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EWYORK, NY — The Community Pres- ervation Corpora- N Company honors New York HPD and State of NY Mortgage Agency TheCommunityPreservationCorporation invests $10B in communities since 1974 the creation and preservation of 45,000 units of affordable housing.
ISSUE HIGHLIGHTS Volume 30, Issue 22 Nov. 23 - Dec. 13, 2018
to call this space their home. Amdocs has been develop- ing software in Cybercity of Magarpatta for the last decade. Be- cause options in the exist- ing market are extremely tight, Amdocs would have been forced to look at new construction if this lease was not renewed. This transaction was the largest office lease renewal in Pune’s history. Nick Jacobs of JLL’s Pittsburgh office rep- resented Amdocs, Inc. in this transaction. Jacobs has represented Am- docs’ global real estate transac- tions since 2013. He is respon- sible for leading global real estate acquisitions and dispo- sitions on behalf of Amdocs. Nick Jacobs have worked with our partners to invest in the places and the projects where we can be the most effective in revitalizing underserved communities. And, while much has changed since 1974, there will always be a need for a company like CPC that is committed to helping our public and private partners solve their most pressing hous- ing and community revitaliza- tion challenges,” said Rafael Cestero , president & CEO of CPC. “Tonight, I’m excited about what the next $10 billion will look like, and encouraged to know that as CPC grows, so too does our ability impact the physical, social and economic outlook of the communities we serve and the people who call them home.” “For the last four decades CPC has been a first-in source of stable capital for under- served communities. When others wouldn’t lend because of the risk, CPC was there and committed to its mission of community revitalization,” said Alan Wiener , Lead Indepen- dent director of CPC’s Board of
Directors. “By any standard, a $10 billion investment in hous- ing is something to be proud of, but we must do more. With cities large and small facing critical revitalization and de- velopment challenges, there is still an enormous need for the sort of patient capital and unique expertise that CPC can provide.” “Citi congratulates CPC on this significant milestone and is proud to be a lending partner of CPC in support of its work to strengthen and revitalize communities through invest- ments in housing,” said Jer- emy Johnson , co-head of Citi Community Capital . CPC began working with HPD when the city agency was founded in 1978, and the two have long shared a mission to solve the serious problems facing New York City’s neigh- borhoods by making invest- ments in housing that would strengthen and stabilize com- munities. Over their more than four decades of work together - CPC and HPD have deployed a combined $3.1 billion to finance
SPOTLIGHTS
tion (CPC) , a l e a d i n g n o n p r o f i t a f f o r d a b l e housing and c ommun i t y r e v i t a l i z a - tion finance c o m p a n y , was joined by
“For 45 years, CPC has been at the forefront of the City’s efforts to create and preserve affordable housing," said New York City Department of Hous- ing Preservation and Develop- ment Commissioner Maria Torres-Springer . "While the nature of the housing crisis has changed over the years, CPC has been a steadfast part- ner throughout, continuing to play a transformational role in neighborhoods across New York City, with investments in affordable housing that anchors both individuals and communi- ties. On behalf of everyone at HPD, I want to congratulate CPC on this significant mile- stone, and look forward to working together to ensure that this is the type of city where safe, affordable homes are with everyone’s reach.” CPC was founded in 1974 as a direct response to the issues of property abandonment and blight that New York City was facing at the time.
MAREJ EVENTS November 29 New Jersey Medical Properties Conference For speaking and sponsorship information, please contact: Lea at 781-740-2900 or lea@marejournal.com CONSTRUCTION MANAGEMENT 9-18C PROFESSIONAL SERVICES 5-18A HEALTHCARE/ MEDICAL PROS. 19-26A NY ICSC DEAL MAKING Section B
Rafael Cestero
hundreds of its borrowers, lend- ing and government partners and others to celebrate the company having deployed more than $10 billion dollars since its founding in 1974, and the impact that investment has cre- ated in communities. As part of the celebration, CPC recognized both the NYC Department of Housing Preservation & De- velopment (HPD) and the State of New York Mortgage Agency (SONYMA) with a government partnership award for their de- cades of work together and com- mitment to making investments in housing that strengthen and stabilize communities. “Over the last 44 years we
Jacobs of JLL’s Pittsburgh office completes 750,000 s/f, $72M renewal and expansion on behalf of Amdocs
PUNE, INDIA — JLLPitts- burgh successfully completed a 750,000 s/f, $72M renewal and expansion on behalf of leading software and services provider Amdocs in Pune, India. As a re- sult, more than 40% of Amdocs’ employees are able to continue
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Professional Services........................................5-18A Healthcare/Medical Properties. .....................19-26A Business Card/Billboard Directory..................30-31A Organization Events Calendar..............................32A Shopping Centers....................................... Section B Owners, Developers & Managers............... Section C
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Additionally, Nick and his team have closed a number of other exciting deals for their JLL clients including a new 30,000 s/f class A office transaction in Seattle, Washington, a 20,000
s/f office renewal in Herndon, VA, and a 45,000 s/f renewal in Ottawa, Ontario, Canada, with more than a dozen other active transactions currently underway.
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M id A tlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Account Executive ........................................... Steve Kelley Account Executive ............................................. Kim Brunet Account Executive ........................................ Marisol Chase Account Executive .........................................Alyson Parker Senior Editor/Graphic Artist ..........................Karen Vachon Office Manager ...............................................Kerrin Devine Contributing Columnists: ..............................Lisa Cassidy, ecoImagine; Leonard C. Green, CPA, MBA, The Green Group; Emily Landgraf; John B. Wollenberg, CPA, JD, MBA, The Green Group 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. 30, Issue 23 Subscription rates: $99 - one year, $148 - 3 years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 | Fax: 781-740-2929 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
M id A tlantic Real Estate Journal
T R A N S A C T I O N A N N O U N C E M E N T
Visit northmarq.com/north-new-jersey or call 973.538.2330 to learn more. PERMANENT LOAN $38,000,000 CAMELOT AT CINNAMINSON CINNAMINSON, NJ | 405 UNITS | LIFE COMPANY
Emily Landgraf
The Benefits of a Flexible Commercial Mortgage Lender I n order to be successful, it’s important for mort- gage brokers to work with a variety of lenders, including flexible lenders who specialize in small-balance commercial fi- nancing. While banks and other traditional funding sources are going to be important to your business, a small-balance commercial lender that offers flexibility will allow you to fund tougher deals and earn additional income. Here’s what to expect from a flexible lender: • A variety of programs: The first thing that you’ll need to look for if flexibility is an im- portant quality for your small- balance commercial lender to have is a number of different programs. You’ll likely be work- ing with borrowers who vary in terms of their credit history, the properties they’re looking to pledge as collateral and their financial situations. These bor- rowers will likely qualify for a variety of rates and terms, so it’s important for you to be able
to present the best financing option for each borrower. You need to work with a lender that offers a variety of programs that fit multiple types of com- mercial borrowers. • The willingness to listen to a borrower’s story: Another sign that a small-balance com- mercial mortgage lender is flexible is that they’re willing to take the time to get to know your borrower and their unique financial situation. These are lenders who understand the obstacles that small business owners face, and they’re will- ing to work with borrowers to resolve any issues in order to provide the best possible com-
mercial mortgage. • Underwriting on a case-by- case basis: While banks and other traditional lenders have strict guidelines that often lead to borrowers being reduced to their credit score, alternative commercial lenders underwrite each deal based on a variety of factors. These lenders under- stand that borrowers are more than a credit score, and that it’s possible to underwrite com- mercial mortgages for business owners whose credit histories aren’t spotless or who have faced other financial obstacles. • Adaptability: A side effect of flexibility in a small-balance continued on page 3A
Real Estate Journal — November 23 - December 13, 2018 — 3A
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M id A tlantic R eal E state J ournal Proven track record in developing financial services orgs. Eastern Union appoints Schnurman as chief sales &COO
WE'RE LOOKING FOR...
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of Eastern Union's advanced data-driven platform that is designed to secure optimal financing for clients. Previously, he served as chief sales officer with Eastern Consolidated for five years, during which time his broker management, recruitment and training were instrumental in Eastern Consolidated’s increase in sales volume, rev- enue diversification and profit- ability. “Mark has a proven track record in developing real estate and financial services organi- zations, propelling businesses to new heights,” said Zlotowitz. "We are thrilled to have him on board as we continue to grow our business to record- breaking levels." Schnurman said, “I am excit- you and your borrowers can depend on them. For brokers closing commer- cial mortgages, a flexible lender is going to be a crucial factor in earning more. Look for lenders with a variety of programs de- signed to fit the needs of small business owners, a willingness
ed to join Eastern Union, a firm with energy, a collaborative culture and a clear, long-term vision. The confluence of Ira Zlotowitz’s leadership, young and dynamic broker talent, and the firm's cutting-edge use of data and technology, creates unique opportunities for intel- ligent and rapid growth.” Schnurman also served as executive vice president of Business Development andHu- man Resources at GFI Capital Resources Group. In his eight years at GFI, he was respon- sible for building sales and human resources platforms that enabled its transformation from 300 to 1000 employees. Prior to that, he worked at Wachovia Securities as SVP, director of professional development. to listen, a common-sense ap- proach to underwriting, and overall adaptability. These are the lenders who will help you close more deals and increase your income. Emily Landgraf is the Social Media Coordinator at APEX Mortgage Corp.
OWELL, NJ — Ira Zlotowi tz , presi - dent of commercial
m o r t g a g e b r o k e r a g e f i rm East - ern Union F u n d i n g , has named industry vet- eran Mark Schnurman chi ef sal es and operating officer.
Requirements for participation include:
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Mark Schnurman
With nearly 25 years of experience in the lending, in- vestment sales and advisory sectors, he will provide overall day-to-day management of the company’s brokers, underwrit- ers and operational teams. Schnurman will have a par- ticular focus on recruiting, and driving talent and their use commercial mortgage lender is that they’re very adaptable. If the market changes, or if issues arise in the industry, they’re going to find ways to continue doing business and providing commercial financing to bor- rowers. This means that both
The benefits of a flexible commercial mortgage . . . continued from page 2A
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M id A tlantic R eal E state J ournal MEP Engineering panel for the CTBUH Annual Awards AKF’s Mark Richter to Chair World’s Foremost Tall Buildings Design Award Panel
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“For nearly 50 years, CTBUH has been a leading authority on tall building and urban design trends,” said Richter. “And to- day, as technology continues to change the landscape for MEP professionals around the globe, CTBUH continues to set the standard for the construction and design of next-generation buildings. I amhonored to chair the MEP Jury.” Richter, who has earned praise for his expertise in the planning and design of high- rise and mixed-use properties, noted that to date AKF has been instrumental in the de- sign and commissioning of over
thirty high-rise and supertall structures around the globe. This includes work on four of Mexico’s five tallest buildings, as well as Three Sixty West in Mumbai, which will be India’s tallest building upon construc- tion completion. Richter’s 26-year career in- cludes the design of iconic New York City buildings such as One57, Central Park Tower, and 520 West 28th, the new luxury condominium along the Highline designed in collabora- tion with Pritzker Prize-win- ning architect Zaha Hadid . 520 West 28th won AKF an American Council of Engineer-
ing Companies New York State Diamond Award for engineer- ing excellence. Mark also added that the CTBUH gathering is the perfect venue to celebrate professionals whose passion is engineering healthy, sustain- able tall buildings. “As buildings across the globe continue to get taller and taller, a comprehensive approach to sustainability is critical. AKF has always delivered design enhancements that are above energy code, mindful of the surrounding environment, and conscious of their energy impact. I look forward to joining other jurists who share these
values.”
EW YORK, NY — AKF , a global lead- er in engineering,
About AKF Group AKF provides innovative solu- tions and Engineering Leader- ship to enhance the built envi- ronment and redefine the edge of what’s possible. With more than 500 dedicated team mem- bers and ten offices throughout North America, AKF provides a robust offering of integrated services, including: Mechani- cal, Electrical, Plumbing, Fire and Life Safety Engineering, Architectural Code Consulting, BIM Management, Building Controls, Central Utilities, Cogeneration, Commission- ing, Critical Systems, Energy & Sustainability, Fire & Life Safety, IT/AV/Security, Light- ing Design, Special Inspec- tions, and Vibration Analysis & Testing. AKF locations include New York, NY; Boston, MA; Phila- delphia, PA; Baltimore, MD; Minneapolis, MN; Richmond, VA; NewHaven, CT, and Ham- ilton, NJ, as well as two offices in Mexico: Puebla and Mexico City. For additional informa- tion about AKF, please visit www.akfgroup.com. About the CTBUH Annual Awards Program The CTBUH Annual Awards program recognizes projects and individuals that have made extraordinary contributions to the advancement of tall build- ings and the urban environ- ment, and that achieve sus- tainability at the highest and broadest level. The objective is to deliver a comprehensive and sophisticated view of these im- portant buildings, spaces, and technologies, while advocating for improvements in every aspect of their performance, especially those that have the greatest effect on the people who use them each day. This means that the buildings high- lighted are often not the tallest in a given year, but represent the best qualities and innova- tions in the typology. Celebration of the award- winning projects is recognized through the annual Tall + Urban Innovation Conference, where Award of Excellence Winners in each award cat- egory present their projects to an international audience and live juries. Overall Category Winners are then selected during the event and awards are conferred at the Dinner & Ceremony held at the close of the event. Projects are judged by live juries during the event itself.
technology, design, con- sulting and commission- ing, is excited to announce that Partner Mark Rich- ter, PE has been appoint- e d b y t h e
Mark Richter
Council on Tall Buildings and Urban Habitat (CTBUH) to serve as 2019 Jury Chair on the MEP Engineering panel for the CTBUH Annual Awards.
GLOBAL ENGINEERING &
INTEGRATED SERVICES
akfgroup.com
©Evan Joseph Photography
Real Estate Journal — November 23 - December 13, 2018 — 5A
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Mid Atlantic R eal E state J ournal ’ s P rofessional S ervices
Stuart Berger, CPA Sax LLP
Richard Gacek Gacek Design Group
Carlo L. Batts, MAI Rittenhouse Appraisals
Mike Martinelli Estate Planning Team
Brenda Muller Asset Preservation, Inc
William Procida Procida Funding & Advisors
Joe Sauers Sauers Snow and Ice Management
INSIDE: 1031 EXCHANGES Brenda Muller, Asset Preservation, Inc........................................................................................................................................... 14A APPRAISAL Carlo L. Batts, MAI, Rittenhouse Appraisals................................................................................................................................... 12A CAPITAL GAINS TAX DEFERRAL Mike Martinelli, Estate Planning Team............................................................................................................................................8A INTERIOR DESIGN Richard Gacek, Gacek Design Group............................................................................................................................................. 16A LENDING William Procida, Procida Funding & Advisors................................................................................................................................... 3A MULTIFAMILY LENDING............................................................................................................................................................. 11A PEST CONTROL Corbett Exterminating ................................................................................................................................................................... 18A SAUERS SNOW AND ICE MANAGEMENT..................................................................................................................................6A TAX AND ADVISORY SERVICES Stuart Berger, CPA, Sax LLP...................................................................................................................................................12-13A
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6A — November 23 - December 13, 2018 — Professional Services — M id A tlantic
Real Estate Journal
S now & I ce M anagement
By Sauers Snow and Ice Management Deicing reduces your chance of slips & falls this winter
ce is a serious concern for business owners dur- ing the winter months. Icy sidewalks, entrance ways and parking lots are not just dangerous for your customers, they are dangerous for you and your staff, as well. A simple de- icing application reduces your chance of slips and falls. Liability When someone falls on your property, you can be held liable for their injury. Generally, this means you can be held finan- cially responsible for medical bills, lost wages and court costs incurred by the injured party. I
Sauers deicing Reduces Your Chance of Slips & Falls This Winter.
Because you are responsible for maintaining your property and the safety of your custom- ers and visitors there are very few protections afforded you under the law regarding ice- related falls. Preventing slips and falls on your property is the best way to stay out of court. Deicing As a full-service snow and ice management company, Sauers deicing services help keep your walkways and parking lots in a safe condition. Deicing can be done on-demand or as part of your regular snow manage- ment services. We recommend including it as a consistent part of your winter response treat- ment plan. Crews target and break down ice buildup on your property us- ing a brine solution. The brine mixture reduces ice to a slush that can easily be shoveled out of low-lying areas in your parking lot and around your building. Snow Removal Keeping snow from building up in your parking lots and around your building helps reduce the amount of ice on your property. Short periods of warmth lead to melt, which hangs out above ground dur- ing the winter until it is frozen again and becomes ice. This cycle is dangerous as the dips in weather are unpredictable in our region. Until the ground has thawed sufficiently to drain away ex- cess water you will need to have a plan in place to reduce ice on your property. Contact Sauers or at 215- 659-1613 for more information on deicing services for your commercial property. Sauers Snow and Ice Man- agement is the region’s pre- mier, privately-owned snow removal company.
Schedule a FREE Property Evaluation Sauers is the Philadelphia / Tri-State Region’s premier snow and ice management company. We get businesses back up and running 4x faster than the competition.
Sauers Snow Removal Services Customized Snow Response Plan Snow Plowing & Relocation Ice Control – Liquid & Granular Sidewalk Clearing Dedicated Crews & Equipment 24/7 Truck Brushes & Under Trailer Plow Dedicated Account Manager Snow Hauling, Melting and Stacking Site Monitoring …and much more!
Don’t wait until the first snow event. Start planning snow removal services now!
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L ending
rocida Funding & Ad- visors, LLC recently announced that it’s es- Investors don’t need to go through a fund to take advantage of the Opportunity Zones Tax Incentives Procida Funding & Advisors, LLC to launch Opportunity Zone Investment Program P
middle class, you will make money and make the world better. Now with this program, you won’t have to pay taxes on your profits and you can do it with tax differed money.” Procida was the Winner of the 1994 Associated Builders & Owners of Greater New York- Developer of the Year Award and the Winner of the 1994 Pillars of the Industry- Best Affordable Housing Develop- ment Award from the National Association of Home Builders for his development work at the Melrose Court Condominiums in the South Bronx. In 1990, the Melrose section of the South
Bronx was one of the most dangerous places in America. A decade later, after building 275 middle class condominiums, crime is down, graduation rates are up, and billions of invest- ment dollars have flowed in. “It’s a simple but complex process. Simple in that if you improve a community, crime goes down and values go up, but complex in that it requires more than a typical real estate deal. You need police, private security, some gang relations, minority training, minority and women-owned business involvement, churches and community groups. You need
to realize that you’re not just building one project, you’re rebuilding a community. Back in the 80’s and 90’s, I was privi- leged to work with other great builders, large and small. We were all in it together. In the end, it’s all worth it. It’s good for the pocketbook and good for the soul, and if you are go- ing to build in these areas you better have a lot of soul or you’ll get eaten alive. Just think, if you had invested in Harlem or Jersey City in the 80’s or 90’s and now you could liquidate without paying Uncle Sam… pretty good,” said Procida. Procida’s services will include
identifying the correct invest- ment from size, location and asset class, implementing ap- provals, overseeing construc- tion, and maintaining compli- ance with the Opportunity Zone guidelines with the IRS. Procida who authored “How The Real Estate Industry Can Save America” and “Why The Bloods and The Crips Are The Cure for The American Budget Deficit” has been a passionate advocate of fixing America’s in- ner cities and has closed many articles and speeches with the phrase, “you’ll never go broke doing good.” continued on page 14A
tablishing a platform to provide one- stop shop- ping for Self- D i r e c t e d “Cu r a t e d ” Opportuni- ty Zone In- vestments.
William Procida
Procida will focus on Oppor- tunity Zones in New York, New Jersey, Pennsylvania and Connecticut. Opportunity Zones are no stranger to William “Billy” Procida, Founder and CEO of Procida Funding, as he spent most of his life in areas such as the South Bronx and Harlem. In the 1980’s and 1990’s, Proci- da was one of the most prolific builders in what are now called, “Opportunity Zones.” Procida built thousands of housing units and strip centers under various programs within for- mer New York City Mayor Ed Koch’s $6.8 billion initiative to rebuild New York City. Procida Funding has also completed over $2 billion of loans and investments in places like Paterson, NJ, Camden, NJ, Hackensack, NJ, and the North Broad corridor of Philadelphia, all now “Opportunity Zones.” “The Opportunity Zone Pro- gram was created to encour- age those with capital gains to invest in downtrodden neigh- borhoods and it is one of the biggest things I’ve seen in my 37- year career. As I’ve writ- ten and spoken about over the last three decades, improving low-income, high-crime areas is, and has been, amongst the most important issues facing our country. This program will bring billions of dollars to these communities without the gi- gantic red tape of prior govern- ment subsidized programs. The trick for investors will be how to actually implement these investments,” said Procida. “As a taxpayer, I fully support this. However, I caution investors to be careful about who they participate with and how they implement their investments. These neighborhoods have high crime rates, gangs and all the issues associated with low-income residents. However, we proved in the South Bronx, Harlem, Camden and Jersey City in the 80’s and 90’s, if you build the right product and rebuild neighborhoods for the
0
For New Loan Requests please contact Brian Foley at bfoley@procida.com. For Due Dilligence, Asset Management & Workout Services please contact Billy Procida at bprocida@procida.com To invest or partner with The 100 Mile Fund please contact Ali Betts at abetts@procida.com. www.procida.com | 201-871-1177 | 570 Sylvan Ave Englewood Cliffs, NJ 07632
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8A — November 23 - December 13, 2018 — Professional Services — M id A tlantic
Real Estate Journal
C apital G ains T ax D eferral
hy can’t you con- vince your client to list their property By Mike Martinelli, Estate Planning Team Why you can’t get your prospect to list that property (and what you can do about it) W City even has a City tax that can further exacerbate the capital gains tax liability.
or $450,000.00 as a married couple, your federal rate is now 20% up from 15% - a 5% increase. • If you have income or capi- tal gain over $200,000.00 as an individual, or $250,000.00 as a married couple, you will now have to pay an additional tax of 3.8% for the Obama Health Care tax obligation. • If you live in a State with a high State Capital Gains tax like California, New York or Illinois, for example, you could pay substantially more in state capital gains taxes. New York
transaction will require that prospect to reinvest in replace- ment real estate in a very short period of time. In fact, when engaging in a 1031 Exchange, they must identify their re- placement real estate within a strictly enforced time period of 45 days from the date of their relinquished property closing or lose the opportunity for tax deferral under Section 1031. Reinvesting in real estate under these conditions, and paying inflated acquisition prices for their replacement property, could be counterin- tuitive to your prospect’s goals and, therefore, even a 1031 Exchange may not be an at- tractive or useful solution for them. Well, a better solution for them may be the Deferred Sales Trust ™ . The Deferred Sales Trust ™ is the core service of the Estate Planning Team. It has become a popular strategy for defer- ring capital gains taxes upon the sale of real estate and businesses and other highly appreciated assets. Like a 1031 Exchange, the DST can be used to defer capital gains taxes on real estate but, unlike a 1031 Exchange, it does not require that the taxpayer reinvest in Like-kind property, thereby providing a much broader va- riety of potential investment options and the opportunity for diversification of assets. Moreover, the DST can be used to defer capital gains taxes on other high value assets such as a taxpayer’s business, including goodwill, which is typically not appropriate for 1031 Exchange treatment. Here’s a simplified explana- tion of how the DST works: The client sells their asset to a third-party trust in a seller financed transaction (in whole or in part) under IRC Section 453. In return, the taxpayer receives an installment note with a specified rate of return. The trust then sells the asset at the new basis (established under the sale to the trust) to the third-party buyer (whom you, the real estate broker, locate). The result is that the taxpayer’s capital gain taxes are deferred under the install- ment sale rules and the relin- quished property is sold from the trust, leaving the pre-tax proceeds to be invested within the trust in a manner that will secure the note principal and support the agreed upon rate continued on page 14A
now is the time to sell because the real estate market has ap- preciated so rapidly in recent years and the future is uncer- tain. Everything points to sell- ing yet they won’t do it. Why? Well, the problem may very well be that they actually want to sell but are concerned about substantial Capital Gains Tax- es draining a large portion of their sales proceeds and deplet- ing their wealth. CONSIDER THE TAX IM- PLICATIONS… • As of 2013, if you have income or capital gain over $425,000.00 as an individual,
w i t h y o u ? Y o u k n o w the one. The h i gh l y ap - p r e c i a t e d p r o p e r t y that they’ve own e d f o r years , and that’s been
It is conceivable that your prospect could end up paying a third or more of their capital gains (the amounts over their adjusted basis) in capital gains taxes. So, you might say the solu- tion for somebody who wants to sell is a 1031 exchange. But the very reason they may want to sell is their current ability to secure what they perceive to be an attractive price in an appre- ciated real estate market. But, by definition, a 1031 exchange
Mike Martinelli
fully depreciated. You’ve told them about all of the great resources you have to market that property and secure the best price for them, and that
WHY DO A 1031 EXCHANGE IN AN OVER-VALUED MARKET? USE THE DEFERRED SALES TRUST! www.mydstplan.com/mmartinelli
Involved in a failed 1031 exchange? Contact: 610-238-9900 mmartinelli@myept.com
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For more information contact Marisol marisol@marejournal.com or call 781-740-2900
Remco Realty Group 370 Campus Drive, Suite 128 Somerset, NJ 08873 T: 732-253-0888
For Sale: SomerSet, NJ Remco Realty Group’s President, Peter Gallicchio is pleased to announce the firm’s recent appointment as exclusive marketing agent for this free-standing 25,000 SF commercial building located next to a 6 month old Super Wawa Gas/Convenience Center. The property, which is being offered for sale, features 125’ of Route 27 frontage, highway signage, and 2.7 acres of land for future expansion. The immediate trade area, which located just minutes from downtown New Brunswick, is going through various phases of re-development, with several multi-family projects being completed, as well as large scale downtown medical and commercial projects in the planning stage. The site benefits from its immediate access to Rtes. 1, 9, 18, 130, I-287, NJ Tpke. and the Garden State Pkwy. Trade area demographics include a population of over 265,000 within a 5 mile radius earning over $98,000 of median household income. The property is zoned (GB) general business which allows for most retail, medical and professional uses. Ideal Uses include: Appliances, kitchen & bath, pools & patio, flooring & tile, HVAC, plumbing, building & electrical suppliers, furniture, sporting goods, equipment rental, lighting showroom, fitness, hardware, surgical supplies, home improvements & furnishings, printing & publishing, offices, education, etc.
Anthony Cline Sales Representative
Contact today for your roofing needs!
Cell: 571-359-5459 acline@duro-last.com
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10A — November 23 - December 13, 2018 — Professional Services — M id A tlantic
Real Estate Journal
A ppraisal
YOUR EXPECTATIONS FOR EXCELLENCE ENGAGE AN APPRAISAL INSTITUTE DESIGNATED MEMBER Much rests on the valuation of real property, especially when there is a property dispute or complicated filing. So, your choice of a valuation professional should give you unshakeable certainty. MAI, SRPA and SRA Designated members of the Appraisal Institute are widely recognized as among the most qualified real property professionals practicing today.
Excellence? Appraisal Institute Designated members raise it to a whole new level.
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Real Estate Journal — Professional Services — November 23 - December 13, 2018 — 11A
M id A tlantic
M ultifamily L ending
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12A — November 23 - December 13, 2018 — Professional Services — M id A tlantic
Real Estate Journal
T ax and A dvisory S ervices By Stuart Berger, CPA, Sax LLP Reshaping our work space: Is the corner office dead?
T
he discussions continue in the real estate world revolving around the
and the workforce is now made up of four generations: Baby Boomers (born 1946-1964); Generation X (born 1965-1980); Millennials (born 1981-1996); Generation Z (born 1997-2010). With these different genera- tional gaps come different ap- proaches and priorities to the work space, and we can see this mirrored in the current trends of office buildings today. To put it into perspective, I myself am a Baby Boomer. When I began my career, there were no options as to the type of office environment I was looking for when I entered
the workforce, nor did I give any thought to the amenities I preferred, or aesthetics I found most pleasing. Accounting firms, and the majority of other corporate office buildings at the time were typically all the same – limited amenities, perimeter offices, cubicles in the center, and no desktop computers, but rather an endless supply of pen- cils. That is one stark difference between then and now. Those entering the workforce today put much importance behind their office location and what is has to offer. I attribute this mindset to the recognition that
our jobs are where we spend much of our time and because of that, they must meet our personal needs. What do the new gen- erations taking over the workforce want in an office space? I believe a primary answer to this question is quality of life. A number of components are baked into that – convenience, comfort, sustainability and well-being. › Convenience. The new generations coming in are ac- customed to our advancing technology, and the ability to
provide and access information at any time and from virtually any place. Gone are the days when we must be tied to our office desk to complete our responsibilities. This ability to work from anywhere gives us more balance between our work lives and our personal lives, which is vital to success in both areas. › Comfort. Trends have shown that amenities are de- sired that enhance our working lives such as workout facilities, baristas, access to dining, and fun activities nearby. New of- fice spaces are being developed to be much more accommodat- ing, and more of a place where a professional would choose to spend their time without the pressures and formality of the traditional or “outdated” office. › Sustainability and Well- being. In addition to a demand for flexibility and freedom, we see Millennials demand personal wellness and sustain- ability opportunities as well. With that, we now see a shift to emphasize good quality working environments. This includes being environmentally sustainable by going green, and providing wellness functions like “Zen rooms”, childcare, and laundries. What is the Real Estate Industry doing to meet the needs of the new genera- tions? This new and growing “want list” for the incoming workforce must be addressed. Developers with vision and creativity have been taking the 70’s and 80’s office campuses and creating the work-live-play concept – and truly transforming them. However, we are still figuring out what exactly these new professionals need. › Potential Trends. Office campuses are being developed as “one-stop-shops” for young professionals looking for the convenience of everything they need in their personal and work lives, in one spot. As time moves along, others are tearing down old office buildings and taking advantage of the high demand in multi-family hous- ing and constructing apart- ments within office campuses. › PossibleMisconceptions. It was thought that the newer generations favored collabora- tive space and open-office con- cepts. In fact, today’s average allocation of space per employee is close to 150 square feet, down continued on page 14A
future of our work space, and particu- larly, what we do when Millennials and Genera- tion Z’s want the i r work environment
Stuart Berger
and their play environment …. at the same time. Do they truly want it all? Times are indeed changing,
When it comes to getting deals done in today's fast-paced market, time is more important than ever. We think waiting 4-5 weeks for an appraisal is unconscionable
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Real Estate Journal — Professional Services — November 23 - December 13, 2018 — 13A
M id A tlantic
P rofessional S ervices
The Real Estate professionals at Sax understand what it takes to achieve profitability, growth and long-term success. We leverage our industry expertise to advise real estate owners, developers, investors and family-owned businesses on the best ways to face industry challenges, stay compliant, seize new opportunities and reach their financial goals. Lean on the strength and knowledge of Sax’s Real Estate industry advisors to exceed even your own expectations. Learn more at SAXLLP.COM.
SPECIAL IZED SERVICES INCLUDE :
› Tax Structuring and Compliance › Cost Segregation › 1031 Tax-Free Exchange Planning › Estate Planning & Wealth Transfer › Feasibility Studies › Loan and Mortgage Restructuring › Worker’s Compensation Audits
› Succession Planning › Buy-Sell Agreements › Aordable Housing
› Tax Credits and Incentives › Renewable Energy Advisory
Clifton , NJ 973.472.6250 › Pennington , NJ 609.737.6600 New York , NY 212.661.8640 › saxllp.com
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14A — November 23 - December 13, 2018 — Professional Services — M id A tlantic
Real Estate Journal
By Brenda Muller, Asset Preservation, Inc. “Fix-up” costs before sale and 1031 Exchanges P rofessional S ervices
I
t is common for many Maryland and Virginia real estate investors to
year is added to the adjusted cost basis and are referred to as a “capital expense” and
property or increasing the capacity, strength or quality of the property.
Schedule E Instructions that “repairs in most cases do not add significant value to the
1031 exchanges and how they can help Mid-Atlantic inves- tors acquiring better perform-
m a k e r e - pa i r s , up - dates , and i m p r o v e - m e n t s t o enhanc e a relinquished property in preparation f o r l i s t i ng
A commonly asked question by investors in the Mid-Atlantic region is, “Can I be reimbursed from the 1031 exchange for the costs associated with improving or re- pairing the property immediately before the sale?” The answer is “no, not without generating a tax consequence”. The reason for this is that any exchange proceeds an investor receives from a 1031 exchange are considered “boot” and are generally taxable to the extent the investor has a capital gain tax consequence.
Brenda Muller
with a real estate agent or broker. A commonly asked question by investors in the Mid-Atlantic region is, “Can I be reimbursed from the 1031 exchange for the costs associ- ated with improving or repair- ing the property immediately before the sale?” The answer is “no, not without generat- ing a tax consequence”. The reason for this is that any exchange proceeds an investor receives from a 1031 exchange are considered “boot” and are generally taxable to the extent the investor has a capital gain tax consequence. However, improvements an investor makes to improve a relinquished property can be added to the “cost basis” of the property. In the most simplistic terms, cost basis is the amount a property is worth for tax purposes. The cost basis changes over time and becomes known as the “adjusted basis.” The adjusted basis can be increased by capi- tal improvements made to the property, and is reduced by depreciation deductions taken during the ownership period and other factors. Generally, the cost of adding capital improvements having a useful life of more than one of return specified in the note. These investments can include a variety of investment vehicles including, but not limited to, bonds, stocks, mutual funds, annuities, REITs, etc. The pro- ceeds can even be invested in conventional real estate down the road. There is a good deal of flex- ibility in the way that a DST can be structured. The client can structure the note for in- come, growth or a combination of the two and, with additional planning, can often be used to resolve estate tax exposure as well, even above the limits of traditional estate planning continued from page 8A
must be capitalized and de- preciated over multiple years. An improvement includes enhancements that add value to the property, increases its useful life or adapts the prop- erty to a new use. Capital im- provements can include room additions, new bathrooms, new roofs, decks, fencing, wiring upgrades, driveways, walkways, plumbing upgrades, and kitchen upgrades. The IRS uses the categories below to define a capital expense which must be depreciated: • Improvements: A taxpayer must capitalize any expense made to improve an invest- ment property. An expense is for an improvement if it results in a betterment to the property, restores the property or adapts the property to a new or different use. • Betterments: Expenses that may result in a better- ment to a property include expenses for fixing a pre-ex- isting defect or condition, enlarging or expanding the strategies. Regardless of the goals and preferences of the individual taxpayer, it is cru- cial that the DST structure be implemented in advance of the closing on the sale of the asset that the taxpayer wishes to de- fer capital gains taxes on, and preferably in advance of a firm sales agreement being reached. Mike Martinelli is a reg- istered representative of Centaurus Financial, Inc., and a member of the Estate Planning Team. Centau- rus Financial, Inc. and the Estate Planning Team are not affiliated entities. As an Estate Planning Team member, Mike Martinelli
• Restoration: Expenses that may be for restoration include expenses for replacing a substantial structural part of a property, repairing dam- age to a property as a result of a casualty loss or rebuild- ing the property to a like-new condition. • Adaptation: Expenses that may be for adaptation in- clude expenses for altering the property to a use that is not consistent with the intended ordinary use of the property when initially purchased or held for investment. Costs that can be deducted as current expenses are amounts paid for incidental repairs and routine maintenance which are not added to the cost basis. Re- pairs are usually one-off fixes that help keep the property in good working condition and habitable. A real estate inves- tor can deduct the cost of minor repairs from the current year’s tax liability, but not from their capital gain tax liability. The IRS clarifies in the 1040 promotes the use of the Deferred Sales Trust ™ or other estate planning tech- niques to individuals as an outside business activity which is unrelated to his/ her affiliation with Cen- taurus Financial, Inc. The Estate Planning Team and the Deferred Sales Trust are unrelated to Centaurus Financial, Inc. and Centau- rus Financial, Inc. is not responsible for nor does it endorse recommendations made by members of the Es- tate Planning Team, includ- ing the Deferred Sales Trust or other tax, legal or estate planning strategies.
property or extend its life.” For more information on basis and adjusted cost basis, read IRS Publication 551, Ba- sis of Assets. For more information about
ing real estate investment properties defer capital gain taxes, contact the author. Brenda Muller is the Mid- Atlantic division manager at Asset Preservation, Inc .
continued from page 12A Reshaping our work space: . . .
exercised when designing the future office space. Is the cor- ner office dead? According to our firm’s own staff, the corner office is still a symbol of success in one’s career. While it is often said that the pendulum swings too far in each direction and history repeats itself, I believe the private office will be with us in the future. However, I also believe the amount of time one is expected to work in that corner office will drastically change. As technology makes every facet of our lives more conve- nient, with that comes an ex- pectancy for convenience in our office space and work environ- ment. Developers can no longer rely on cookie cutter spaces to ensure people fill the offices. We are in a time of innovation, creativity, and combining work and home – and it is on the real estate industry to factor this evolution into all new office space moving forward and to keep up with the times. Stuart Berger, CPA is a partner at Sax LLP and the founder of the firm’s Real Estate Practice.
from 225 feet in 2010. However, I’ve seen a num- ber of critics to this design, and trends actually moving away from this relatively new thought process. Some recent studies have suggested that more and more employees are unhappy with the lack of pri- vacy and the noise that occurs in the open space environment. Many resort to wearing ear- buds during their work hours. › Our Own Findings. We have taken our own poll inter- nally within our firm and posed the question as to what layout ismost desired. To our surprise, the majority of our employees (approximately 50% are Mil- lennials) mentioned wanting amenities, and collaborative areas that promote interac- tion among employees from all levels and departments within our firm, but when it came to their individual workspace, the majority preferred higher cubicle walls for added privacy without interruption. All in all, the ideas behind private office space is rapidly evolving and care should be The firm currently has loans through the 100 Mile Fund and several approved sites on the Camden Waterfront, North Broad section of Phila- delphia and the Rutgers sec- tion of Newark to name a few.
Why you can’t get your prospect to list that property . . .
Procida Funding & Advi- sors, LLC is a direct com- mercial real estate lender and advisory firm provid- ing bridge, construction, mezzanine and equity fi- nancing through its 100 Mile Fund. Procida Funding & Advisors, LLC . . . continued from page 7A
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