R EAL E STATE J OURNAL the most comprehensive source for commercial real estate news
Volume 24 Issue 9 May 11 - 24, 2012
Eastdil Secured brokered the sale of 733 10 th Street Jamestown Properties acquires 171,000 s/f class A office building for $140 million
Heller Urban Renewal sets foundation for Harrison Station ISSUE HIGHLIGHTS
W
ASHINGTON, DC— Jamestown Proper- ties has closed on its
to $7.3 million. Located off the Hudson River and across from Manhattan, the acquisition includes a 91,109 s/f Wal-Mart and a 146,583 s/f Lowe’s Home Improvement, both anchor tenants on ground leases pur- chased by Inland Real Estate Acquisitions. Joe Cosenza, vice chairman of The Inland Real Estate Group and president of Inland Real Estate Acquisi- tions, facilitated the transaction on behalf of the buyer, Inland Diversified Real Estate Trust. “I am very pleased to have closed on the purchase of what I believe to be one of the finest retail assets I have ever acquired,” Cosenza said. “Bayonne Crossing’s unique location draws from 525,000 people within a 5 mile radius, and it’s within an Urban En- terprise Zone that gives pa- trons a 50% break on the state sales tax.” ■ terrace; a tenant-only rooftop terrace with catering capa- bilities; a building security system with 24-hour access; concierge services; on-site property management; a se- cure underground parking garage; and iconic views of Washington, D.C., including the monuments, National Por- trait Gallery and the Verizon Center. “Washington D.C. is an ex- cellent market. We are pleased to have closed this transaction with Jamestown and look for- ward to delivering more high- quality, sustainable projects in the future,” said Rob Ward, executive vice president of Skanska Commercial Devel- opment. Centrally located five city blocks from the White House, the building is in close prox- imity to two Metro stations, retail stores, hotels and res- taurants. The sale of 733 10th St. was brokered by Eastdil Se- cured. ■
acquisition of 733 10th St., an office and retail development in Washington DC’s east end submarket, from Skanska. The class A, 171,000 s/f of- fice building was developed by Skanska starting in 2009, and was designed to give small and mid-sized companies a large-caliber presence with eight floors of office space. The LEED Gold certified 733 10th St. blends energy efficient floor- to-ceiling windows and a green roof system with an exception- ally efficient floor plate design. It also features 1,800 s/f of ground-level retail space. The acquisition of 733 10th Ave. follows two other sig- nificant acquisitions in the Washington D.C. market: the Georgetown Renaissance port- folio, acquired in fall 2010, and the Madison Hotel and office complex in January 2011. “Washington D.C.’s central business district continues to
Quarry Center — 300 Million Years in the Making! 23A
733 10th St.
be a strong focus for James- town,” said Michael Phillips, COO of Jamestown. “Our ac- quisition of 733 10th St. demon- strates an ongoing commitment to working with best-in-class developers, and acquiring in-
novative properties in dynamic urban markets.” Building amenities at 733 10th St. include a fitness center with locker rooms, showers and towel service; a landscaped third-floor outdoor
7-9 B
A shopping center in Bayonne, NJ Inland Real Estate Acquisitions purchases 356,647 s/f Bayonne Crossing for $75.2 million
23 rd Annual Conference & Expo Atlantic City Convention Center
BAYONNE, NJ — Inland Real Estate Acquisitions an- nounced the acquisition of Bayonne Crossing, a 356,647 s/f shopping center for $75.2 mil- lion, including future estimated earnout payments totaling up
Section C
Auctions ...................................................... 6A Financial Digest ...................................... 9-14A DelMarVa ..............................................15-22A New Jersey ...........................................23-33A Pennsylvania ......................................... Section B Directory Upcoming Spotlight INDUSTRIAL/DISTRIBUTION CENTERS CONTRACTORS & SUBCONTRACTORS May 25 th
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Bayonne Crossing aerial
A Inside Cover — May 11 - 24, 2012 — Mid Atlantic Real Estate Journal
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A — May 11 - 24, 2012 — Mid Atlantic Real Estate Journal MAREJ A dvertisers D irectory A&S Boiler & Burner.................................................................21C Accent Group..............................................................................22C AEGIS Energy Services. ..............................................................5C AKF...............................................................................................5B American Boiler Co.. ....................................................................7C Apartment Guide........................................................................13C B.R. Kreider & Son, Inc..............................................................14B Barry Isett & Associates Inc......................................................12B Bayshore Recycling. ................................................................... 30A BH Security. ...............................................................................19C Bohler Engineering......................................................................9B Brasler Properties......................................................................15B Burris Engineers Inc....................................................................4B Bussel Realty Corp..................................................................... 25A CBC Bennett Williams.................................................................2B CDA&I...........................................................................................5B Central Wholesalers...................................................................21C CHAD..........................................................................................10B Columbia Bank........................................................................... 10A Cooper Roffing. .............................................................................1C Cooper-Horowitz, inc.................................................................. 11A CREATE........................................................................................7B CSG Consulting Engineers........................................................ 19A Deerwood Real Estate Capital................................................... 13A Design East.................................................................................16C Dustin C. 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BC-C Jenkintown Building Services, Inc............................................ 11B Jewel Electric Suppy Co............................................................. 11C Kaplin Stewart. ...................................................................... 2A,9B Keast & Hood Co........................................................................ 11B LandmarkJCM. .......................................................................... 21A Lebanon Valley.............................................................................1B LEW Corp.. .................................................................................21C M. 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Construction Corp....................................................12C Patterson Woods......................................................................... 21A Penn’s Northeast..........................................................................2B PennCap Properties. .............................................................. IBC-B Pennrose.....................................................................................IC-A Poskanzer Skott Architects........................................................ 32A Regal Bank..................................................................................17C Riker Danzig...................................................................24A, IBC-A SEBCO Laundry......................................................................... 24A Sheldon Gross Realty, Inc.......................................................... 24A Sign A Rama. ..............................................................................19C Target Building Construction....................................................14B Tenant Safe.................................................................................19C The Kislak Company, Inc........................................................... 26A The Thesing Companies............................................................... 5A Tighe & Cottrell, P.A.................................................................. 21A Transportation Resource Group, Inc...........................................2B TriState Realtors Commercial Alliance..................................... 37A Whitesell....................................................................................... 4A Whitestone Associates Inc............................................................2B Withim Smith + Brown, PC.......................................................18C Wolf Commercial Real Estate.................................................... 27A WP Realty..................................................................................IC-B
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Mid Atlantic R eal E state J ournal Publisher ............................................................................Linda Christman Co-Publisher .........................................................................Joe Christman Section Publisher ..............................................................Michael Campisi Section Publisher ................................................................Elaine Fanning Senior Editor/Graphic Artist ................................................ Karen Vachon Production Assistant ......................................................... Rachel Rugman Office Manager ....................................................................Joanne Gavaza Editorial Consultant .............................................................. Ben Summers Guest Columnist .............................................. Joyce Price & Karyn Tasker Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly P.O. Box 26 Accord, MA 02018 (Mail) 312 Market Street, Rockland, MA 02370 (Overnight) Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, P.O. Box 26, Accord, MA 02018 USPS #22-358 | Vol. 24 Issue 9 Subscription rates: $99 - one year, $198 - 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
By Joyce Price & Karyn Tasker
n 2006, the Financial Accounting Standards Board issued Statement No. 157, Fair Value Mea- surements which was sub- sequently codified under Accounting Standards Codifi- cation Section 820 (ASC 820). ASC 820 provides guidelines surrounding fair value mea- surement and its application. While companies may elect fair value accounting for fi- nancial assets, current U.S. accounting standards only permit fair value reporting for non-financial assets in certain instances such as real estate investments held by pension funds or invest- ment companies. In these situations, the value of the real estate is adjusted to fair value on a recurring basis at each reporting date. ASC 820 also applies to the fair value reporting of nonfinancial as- sets on a nonrecurring basis, such as the purchase of an operating property or the impairment of a real estate project. I What Investors Need to Know About Fair Value Accounting for Real Estate
The statement was cre- ated to provide more relevant statements to investors, and is based on the idea that re- porting assets at fair value is moremeaningful than report- ing based on historical cost. ASC 820 requires additional disclosures related to how the value was determined. How- ever, this information can be confusing to many investors who are reading financial statements. Understanding the disclosures can eliminate the confusion and provide important information to the investor. How ASC 820 Is Interpreted: The Fair Value Hierarchy
ASC 820 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction be- tween market participants at the measurement date.” The inputs utilized to estimate fair value are based on one of three levels (the fair value hierarchy). The reporting en- tity is required to disclose the level of input utilized which provides information as to how much of the reported fair value includes subjective components. Level One inputs are quot- ed prices in active markets for identical assets. For continued on page 12A
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M id A tlantic R eal E state J ournal Sidney Gable & Steven Gable handle $2.9m lease Sidney E. Gable Associates brokers $3 million lease P hiladelphia, PA — ARCA (Advanced Recycling Corporation
They wrote the policy.
We make sure they write the check.
Sidney Gable also completed a transaction with MPC Cor- poration, also fromMinnesota that recycles old computers. They originally rented 60,000 s/f and this year expanded into the remainder of the building, now occupying 112,000 s/f They plan to have 75 employ- ees at the facility. The building is located at 10551 Decatur Road in Philadelphia. The rental payments over the term of the lease is approximately $2.9 million. Sidney Gable and Steven Gable were most happy to complete these difficult real estate transactions. n
of America) has doubled their square footage by expanding to Bldg. “C” at 4301 N. Delaware Ave. They now occupy 95,000 s/f. (Bldgs A & C) The value of the new lease is $3 million for the eight and half year term. Sidney E. Gable, Inc. rep- resented Delaware Ave. LLC, owner, and ARCA, tenant, in this transaction. The proper- ties will be used for a Green Salvage Operation of refrig- erators, washers, and dryers. ARCA has spent ten million dollars for new equipment which includes a $5 million shredder that will recycle ninety percent of white prod- ucts. The “green” operation will recycle all components of the appliances in that: 1. The insulation from these appliances will be shred into small pellets and used as fertilizer. 2. The refrigerants removed from these appliances will be recycled and used as an energy source for electricity. 3. The metal frames from Loman Properties engages Grubb & Ellis as marketing agent in New Jersey ENGLEWOOD CLIFFS, NJ and FAIRFIELD, NJ — Lo- man Properties has engaged Grubb & Ellis as marketing agent for 820 and 815 Rte. 1 in Woodbridge and 3419 Rte. 46 in Parsippany. These premier retail sites are available for sale or lease for the first time in more than a decade. A team lead by senior VP, Jerry Putterman and associate VP, Dean Tselepis at Grubb & Ellis are in charge of the mar- keting effort. 820 Route 1 is .66 acres with lighted intersections on each side of the property and access from both Route 1 North and South. 815 Route 1 is a .25 acre pad site adjacent to Staples at a highly trafficked intersection. At just over seven acres, 3419 Route 46 in Parsippany is less than a mile from I-80 and just over a mile from I-287, offering access from all directions. “We are thrilled to be in- volved with the Lomans and this great portfolio of proper- ties,” said Procida president, Billy Procida. n
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A — May 11 - 24, 2012 — Mid Atlantic Real Estate Journal
www.marejournal.com M id A tlantic R eal E state J ournal Added kiosks for regional train/bus ticket purchases Hartz’s Harmon Meadow works with NJ Transit S
Keep an Even Keel Whitesell designs, builds and maintains its commercial spaces. Each tenant is unique — we work closely with our clients to achieve a balance of economy, function and aesthetic appeal. Over 90 buildings and 9 million square feet owned and managed in the Delaware Valley set Whitesell apart from its competition. Navigate change with confidence — call Whitesell today.
ECAUCUS, NJ — Start- ing this month, New Jer- sey Transit will offer visi- tors, employees, hotel guests and commuters the opportunity to purchase NYC and other re- gional NJ Transit train and bus tickets at two kiosks located at the bus stop directly in front of 500 Plaza Dr. across from Em- bassy Suites Hotel in Harmon Meadow and another kiosk at the bus stop located adjacent to 200 Plaza Dr. across from the Hyatt Place hotel in Harmon Meadow. The ticket kiosks will allow patrons to save time and skip long ticket lines at Secaucus Junction train station, and save money by purchasing same day tickets, including monthly bus passes, before they get on the trains. Both locations accept cash, credit cards and ATM cards. Visitors to both bus shelters can catch a free weekday only shuttle to the Secaucus Junc-
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Laurel Corporate Center Mt. Laurel, New Jersey
200 Plaza Drive
tion train station or pay fairs for buses to Port Authority Bus Terminal in New York, Newark’s Penn Station and Hoboken Station. “We are thrilled to work with New Jersey Transit to provide train and bus tickets at our HarmonMeadowdevelopment,”
said Emanuel Stern, president and COO of Hartz Mountain Industries. “These bus stops service nearly 500,000 visitors and commuters per year—the kiosks will make their traveling or commuting to Manhattan or other areas of New Jersey much easier for them.” n
Recent Financings Arranged By Meridian Capital Group
BLANDON, PA — Schlouch Incorporated has been named by Trexler Fields Twin Home Project, LLC to prepare the site for 15 twin homes and 3 single-family homes on Trex- ler Rd., Upper Macungie Twp. Schlouch prepares site for Trexler Fields Phase 4 Kay Builders is developing the project. Schlouch is providing survey, stakeout, sediment/erosion control, earthwork, sanitary and storm sewers, water line installation, roads, paving and seeding. The project also includes the completion of Schaeffer Run Road. Steve Funk is Schlouch’s site coordinator and Marty “MJ” Weller III is project coordina- tor/estimator. n
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M id A tlantic R eal E state J ournal BBS Architects, Landscape Architects & Engineers First National Green Ribbon Schools program awards W ashington, DC — U.S. Secretary of EducationArne Dun-
can, U.S. EPA Administrator Lisa Jackson, and Chair of the White House Council on Envi- ronmental Quality Nancy Sut- ley announced Hampton Bays Middle School in Hampton Bays, NY, designed by BBS Ar- chitects, Landscape Architects and Engineers (BBS), a winner of the U.S. Department of Edu- cation Green Ribbon Schools program. The announcement ceremony took place at Stod- dert Elementary School in Washington, D.C. The 2012 competition is the first of the new program developed by the U.S. Department of Education in collaboration with the White House and the EPA. “We are very proud of the White House, EPA and the U.S. Department of Educa- tion’s recognition of our project as one of the leading green schools in the nation,” said BBS president and principal Architect Roger Smith, AIA, LEED AP. “The innovative, healthy and environmentally responsible Hampton Bays FREEHOLD, NJ — Since obtaining a loan from Procida Funding’s 100 Mile Fund, Freehold Commons and its broker, CBRE, have brought the office development site from 10 percent to over 50 percent leased in less than one year. Procida negotiated a dis- count from the original lender, provided funding for improve- ments, including construction of a classical lobby and en- trance, and designed a mar-
Hampton Bays Middle School
Middle School is the result of a very close collaboration among the local community, parents, Hampton Bays Union Free School District and the design team. It was the Long Island community’s commitment to sustainable development that resulted in this remarkable, national accolade for a local Suffolk County school.” “Schools that take a green approach cut costs on their utility bills, foster healthy and “The recapitalization of half- built projects is imperative to clearing all of the inven- tory on the market”, said John Mullane, principal at Procida Funding. “Acquiring proper- ties at the right price, using value engineering to keep construction costs down, and working with the borrower in repositioning the asset, are exactly the type of projects our 100 Mile Fund targets.” Recent leases at Freehold
productive classrooms, and prepare students to thrive in the 21st century economy,” said Nancy Sutley, Chair of the White House Council on Environmental Quality. “These Green Ribbon School award winners are taking outstanding steps to educate tomorrow’s en- vironmental leaders, and dem- onstrating how sustainability and environmental awareness make sense for the health of our students and our country.” n Commons include 5,670 s/f to Hobby Publications and 1,995 s/f to Sterne Agee. “Procida provided the per- fect remedy to our situation,” said the principal of Freehold Commons. “They gave us more than just a loan. They renego- tiated our existing debt and were instrumental in reposi- tioning the property for the current market.” Freehold Commons is a 40,000 s/f office development located at 83 South St. n
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M id A tlantic R eal E state J ournal A uctions
PA-MD-VA-W.VA
23± & 60± ACRES COMMERCIAL LAND AUCTIONS Held on Site – Sat., June 16 @ Noon Hemlock Township • Columbia County Interstate 80 and 42 interchange
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• 41 EDU’ s would cost $143,500 to buy • No Buyer’ s Premium, Bid Price is Sale Price • Sewer Connections Available
• Near Columbia Mall, Walmart, Lowes, Home Depot • One Of The Largest Growing Exits Along Interstate 80 • Rt. 42 • Bloomsburg PA 17815 (Buckhorn) • Borders Geisinger Medical Office Building (Employs 600 People) • Excellent Investment Property • Zoned Commercial / High Traffic Counts • 2% Realtor Participation Invited • Endless Opportunities
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Directions: From Interstate 80 and Route 42 interchange (Exit 232) continue on 42 north for approximately 3,000 ft. Properties are located on left & right side of Rt 42. Please watch for auction signs. • 100 EDU’ s would cost $350,000 to buy this amount of sewage capacity • High Traffic Area (see website for counts) • No Buyer’ s Premium, Bid Price is Sale Price • Zoned Commercial / Agricultural • Borders Columbia Mall, Near Walmart, Lowes, and Home Depot • Excellent Development Opportunity • Sewer Connections Available • Rt. 42 • Bloomsburg PA 17815 (Buckhorn) • Turn This Vacant Land Into a Prosperous Business Investment • 2% Realtor Participation Invited
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C ommercial R eal E state O rganizations ’ E vents C alendar
MAY 10 – CREW LEHIGH VALLEY Event: Bethlehem Brownfield Turns Green Time: 4:00 PM – 6:00 PM Location: Lehigh University- Rauch Business Center, Room 85
MAY 16 – ULI PHILADELPHIA Event: Impact of Marcellus Shale on South Jersey Time: 8:00 AM – 10:30 AM Location: Camden County College Address/City: 200 College Dr., Blackwood, NJ P: 800-321-5011 www.philadelphia.uli.org MAY 17 – BOMA PHILADELPHIA Event: Annual Meeting Elections & Scholarship Awards Time: 12:00 Noon Location: The Union League Address/City: 140 S. Broad St., Philadelphia, PA Cost: $65 Members $80 Nonmembers P: 215-567-1775 www.bomaphila.com Location: Davio’s Northern Italian Steakhouse Address/City: 111 S. 17th St., Philadelphia, PA Cost: $55 Members $75 Guest/Nonmembers www.crewphiladelphia.org MAY 17 – NAIOP NJ Event: 25th Annual Commercial Real Estate Awards Gala Time: 5:00 PM Location: The Palace at Somerset Park Address/City: 333 Davidson Ave., Somerset, NJ Cost: $475 Members $545 Nonmembers www.naiopnj.org MAY 17 – APPRAISAL INSTITUTE NORTHEAST NEW JERSEY CHAPTER Event: 6th Annual Meadowlands Conference Time: 8:00 AM – 4:30 PM Location: Teaneck Marriott at Glen Pointe Address/City: 100 Frank W. Burr Blvd., Teaneck, NJ Cost: $175 Member $185 Nonmember P: 201-796-1171 E: nenjai@aol.com www.nnjchapter-ai.org MAY 18 – IREM MD Event: IREM Gala Time: 7:00 PM Location: Congressional Country Club Address/City: 8500 River Rd., Bethesda, MD Cost: $125 Members $250 Nonmembers E: iremgala@gmail.com www.irem8.org Time: 5:30 PM – 8:00 PM Location: Stella Marina Address/City: 900 Ocean Ave., Asbury Park, NJ www.siornj.com MAY 22 – NJBIA Event: 5th Annual New Jersey Economic Policy Summit Time: 9:00 AM – 11:30 AM Location: Rutgers Univ., Edward J. Bloustein School of Planning & Public Policy Address/City: 33 Livingston Ave., New Brunswick, NJ P: 609-393-7707 x-239 E: kwittkamp@njbia.org www.njbia.org Real Estate Investments Time: 7:30 AM – 11:30 AM Location: Dolce Valley Forge Address/City: 301 W. Dekalb Pike, King of Prussia, PA Cost: $60 Members $75 Nonmembers E: eilliano@tristaterca.com www.tristaterca.com MAY 22 – TRISTATE Event: Tax Issues in Commercial MAY 17 – CREW PHILADELPHIA Event: Past Presidents Breakfast Time: 8:30 AM – 10:30 AM MAY 18 – SIOR NJ Event: Membership Meeting
MAY 22 – TRISTATE Event: Distressed Assets Time: 11:45 AM – 3:30 PM Location: Dolce Valley Forge Address/City: 301 W. Dekalb Pike, King of Prussia, PA Cost: $60 Members $75 Nonmembers E: eilliano@tristaterca.com www.tristaterca.com Location: Langan Engineering & Services Inc. Address/City: 30 S. 17th St., Philadelphia, PA P: 800-321-5011 www.philadelphia.uli.org MAY 22-23 – NJAA Event: 23rd Annual Conference & Expo Location: Atlantic City Convention Center Address/City: Atlantic City, NJ www.njaa.com MAY 31 – ULI PHILADELPHIA Event: Focus on Kensington-Summer Tour & Happy Hour Time: 4:00 PM – 7:30 PM Location: Frankford Hall Address/City: 1210 Frankford Ave., Philadelphia, PA Cost: $35 Members $50 Nonmembers P: 800-321-5011 www.philadelphia.uli.org JUNE 7 – ULI PHILADELPHIA Event: Global Marketplace Time: 7:30 AM – 5:00 PM Location: The Union League Address/City: 140 S. Broad St., Philadelphia, PA P: 800-321-5011 www.philadelphia.uli.org JUNE 7 – SIOR NJ Event: Golf Outing Time: 11:30 AM Location: Essex Country Club Address/City: 350 Mt. Pleasant Ave., W. Orange, NJ www.siornj.com JUNE 11 – ABC EPA Event: Annual Golf Outing Time: 9:00 AM Location: Philadelphia Cricket Club- Militia Hill Course Address: 6025 W. Valley Green Rd., Flourtown, PA E: gzeh@abceastpa.org www.abceastpa.org JUNE 11 – CIRC DE Event: Annual Golf Outing Time: 11:00 AM Location: DuPont Country Club Address/City: 1001 Rockland Rd., Wilmington, DE P: 302-633-1705 E: janet@circdelaware.com www.circdelaware.org JULY 12 Event: Lakewood Regional Business Expo & Networking Event Time: Noon – 4:30 PM Location: Lakewood Industrial Park, Lake Terrace Hall Address/City: 1690 Oak St., Lakewood, NJ P: 732-364-2500 Ext. 5257 E: pkomsa@lakewoodnj.gov MAY 22 – ULI PHILADELPHIA Event: New Member Breakfast Time: 8:30 AM – 10:00 AM JUNE 6 – CREW LEHIGH VALLEY Event: The Art of Networking Time: 8:30 AM – 10:00 AM Location: Lehigh University – University Center Faculty Room Cost: Members & Invited Guests Free www.crewlehighvalley.org
Address/City: Bethlehem, PA Cost: Members Free/$25 Guests www.crewlehighvalley.org
MAY 11 – IREM NJ Event: Ethics for the Real Estate Manager Location: Interstate Realty Mgmt. Offices Address/City: Marlton, NJ Cost: $175 Premier Member $200 Classic Member & $220 Nonmember E: admin@irem101.org www.irem1.org MAY 15 – CORENET Event: Expediting the Process – Local, State & Federal Approvals for New Projects Location: Duquesne Club-Walnut Room Address/City: 325 Sixth Ave., Pittsburgh, PA P: 412-336-3332 E: sscheerbaum@cresa.com www.corenetglobal.org MAY 15 – NAIOP NY Event: 19th Annual Golf Outing Time: 11:30 AM Location: Westchester Hills Golf Club Address/City: 401 Ridgeway, White Plains, NY P: 212-450-7300 www.naiopnyc.org MAY 15 – TRISTATE Event: Legal Updates in Commercial Real Estate Time: 7:30 AM – 11:30 Am Location: Dolce Valley Forge Address/City: 301 W. Dekalb Pike, King of Prussia, PA Cost: $60 Members $75 Nonmembers E: eilliano@tristaterca.com www.tristaterca.com MAY 15 – TRISTATE Event: Supply & Demand in a Recovering Market Time: 11:45 AM – 3:30 PM Location: Dolce Valley Forge Address/City: 301 W. Dekalb Pike, King of Prussia, PA Cost: $60 Members $75 Nonmembers E: eilliano@tristaterca.com www.tristaterca.com MAY 16 – CORENET NJ Event: Agency Overview – Risk Management Time: 8:00 AM – 12:00 PM Address/City: 56 Livingston Ave., Roseland, NJ Cost: $40 Members $75 Nonmembers www.corenetnj.org MAY 16 – IREM DELAWARE VALLEY Event: Chapter Meeting & Tour of The Queen Time: 4:30 PM Location: World Café Live at the Queen Address/City: 500 N. Market St., Wilmington, DE Cost: $55 Members $65 Nonmembers www.irem3.org MAY 16 – SIOR NJ Event: Membership Meeting Time: 5:30 PM – 8:00 PM Location: Stella Marina Address/City: Asbury Park, NJ www.siornj.com MAY 16 – SMPS PHILADELPHIA Event: Regional Planning: The Shape of Things to Come in the Delaware Valley Time: 5:00 PM – 7:30 PM Location: The Downtown Club – Public Ledger Bldg. Address/City: 6th & Chestnut Sts., 11th Fl., Philadelphia, PA Cost: $35 Members $55 Nonmembers www.smpsphiladelphia.org
F inancial D igest
Mid Atlantic Real Estate Journal — May 11 - 24, 2012 — A
www.marejournal.com
Largest loan totals $27m for 264 unit multi-family rental community in Georgia Cooper-Horowitz arranges $81.3 million in financing
Chatham, NJ — Cron- heim Mortgage has arranged $12,500,000 in five separate transactions for Office, retail and multifamily properties in New York, New Jersey and Maryland. This brings the firm’s total volume for the last four months to $333,625,000, covering properties in eight states, which also include Pennsylvania, Connecticut, Oklahoma, Arizona and Ten- nessee. These transactions involved note purchase fi- nancings, first mortgages, construction loans, forward commitments, and preferred equity. In Manhattan, Cronheim Mortgage has arranged fi- nancing of $6,000,000 for 1270 Broadway, a 14-story multi-tenanted class B of- fice building. The five-year loan was placed with Aviva Life and Annuity Company, whom Cronheim represents as correspondent and servic- ing agent. Built in 1912 and situated on 8,525 s/f of land, the property consists of 12 stories plus a penthouse suite and basement. The ground floor is leased to two retail C larksville, TN — Cooper-Horowitz, Inc. recently arranged financing for the following properties: Fort Campbell Indepen- dence Place Apartments, 3193 Fort Campbell Boule- vard, Clarksville, Tennessee: 228 unit multi family rental community. The loan was for $20,800,000. Thefirmwas representedby MatthewPaul, Justin Schact- er and Jayson Schwartz for the above transaction. Fort Stewart Independence PlaceApartments, 1300 Inde- pendence Place Drive, Hines- ville, Georgia: 264 unit multi- family rental community. The loan was for $27,000,000. The firmwas represented by Matthew Paul, Justin Schact- er and Louis Mirando.
Fort Stewart Independence Place Apartments
tenants, with Duane Reade occupying a total of 12,800 s/f including basement and mez- zanine spaces. In Plainsboro, NJ, Andrew Stewart and Lisa McMahon have arranged financing of $3,000,000 for a four-build- ing office property located on Plainsboro Road. Built in the late 1970’s, the 44,000 s/f property is 98% occupied by mostly medical-related ten- ants. The property is located three miles east of Route 1 and the new University Medical Center of Princeton, which is slated to open in May 2012. The non-recourse loan was placed with a local bank on a 10-year term and 25-year amortization. In Franklin Lakes, NJ, Ja- net Proscia arranged financing of $1,750,000 for a 18,350 s/f single tenant office/warehouse building located on Commerce Road. The client needed to take out existing financing, but in a declining value en- vironment, had struggled for nearly two years to find a lender who could understand the intricacies of the deal. Ultimately, Cronheim secured The firm was represented by Schacter and Jeffrey Horowitz for the above two transactions. Palm Breeze at Keys Gate: 1140 SE 24th Road, Home- stead, Florida. 375 Town Homes. The loan was for $14,500,000. The firm was represented by Bruce Marcus and George
a 7-year loan at 4.85% for the borrower. In Bethesda, MD, David Turley and Lisa McMahon se- cured financing of $1,115,000 for a 331,618 s/f parcel ground- leased to a subsidiary of Home Depot. The parcel is improved with a 108,908 s/f Home Depot and an inline building contain- ing approximately 32,600 s/f. The property is 200 yards west of I-270 and is situated direct- ly across the street from the Westfield Montgomery Mall. The original ground lease dates back to 1980, when the property was developed as a Hechinger home improvement store. The lease and leasehold interest were subsequently sold to Home Depot in 1999 after Hechinger closed. In Irvington, NJ, David Turley and Lisa McMahon ar- ranged financing of $600,000 for a five-building, 22-unit apartment complex located on ElmwoodAvenue. Constructed in the 1960’s, the brick build- ings are comprised entirely of one-bedroom units. The non- recourse loan was placed with a local bank on a 7-year term and 25-year amortization. n Stergiopoulos for the above transaction. 137 Franklin Street, New York, New York: Condomini- umapartments. The loan was for $5,000,000. The firm was represented by Jerry Sobol and Nick Barbato for the above trans- action. n
Fort Campbell Independence Place Apartments
727 Bronx River Road, Bronxville, NewYork: 79 unit apartment complex. The loan was for $3,500,000.
44 North Broadway, White Plains, NewYork: 163 units, 6 story apartment complex. The loan was for $10,500,000.
Cronheim Mortgage closes $333.625 million in the last 4 months
1270 Broadway
10A — May 11 - 24, 2012 — Financial Digest — Mid Atlantic Real Estate Journal
www.marejournal.com
F inancial D igest
By Bruce J. Coin, Bruce Coin Consulting, Inc. The current commercial mortgage market
T
he Federal Reserve’s Open Market com- mittee on April 24th
realized that there is no im- minent threat of a “double dip” recession and that the economy is truly on the verge of a self-sustaining recovery notwithstanding the “oil price” wildcard. The GDP is growing at a rate of 2 percent or better and while not the roughly 3 percent seen for 2011 it is a positive upside statistic. The “Fed’s “target for this year is about 2.6 percent. Nationally, unem- ployment has fallen below 9.0 percent. Consumer and business spending are the
sustaining forces. Automo- bile sales are up dramatically increasing from about $6 mil- lion in sales during the recent recession years to about $14 million last year. For many years economic growth was backed by auto sales and new construction. If that latter contributor starts perform- ing the economy will really pick up. As guidance, and certainly with exceptions, I am seeing interest rates for commercial mortgages being provided in the very wide range of 3.75
percent to 6.00 percent for most well (90 percent) leased income properties. 5 and 10 year balloon terms are most prevalent for multitenant properties. The lowest rates and highest loan to value ratios are being obtained by quality multifamily proper- ties and long term net leased single tenant credit leased transactions. Overall “cap rates” for apartments are running at about a full 1 per- cent or more below those for other property types. Some multitenant offices with less
than 90 leasing are being fi- nanced but at levels of 60-65 percent LTV. Rates increased by about a quarter point since late March but should soften again. The rates jumped be- cause the benchmark 10 year treasury increased from sub- 2.00 percent to 2.38 percent by March 19th. The treasury has steadily declined since then. As of April 26th it was back under 2.00 percent. It appears to be a nervous in- vestor market over-reacts to the slightest bit of bad news, local or worldwide. The agencies, Fannie and Freddie, for the right prop- erty, will offer close to 80 percent LTV financing and with 30 year amortizations. A DSCR of 1.20 seems achiev- able and if not then 1.25. I am seeing credit leased financing transactions still being un- derwritten with DSCRs as low as 1.05 times. Insurance companies and many banks are all active. CMBS II is struggling for a comeback after an early year start that tailed off but sooner or later that will rebound. Apartment construction is on the upswing as lend- ers see increased demand. Supporting the need for new apartments is a recent state- ment by the Mortgage Bank- ers Association’s that “ We’re generating an average of one million new renter house- holds per year”. In mid-April over 400 members of the real estate finance committee met in Washington to discuss the future and to try to again define a “QualifiedMortgage” and the related “premium re- capture” concept. It appears to me that the Dodd-Frank Act erred by opening the door for such a loop hole. If every lender selling a loan had to retain a 5 percent first risk of loss position, with no ex- ceptions, the problem would not exist. They would either hold loans “on book” or if they decided to sell they would take the risk. There would be no fear that lenders would “discriminate” and only take “qualified mortgages” and thus adversely impact cer- tain borrowers. Bruce J. Coin is director of Bruce Coin Consulting, Inc. n
and 25th , as expected, aga i n l e f t short term i n t e r e s t rates alone. That is con- sistent with their earlier statements t h a t t h e y would keep rates low through 2014. I think “everyone” now has Bruce J. Coin
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Mid Atlantic Real Estate Journal — Financial Digest — May 11 - 24, 2012 — 11A
www.marejournal.com
F inancial D igest
$27,000,000
FORT STEWART INDEPENDENCE PLACE APARTMENTS 1300 INDEPENDENCE PLACE DRIVE HINESVILLE, GEORGIA 264 Units in 13 three story garden style apartments
$20,800,000
FORT CAMPbELL INDEPENDENCE PLACE APARTMENTS 3193 FORT CAMPbELL bOULEVARD CLARkSVILLE, TENNESSEE 228 Units in 13 three story garden style apartments
The undersigned arranged the above financing
51 East 42nd Street New York, NY 10017 (212) 986-8400 Fax: (212) 983-0512 www.cooper-horowitz.com
Real estate Financing
12A — May 11 - 24, 2012 — Financial Digest — Mid Atlantic Real Estate Journal
www.marejournal.com
F inancial D igest
continued from page 2A What investors need to know about fair value . . .
Also closes sale/positions financing for NJ portfolio HFF arranges $66.25m Phila. construction loan
ers’ skepticism about the market and the availability of financing. Factors that distinguish the CAP rate for properties include location, age, size, features, exist- ing tenants, etc. The IRR is the rate of return that an investor expects to receive on their investment. Riskier investments, for example, investments where cash flows are volatile or construction is not complete, will require a higher IRR. It is the owner’s responsibility to review the market transactions and determine which rates most closely line up with the char- acteristics of their real estate. Since there is a significant amount of subjectivity in this area, owners should clearly document all of the informa- tion received, how the infor- mation compares to their property, and the reasons for ultimately choosing the IRR and CAP rates utilized in the final valuation. As you can see, Level Three valuations are based on cur- rent market conditions and a projection of events to oc- cur in the future, i.e., lease renewals, absorption rates on vacant spaces, inflation rates, capital expenditures, etc. Even a small change in the cash flows, IRR or CAP rate could change the property’s fair value by a significant amount. The key for inves- tors is to understand the un- derlying inputs and assump- tions utilized in determining the fair value and realize this is the owner’s estimate as of the measurement date. The increased transparency required by ASC 820 will help investors understand the inputs and assumptions utilized in determining the reported fair value of the real estate. As investors become more familiar with the finan- cial statements and disclo- sures explaining the owner’s estimates, the understanding of fair value accounting will increase. Joyce Price is a princi- pal and Karyn Tasker is a manager in the Balti- more, MDoffice of Reznick Group. n This publication contains only gen- eral information and is not intended by Reznick Group to be a rendering of accounting, business, financial, investment, legal, tax or any other professional advice or services. This publication is not a substitute for any professional advice or services.
example, current stock price for shares owned. Level One is the most accurate level of inputs and does not have sub- jective components. The use of Level One inputs is rare in property valuations since no two buildings or parcels of land are identical. Level Two inputs are quoted prices for similar assets in ac- tive or inactive markets. For example, actual recent sales data for properties that are similar to the subject prop- erty. Level Two requires more judgment from owners and those determining fair value. In the last few years, the market for real estate sales has fluctuated significantly, reducing the availability and reliability of Level Two in- puts. In addition, many real estate transactions that have occurred were based on dis- tressed circumstances, such as forced or foreclosure sales or properties with inadequate working capital. ASC 820 provides that fair value mea- surements are to be based on an orderly sale and should not consider forced sales or distressed circumstances. Volatility in the real es- tate and capital markets is pressing owners and those estimating the fair value of real estate to utilize Level Three inputs. Level Three inputs, which are the most subjective, are based on un- observable inputs. Determining Fair Value Using Level Three Inputs A common valuation tech- nique utilized in determin- ing fair value under Level Three is a discounted cash flowmodel. The typical model uses a financial forecast con- sisting of projected cash in- flows and cash expenditures for the real estate over the next 11 years. A presumed sales price is determined based on the eleventh year net cash flows and a capital- ization (CAP) rate. Net cash flows for the first 10 years and the presumed sales price are then discounted to the present value using a market internal rate of return (IRR) to determine the fair value of the real estate as of the measurement date. Owners typically use third- party brokers to provide a range of IRR and CAP rates. Concurrent with the fluctuating real estate sales, CAP rates have fluctuated significantly due to buy-
P
hiladelphia, PA — HFF arranged a $66.25 million construction loan
for The Granary, a mid-rise multi-housing development in Center City, Philadelphia’s Logan Square neighborhood. HFF worked on behalf of the borrower, Pearl Properties, to secure the three-year construc- tion loan through Wells Fargo Bank. The HFF team represent- ing Pearl Properties was led by managing director Jim Cadranell. “It was a pleasure to repre- sent Pearl Properties on this assignment to help create a first class property in one of the hottest apartment markets in the country,” said Cadranell. In Nutley, NJ HFF closed the sale of and arranged financing for a three-property, 126-unit multi-housing portfolio. HFF marketed the offering on behalf of the seller, AIG Global Investment Group. Balt Investments LLC purchased the assets for $15 million free and clear of debt. The portfolio is 94% leased overall. The properties include NewYork, NY—Mortgage brokerage firm Eastern Union Commercial has arranged $34 million in refinancing for a four-building, 580-bed skilled nursing portfolio in New York and New Jersey. Provided through M & T Bank, the $34 million loan was financed at 5.03%. Abraham Bergman, managing partner of Eastern Union, negotiated the loan on behalf of the bor- rower, a privately held nursing home owner and management Morristown, NJ — G.S. Wilcox & Co. announced that Gretchen Wilcox, Al Raymond and David Fryer, president and principals of the firm arranged $35.5 million in financing in the month of March. The two retail transactions, one of which was on Long Island and the other in South Jersey, involved key market players including A New Jersey based real estate fund, Arlona Limited Partner- ship, Prudential and Genworth Financial.
The Granary in Center City
Greylock Apartments, Lincoln Apartments and Ambassador Apartments. The properties are the second pool of assets HFF has sold for AIGGlobal Investment Group. In July 2011, HFF closed the $241.5 million sale of a 2,185- unit multi-housing portfolio in central New Jersey. The HFF team representing AIG Global Investment Group included senior managing di- rectors Jose Cruz and Andrew Scandalios, directors Jeffrey Julien and Kevin O’Hearn and associate Mike Oliver. Bergman explained that while financing of medical fa- cilities has become increasingly difficult given the numerous medical and healthcare cuts in today’s market, he was able to close this transaction by work- ing with M & T Bank to help mitigate the risk, packaging the four buildings together. “With volatility in the Med- icaid and Medicare rates being paid to facilities, forecasting projections are extremely dif- David Fryer, principal of G.S. Wilcox & Co., originated the Long Island transaction for $26 million involving Arlona Lim- ited Partnership and Genworth Financial. The loan is secured by Mayfair Shopping Center in Commack, NY. This transac- tion provides favorable terms for both parties including an interest only amortization for the full 11 year term of the loan. Levin Management manages the asset for the ownership and was instrumental in helping
HFF senior managing direc- tor JonMikula represented the borrower. “The buyer was able to capi- talize on an opportunity to purchase quality assets in Nutley with upside, where he already owned real estate so there are economics of scale,” said Cruz. “AIG obtained solid pricing and was able to take advantage of a strong demand for that submarket.” “The properties are well- positioned for an upgrade and will provide good long term growth,” added O’Hearn. n ficult,” he said. “The chal- lenge in closing this loan was compounded in that we were working with properties in two different states and thus two different rate systems.” Bergman noted that Eastern Union faced a key hurdle in closing this transaction. One of the loans being paid off with the refinance was due December 31, 2011. But despite reluctance from the lender to do so, East- ern Union negotiated a 3 month extension. n
Eastern Union organizes $34m multi-state refinancing for a four-building portfolio company.
with the refinancing. Gretchen Wilcox and Al Ray- mond, president and principal of the firm originated the South Jersey transaction involving A New Jersey based real estate fund and Prudential for $9.5 million. The loan is secured by Towne Square, a multi-ten- anted 88,380 s/f retail center located in Mount Laurel, NJ. This transaction offered fa- vorable terms to both parties including a 7/25 amortization schedule and low LTV. n G.S. Wilcox & Co. closes $35.5m in March
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