4A —January 21 - February 17, 2022 — Financial Digest — M id A tlantic Real Estate Journal
www.marej.com
F inancial D igest
U Rosado and Kennedy of Capital One closes transactions STRO lands $22Mto refinance two NJ warehouse assets NION, NJ — The STRO Companies (STRO) has ref i -
JLL works on behalf of developer SilverTreeCommercial Real Estate places loan with Provident Bank
nanced 510 Ryerson Rd. i n L i nc o l n Park and 600 Green Lane inUnionwith $22 million, in separate l oans f rom Capital One, N.A.
Jack Shulman
Port Newark Junction
510 Ryerson Rd. is a 148,000 s/f industrial warehousing facility with 24’ clear ceilings, 22 loading docks, and 1 drive in. The property is close in proximity to I-287 and I-80. 600Green Lane spans 88,000 square feet, serving as a single tenant warehouse- distribu - tion Freezer/Cooler facility with 14 loading docks and 1 drive in. The property provides flawless access to the Port of Newark submarket, Newark airport, and Interstates 95 negative rent growth. Anyone who owned real estate during the “Great Recession” faced dramatic events such as loan defaults, massive layoffs, and vacated homes that owners abandoned after property values plummeted. Still, some speculative investors look at this cycle phase as a good time to buy as property values will be at rock bottom. Some of the advantages of buying real estate during recessions include lower prices, less competition, and many sellers might be more willing to offer provisions as improvements and amenities. If successfully executed, a buyer who pur - chases during a trough or re - cession will wait and hold the investment property until the real estate cycle circles back, and the downturn is over—as the market begins to recover and eventually expand. ● Recovery/Expansion: English theologian and histo - rian Thomas Fuller once fa - mously said, “It’s always dark - est before the dawn”, which many real estate investors apply to the earliest moments of a recovery. In the recovery phase, the real estate market begins at a low point from the recession and gradually rises in strength. Some people who invest in the recovery phase look at Core real estate assets that will generate stable in -
ark Junction is along US Rte. 9 on the eastern side of Newark. This irreplaceable location also provides the tenants access to service more than nine million residents within 15 miles and 58 million consumers within a five-hour drive. The property is within the highly sought- after Port submarket, the largest submarket in Northern New Jersey, which, according to JLL Research has a vacancy of only 1.4%. MAREJ About Kay Properties and www. kpi1031.com Kay Properties & Investments is a national Delaware Statutory Trust (DST) investment firm. The www. kpi1031.com platform provides ac- cess to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market. Kay Properties teammembers collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over $21 Billion of DST 1031 investments. Diversification does not guarantee profits or protect against losses. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, gen- eral risks of owning/operating com- mercial and multifamily properties, short term leases associated with mul- tifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. All of- ferings discussed are Regulation D, Rule 506c offerings. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential distribu- tions, potential returns and potential appreciation are not guaranteed. For an investor to qualify for any type of investment, there are both financial requirements and suitability require- ments that must match specific objec - tives, goals, and risk tolerances. Secu- rities offered through Growth Capital Services, member FINRA, SIPC Office of Supervisory Jurisdiction located at 2093 Philadelphia Pike Suite 4196 Claymont, DE 19703.
NEWARK, NJ — JLL Cap- ital Markets announced that it has arranged a $12 mil - lion facility for Port Newark Junction, a fully leased, six- building, 154,149 s/f industrial complex near Port Newark. JLL worked on behalf of the developer, SilverTree Com- mercial Real Estate , to place the three-year, facility loan with Provident Bank. Situated on 13.81 acres at 150 St. Charles St., Port New - now, the length of the current economic expansion has many people suspecting that we are close to a peak market cycle. However, others suggest cur - rent slow and steady growth may be sustainable, and there doesn’t appear to be anything imminent that could derail that pattern. The peak could very well turn out to be more of a plateau than the beginning of the end. Even if there is a contraction or trough ahead, it could be a slight downturn rather than a sharp drop off a cliff. There are numerous variables that contribute to the shape of market cycles that range from Fed monetary policy to market bubbles that pop, such as the housing and Dot.com booms that caused the last two recessions. But real estate experts point to several macro real estate trends that suggest it might be a good time for investment property owners to consider selling their buildings and con - sider DST 1031 investments. Even if we cannot know if we are currently experiencing a peak in the real estate market cycle, many real estate inves - tors have seen their proper - ties appreciate significantly and recognize an opportunity to sell and potentially unlock trapped equity. Jason Salmon is senior vice president at Kay Prop- erties & Investments. MAREJ
510 Ryerson Rd.
and 78. “We are pleased to have consummated another trans - action with Capital One,” said Jack Shulman , STRO’s di - rector of acquisitions and capi - tal markets. “Louis Rosado, Katie Kennedy and their team were great to work with and we look forward to continuing to do more business with them in the future.” come with very low risk. These assets include a NNN property with a long-term lease or a fully leased office building in a prime location. Other assets that savvy investors target during a recovery phase of real estate investment include value-add real estate, and op - portunistic investments like distressed properties or even raw land. While many people have a hard time identifying when the trough stage seg - ues into the recovery phase, experts look at trends like gradual occupancy increases or growing demand to identify when the recovery stage has begun. The recovery phase is a popular time for real estate investment and speculation since prices of properties are typically high, which helps the potential for a solid return upon the sale of the asset. ● Peak: The peak phase will be when supply catches up with and even exceeds demand pushing prices up. During this phase, assets are fully priced, and some real estate investors feel eager to sell at attractive prices and reap profits. How - ever, the peak market can also be a good time for savvy inves - tors to refinance any leverage while interest rates are low and fixed. ● Contraction: The con - traction phase generally oc - curs after the business cycle peaks, but before it becomes
In announcing this trans - action, STRO also noted their expansion plans. “We are eager to continue pur - chasing more industrial warehouses in Northern New Jersey. We have a con - siderable amount of capital to deploy and are interested in either core+, value-add, or opportunistic acquisitions,” said Shulman. MAREJ a trough. If growth stalls or becomes negative, it can fall into a recession, which is usu - ally defined as two consecutive quarters of negative growth. During this period, investors need to act very cautiously while simultaneously monitor - ing the market for opportuni - ties - because while contraction cycles can be difficult, they can also coincide with some great opportunities. For example, in a recessionary environment, the worst-performing assets are those that are highly lev - eraged, very speculative, and fraught with risk. For many years, Kay Properties has avoided the sectors of hospital - ity, senior care, and oil & gas for this exact reason. While this cycle pattern is widely accepted to view the real estate market over the long-term, there are many variables that come into play with real estate. For example, real estate is a highly local - ized industry with different conditions in every state, market, and sub-market mak - ing real estate a constantly moving target. Record-breaking expan- sion cycle and DST Invest- ment Opportunities Timing investments cor - rectly may potentially help to increase returns. Yet getting market timing exactly right is never easy unless you happen to be a fortune teller. Right
continued from page 2A Investing Across Market Cycles and Delaware Statutory Trust Investments . . .
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