Real Estate Journal — The Year in Review 2017 — December 22, 2017 - January 11, 2018 — 23C


M id A tlantic

OCTOBER13–26,2017 SELARealty Investments acquires Crest Ridge inWest Orange for $40.5 million Buchanan Partners & Elion Partners purchases 700,000 s/f Northern VA industrial portfolio Griffin Industrial Realty closes on $5.9 million mortgage loan Horvath & Tremblay sells TGI Fridays in Homestead, PA and CVS in Raleigh, NC for $8.87 million Sabal Capital Partners closes $129 million portfolio of Freddie Mac small balance loans Progress Capital Advisors’ Domenico secures financing through Sabal Capital at a 75% loan to value RPAI selects Kinsley Construction to provide general contracting services for Circle East in MD NAI Keystone’s Willems sells a 153,000 s/f industrial building Mack-Cali Realty Corporation unveils $75M capital transformation of Harborside Walters Group unveils new LEED-Certified multifamily development in Toms River NAI Mertz receives two distinguished awards from NAI Global Matthew Hurly of Hurley Auctions to coordinate auction of 27,000 s/f commercial building CBRE’s Dunne & Neuer rep. entity controlled by Hartz in $24.8 million 1031 acquisition Roddy Inc. brokers the sale of a 233,500 s/f crane-served facility

Year in Review 2017

By Neil Andrew Stein, Esquire, Kaplin Stewart 2017: A dream year for the commercial real estate industry


n many respects, 2017 was a dream year for the real estate industry. Wheth-

requires changes to traditional suburban zoning. Yet opposi- tion to change remains in some communities seeking to pre- serve the status quo. Thanks to social media, the opposition is often well-organized and well-funded. Local governments have been and will continue to be aggressively pushing the pri- vate sector to meet worsening housing affordability needs. Inclusionary zoning ordinances and impact fees are making a comeback. Many retail stores will need to adapt or die. More retail stores are being transformed

into places that sell experi- ences, rather than goods, and more development will combine housing and retail to satisfy consumer demand for places that offer convenient, car-free shopping. Suburban office demand has been slowly returning but continues to face competition from cities and small towns which have enacted economic development and tax-incentive zones, to lure tenants out of the suburbs. Another damp- ening effect on office growth generally, will be the continu- ing march of technology-drive contnued on page 29C

er the game was new de- v e l o pm e n t or redevelop- men t , new markets and opportunities p r e s e n t e d themse l ves to those will-

Neil Stein

ing to plunge headfirst into the fray. Unquestionably, the pain brought on by the global financial crisis is a distant memory. The ready availability of debt and equity, has helped real estate transaction volume to rebound, but with a mix of caution and restraint. Over- all, there is a sense that real estate has learned painful but valuable lessons and therefore a real estate-driven recession seems unlikely. The Federal Reserve has helped, by remain- ing cautious about raising interest rates too high and too soon. In addition, while bank regulators and new risk rules have affected the volume of real estate loans from national lenders, some of the void is be- ing filled by regional and com- munity banks. These are the institutions that smaller devel- opers have long depended upon, banks that are experienced in local market conditions and that have the capacity to under- write smaller deals skillfully. From a land use perspec- tive, developers have focused on infill opportunities with a more modest project size, both in the cities and in older mixed-use suburbs. Suburbs continue to grapple with their own problems. Maintaining or increasing tax revenue requires a certain degree of governmen- tal zoning flexibility. In many areas, industrial users have shuttered existing plants and manufacturing facilities, made obsolete by technology or the export of such facilities over- seas. The result has been a re- newed focus on adaptive reuse. A transformation from indus- trial zoning to multi-family or transit-oriented development has been popular, principally because of the demand driven by millennials’ and empty nest- ers’ preferences for residences that are walkable and transit accessible. The two groups are looking for similar amenity packages but will differ on unit size and price. However, to cre- ate these amenities and keep neighborhoods affordable often

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