18B — March 29 - April 11, 2019 — Owners, Developers & Managers — M id A tlantic
Real Estate Journal
www.marejournal.com
O wners , D evelopers & M anagers
YATTSVILLE, MD — In an off-market t ransac t i on , The In partnershipwithDeclarationCapital &Angelo, Gordon TheDonaldsonGroupacquire 288-unit apartment community H
For former Ballantine Brewery Campus Cushman & Wakef ield named property manager
the bargain made and paid for, without receiving very unpleasant and possibly fa- tal news after the closing. Once the purchase price is paid, absent certain limited circumstances, the property with all of its faults belongs to the buyer, and if it isn't worth what was paid, the buyer will have to live with the consequences. The information you obtain in this article is not, nor is it intended to be, legal advice. You should consult an at- torney for individual advice regarding your own situation. Bruce E. Gudin, Esq. is a partner with the firm of Ehrlich, Petriello, Gudin& Plaza, PC headquartered in Newark, NJ. of in-house servers. And, if disaster should strike, cloud backup provides easy resto- ration and retrieval of key corporate data. Everything from historical client informa- tion to financial and project records is available 24/7 with just a few simple mouse clicks. While the economy seems rea- sonably stable today, questions continue to hover about the near future. Still, among the few ab- solutes in business is the need to prepare with the best possible resources. The commercial real estate industry is no different. Fortunately, technologies exist right now that not only provide immediate operational efficien- cies and cost benefits, but an on- going foundation for growth and an enhanced ability to navigate successfully in an unpredictable world. Michael Mullin is presi- dent of Integrated Busi- ness Systems (IBS) in Totowa, NJ to-day operational support for the 1.1-million s/f campus. Originally owned and operated by P. Ballantine & Sons, the site on Ferry St. served as the company's largest brewery. It closed in 1972 and ultimately was repositioned as a multi- tenant property. Its single- and multi-story, loft-style industrial and office buildings today house 30 businesses involved The new ownership has launched a major renova- tion/repositioning effort ac- cording to Nevins, a Cush- man &Wakefield managing director.
when the time comes to pres- ent a deal to either partners, investors, lenders or another buyer, one will have the level of information and knowledge surrounding the property that gives a clear picture of a prop- erty's financial and physical condition. This information enables others to make lend- ing and investing decisions relative to the property in an informed manner. In ad- dition, proper due diligence also reflects favorably upon a purchaser in the eyes of lend- ers and cuts down on time bringing the transaction to loan closing. The most important result, however, is that the buyer will receive the benefit of Further advantages of to- day’s ERP systems built specif- ically for the commercial real estate marketplace include creativity in both pricing and design. While some solutions are provided by vendors on a per-seating basis, others offer SaaS pricing structures, which means subscriptions without seat-based limitations. And these systems can be custom- ized according to company specifications. This includes real-time access to meaningful data organized in dashboards created per customer wants and needs. Cl oud comput i ng a l so means no longer having to worry about the purchase, storage and maintenance NEWARK, NJ — Cush- man & Wakefield has been named property manager for the 22-acre former P. Ballan- tine & Sons brewery on Ferry St. in Newark. The appoint- ment closely follows the Iron- bound industrial property’s acquisition by Turnbridge Equities and institutional investors advised by J.P. Mor- gan Asset Management . Michael Nevins, SamCol- lison, Mike Baldino, Eladio Bracero and Kevin Smith – members of Cushman & Wakefield’s regional Asset Services practice – are heading the assignment to provide day- requirements of other API applications, enabling them to seamlessly share data in a multi-cloud environment. Customizable Pricing and Features
a large business taxpayer as explained below. For those entities exceeding the gross receipts threshold of $25 million, the recording of costs are not as straight forward. These entities are required to follow the regula- tions under code Section 263A which requires capitalization of certain indirect costs related to the production of real prop- erty. Below is a useful guide to how those costs should be recorded before, during and after the production period: Production Period The production period for real property begins the date that any physical produc- tion activity takes place with respect to the unit of real property. The following is a partial list of examples that may indicate whether physi- cal production activity has occurred: • Clearing, grading, or exca- vating of raw land; • Demolishing a building or gutting a standing building; • Engaging in the construc- tion of infrastructures, such as roads, sewers, sidewalks, continued from page 2B Donaldson Group , Decla- ration Capital , and Angelo, Gordon have acquired Plaza Towers Apartments, a 288- unit high rise apartment com- munity located in Hyattsville. The partnership acquired the property for $42.6 million and plans to invest additional capi- tal for property improvements. Situated on 6.6 acres at 6700 Belcrest Rd., Plaza Tow- ers is located within walking distance of both the Prince George’s Plaza Metro Sta- tion and The Mall at Prince George’s. It is within minutes of two newmixed-use develop- ments: the $2 billion, 150-acre research-focused Discovery District, and Riverdale Park Station, a 1.4 million square foot town center anchored by Whole Foods. Also nearby is the University of Maryland’s flagship College Park cam- pus, the largest university in the Washington metropolitan area and a major employment center. The partnership will in- vest much-needed capital to enhance and modernize the community. Capital improve-
continued from page 3B Tech investment in today’s digital . . .
Plaza Towers Apartments
cables, and wiring; • Undertaking structural, mechanical, or electrical activ- ities with respect to a building or other structure; or • Engaging in landscaping activities. In the case of real property constructed by the taxpayer for use in a trade or business, the production period ends when the property is placed in service. In the case of prop- erty developed for sale, the production period ends when the property is ready to be held for sale. Direct Production Costs All direct production costs of the property must be capi- talized. Real Estate Taxes Real estate developers must capitalize real estate taxes paid, even if no development has taken place if it is reason- ably likely when the taxes are incurred that the property will be subsequently developed. Interest Expense Interest incurred before the production period begins may be deducted as investment interest expense. Once the production period begins, in- “We are pleased to complete another successful acquisi- tion with our partners at An- gelo Gordon and Declaration Capital,” said Carlton Einsel , chief executive officer, The Donaldson Group. “We made an all-cash offer in conjunction ments will include a leasing center, upgraded common areas, exterior building im- provements, and new tenant amenities. Efficient property management by Donaldson will reduce operating expenses and improve customer service. Work is expected to begin by late spring.
terest expense should be capi- talized using the avoided cost method. Under the avoided cost method, any interest that theoretically would have been avoided if production expenses had been used to repay or re- duce outstanding debt must be capitalized. At the end of the production period, interest would again be deductible. If there is a suspension in the production period for 120 consecutive days (without regard to normal delays for weather, etc.), capitalization of interest is not required and interest incurred may be ret- roactively deducted. Insurance Expense Any insurance expense prop- erly allocable to the production activity must be capitalized and included in the basis of the asset when produc- tion is complete. These costs should be capitalized during the pre-production period if it is reasonably likely at the time the costs are incurred that production will occur at some future date. M i c h a e l D . Y a r - row is a partner with WithumSmith+Brown. Declaration Capital is the family office of David M. Ru- benstein, the co-founder and co-executive Chairman of The Carlyle Group. with an accelerated settlement period, thereby meeting the seller’s closing timeframe.” “Plaza Towers is a well-built apartment community in a fantastic location,” said John Majeski , senior vice presi- dent, The Donaldson Group. “We believe in this growing Hyattsville market and plan to continue investing in qual- ity rental communities in the Washington, DC area.”
Real Estate Development – When to Expense vs Capitalize . . .
continued from page 8B Performing your real estate due . . .
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