartered in Orwigsburg, PA, has completed the pur- chase of the 30,000 s/f Berger’s Market in Schuylkill County. The Berger’s family oper- ated the grocery store for al- most 50 years at the current location on Lovers Lane in Pine Grove. 2020, comm rcial eal estate service fir L vinManage ment Corporation (LMC) achieved tangible pr gress – a promising sign for the industry moving into a new year. Over the pas 12months the North Plainfield based organization secured nearly 700,000 s/f of new leases and renewals, added new leasing and management assign ments, solidified its st ff with n w h r s/promotions, a d garnered several in ustry recognition . With the acquisition, Boyer’s Food Markets now has 19 lo- cations in Central and North- eastern Pennsylvania. “We are excited to serve the Pine Grove Community,” said Dean Walker, president of Boyer’s. The size of the store is perfect for our operation and the loca- tion fits well in our footprint. The Berger family did a great job of being a pillar in the community. We look forward to continuing to provide great service, and at the same time adding some new and excit- ing options for the Pine Grove consumers.” In 1949, Boyer’s was found- ed with a corner store in Or- wigsburg, PA by the late Har- old S. Boyer. Since 1949, the company has grown from that corner store, to a full-service Supermarket, ensuring that its’ customers can shop fast and save money. In Cumberland County, PA, Highligh s of LMC’s retail leasing activ ty i cluded n anchor lease with ff-price retail r Burlington Stores at Mill Creek at Harmon Meadow (Secaucus), a 24,000 s/f lease with Aqui Market Twin City Shopping Center (Bayonne) and a 20,000 s/f lease with Planet Fitness at Mayfair Shopping Cen- ter (Commack, NY). LMC’s transactional ac ivity also brought a host of renew ls as well as new retailers and service provide s to the region, pu ctuated by nearly on doz n le ses with restauran enants – several of which have lready launched opera- tio s. Other openings involved S N ORTH P L A I N FIELD, NJ — Amid the chal lenges of
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Burlington Stores at Mill Creek at Harmon Meadow The Lower Allen Township Development Authority and Campbell Com- mercial Real Estate is co firming that Trader Joe’s will occupy 12,500 s/f of retail space in Lower Allen Common .
The Lower Allen Township Development Authority and Campbell Commercial Real Estate is confirming that Trader Joe’s will occupy 12,500 s/f of retail space in Lower Allen Commons, where the former Camp Hill Bon-Ton was located. Trader Joe’s, which is known for provid- ing great, quality products at every day, affordable prices, has more than 500 stores in 42 states, including Washington DC. The location off Rte. 15 at Lower Allen Dr. will mark the first-ever Trader Joe’s store in the mid-state area. Cur- rently, the closest stores are in State College, Baltimore, and Philadelphia. Construction is underway, and the store is expected to open in early 2022. Alongside Trader Joe’s, are three small tenant spaces in the building. A lease has been signed with Sports Clips, high-profile anchors like Lidl (North Brunswick) and Burl- ington Stores (Raritan). Non-retail leasi g highlights within LMC’s diversified port - folio includ d a 135,000 s/f renewal by Hall’s Warehouse Corp. at Rutg rs Industrial Center (Piscataw y). “D spit the economic un- certainty and business-related disruptions facing ou indu - try since March, there has been progress – with certain key dynamics coming nto sharpen d focus,” aid LMC’s M tthew Harding , c ief ex- ecutive officer. “For example, p sitive la dlord/tenant rela- tions have always been impor- tant. Dur ng 2020, as tenants worked to navigate an incred- ibly difficult environment, we approached everything on a very granular basis, revi w- ing th distinctive needs and nature of each business. Like - wis , we hav do e the same with our landlord clients and their individual properties to
which specializes inmen’s hair cutting and grooming needs; a Lease is being negotiated with The Good Feet Store which offers orthotics and Brook’s running shoes; and the re- maining 1,723 s/f space is being marketed by Campbell Commercial Real Estate Inc. The project also includes a 124 room Spring Hill Suites by Marriot, developed by Spring- wood Hospitality of York, PA. The hotel will be opening in 2022. Current tenants in the proj- ect include Bonefish Grill, Texas Roadhouse and Burger King, all of whomhave recently extended their leases to remain part of Lower Allen Commons. There are two additional pad sites 1.01 Acres and 1.12 acres that will be developed for retail uses and are being marketed by Campbell Commercial Real Estate. MAREJ help them best respond to ten- ant requests and operational needs. “T i customized approach has always been central for our t am; however, this year has intensifi d the practi e to a new level that we will s stain m ving forward,” H rd added. “This is n ad- va tage we can provide ov r s e of our larger, n tionally focused pe rs.” LMC also continued o ex - pand its leasing and manage ment p rtfolio, which today totals 110 prop rti s total- ing nearly 15.5 million s/f. The fi m was appoi ed leas ing a d managing agent for Springfiel Avenue Market - place, a 112,000 s/f sup rmar- ke -anchor d prop r y at 204- 234 Springfield Ave. in New - ark. In Bergen County, LMC wa named managing gent for Marketplac at E gewa er, a 73,000 s/f shopping cen r located at 725 River Rd. in dgewater. MAREJ
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BORRUS ASSOCIATES Investment Real Estate
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Julius Borrus Broker & President Borrus Associates
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P.O. BOX 8357, REDBANK, NJ 07701 P: 908-839-0052 | borruscommre@aol.com A Member Of The International Council Of Shopping Centers NY, NJ, CT, PA INVESTMENT REAL ESTATE
M id A tlantic Real Estate Journal — Retail Development Reimagined — July 23 - August 19, 2021 — 5A
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R etail D evelopment R eimagined
Farkas of Jeffery Realty represents landlord in 1,721 s/f lease at the Ridgemont Shopping Ctr. Pierson Commercial’s Krauss records 12 newCentral and North Jersey commercial retail transactions
M
The landlord, D & L Realty Associates, LLC, represented themselves in the deal. • Tropical Smoothie , Hillsborough – Comprised of 1,400 s/f, this location will begin operations in the second half of 2021 in the Hillsborough Village Center. The landlord, Hillsborough Village Center, LLC, was rep- resented by Shane Wierks of Jeffery Realty . • Jersey Mike’s Subs o Stony Point, NY – This 1,509 s/f Holt Drive location has a targeted opening in the second half of 2021. The
landlord was Crossroads-Holt Drive Associates, LLC. o Wanaque, NJ – Centrally located in Passaic County at 1355 Ringwood Ave., this 1,502 s/f location has a pro- jected fall 2021 opening. The landlord was Wanaque La - Sala, LLC. • Ares Nutrition , Edison – Opened in February, this 1,120 s/f of retail space is located in the Edison Woods Shopping Center. The land- lord, Edison Woods Com- mercial Associates, was rep- resented by Krauss of Pierson Commercial. MAREJ
ARLBORO, NJ — Pierson Commer- cial announced that
Gary Krauss has completed 12 new commercial retail transactions throughout Cen- tral and Northern New Jer- sey during Q1 2021. As a result of this height- ened demand, Krauss final - ized the following transac- tions during the first quarter: • Apple Montessor i Schools, Warren – Apple Montessori Schools opened an 11,856 s/f facility on March 1, 2021, located on Mt. Bethel Rd. The landlord, 117 Mt. Bethel Associates, was rep- resented in-house. • Bubbakoo’s Burritos o Hazlet – This 1,700 s/f location is projected to open in Q1 2022 at the Hazlet Town Center. The landlord, Onyx Equities , was represented by Gregg Medvin of Pierson Commercial. o Park Ridge – The lease in- volves 1,721 s/f at the Ridge- mont Shopping Center. The landlord, Park Ridge Hye Partners LLP, was repre- sented by Bill Farkas of Jeffery Realty. o Poughkeepsie, NY – Situ- ated in the Neptune Shopping Center, this 2,400 s/f location is poised to open this summer. The landlord, Vieira Sardinha Realty, LLC, was represent- ed by Tom Cervone of CR Properties Group, LLC . o New City, NY – The New City Shopping Mall location will feature 1,500 s/f space with an opening Q3-4 of 2021. The landlord, Newton As- sociates, LLC , was repre- sented by Scott Milich of The Goldstein Group . o Midland Park, NJ – Fall, 2021 will see the opening of a 1,700 s/f location at the Midland Park Shopping Center. The landlord, UB Midland Park I, LLC, was represented by Curtis Nas- sau and Matt Grundy of Ripco Real Estate . • Wing Stop o Eatontown – Centrally situated on Rte. 35 andWyck- off Rd., this 1,500 s/f location is being targeted for a Q1 2022 opening. The landlord, Eatontown Wyckoff, LLC, was represented by Rich Schulz of Schulco Real Estate, LLC . o Freehold – Slated to open in the second half of 2021, this 1,550 s/f location is part of Colonial Plaza in Freehold.
Pierson Commercial’s Director Gary Krauss (center) recently arranged five lease transactions on behalf of Bubbakoo’s Burritos during Q1. Pictured with Krauss are Bubbakoo’s Burritos’ Fenil Patel (left) and Perry Partesh (right), who are partners in the New City, NY location.
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6A — July 23 - August 19, 2021 — M id A tlantic Real Estate Journal
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Beacon CRE announces June leasing activity
Line Foot & Ankle Center. The landlord, Bala Plaza Prop- erty, Inc was represented by Janet Giuliani of Tishman Speyer . Two Bala Plaza features a center atrium on the first floor, eight tower floors and two lower levels. Additional amenities in- clude a Saks Fifth Avenue retail store connected via an enclosed walkway. MAREJ
BALACYNWYD, PA — Bea- con Commercial Real Estate LLC successfully completed the following transactions. Main Line Foot & Ankle Cen- ter signed a lease to expand their practice for 5,637 s/f at 2 Bala Plaza, Bala Cynwyd dated June 15, 2021. Gene McHale of Beacon Commercial Real Estate represented the tenant Michael R. Grossman, DPM dba Main
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*This is a Regulation D Rule 506 (c) offering. All real estate and DST investments carry the risk of a complete loss of invested capital and that returns/ cash flow/appreciation/ distributions are not guaranteed and could be lower than anticipated. Preferred Returns are not guaranteed. Securities offered through Growth Capital Services, member FINRA, SIPC, Office of Supervisory Jurisdiction located at 582 Market Street, Suite 300, San Francisco, CA 94104. Potential returns and appreciation are never guaranteed and loss of principal is possible. Please speak with your CPA and attorney for tax and legal advice.
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F inancial D igest F eaturing T ax I ssues /A ccounting
M id A tlantic Real Estate Journal — July 23 - August 19, 2021 — 7A
www.marej.com
Hudgins and Richards orchestrate transactions Berkadia completes sale and secures $100M in financing for student housing portfolio in Virginia
B
two-, three- and four-bedroom floor plans with in-unit wash - ers and dryers and full appli- ance packages. Community amenities include a swimming pool, a fitness center, a tan - ning salon, a grilling station and a two-story clubhouse. Collegiate Suites at Blacks- burg is a 210-unit property located at 1310 Henry Ln. The property features one-, two- and four-bedroom floor plans with full appliance packages, laundry rooms with storage, living room and bedroom fur- niture packages and private bathrooms. Community ame- nities include a clubhouse with a fitness center, a coffee bar, a game area, picnic areas with grilling stations, a basketball court and a tanning bed. The properties afford resi- dents convenient access to Virginia Polytechnic Institute and State University, U.S. Rte. 460 and the shops and restaurants along North Main St. MAREJ and cultural events, including high school sports as well as motorcar racing, boxing tour- naments and concerts. The ballpark fell into disrepair in the late 1990s, and has been largely neglected for the last two decades, opening the door for the redevelopment initia- tive being led by BAWDevelop- ment and RPM Development Group. In addition to the 7,800-seat athletic facility, the project also includes ground-up develop- ment of: ● A 12,000 s/f restaurant and event space that will pay homage to the professional and high school athletic exploits at Hinchliffe Stadium, as well as related racial issues ● A six-story, USGBC LEED Platinum-certified affordable senior housing building featur- ing 75 studio, one- and two- bedroom units ● A 5,200 s/f preschool; and ● A 314-space structured parking garage. MAREJ
representing the seller and Berkadia Richmond Mortgage Banking arranging the debt for the buyer, and a smooth execution was the end result.” “The sellers were able to use Berkadia’s knowledge and resources to help secure an ag- gressive price,” said Hudgins. “Reliant Group was already in the market and a great com- pany to work with throughout the transaction.” Hunters Ridge is a 72-unit property located at 1401 and 1441 Seneca Dr. The property features spacious four-bed- room floor plans with a bal - cony or patio, in-unit washers and dryers and full appliance packages. Community ameni- ties include a clubhouse, a coffee bar, a gaming area with a pool table, grilling stations, a full-sized basketball court, a fitness center and a tanning salon. Maple Ridge Townhomes is located at 344 Red Maple Dr. The 314-unit property features the future of not only Hinchliffe Stadium, but the broader im- pact it will have for the entire city of Paterson.” The financing will enable the ongoing redevelopment of the stadium. U.S. Bank provided capital to the stadium redevelopment as part of its ongoing ‘U.S. Bank Access Commitment’ initiative, which focuses on supporting businesses owned by people of color, helping in- dividuals and communities of color advance economically and enhancing career opportunities for employees and prospective employees. Originally constructed in 1932, Hinchl i f fe Stadium once served as home to Negro League teams such as the New York Black Yankees and New York Cubans, in an era when many of baseball’s most talented players were barred from the sport’s biggest stage. Over the decades, the ballpark hosted a wide range of athletic
LACKSBURG, VA — Berkadia announced the sale of and financ -
ing secured for a three- property stu- dent housing portfolio in Blacksburg. The proper- ties in this portfolio in- cluded Hunt- e r s R i dg e , Maple Ridge Townhomes and Co l l e - giate Suites o f B l a c k s - burg. senior director Da- vidHudgins of Berkadia
David Hudgins
Hunters Ridge
lion in financing for the acqui - sition of this property on be- half of the buyer. The five-year Pacific Life Insurance loan included full-term interest- only, a 30-year amortization schedule and a 2.66 percent interest rate. “This deal was challenging on so many fronts as uncer- tainty from the pandemic kept delaying our ability to arrange the financing and as lend- ers were extremely selective when contemplating student
housing deals,” said Richards. “Fortunately, we had an ex- tremely strong experienced buyer in Reliant CAP IX Fund that already owned a student community at VA Tech. Ad- ditionally, Pacific Life took the time to understand how tight the Blacksburg market is (specifically student housing at VA Tech) and offered a very attractive five-year structure. This was a win-win for all parties with Berkadia New- port News Investment Sales
John Richards
Newport News completed the sale on behalf of the seller and the buyer. The buyer was Cal- ifornia-based Reliant Group . Managing director John Richards of Berkadia Rich- mond secured the $100.2 mil-
BAWDevelopment announces $94Million in construction financing for Negro League Stadium mixed-use project
PATERSON, NJ — BAW Development has closed on the $94million financing for the redevelopment of the Hinchliffe Stadium Neighborhood Res- toration Project (HSNRP), in Paterson, which includes Hinchliffe Stadium, one of just two remaining stadium struc- tures that was home to a Negro League baseball team. The financing comes via a unique combination of private loans, tax credits and other ve- hicles, including a $60 million construction loan from Gold- man Sachs and $10 million in New Market Tax Credit and Federal Historic Tax Credit equity from U.S. Bancorp Community Development Corporation , U.S. Bank’s tax equity and community develop- ment subsidiary. The financing also includes $21 million of New Market Tax Credit allocation from four Community Development Entities (CDE): Community Loan Fund of New Jersey,
Hinchliffe Stadium
Consortium America, RBC Community Development and USBCDE. The Passaic County Improvement Authority also issued a bond in support of the project, purchased by Goldman Sachs through its construc- tion loan, which serves as a bridge loan for the New Jersey Economic Redevelopment and Growth (ERG) credits. All financing was managed by BAW’s partner on the re- development, RPM Develop- ment Group . “When it comes to a project of this nature, there’s no question
that it takes a strong team to put all the pieces in place, and we are extremely thankful for the diverse group of financial partners that came together to fund the reimagination of this historic site,” said Baye Adofo-Wilson , founder of BAW Development. “Given the challenges of the last year, pushing this long-awaited infrastructure project forward required a highly complex, creative financing structure from all parties. The successful closings are a testament to our partners’ belief in the vision for
8A — July 23 - August 19, 2021 — Financial Digest — M id A tlantic Real Estate Journal
www.marej.com
F inancial D igest March Associates Construction served as construction manager for multifamily building Procida Funding’s $18.5Mconstruction loanfinalizes 122-unit micro-apartment building in Jersey City
ERSEY CITY, NJ — New Jersey-based com- mercial real estate lender P rocida Funding, LLC announced the recent payoff of an $18.5 million construc- tion loan. Provided to Stra- tegic Properties, LLC on June 7, 2019, loan proceeds were utilized for the devel- opment of the “Nest Micro- Apartments,” a 122-unit micro-apartment building in the Journal Square Section of Jersey City. Thanks to a great sponsorship team and March Associates Con- struction, Inc. , the project J
job; not to mention that this property was the first of its asset class in the area. How- ever, with our local presence and expertise, we were able to mitigate those risks in order to perform seamlessly for the sponsor,” said vice president of Procida Fund- ing Brian Foley . “This is a product I think we will be seeing much more of,” noted vice president of Procida Funding Derek Weissman . “This is a perfect example of how we can help our clients throughout the development process. We worked with the sponsorship team to replace their GC with March Con- struction and proceeded to provide aid throughout the life of the project to ensure its success. Our team was on site multiple times a week. We are thrilled to be part of such a transformative project.” The building is now open for leasing with tenants be- ginning to occupy its units. Apartments start at $1,395 and will be managed by Com- mon. Flip Sigi “The Original Filipino Taqueria” will be moving in this fall as they continue to expand their footprint throughout North Jersey. Procida Funding, estab- lished in 1995, provides capi- tal for a wide range of asset classes in the eastern region of the US, with a concen- tration in the New York metropolitan area. The firm uses both its own capital and that of its strategic partners, which includes private eq- uity funds and institutional lenders. The firm’s experi - ence as a borrower and de- veloper provides them with keen insight into how to be a creative and responsible lender and investor. The firm was named “Best Non-bank Lender in America” by REFI Magazine . Procida Advisors provides due diligence and asset man- agement services to develop- ers, financial institutions and private equity funds with a concentration on development, construction, bankruptcy, restructuring and marketing. The firm’s specific services include Development Manage- ment, Construction Supervi- sion, Restructuring, Crisis Management, Investment Banking, and Asset Manage- ment & Disposition. MAREJ
was completed and is cur- rently being leased. Nest Micro-Apartments is a 43,310-gross s/f class A mul- tifamily building with one ground-floor retail unit. The 122-unit micro-apartment building was constructed atop a 9,294 s/f vacant land parcel at 184-190 Academy St. in Jersey City. “When this deal initially came in, it had been heavily shopped in the marketplace with little success. The spon- sors had a relatively small track record and originally chose the wrong GC for the
Nest Micro-Apartments
Since 1995, Procida Funding has provided over $3 Billion in capital. Procida Funding provides capital for a wide range of asset classes in the Eastern region of the United States, with a concentration in the New York Metropolitan area.
12.58% $806+ $440+
ANNUALIZED RETURN
M id A tlantic Real Estate Journal — Financial Digest — July 23 - August 19, 2021 — 9A
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F inancial D igest
Verus Commercial Real Estate Finance worked with CRE financing firm to close transaction NorthMarq arranges $13.275M bridge loan for new construction of The Opus Apartments
N ORTH ARLING- TON, NJ — Robert Ranieri , senior vice president/managing director of NorthMarq’s White Plains office, secured a $13.275 mil - lion bridge loan for the con- struction of The Opus Apart- ments. The 49-unit multifam- ily property is located on Ridge Rd. in North Arlington, NJ. The transaction was struc- tured with a two-year term. NorthMarq negotiated the financing for the borrower through its relationship with Verus Commercial Real Estate Finance (VCREF). “It was a pleasure working with NorthMarq to close this transaction. The NorthMarq team and VCREF worked dili- gently to maximize the execu- tion of the loan for its mutual Kennedy Funding closes $3.456M land loan for Texas mixed-use development ENGLEWOOD CLIFFS, NJ — One of the largest and fastest-growing cities in the United States will soon be home to a mixed-use develop- ment in the heart of its down- town, thanks to a loan secured for its developers by Kennedy Funding . The Engl ewood Cl i f f s - based direct private lender announced it has closed a $3.456 million land loan to EssexModern City, LLC. Loan proceeds will be used toward cashing out the current loan, funding to advance the plan- ning and engineering stage of the site, and completing quiet zone construction in partnership with the city of San Antonio and Union Pacific Railroad. The loan is secured by seven parcels of vacant land located at 51 Essex St. in downtown San Antonio. “San Antonio is one of the fastest-growing cities in the United States: Real estate values in the metro area have appreciated 40% since 2015, and coupled with low unemployment and a grow- ing population, this makes the Alamo City an excellent place for new construction that will be home to living, working, and recreation for its residents and visitors,” said Kevin Wolfer , CEO, Kennedy Funding. MAREJ
As a capital markets leader, NorthMarq offers commercial real estate investors access to experts in debt, equity, invest- ment sales, and loan servicing to protect and add value to their assets. For capital sources, we offer partnership and financial acumen that support long- and short-term investment goals. Our culture of integrity and innovation is evident in our 60- year history, annual transac- tion volume of $16 billion, loan servicing portfolio of more than $65 billion and the multi-year tenure of our more than 600 people. MAREJ
client,” said Ken Wood , man- aging director, VCREF. The newly constructed OPUS apartments feature one-bed- room units and penthouse suites with state-of-the-art kitchens, spa bathrooms, high end finishes and modern open concept floor plans. Floor to ceiling windows bring in natu- ral light and offer breathtaking views of the NYC skyline. “The New Jersey apartment market continues to be strong and this first-class building will serve the growing need for young professionals in this market,” said Ranieri.
The Opus Apartments
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10A — July 23 - August 19, 2021 — Financial Digest — Tax Issues/Accounting — M id A tlantic Real Estate Journal
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T ax I ssues /A ccounting
By Bruce A. Johnson, MBA, CRE, Capstan Tax Strategies Multifamily Matters: The #1 Property Type Continues to Hold Strong
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Cost Segregation report can be used to produce and support disposition tables. ▪ In December of 2019, Proj - ect ABC (above) underwent a renovation with an associated depreciable basis of $3M. The same Capstan engineer re- turned to the property to docu- ment the discarded assets. He was also able to move 32% of the new assets into 5-year. Between both strategies the first-year tax savings on the renovation was $325,000. • Energy-efficient tax in - centives are in play for multi- family properties. The EPAct 179D deduction is a great op- tion for multifamily facilities that are 4 or more stories high, and the deduction is psf -- up to $1.80/s/f -- so the bigger the better. The 45L tax credit is extremely popular right now, and condos, townhouses, and apartment buildings that are a maximum of three sto- ries high are all solid candi- dates. The federal tax credit is $2,000 per unit, so the savings can really multiply. ▪ Example: A large multi - family property was placed- in-service on the east coast in 2020. The total square footage was 85,000, and the property was eligible for the maximum EPAct 179D deduction of $1.80/SF. The total deduction benefit was $153,000, result - ing in an actual tax savings of $61,200, on top of tax savings from accelerated depreciation and other strategies. ▪ Example: A 90-unit gar - den-style property was newly constructed. Each unit met the eligibility criteria for a 45L tax credit. At $2,000 per unit, the total tax credit was $180,000. The key to maximizing tax savings on your multifam- ily property is a quality cost segregation study. The study will allow you to leverage a combination of strategies old and new, increasing cash flow, reducing tax liability, and teeing you up for better days ahead. Bruce A. Johnson, MBA, CRE, is a co-founder and partner at Capstan Tax Strategies. Bruce works closely with commercial real estate owners and ac- counting firms to provide practical, creative, and customized engineering- based tax solutions. MAREJ
he multifamily mar- ket remains consis- tently steady and
in September of 2018. The total depreciable basis was $37,445,200. Capstan engi- neers were able to move 18.7% of assets into 5-year personal property, and another 7% of assets into 15-year land improvements, resulting in a first-year tax savings of $3,142,872. • The CARES Act from March 2020 temporarily re- moved two unfavorable loss limitations that many real es- tate investors would encoun- ter: the 80% net operating loss limitation and the $500K
overall loss limitation. • The Tangible Property Regulations (TPRs) are still very much in play, augment- ing the utility of the newer leg- islation. The TPRs guide the taxpayer in making expense and capitalization decisions, to ensure that all possible assets are capitalized. • Partial Asset Dispositions are very useful in a renovation scenario, as the remaining de- preciable basis of the discard- ed assets may be immediately written off in the current year. Data generated by a Capstan
have brought depreciation deductions to an all-time high, and this continues to drive interest in multifamily, par- ticularly at a time when cash flow is all-important. Here are just some of the factors making multifamily properties of interest: • The Tax Cuts and Jobs Act (TCJA) brought 100% bonus depreciation through the end of 2022 and made acquired assets eligible for said bonus. ▪ Property ABC, a garden apartment complex, was ac- quired and placed-in-service
robust, even through the cha l l enge s of the last year. Along with provid- ing the op- portunity to earn rental income, mul-
Bruce Johnson
tifamily projects offer several tax benefits to the thoughtful investor. Recent provisions in the CARES Act and TCJA
CAPSTAN our strength. your tax savings.
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