- DC
The Regent Medical Portfolio is a 353,000 s/f core medical office portfolio NorthMarq Capital arranges $91.5m refinance for medical office portfolio
ISSUE HIGHLIGHTS Volume 28 Issue 15 August 12 - 25, 2016
Multifamily Financing 5-14A Central NJ 5-13B
N
Estate Capital and a $10 mil- lion mezzanine loan placed with Morrison Street Capital . The Regent Medical Portfo- lio is a 353,000 s/f core medical office portfolio with several of the buildings having on-site surgery centers and within close proximity to major hos- pitals. Moreover, the portfolio is highly specialized since ap- proximately half of the tenan- cy is borrower affiliated. “This unique attribute, combined with this refinancing repre- senting a substantial loan ba- sis of $260 psf for a suburban office portfolio (which included a sizable cash-out), proved challenging for many lenders”, said Nalbandian. “Natixis Real Estate Capital and Morrison Street Capital worked dili- gently to understand the value in this prestigious portfolio and invested significant time and resources to understand Regent’s affiliated tenant.” “We continue to see compet- itive floating rate pricing for quality product with strong sponsors,” said Campanella. International Place is a LEED Gold and ENERGY STAR certified building locat- ed directly across the street from The Rosslyn Metro sta- tion (Blue, Orange and Silver lines) with quick access to Washington, DC, The Penta- gon, Reagan National Airport, Tysons and Dulles Inter- national Airport. Vehicular access is available with con- nections to Rte. 50, I-66 and 395, Wilson and Clarendon Blvd., the George Washington Memorial Parkway, and all major bridges into DC (Key Bridge, Roosevelt Bridge and Memorial Bridge). The building includes a newly renovated 4,376 s/f fit- ness center, modern high-end restrooms and best-in-class conference facility and man- agement office on the ground of The Meridian Group . A bank and debt fund served as the lenders.
ORTHERN NEW JERSEY — Gregory Nalbandian , manag-
ing director o f N o r t h - Marq Capi- t a l ’ s N e w Jersey-based regional of- fice, arranged $91.5 million in refinanc- ing for a best
CBRE arranges $183m in financing for presidential city apartment complex
Greg Nalbandian
in-class, 13 property medical office portfolio, of which eleven assets are located in excep- tional, high-demographic, in-fill markets throughout Northern New Jersey. The remaining assets are located in New York and Florida. Working for Regent Medical Properties, LLC, a rap- idly growing full service medical owner-operator based in North- ern New Jersey, the five-year fixed-rate loan was bifurcated between an $81.5 million senior loan placed with Natixis Real WASHINGTON, DC — Cushman & Wakefield an- nounced that it has secured $80.4 million in financing for 1735 N Lynn St., a 293,539 s/f, LEED Gold and ENERGY STAR Certified office build- ing. Executive managing direc- tor John Campanella of Cushman & Wakefield ar- ranged the financing on behalf
Chief investment officer for Regent Medical Properties, Barton Schack , noted how the portfolio has grown or- ganically over the past fifteen years from a single condo unit to its current size through the efforts of its owner, Dr. John Hajjar of Sovereign Health System. “The refinancing with Natixis and Morrison Street marks a significant first step
in transitioning Regent from local and regional lenders to more institutional capital pro- viders”, said Schack. “Based upon our growth projections, we required this refinancing to further expand our portfolio while also providing for short term flexibility as we continue to evaluate and execute on our strategic options during the next five years.” n
5A
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Cushman & Wakefield DC arranges $80.4m in financing for a LEED Gold office building
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Financial Digest................................................5-14A DelMarVa • DC.................................................15-19A New Jersey................................................. Section B Pennsylvania.............................................. Section C
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MAREJ A dvertising D irectory Applied Bank..........................................................13A Berkadia................................................................BC-A Bussel Realty Corp...................................................7B Capstan Tax Strategies........................................BC-B Caryl Communications...........................................21A CIRC DE. ................................................................19A Common Cents Planning. ......................................11C Cooper Horowitz.......................................................7A CREW Lehigh Valley. .......................................16-IBC CREW NJ................................................................17B CREW Philadelphia. ..............................................15C Cushman & Wakefield. ............................................5C Cushman & Wakefield NJ. ...................................IC-B Deerwood Real Estate Capital.................................8A Earth Engineering, Inc.. ..........................................8C Environmental Systems.........................................21A Equity Retail Brokers. .............................................2C Fowler Companies..................................................21A Gebroe-Hammer Associates.....................................3B Harvey Hanna Associates......................................17A Heller Industrial Parks............................................8B Hillcrest Paving & Excavating..............................21A Hinerfeld Commercial Real Estate.............. 21A, IC-C Investors Real Estate Agency................................21A Investors Realty, Inc.. ............................................16A Kaplin Stewart. ........................................................3A Landmark Commercial Realty. ...............................7C Marcus & Millichap........................................... 3A, 6C Mericle...................................................................BC-C Meridian Capital Group...........................................9B Morris County EDC................................................16B NAI Mertz.................................................................9C NAI Summit..................................................... 21A, 4C New Day Underwriting Managers. .......................11B NorthMarq Capital...................................................9A PennCap Properties. ..............................................21A Poskanzer Skott Architects......................................4B PREC.........................................................................1C Principal Commercial Capital Group......................6A Provident Bank.......................................................11A Real Property Capital.............................................12A Redwood Realty Advisors.........................................2B Regal Bank..............................................................10A Remco Realty Group...............................................12B Rittenhouse Capital Advisors................................14A Sebco Laundry Systems...........................................2B Sitar Auctions.................................................. 4A, 10C Subway....................................................................21A The Berger Organization. ........................................1B The Goldstein Group................................................3B The Kislak Co.. .........................................................6B The Traffic Group...................................................18A Warner Real Estate & Auction.........................13-14B WCRE........................................................................3C Whitesell...................................................................3A
Mid Atlantic R eal E state J ournal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Associate Publisher ................................................................ Steve Kelley Associate Publisher .............................................................Alissa Aronson Associate Publisher ..........................................................Barbara Holyoke Associate Publisher ...................................................................Kim Brunet Senior Editor/Graphic Artist .................................................Karen Vachon Production Assistant/Graphic Artist ...........................................Julie King Office Manager .................................................................... Joanne Gavaza Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, 312 Market St. Rockland, MA 02370 USPS #22-358 | Vol. 28 Issue 15 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 Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
Mid Atlantic Real Estate Journal
Court rejects NJ Municipality’s attempt to unilaterally extend affordable deed restrictions on condominium units I Steven G. Mlenak n a recent opinion, Society Hill at Piscataway Condo. Ass'n v. Township of Pisca- taway, Middlesex County Supe- rior Court Judge Douglas Wolf- son ruled that municipalities could not unilaterally extend certain expiring deed restric- tions encumbering affordable housing units if those restric- tions did not explicitly empower the municipality to do so. The Society Hill at Piscat- away Condominium was devel- oped more than thirty years ago following protracted Mt. Laurel litigation, which resulted in the rezoning of several properties throughoutMiddlesex County to accommodate affordable hous- ing development. As part of the settlement of the litigation, Soci- ety Hill sought site plan approv- al to build an inclusionary devel- opment containing 109 low- and moderate-income units. As a condition of the site plan ap- proval, an Affordable Housing Plan was adopted which, by its terms, was to expire thirty years from its execution. The Plan required that the Associa- tion's master deed and each of the unit deeds to the 109 units contain restrictions prohibiting the owner fromselling or leasing the unit to a purchaser or ten- ant whose income exceeded the threshold necessary to qualify for low- and moderate-income housing as set by the State. The settlement wasmemorialized by the Court and, as a consequence, Piscataway received credit for the 109 deed-restricted units against its fair share obligation since that time. On July 17, 1989, the Council on Affordable Housing (COAH) adopted its first recapture regu- lation, which prevented the purchaser of a deed-restricted unit from reaping a windfall after the expiration of the deed restrictions. In 2001, COAH adopted the Uniform Housing Affordability Controls (UHAC), which provided in pertinent part that "[a] municipality shall have the right to determine that the most desirablemeans of promot- ing an adequate supply of low- and moderate-income housing is to prohibit the exercise of the repayment option and main- tain controls on lower income
housing units sold within the municipality beyond the period required by N.J.A.C. 5:93-9.2." On December 8, 2012, nearly thirty years after the first af- fordable housing units were constructed and sold, Pisca- taway adopted an ordinance that purported to extend the deed restrictions on the 109 deed-restricted units in Soci- ety Hill through June 7, 2045. Piscataway asserted that the ordinance was adopted pursu- ant to the UHAC and N.J.S.A. 5:97-6.14(a), which permits a municipality to extend such restrictions to address its growth share obligation. Society Hill and five of its members sued Piscataway, claiming that the extension was unlawful, that it violated their legal rights, and that it constituted a cloud on their respective titles. The Township argued that its power vested in the UHAC and in the "state's strong constitutional and public policy imperatives, which com- pel municipalities to provide their respective fair share of affordable housing." With re- spect to the UHAC, the Town- ship claimed that the power contained therein for munici- palities to unilaterally extend the restrictions applied retro- actively because, when read as a whole, the Plan "reserved" the Township's right to amend or modify the covenants uni- laterally. The Court disagreed, finding no express language in the Plan, the Master Deed or in any of the individual deed restrictions which permitted the Township to unilaterally modify the restrictions. The Court found that "it is plain that the UHAC regula- tions were designed to imple- ment the Fair Housing Act [N.J.S.A. 52:27D-301 to -329] by assuring that low- and moder- ate-income units created under the Act are occupied by low- and moderate-income households for an appropriate period of time. . . . As contemplated by COAH, mu- nicipalities were clearly empow-
ered to impose deed restrictions, but only on newly constructed low and moderate income units subject to the FHA." As all the deed-restricted units within So- ciety Hill were constructed and approved prior to July 17, 1989 (the date of the first recapture regulation adopted by COAH), the Court refused to allow the unilateral modification power created by the UHAC to apply retroactively to deed restric- tions. Even had the restrictions come into play after 1989, the Court found that N.J.A.C. 5:80-26.5(a)(2) prohibited amu- nicipality's ability to extend the affordability controls for any "unit that, prior to December 20, 2004, received substantive certification from COAH, was part of a judgment of compli- ance from a court of competent jurisdiction or became subject to a grant agreement or other contract with either the State or a political subdivision there- of[.]" N.J.A.C. 5:80-26.5(a)(2). As a result of this case, the first to construe the UHAC provisions that appear to au- thorize the unilateral exten- sion of affordability controls, municipalities should think twice before unilaterally ex- tending the affordability con- trols on deed restrictions set to expire shortly unless such re- strictions explicitly empower the municipality to do so. This decision is not only im- portant to municipalities and the owners of deed-restricted units whose deed restrictions are set to expire; it is also impor- tant to those common interest communities whose member- ship includes the owners of such deed-restricted units. Following this case, associations in devel- opments containing affordable units with restrictions set to expire should consider taking a leadership role in defending against a municipality's at- tempt to unilaterally extend those restrictions. Steven Mlenak is a mem- ber of Greenbaum, Rowe, Smith & Davis LLP. n
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M id A tlantic R eal E state J ournal Gerorinda & Associates, Ltd represents tenant The Kaufman Org. secures 16,000 s/f lease for innRoad
Leading the Real Estate Investment Market Contact us today to access the largest inventory of properties.
N EWYORK, NY — The Kaufman Organiza- tion (Kaufman) , a full-service commercial real estate firm, announced today that the company secured a seven-year, 16,000 s/f lease for innRoad, a leading software- as-a-service solution (SaaS) company that integrates prop- erty management, global dis- tribution, bookings and mar- keting for independent hotel businesses of all sizes, at 519 Eighth Ave. on the 15th floor. Relocating from 261 West 35th St., and after recently garnering $1 million in new funding, innRoad will be using the space as its new headquar- ters as the company continues to grow. The company’s all-in- one hospitality management system has revolutionized the way owners incorporate tech- nology into their properties and has been selected by more than 350 independent hotel properties in the Americas and Europe and will only continue to expand. “We are excited to have in- nRoad, a uniquely innovative company join 519 Eighth Av- enue,” said Steve Kaufman , p r e s i den t a t Kau fman . “Kaufman’s location provides
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the ideal space for rapidly growing companies to thrive in due to its ideal Garment District location, updated loft-style office spaces and state-of-the-art communica- tion infrastructure.” Kaufman, along with Bar- bara Raskob and Yvonne Chang represented the land- lord, Kaufman 8th Avenue As- sociates, LP in the transaction. Jack Petrie and Eva Shih of Gerorinda & Associates, Ltd represented innRoad. Asking rent was in the high- $40’s-per-square-foot range. 519 Eighth Ave. is a 26-sto- ry, 349,000 s/f building cen- trally located in the Garment
District between West 35th and West 36th St. in close proximity to major transpor- tation hubs, including Penn Station, Port Authority, PATH train, and the E, N, R, Q, S, 1, 2, 3 and 7 MTA subway lines. The building’s office space showcases open layouts; as an added bonus, the top floors are light-filled and feature im- pressive views of the Hudson River. Each full-floor space is equipped with the optimal set- ting and functionalities for ten- ants to continue to grow their business, including high-speed internet, key cards for after- hour access, 24/7 staffed lobby, and on-site management. n
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M id A tlantic R eal E state J ournal CBRE, JLL, NGKF contribute to report among others CoreNet Global explores the future of the real estate profession
A TLANTA, GA — The corporate real estate (CRE) profession will be influenced, disrupted and transformed in the years ahead by a powerful combination of forces that are re-shaping busi- ness strategy and operations, consumer preferences, and how and where people want to live and work, according to a new report released by CoreNet Global . CoreNet Global is the leading global professional as- sociation for corporate real es- tate and workplace executives, service providers and economic developers. “The Bigger Picture: The Fu-
interconnected than ever be- fore, constantly disrupted by technological innovation, and replete with both risks and opportunities. Among the key findings in the report: Over the next 10 to 20 years, potentially 40 to 60 percent of the worldwide labor force that is now doing transactional work could be replaced and augmented by artificial intelli- gence, work-force automation and smart cognitive thinking machines. The increasingly mobile and connected workforce is chang- ing real estate requirements
as it relates to howmuch space is needed, where facilities will be located, and how that space is configured, utilized and managed. The next generation workplace likely will be built around workplace networks that will support this new mobile workplace complexity. Although some might think of cyber security as an IT issue, high-profile cases such as the 2013 Target credit card breach show a crucial link to CRE and the built environment. That breach, for instance, came from a refrigeration, heating and air-conditioning subcontractor that had secu-
rity access to service Target as a client. “Now, more than ever, it is crucial that corporate real estate professionals become not only students of the busi- ness, but students of the world and how it is changing,” said Angela Cain , CEO of CoreNet Global. “That is the purpose of our new report: to place the future of CRE in the context of the bigger picture.” Several CoreNet Global Gold Strategic Partners con- tributed to the report: CBRE, Deloitte, ISS, JLL, New- mark Grubb Knight Frank, Sodexo and Steelcase . n Ted Pfeifer joins Landmark Commercial Realty HARRISBURG, PA — Landmark Commercial Re- alty, Inc. recently announced the hiring of Ted Pfeifer as vice presi- dent – retail. In hi s new role, his pri- mary f ocus will be the sale and leas- ing of retail properties, including shopping centers and restaurants. Throughout the course of his extensive career in commercial real estate, he launched his own brokerage firm (Ted Pfeifer Realty) and also worked for sev- eral national retailers includ- ing Walgreen’s, McCrory’s and Modern Woman Stores. Pfeifer’s firm specialized in commercial real estate tenant representation, along with con- sulting. His client portfolio in- cluded companies such as Taco Bell, Amelia’s Grocery Outlet, Panera Bread, Auto Zone and Dollar General. “Having facilitated over 1,500 new leases and negotiating nearly 10,000 during his 30 plus years in commercial real estate, we are excited to bring such an expert in the retail industry on board,” said Barb Murdocca , director of operations. “His ex- perience will further advance our retail division.” Pfeifer is currently a member of the International Council of Shopping Centers. Landmark Commercial Re- alty, Inc. is a full service Com- mercial/Industrial Brokerage firm headquartered in Har- risburg, Pennsylvania with focus on the South Central Pennsylvania n Ted Pfeifer
ture of Corporate Real Estate,” draws on the expertise of more than 30 thought leaders to provide crucial insights from multiple perspectives beyond CRE: technology and the inter- net of things; risk mitigation; cyber security; environment, energy and sustainability; corporate social responsibility; the global economy; people, talent, wellbeing; and the future of cities. The report connects these dots to draw a forward-looking picture of the dynamic business envi- ronment in which CRE must deliver value – a world that is changing rapidly, more
PUBLIC AUCTION PRIME! REAL ESTATE , LIQUOR LICENSE, GREAT ART, BAR/RESTAURANT EQUIPT. Monday August 29 th @ 10:00 A.M. “THE BUCA DEL VINO RESTAURANTE, Wine & Cigar LOUNGE” 1901 Highway 315, Pittston, PA 18640
Includes, 16,200 Sq Ft Facility w/Large Deck, .83 Acres, with Paved Parking Areas. Liquor License, Luzerne County, LID# 58785 R-21231
Terms of Sale: Real Estate: Terms: $50,000 Non-Refundable Deposit by the successful Bidder. The Balance due upon closing within 45 days, Time being of the Essence. Real Estate sale subject to clear title but not financing. Real Estate Subject to Approval of Owner. Liquor License: Twenty Percent (20%) nonrefundable deposit by successful bidder, balance due upon approval of the PLCB, but the deposit is non-refundable unless the non-approval by the PLCB is due to the part of the Seller, not the Buyer. Liquor License Subject to Approval of Owner. Their shall be no other contingencies. All Equipment, Fixtures, Furniture Art and Décor. To be sold Piece by Piece. Payment in full the day of sale. INSPECTION: By Appointment! For more Information & Photo’s, check our Web Site! Col. Steve Sitar /Sitar Auctions Ph:(570) 586-1397 P.O. Box 779 Cell: 570-954-7001 Waverly, Pa. 18471 Pa.Lic.AU2124-L www.sitarauctions.com www.Auctionzip.com ID#4898
M id A tlantic F inancial D igest F eaturing M ultifamily F inancing Shawn Rosenthal of CBRE represents Post Brothers CBRE arranges $183m in financing for Presidential City Apartment Complex
Real Estate Journal — August 12 - 25, 2016 — 5A
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HILADELPHIA, PA — CBRE Capital Mar- kets’ Debt & Structured Finance team has arranged a $183 million loan for the refi- nance of Presidential City, a class A apartment complex in Philadelphia. Shawn Ros entha l o f CBRE’s Midtown Manhattan office secured the three-year interest-only loan with two one-year extension options on behalf of Post Brothers , a multi-family property de- velopment company based in Philadelphia, headed by Mat- thew and Michael Pestronk . Financing was provided by Starwood Capital . “The financing markets were extremely impressed with the quality of the renovations to date, the interiors of the units, and the unique and expansive amenities. The Pestronk broth- ers truly created a destination Class A multifamily asset, unmatched in the Philadelphia P BETHESDA, MD — Capi- tal One announced that it has provided BDMG a $66.7 million Fannie Mae loan to fund its acquisition of Gates of Cipriano, a 591-unit apart- ment complex in Greenbelt, Maryland. The loan has a 12- year term. Meridian Capital Group senior managing director Abe Hirsch and managing direc- tors Jacob Katz and Zev Karpel negotiated the financ- ing on behalf of the borrower, working with the Capital One Multifamily Finance team. “The Gates of Cipriano is well-situated to take advan- tage of the exciting develop- ment proposed for the area surrounding the Greenbelt Metro Station,” said Grace Huebscher , president of Cap- ital One Multifamily Finance. “This prime location and our excellent working relation- ship with Meridian Capital and Fannie Mae helped us to create a tailored financing solution that met BDMG’s
area,” said Rosenthal. “The CBRE teamwas able to help us obtain a loan that was commensurate with the world- class environment that we’ve created in one of Philadelphia’s most significant and historical apartment communities,” Post Brothers president Matthew Pestronk said. Located at 3900 City Ave., Presidential City is comprised of four high-rise towers that of- fer an unparalleled diverse se- lection of apartment layouts. In 2014, Post Brothers launched its plan to perform full gut renovations to each of the four buildings, transforming them into luxurious, high-efficiency residences that provide a rare mix of quality, accessibility and value. Post Brothers recently opened its centerpiece, the five- acre Sora Pool Club. Designed and built with a sleek South- east Asian-inspired aesthetic, Sora mirrors contemporary VIP day clubs and resorts,
carbon-free electric heating and cooling systems. Living areas are accented with quartz windowsills, energy star appli- ances and exotic, sustainable Sapele hardwood flooring. Kitchens feature antimicro- bial quartz countertops, wood grained drawer spaces and high gloss cabinetry. Resi- dents will also find premium integrated stainless steel ap- pliances and unique features such as glass tile backsplash and a movable island, all of which are highly customizable to each resident’s preference. Phase I of the project, which includes redeveloping Wash- ington Tower (180 units) and Madison Tower (265 units) in addition to creating the Sora Pool Club, has been completed. Phase II, which includes re- developing Jefferson Tower (331 units) and Adams Tower (242 units), is underway. The property is expected to be fully leased in 2017. n Case entered into a joint venture agreement with a NY-based real estate cred- it fund in early 2016 and is expanding its platform. Responding to the middle market’s need for smart situ- ational capital, Case provides financing solutions for a range of transitional properties, including multi-family, in- dustrial, retail, land and office assets. Its funds are typically deployed as note purchases in addition to bridge and ac- quisition loans or rescue and restructure capital. Case helps local entrepre- neurs take advantage of near- term profit opportunities. The principals of Case evaluate each loan, property and real estate debt purchase based on its own merits, the borrower’s or seller’s situation and busi- ness plan, and whether local market conditions allow the firm to execute proven value creation strategies. n with more than 40 years of residential development ex- perience.”
Presidential City
embody the portrait of urban class and stylish living. Rooms feature recessed LED overhead lighting and energy-efficient,
designed as an ideal location for relaxation and recreation. Presidential City’s one-, two-, and three-bedroom residences
CapitalOnecloses$66.7mFannieMaeloan for acquisition of multifamily property
Case Real Estate Capital funds $15.15m first mortgage bridge loan
ROCHELLEPARK, NJ — Case Real Estate Capital, LLC (Case) through Case
Inves tors I I I , L L C has provid- ed a $15.15 million first m o r t g a g e bridge loan to SAMTD A c q u i - s i t i o n s
Sandy Herrick
Woodbridge LLC , a New Jersey-based residential de- veloper, to facilitate the ac- quisition of 7.1 acres of fully entitled land in Woodbridge, NJ. The property is approved for construction of 355 resi- dential units. Case expects to be taken out by a construction lender within a year. “We are very excited to be doing business with SAMTD,” said Sandy Herrick , found- er and managing principal of Case, a commercial real estate investment firm head- quartered in northern New Jersey. “They are a trusted participant in New Jersey
Gates of Cipriano
needs for its acquisition of the complex.” Located at 8501 Greenbelt Rd., Gates of Cipriano is min- utes from I-95 and 295 and a short distance from Washing- ton, DC. It’s also across the street from NASA’s Goddard Space Flight Center. “It was a pleasure working with Meridian and Capital
One in order to facilitate the loan in an expedited fashion,” said BDMG president Avi Bernstein. Capital One Bank’s Com- mercial Real Estate Group offers a comprehensive array of financing solutions for prop- erty owners and developers nationwide, including balance sheet and agency lending. n
6A — August 12 - 25, 2016 — Financial Digest — M id A tlantic
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F inancial D igest
Company offers buyers reasonably priced immediate financing for soft deposits Startup launches first lending platform BCRM Group, funds real estate due diligence deposits
EW YORK, NY — BCRM Group LLC , a real-estate deposit In response to the previ- ously unaddressed demand for capital, owners Ben Cohn and Randy Modell formed BCRM Group. Unlike anyone else in the industry, the com- pany offers buyers reasonably priced immediate financing for soft deposits, enabling them to sign contracts and close on properties. Typically, real-estate buyers N funding startup, will fund earnest money deposits for real estate acquisitions in the United States.
initiate their purchases with a “soft period,” during which they conduct due diligence before committing to proceed with the acquisition. Sellers customarily require an earnest money deposit of as much as 10 percent of the purchase price before granting the “soft period” to a purchaser and withdraw the property from the market. BCRMGroup was developed to ease the liquidity burdens of such deposits. “Countless talented entre- preneurs are forced to pass on buying opportunities because they do not have immediate funds available for the deposit.
With our platform, they will now have the ability to tie up deals while they raise the re- quired equity and debt,” said Modell. “Now investors will have the power they need to proceed with all real estate deals being considered.” Cohn and Modell believe this platform is geared toward borrowers of varying profiles, including: 1. Entrepreneurs beginning their real estate career. 2.Experienced investors, often presented with several opportunities, whose immedi- ate funds may be unavailable to tie up every deal being
considered. 3.Financial investors with a preference for delaying the internal rate of return clock by funding deposits off the balance sheet. 4.1031 exchange buyers who do not have the required funds to secure an exchange property. “Inspired by clients and contacts in the real estate in- dustry who have approached us for assistance with de- posit funding, we have cre- ated a success-based pricing structure that is sensitive to the buyer’s all-in costs,” said Cohn. “For deals that proceed
to close after the due diligence is complete, services will cost the buyer approximately one percent of the total purchase price.” Currently, the founders are financing this new venture from their own resources, with institutional backing and crowd funding as the next development in their growth. n Cronheim Hotel Capital secures $7.5m for Hilton Garden Inn
MOBILE, AL — David Turley, Janet Proscia and Jeffrey Pacailler arranged financing totaling $7.5 million for the Hilton Garden Inn in Mobile, AL. The 10-year loan was structured with a 30-year amortization schedule and executed via CMBS to replace maturing debt. The property was constructed by the bor- rower in 2008 and has become one of the top hotels in the market. Mobile has proven to be an exceptionally stable market over the past decade due to a wide variety of industry and employment. In addition, a number of recent develop- ments in the aerospace, ship- building and steel industries have provided strong catalysts for future growth and expan- sion. The Subject Property is well positioned to capture this demand. “CHC has built a strong track record executing deals of this type – well flagged and well located limited service ho- tels in secondary and tertiary markets throughout the U.S.”, said David Turley. “In general, lenders remain conservative on these assets. However, we’ve been very successful in understanding and commu- nicating the specific merits of each deal to secure favorable financing.” n
Real Estate Journal — Financial Digest — August 12 - 25, 2016 — 7A
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The undersigned arranged the above acquisition financing
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Real Estate Financing
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By Allison Kerwin, M&T Bank Multifamily performs well in Delaware due to smart dev. targeting millennials & retirees
A
s multifamily devel- opment continues to perform well nation-
But it’s not with the same pre-bubble expectation of, “if you build it, they will come.” Rather, smart developers in Delaware have realized that the market exists only if they offer potential apartment dwellers the right amenities at the right location. For Millennials, that means an urban lifestyle that’s close to jobs and entertainment. And this demographic is quick- ly snatching up new develop- ment in and around Wilming- ton’s redeveloped Riverfront and well suburban areas such as Claymont, in projects com- prised of the right mix of
amenities. Those amenities include pools, rooftop outdoor spaces, cafes, restaurants, and on-trend, outdoor beer gardens where Millennials can enjoy their favorite craft brews. And don’t forget about their pets. Some of the most popular new multifamily projects in Delaware include not only dog parks, but also dog washing facilities, making apartment living a pet friendly option. Interestingly, new construc- tion isn’t only appealing to Millennials. Downsizing baby boomers are also discover- ing the carefree apartment life and they are leaving the
suburbs for the urban core. An employment hub home to more corporate headquarters than any other state, Dela- ware‘s aging corporate work- force is nearing retirement and embracing downsizing. New multifamily options al- low them to stay connected to family and friends, as well as nearby beaches and the I-95 corridor that makes Delaware so accessible to New York; Philadelphia; Baltimore; and Washington, DC. All of that is responsible for a number of recent local successes. The Buccini/Pollin Group, Inc. has led the way
with development of The Resi- dences at Justison Landing, a pet friendly, 204-unit luxury, Riverfront development that opened in 2008. It is also the force behind the develop- ment of The Residences at Harlan Flats, which opened in 2015 and sits on Wilming- ton’s Christiana River. Both properties deliver convenient access to waterfront dining, shopping, and entertainment, and capture the lifestyle Mil- lennials prize. The Capano or- ganization has also embraced the changing multi-family demands with the develop- ment of The Reserve at Darley Green located in the North Wilmington area of Claymont, DE. Proximity to major road arteries and public transpor- tation hubs, coupled with an amenity rich project, provides renters with those features they are actively seeking. That demand has made Delaware an increasingly competitive financing market. Local players who understand Delaware to be a sensible, proven, and somewhat under- served market have always contended for quality projects. But now, active interest is also coming from places such as New York, Northern New Jersey, and South Carolina. That interest stems from the strength of the market, but also from how well Delaware weathered the recession, now showing strong upward trends. These players are providing long-term placement, further encouraging local developers and lenders, as the number of takeout sources increases. Fannie Mae and Freddie Mac also continue to show active interest in taking those assets on the permanent side. Even with some of the tightening seen in the commercial mort- gage-backed security market, investor interest remains high. So much so, that some permanent, non-recourse play- ers are beginning to dabble in construction and bridge financing to help complete projects. That’s proving to be power- fully attractive to developers, who with a number of long- term placement options in a low-interest rate environment, do not have to wait another six to 10 months for project completion to lock in perma- nent rates that could be higher in the future. All these factors have made continued on page 12A
ally, with ex- pected origi- na t i ons t o top $260 bil- lion in 2016, D e l a w a r e is following suit, due pri- marily to de- mand from
Allison Kerwin
Millennials and retirees. With vacancy rates hovering near 5% in the state, the market continues to absorb new rent- als at a strong and encourag- ing rate.
Real Estate Journal — Multifamily Financing — Financial Digest — August 12 - 25, 2016 — 9A
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Greysteel arranges the sale of The Oaks for $250,000 per unit Greysteel arranges $35m in financing & private placement equity for off-market acquisition L
features a competitive 10-year fixed-rate and four years of interest-only payments. The $9 million of equity was raised through a private placement with high-net-worth and fam- ily office investors for the acquisition and capital im- provements of the property. Capital improvements will include replacement of all windows, updating of com- mon areas, property amenities including an Olympic-sized swimming pool, a sundeck, a picnic area, a 24-hour fitness center, a playground, bike storage, and laundry facilities
on every floor. The location of the multifamily property, at 3563 Fort Meade Rd., offers residents easy access to both Washington, D.C. and Balti- more via the MARC train line, the Baltimore-Washington Parkway, and I-95. Also in close proximity is Fort Meade, located less than six miles from the property, which is the largest employer in the state of Maryland and the third largest workforce of any Army installation in the U.S. Home to 117 partner or- ganizations and federal agen- cies including the NSA (Na- tional Security Agency), the U.S. Cyber Command, and the Defense Information Systems Agency, Fort Meade maintains a direct and growing workforce of more than 55,000 employees and is responsible for generat- ing thousands of indirect and induced jobs by virtue of the numerous defense and govern- ment contractors that serve it’s tenant organizations and maintain a presence in the market. “By leveraging the high quality of the asset, top-tier sponsorship, and our rela- tionships with private capital investors, we were able to execute a private placement of equity for the reposition of the property,” said Schwartz. “Greysteel was able to provide the full capital stack for this acquisition, tailored to fit the needs of the sponsor’s business plan,” he added. WASHINGTON, DC — Greysteel has arranged the sale of The Oaks, a multifam- ily property located in North- west Washington, DC, for $2 million or $250,000 per unit. This transaction was ar- ranged by Greysteel senior director, W. Kyle Tangney , and investment associate, Herbert Schwat ; who are based in the company’s Wash- ington, DC office. The Oaks, totaling eight units, was completely reno- vated in 2013 and delivered vacant for prospective buyers, making it an ideal 1031 Ex- change opportunity. Located at 1447 Oak St., NW in the Co- lumbia Heights neighborhood of Washington, DC, The Oaks is within walking distance to various retail, dining, and nightlife options along 14th Street including Black Whis- key, Provision 14, Shinola, and Barcelona Wine Bar. n
A U R E L , M D — Greys tee l Equi ty Markets , an affiliate of Greysteel, has arranged $26 million in agency financing and $9 million in private place- ment equity for the off-market acquisition and repositioning of the Horizon Square Apart- ments, a multifamily property located in Laurel, MD on be- half of ROSS Companies , one of the leaders in multifamily acquisitions, property man- agement, and renovation in the Mid-Atlantic Region. The $26 million loan, provid- ed by a national agency lender,
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ANAYUNK, PA — Real Property Cap- ital (RPC) closed Barzilay Development engages RPC as an agent to seek financing Real Property Capital closes on a $7,489,283 construction loan for a 50-unit apartment bldg. M buildings that were originally home to the Wilde Yarns Fac- tory built in stages between 1884 and 1984.
$7,489,283 in construction financing for the adaptive reuse of an historic in- dustrial loft into a 50-unit luxury apart- ment c om-
Delaware an ideal region for multifamily development, one where smart development that fits the lifestyle and demands of the market are finding suc- cess, and will likely continue to be successful as Delaware proves itself to be an ideal market for multifamily living and investment. Allison Kerwin serves as group manager and vice president, Delaware com- mercial real estate at M&T Bank. n continued from page 8A Multifamily performs well in Delaware due to smart dev. . . Due to RPC’s extensive expe- rience in financing deals with historic tax credits, they were able to instill confidence in the lender, who comfortably funded their first historic tax credit financing. This transaction ex- pands Real Property Capital’s existing roster of nearly 200 transactions, totaling well close to a billion in total financing. n RPC originated two separate credit facilities on behalf of the client. The first is a $7 million, two year first mortgage con- struction loan that was under- written at 70% of the stabilized value. The second loan is a $489,283 line of credit used to bridge the timing of payments being funded against a historic tax credit that was sold to an investor at settlement. This complicated transaction took over two years to get to closing from the inception of the project. It’s successful outcome is a direct result of the level of attention to detail RPC gives to each client and each deal. According to Brenner Green , president of RPC, finding a suitable lender required an ex- haustive survey of the market that included over 40 lenders, most of whomwere local banks. “Through our diligence and determination, we were able to generate not only a viable but a very attractive financing proposal with a lender that had never been involved in a historic tax credit deal before, and then we stayed with the deal through all of the changes to the project along the way and saw it through to the end.”
Brenner Green
plex located in Manayunk. Barzilay Development en- gaged RPC as an agent to seek financing for the property, consisting of three contiguous
50-unit luxury apartment complex located in Manayunk, PA
Recently Closed Loans
$7,489,283 $3,000,000 $8,500,000 50-Unit Multifamily Construction Horizontal Development Loan Holiday Inn Express Acquisition Loan Manayunk, PA Chesterbrook, PA Lima, OH 70% LTV, 24 Months, 4.5% 50% LTV, 12 month, LIBOR + 275 bps 70% LTV, 10 year, S + 315 bps, Non-Recourse Real Property Capital is a Philadelphia based full service commercial mortgage banking firm with a regional focus and national capabilities. Our business model emphasizes client satisfaction through a high-touch, analytical approach that distinguishes us from the competition. Learn more about our distinct approach and proven track record of success at www.realpropertycapital.com. FOR MORE INFORMATION: R. Brenner Green, President 303 Harry Street • Conshohocken, PA 19072 • 610-456-9644 • bgreen@realpropertycapital.com
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