- DC
Trading activity breaks firm’s quarterly benchmarks Gebroe-Hammer ends Q1 2016 with 30 multi-family sales of $578+M/3,590 units L IVINGSTON, NJ — The multi-family-in- vesting rush reached
ISSUE HIGHLIGHTS Volume 28 Issue 7 April 15 - 28, 2016 Financial Digest Featuring Appraisal
property located at 77 Oak- wood Village. The apartments have upgraded kitchens with maple cabinetry and new ap- pliances. The community fea- tures numerous resident ame- nities including a swimming pool and sundeck, children’s pool, tennis court, playground, dog run, parking garage, on- site management and 24-hour on-site maintenance. “The sponsor acquired Oak- wood Village with a detailed business plan coming into the acquisition, which includes significant capital improve- ments,” said Schubert. “Me- ridian successfully negotiated loan terms that allowed for the funding of $7.5 million in capital expenditures over and above the 75% loan-to-cost ac- quisition financing, equivalent to 79% loan-to-cost in total,” he added. n “Within the Northern New Jersey submarkets, investor demand and tenant occupan- cies have struck a nice balance. Both are keeping pace with the existing apartment-housing stock dominated by pre-1970s- era buildings and the sweeping introduction of new construc- tion and revitalization initia- tives in urban and suburban areas, especially those adja- cent to or within walking dis- tance to mass transportation hubs,” said David Oropeza , managing director. continued on page 2A strategically located class-B garden-apartment commu- nities prime for value-add repositioning. Other promi- nent sales included four sepa- rate buildings totaling 264 units in Essex County’s East Orange, while four others comprised of 543 units were located in Maywood, Wood- Ridge, Ridgewood and Wayne within the high-barrier-to- entry Bergen/Passaic County submarket. A total of 26 units also were sold in Philadelphia and 21 units traded inWarren County, NJ.
a new level during the first quarter along the New Jer- sey/Philadelphia corridor, where Gebroe-Hammer As- sociates closed $578+ mil- lion in transactions. The firm recorded 30 sales involving a total of 3,590 units during the three-month timeframe, averaging over two sales per week and breaking records previously set during the course of its 40-year history. The latest trades spanned the entire 112-mile corridor from Philadelphia to North- ernNew Jersey. They extend- ed from the City of Brotherly Love, across the prosperous corners of Central Jersey and the 72-mile shoreline of Ocean and Monmouth coun- ties, to the Garden State’s most densely populated cit- ies and suburban commuter hubs. “Favorable multi-family in- vesting fundamentals – from demographics and prevailing housing/lifestyle ideologies to a static low-interest-rate
5-20A
Houlihan-Parnes Celebrates 125th Anniversary
Deer Creek Apartments, a 288-unit apartment-home community in Plainsboro, NJ, was among the multi-family sales arranged by Gebroe-Hammer Associates during Q1 2016.
2-3B
environment – continue to feed brisk trading and a record-setting transaction pace,” said Ken Uranowitz , Gebroe-Hammer president. “Demand is significantly outpacing supply of for-sale product, prompting buyers to aggressively pursue mar- keted and off-market proper-
ties with a sense of urgency I have not seen in the 40-plus years I’m in the business.” In March alone, Gebroe- Hammer’s area market spe- cialists established new firm benchmarks by arranging sales totaling more than $364 million and 2,031 units. Over- all, six of the properties were
For speaking and sponsorship information, please contact: Linda Christman at 781-871-3456 or lchristman@marejournal.com Philadelphia Real Estate Capital Markets Summit April 29, 2016 New Jersey Office Summit May 20, 2016 Delaware Commercial Forecast Summit UPCOMING CONFERENCES April 13, 2016
Meridian Capital arranges $146million in acquisitionfinancing forOakwoodVillage
FLANDERS, NJ — Merid- ian Capital Group arranged $146 million in acquisition fi- nancing for the purchase of the Oakwood Village multifamily property located in Flanders,
Directory
Upcoming Spotlights Spring Preview Engineers Las Vegas RECON ICSC Convention Financial Digest Feat. Appraisal........................5-20A DelMarVa • DC.................................................21-25A New Jersey................................................. Section B Pennsylvania.............................................. Section C
Oakwood Village
NJ. The seven-year loan, provid- ed by a regional balance sheet lender, features a fixed-rate of 3.625%, two years of interest- only payments and a five-year extension option. This transac- tion was negotiated by Merid-
ian senior managing director, Israel Schubert and senior vice presidents, Russ Drebin and Steve Halpert , who are all based in the Company’s Iselin, NJ office. Oakwood Village is a 1,224- unit garden-style multifamily
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$248,000,000
1180 AveNue OF The AmericAs New YOrk, New YOrk A 400,000 square foot office building
The undersigned arranged the above financing.
David horowitz richard T. horowitz
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MAREJ A dvertising D irectory Appraisal Institute: Metro NJ................................ 17A Appraisal Institute: Northeast NJ . ....................... 16A Appraisal Institute: Southern NJ...................... 18-19A ARD Appraisal Co.. ................................................. 11A Barry Isett & Associates......................................... 13C Bussel Realty Corp.....................................................1B CIRC Delaware........................................................ 24A Concannon Miller.................................................... 13C Cooper Horowitz.........................................................1A Corfac International.............................................. BC-A Cozen O’Connor..........................................................8C CREW Lehigh Valley. ........................................ 12-13C CREW NJ................................................................. 13B Cushman & Wakefield. ........................................... 12B Deerwood Real Estate Capital...................................6A DesignPoint.............................................................. 13C Dietrick Group............................................................8A Earth Engineering................................................... 10C Environmental Systems.......................................... 27A Fortuna & DiFlumeri.................................................7A Fowler Companies................................................... 27A Gebroe-Hammer Associates................................... IC-B Griffin Industrial Realty | CBRE..............................7C Harvey, Hanna & Associates.................................. 23A HFF.............................................................................2C Hillcrest Paving & Excavating............................... 27A Hinerfeld............................................................27A, 1C Houlihan-Parnes Realtors. ........................................3B Hutchinson Mechanical Services...............................8B Investors Real Estate Agency................................. 27A Kaplin Stewart. ..........................................................3A Marcus & Millichap...........................................3A, 14C Mericle Commercial. ............................................. BC-C Meridian Capital Group.......................................IBC-B Moonstone Environmental...................................... 13C NAI Summit............................................................. 27A NAI Summit................................................................4C National Realty & Development Corp.......................6B NJ Realty Advisory Group...................................... 10A NJAA....................................................................... IC-A PennCap Properties. ......................................27A, IC-C Pfister Roofing. ........................................................ 14B Poskanzer Skott Architects........................................6B Provident Bank........................................................ 15A Red Marketing Communications...............................4B Redwood Realty Advisors...........................................5B Regal Bank............................................................... 14A Reis Valuations Limited.......................................... 13A Rittenhouse Appraisals..............................................9A Rittenhouse Realty Advisors. ....................................6C ROCK Commercial Real Estate.................................4A RT Environmental......................................................5C SEBCO Laundry Systems..........................................5B Skladany Valuation................................................. 12A Sorce Companies. .................................................... 15B Subway..................................................................... 27A The Berger Organization. ..................................... BC-B The Kislak Co.. ...........................................................4B Tranzon Auction.........................................................3A Urban Land Institute.............................................. 16C Warner Real Estate & Auction.......................11B, 16B WBG Commercial Lending..................................... 27A WCRE..........................................................................9B Whitesell.................................................................. 10B
Mid Atlantic R eal E state J ournal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Associate Publisher ................................................................ Steve Kelley Associate Publisher .............................................................Alissa Aronson Associate Publisher ..........................................................Barbara Holyoke Associate Publisher ..............................................................Eric Ballenger Senior Editor/Graphic Artist .................................................Karen Vachon Production Assistant/Graphic Artist ...........................................Julie King Office Manager .................................................................... Joanne Gavaza Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, 312 Market St. Rockland, MA 02370 USPS #22-358 | Vol. 28 Issue 7 Subscription rates: $99 - one year, $148 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
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Transwestern report underscores value of Gen X in workplace Matthew Dolly
T ranswestern released a report that explores the generational pref- erences of office employees and highlights the unique perspective provided by those classified as Generation X. The research and commen- tary, titled “The Gen X Factor: Stuck in the Middle or Best of Both Worlds? ” compares the responses of 273 Transwest- ern team members classified as Baby Boomers (born 1946 – 1964), Gen Xers (born 1965 – 1980) and Millennials (born 1980 – 1998). In nearly all cases, the re- sponses of Gen Xers fall some- where between Baby Boomers and Millennials, highlighting the unique blend of views this generation possesses – a mix of seasoned experience and savvy thinking that was the fortuitous byproduct of being sandwiched between two large generations. “Although Millennials are now the largest segment of the U.S. labor force, companies that value workforce diversity benefit from a broader range of ideas and experiences,” said New Jersey research director Matthew Dolly . “At the same time, while it is easy to create divisions between age groups, we found that there are just as many commonalities as dif- ferences between these three “Market-rate rents continue to climb and aren’t expected to decline anytime in the near future.” Throughout the densely- populated counties of Hudson and Union, Gebroe-Hammer exclusively represented the sellers and/or identified the buyers in 14 separate deals accounting for a total of 652 units. The properties were located in Rahway, New Provi- dence, Jersey City, Bayonne, Elizabeth, Union City and West New York. In Central and Southern New Jersey – where there is a lower concentration of multi- family properties as compared to Hudson and Union County – the firm’s brokerage profes- sionals arranged three sales in Middlesex County’s Wood- bridge, Plainsboro and Pis- continued from FC-A
office space. • The preference for down- town living more than tripled between Baby Boomers and Millennials, at 19% and 64%, respectively. • The importance of social media to professional life is inversely related to age: only 4 percent of Baby Boomers feel that social media is very im- portant, compared to 7% of Gen Xers and 20% of Millennials. • Of the Generation X re- spondents, 56% reported that they identify more strongly with Baby Boomers, and 44% reported that they identify more strongly with Millennials. This gives Gen Xers, as a whole, a broad perspective of the wants and needs of today’s workforce. “Because of their age and experience, Gen Xers are often a natural fit for leadership positions,” Dolly said. “This group is equipped to bring proven skills and thoughtful creativity that enables all generations to make valuable contributions and positions the organization to excel.” n Star Power Broker. The 11- time honor was for Top Sales Firm – a category in which Gebroe-Hammer has been rec- ognized since the award was established in 2005. In addi- tion, Brecher and executive vice president Greg Pine , who were involved in each of the recent Bergen County trades, were named among the Top Sales Brokers for 2015. Based in Livingston, NJ, Gebroe-Hammer is one of the most active multi-family in- vestment sales brokerage firms in the New Jersey/Philadel- phia/New York State region. Its brokerage activities concen- trate on suburban and urban high-rise and garden-apart- ment properties throughout the Northeast and nationally. Gebroe-Hammer also markets mixed-use and free-standing office and retail properties. n
influential generations.” Some of the survey’s findings include the following: • Flexibility is highly valued by all generations, with only 11 percent of total respondents favoring mandatory “9 to 5” hours in the workplace. Across all groups, flex hours – charac- terized by an alternative, yet defined schedule – is preferred over no set hours, with Gen- eration X voicing the strongest preference for this type of flex- ibility. • All generations agree that there is a high correlation be- tween work environment and productivity. When it comes to the amenities that contribute to a comfortable environment, pri- vacy and abundant light ranked No. 1 and No. 2, respectively, for every group of respondents. • Open offices, or “hoteling,” was viewed most favorably by Millennials, while private of- fices received the most votes from Baby Boomers. However, in total and by generation, respondents overwhelmingly prefer a mix of private and open cataway. These encompassed 1,488 units, while in the Jersey Shore submarket’s municipali- ties of Brick, Asbury Park and Long Branch, 577 units traded. “Multi-family properties that run the full spectrum in terms of condition, amenities and upgrades are performing and trading at levels well above what was once the historical norm,” added managing direc- tor Joseph Brecher . “While rising interest rates – com- mercial real estate’s nemesis – could eventually impact debt costs in the distant future, the Fed has toned down its earlier predictions about the frequen- cy of its increases, which bodes well for investor appetite that is already at peak levels.” Last year, Gebroe-Hammer recorded a 178% increase in year-over-year sales and has once again been named a Co-
Gebroe-Hammer ends Q1 2016 with 30 multi-family sales. . .
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M id A tlantic R eal E state J ournal Mack-Cali represents owner, JLL represents tenant Keystone Property Group signs 14,316 s/f NY HQ lease
Leading the Real Estate Investment Market Contact us today to access the largest inventory of properties.
E LMSFORD, NY — Keystone Property Group , a leading real estate developer, manager, and investor of mixed-use properties, announced a long- term 14,316 s/f lease with the Westchester Library System at 570 Taxter Rd. in Elmsford, NY. The lease comprises the property’s entire fourth floor and a portion of the first floor. 570 Taxter is a six-story of- fice building located near the intersection of Routes 87 and 287 in Elmsford, a suburb of White Plains. The full-glass building features a continu- ous window line, bringing significant sunlight to interior spaces. The well-appointed property contains an elegant lobby with granite flooring, mahogany doors and a cafe. “This building offers the ideal balance of amenities and technological infrastruc- ture that makes it an idyl- lic headquarters location for corporations and non-profits, alike,” said Thomas Sklow , Keystone’s vice president of development and leasing. “Located just minutes from the Tappan Zee Bridge and in proximity to the Metro-North White Plains station, 570 Tax-
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570 Taxter Rd.
ter offers an easy commute to workers residing in New York City, Connecticut and other areas in and aroundWestches- ter. We’re confident that the property will provide library staff with an ideal work en- vironment that will support the success of the system’s 38 libraries.” “We are very excited to be moving our offices to 570 Tax- ter Road,” said Terry Kirch- ner, executive director of the Westchester Library System. “The new space will provide us with the opportunity to ex- pand our services to the com- munity and to add programs to
support our member libraries.” 570 Taxter’s central loca- tion provides access to a wide range of restaurants, hotels, retail shops and business services establishments. It is also located less than 20 min- utes away from Westchester County Airport. Ownership was represented by Mack-Cali vice president of leasing Carol McGuire and senior vice president of leasing Jeff Warner . The Westches- ter Library Center was rep- resented by the Jones Lang LaSalle team of managing director Chris O’Callaghan and associate Mark Jacobs . n
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M id A tlantic R eal E state J ournal CRESCO Real Estate, member of Cushman & Wakefield Alliance, represents seller Joel Gorjian of NY-based Namdar Realty Group acquires 6,600 s/f single-tenant retail property G REAT NECK, NY — Joel Gorjian , vice president of acquisitions
numerous popular art, com- munity, culinary, and busi- ness initiatives and programs. However, it lacks sufficient retail facilities to serve the local residents, which made the property an appealing ac- quisition target. In addition,
the tenant renewed the lease only six months prior to the transaction taking place. The all-cash deal was negotiated off-market and we are plan- ning to retain and operate the property long-term,” said Gorjian. n
& dispositions at Namdar Re- alty Group , has completed the acquisition of the 5900 St. Claire Ave. retail property in the St. Clair-Superior section of Cleveland, OH. A Key Bank branch currently occupies the 6,600 s/f, one-story, single- tenant retail building. Namdar is a national commercial real estate investment and man- agement firm headquartered in Great Neck, NY. The seller was a private investment fund represented by CRESCOReal Estate , a member of the Cush-
ROCK announces lease transactions
5900 St. Claire Avenue
situated within an up-and-com- ing, 7,000-resident St. Clair- Superior section of Cleveland. The neighborhood is home to
man & Wakefield Alliance. “The Key Bank branch build- ing, one of the most attractive retail properties in the area, is
YORK, PA — ROCKCom- mercial Real Estate recent- ly completed 6 lease transac- tions totaling 303,575 s/f. SALES • 860 Gitts Run Road As- sociates, LP purchased a 192,360 s/f industrial facility located at 860 Gitts Run Rd., Penn Township, York Coun- ty, PA. ROCK represented the seller in the transaction. • s.e. hagarmanDESIGNS, LLC purchased a 2,100 s/f former house of worship lo- cated at 1001 East Walnut St. in Hanover Borough, York County. ROCK rep- resented the seller in the transaction. • Tolna Road, LLC pur- chased a 45,300 s/f industrial facility located at 921 Tolna Rd. in Shrewsbury Town- ship, York County. ROCK represented the seller and the buyer in the transaction. LEASES • LZKManufacturing, LLC leased 6,295 s/f of industrial space at 26-28 Onion Blvd. in Shrewsbury Borough, York County. ROCK represented the landlord and the tenant in the transaction. • Bridget Feldman & Pat- rick Reachard leased a 2,520 s/f retail space at 2 Baltimore St., Jefferson Borough, York County. ROCK represented the landlord and the tenant in the transaction. • Southern States Coop- erative leased 55,000 s/f of industrial space at 860 Gitts Run Rd., Penn Township, York County. ROCK repre- sented the landlord and the tenant in the transaction. n 860 Gitts Run Rd, Hanover, PA
F inancial D igest F eaturing A ppraisal
Real Estate Journal — April 15 - 28, 2016 — 5A
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Including a $55.9 million Fannie Mae loan for a NY student housing complex Walker & Dunlop originates $617m of student housing loans in 2015
ETHESDA, MD — Walker & Dunlop, Inc. announced that it originated $617 million in loans backed by student hous- ing properties in 2015. With a growing percent- age of high school graduates choosing to pursue higher education, steady growth in college enrollment over the next several years is expected in the United States, which will drive the demand for student housing across the country. This expectation of increased demand combined with strong occupancy trends make student housing an at- tractive option for borrowers looking to deploy capital in the commercial real estate space. As a sub-sector of multifam- ily housing, student housing B ALEXANDRIA, VA — MAC Realty Advisors, LLC (MAC) , on behalf of Foulger- Pratt, has placed a $40 million joint venture equity invest- ment from a US-based private equity real estate fund and a $93.5 million construction loan from a national lender for the development of The Thornton, a new 439-unit apartment community in Al- exandria, VA. The transaction closed in February 2016. Located on South Wash- ington St., The Thornton is ideally situated in Old Town Alexandria near thousands of jobs and transit, and is surrounded by some of the best recreation resources in the region. The design of The Thornton will take advantage of this unique setting with one foot in nature and the other in Old Town. There will be a boardwalk that encircles the property, reinforcing the natural surroundings of the site, a pool overlooking the Cameron Run, an on-site kayak storage for residents, and residents will enjoy access to the adjacent Mount Vernon Trail, an 18-mile paved trail popular with cyclists, run- ners, and walkers.
financing requires specialized knowledge of the evolving market trends facing owners and operators of these proper- ties that cater to college-age residents with very specific demands. Walker & Dunlop’s presi- dent, Howard Smith said, “Walker &Dunlop has decades of experience financing stu- dent housing properties and in-depth knowledge of student housing markets throughout the country. This market is ever-changing to meet the increasing demand for off- campus student housing and it’s vital that borrowers are aware of the current trends in this sector. Walker & Dun- lop’s experienced originators understand the unique financ- ing requirements and options
available to borrowers in the student housing space, which allows our team to structure optimal financing to meet the needs of our borrowers.” Recent student housing fi- nancings byWalker &Dunlop: Collegetown Terrace Ithaca, New York •$55.9 million Fannie Mae loan for a student housing complex in close proximity to Cornell University •The borrower was able to complete development of the property using a one- year bridge loan provided by Walker & Dunlop’s Interim Loan Program •Walker & Dunlop subse- quently arranged permanent financing for the property in the form of a ten-year, fixed rate Fannie Mae loan
property features amenities like a bocce ball court, dog park, coffee shop, sports bar, and arcade that make the community very attractive to students in the area South Campus Apartments Madison, Wisconsin •$7.5 million, 6-year loan for a student housing apartment community located near the University of Wisconsin •Walker & Dunlop used its access to a wide variety of capital sources to obtain the optimal financing terms for the borrower through life insurance company, PPM Fi- nancial, which also financed the student housing property that is adjacent to South Cam- pus Apartments and owned by the same sponsor. n
Domain at Tempe Tempe, Arizona
•$48.8 million Fannie Mae acquisition loan for a dedicat- ed student housing property serving students at Arizona State University, the larg- est university in the United States •Student housing occupancy in the Tempe, Arizona sub- market averaged 98.3% at the time the loan was underwrit- ten, demonstrating the strong demand for student housing in this area Tetro Student Village San Antonio, Texas •$24.0 million Freddie Mac acquisition loan for a student housing development located 0.5 miles from the University of Texas at San Antonio •This newly-constructed
MAC places development financing for $137m Alexandria Apartments
Mission Capital arranges $16.5 million in bridge financing
Valley Square
The Thornton
the property and substantially leased many of the upgraded buildings. “Because Valley Square was acquired at such a low basis, the property has a competi- tive advantage, as it provides a value alternative for office tenants looking for space in the submarket,” Buchwald said. “The sponsor has successfully repositioned the property, re- sulting in great leasing veloc- ity and momentum.” Originally constructed in 1983, Valley Square is located in the heart of Pennsylvania’s Montgomery County, approxi- mately 20 minutes northwest of Philadelphia. The property provides easy access to the Pennsylvania Turnpike and other major thoroughfares. n
BLUE BELL, PA — Mis- sion Capital Advisors , a national real estate capital advisory firm, announced that its Debt & Equity Finance team arranged a $16.5 million bridge loan for Valley Square, a five-building, 289,194 s/f office complex located at 512 Town- ship Line Rd. in Blue Bell, PA. The Mission Capital team of Steven Buchwald and Lexington Henn arranged the loan on behalf of Contrar- ian Capital Management , a Connecticut-based investment firm (“Contrarian”). After acquiring the complex in 2013 for only $8.5 million, Contrarian and operating part- ner Corvest Realty Group implemented millions of dol- lars of capital improvements at
The Thornton will also fea- ture community amenities including concierge services, top of the line fitness center with yoga studio, business center, bicycle storage and repair center, kayak storage, library, resident clubroom, and pet washing facilities. “We are very excited to be under construction on the Thornton. We’ve had our eye on Alexandria for quite some time and are thrilled to now have a foothold in Historic Old Town. We feel that we have a wonderful location, with scenic views of the river and a short walk to all the amenities of old town. We are looking forward to delivering luxury apartments in the spring of 2018,” said Bryan Foulger ,
Vice president of development at Foulger-Pratt Compa- nies . “The opportunity to develop a high quality apartment community in one of the most sought-after submarkets with a leading experienced partner attracted multiple investors and lenders,” said Andrew McAllister , executive direc- tor at MAC. “The strong fun- damentals of the Alexandria market and limited availabil- ity of large scale sites make this transaction especially compelling,” added Bruce Levin , executive director at MAC. Bruce Levin, AndrewMcAl- lister, Warren Dahlstrom , and Caren Garfield led the placement effort for MAC. n
6A — April 15 - 28, 2016 — Financial Digest — M id A tlantic
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F inancial D igest
.S. Realty Capital has just returned from the Mortgage Bank- U.S. Realty Capital meets face-to-face with lenders at MBA annual conference Commercial Mortgage Update: Interest Rates, Oil and China U Seller Servicers.
the Fed Funds Rate. If there is a temporary inter- ruption in rising interest rates, it may be a good time to lock-in long-term, fixed-rate financing. Even if there is a year or two left on current fixed-rate financ- ing, it may be advantageous to pay a prepayment penalty or pay defeasance in order to obtain new long-term financ- ing at current interest rates. In addition, USRC has over 10 lenders that offer forward rate locks; the forward rate locks are typically 3-6 months but 12 months is available from certain lenders. This is a stra- tegic way to lock-in before rates
move up. The general consensus among lenders is that the first half of 2016 will be active but they are expecting a slowdown in the 3rd quarter as capital tightens due to the implementation of Regu- lation AB and new Risk Reten- tion rules that were passed as part of Dodd-Frank. There is uncertainty with lenders on how they will price to reflect these changes with some saying they may sit out the market for a period of time and see how pricing is impacted by these new regulations. Given some of the unknowns, CMBS spreads have widened
by about 30 basis points. In ad- dition, lenders are pricing over the higher of Swap Spreads or Treasury Yields. The B-Piece buyers for CMBS securitiza- tions are less active than there were six months ago, are being more selective and are demand- ing increased yields. Some smaller CMBS lenders without strong financial backing are freezing their programs tempo- rarily and some have shut down their programs altogether. It appears that 2016 will bring additional consolidation in the CMBS market. Common themes in the capi- tal markets right now are: •Capital remains available and lenders are actively review- ing, quoting and closing deals. •Small balance CMBS ($2mil- lion to $5 million) is available. •CMBS loan maturities in 2016 and 2017 will total over $240 billion and will need to be refinanced; it is estimated that a significant percentage of these loans are impaired. •Forward rate locks are available at varying terms and pricing. •HUD Lenders are quoting and closing long-term, fixed- rate, fully amortizing loans for multifamily, assisted living and skilled nursing. •USRC has access to a small- balance permanent loan pro- gram for multifamily that is more attractive than typical bank financing; non-recourse, fixed rate, 10-year term, 30- year amortization, step-down prepayment and up to 80% loan to value. •Life insurance companies and larger pension funds are active at 60-70% loan to value; many allowmezzanine debt be- hind their first position. There is a strong push for multifam- ily and industrial floating rate bridge loans – including single tenant industrial. Given the volatility in the CMBS market, many expect life companies to be out of money but mid-year making the possibility of a year-end credit crunch more likely. •Non-recourse construction loans at 90% of cost are now available. •There is robust lending activity in non-core, secondary and tertiary markets. •Regulation AB and changes in Risk Retention in the 4th Quarter of 2016 are expected to increase uncertainty with possible tightening of liquidity and increased pricing in the capital markets. n
The general economy, the volatile stock market and the outlook for additional interest rate increases by the Federal Reserve are considerations that are reflected in pricing. In the 4th Quarter of 2015, the Federal Reserve increased the Fed Funds Rate for the first time since 2008. Although the increase was merely 25 basis points, the action created the expectation for further increas- es in 2016. On the flip side, the economic slowdown in China, plummeting oil prices and the resulting global stock volatility may delay further increases in
ers Association (MBA) an- nual conference on commercial real estate financing in Orlan- do. The Conference provided an excellent opportunity for USRC to meet face-to-face with lend- ers from various parts of the country and to receive updates on their programs and pricing firsthand. Lenders ranged from Wall Street to Main Street, including included life insur- ance companies, CMBS lend- ers, specialty funds, pension funds, HUD Lenders, Fannie DUS Lenders and Freddie Mac
Real Estate Journal — Financial Digest — April 15 - 28, 2016 — 7A
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U.S. Bank provides a $69 million construction loan HFF arranges equity & debt for Woodfield Dulles Station
For the refinancing of a BB&T bank branch Eastern Union Funding arranges $4 million loan
H
ERNDON, VA — Holliday Fenoglio Fowler, L.P. (HFF)
announced that it has ar- ranged joint venture equity and construction financing for the development of Woodfield Dulles Station, a 400-unit, class Amulti-housing property adjacent to the future Innova- tion Center Metro station in Herndon, VA. HFF worked on behalf of the developer, Woodfield Investments , to arrange joint venture equity from an undisclosed capital partner. U.S. Bank provided a $69 mil- lion construction loan. Woodfield Dulles Station is part of Dulles Station, a 63-acre, mixed-use, master planned community provid- ing a walkable live-work-play lifestyle. Due for completion in 2017, the five-story, NBGS Silver-certified, eco-conscious property will have studio, one- and two-bedroom units averaging 850 square feet each. Community amenities will include a resort-style swimming pool; gourmet out- door kitchen spaces; rooftop multi-amenity deck; profes- sional-grade fitness center; The Henley Group handles $10MM B Note for SC owner MID ATLANTIC — The Henley Group assisted an owner of a 160,000 s/f grocery- anchored shopping center with a 57% vacancy. Given the grocer’s space accounted for approximately 60,000 s/f, the in-line retail vacancy rate of approximately 75% was an economic drag on the property. Due to the sustained anemic retail market conditions along with new competitors gaining traction, re-leasing the store- fronts proved difficult. Ad- ditionally, a major employer had closed down operations in 2011, negatively impacting consumer demand. The value of the property had dropped significantly since the CMBS loan was securitized in 2007. Without Lender relief the sponsor was not incentivized to make in- vestments needed to re-lease the property and the property would likely have gone back to the lender at a distressed valuation. Owners with complex CMBS issues have been clients of The Henley Group for eight years. n
BB&T bank branch in Hyattsville, MD
bank branch in Hyattsville, MD, located at 3400 East- West Highway. Placed with a local bank, the limited non-recourse loan features a 10-year fixed rate of 4 percent and 30-year amortization schedule. n
HYATTSVILLE, MD — Eastern Union Funding senior managing director Marc Tropp and direc- tor Shai Romirowsky ar- ranged a $4 million loan for the refinancing of a single- tenant, net-leased BB&T
state-of-the-art conference space; computer lounge; coffee bar; and direct-access, secured parking garage.
The HFF multi-housing team representing the devel- oper was led by Walter Coker and Brian Crivella . n
Fortuna & DiFlumeri is a full service Commercial, Industrial and Residential Real Estate Appraisal firm located in Center City Philadelphia and serving Pennsylvania, New Jersey and Delaware Our Services Include: Narrative and Form reporting, Consulting, and Expert Witness Testi- mony for the Public, Private and Municipal sectors
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The leader in real estate appraisal education About the Appraisal Institute
T
state and local laws. Individu- als of the Appraisal Institute benefit from an array of profes- sional education and advocacy programs, and may hold the prestigious MAI, SRPA, SRA, AI-GRS and AI-RRS designa- tions. Learn more at www. appraisalinstitute.org. OUR MISSION Our mission is to advance professionalism and ethics, global standards, methodolo- gies, and practices through the professional development of property economics worldwide. OUR PROFESSIONALS The majority of Appraisal Institute professionals are
and SRPA designations are experienced in commercial valuation, including indus- trial, retail and multifam- ily properties. Those holding the SRA designation are experienced in residential valuation. All Appraisal In- stitute professionals adhere to a strictly enforced Code of Professional Ethics and Standards of Professional Appraisal Practice. WHAT WE OFFER • The leader in real estate appraisal education The Appraisal Institute is the acknowledged worldwide leader in residential and com-
practicing real estate apprais- ers and property analysts who provide valuation-related services to such clients as mortgage lenders, financial institutions, government agencies, attorneys and fi- nancial planners as well as homeowners and other indi- vidual consumers. Appraisal Institute des- ignated members have met rigorous requirements relat- ing to education, testing, ex- perience and demonstration of knowledge, understanding and ability. Those individuals holding the Appraisal Institute’s MAI
mercial real estate appraisal education. Its extensive cur- riculum of courses and spe- cialty seminars provides a well-rounded education in valuation methodology for both the novice and seasoned practitioner. • Real estate appraisal literature As the world’s largest pub- lisher of real estate appraisal literature, the Appraisal In- stitute offers a wide range of books and other materials on subjects ranging from basic valuation theory and techniques to advanced ap- plications. It also publishes two quarterly periodicals, The Appraisal Journal and Valuation magazine. • AI Benefits Appraisal Institute pro- fessionals have access to a variety of benefits, including insurance programs, data re- sources and tools, and related business materials. The Ap- praisal Institute also houses the Lum Library, which pro- vides support for the research needs of AI professionals as well as the profession at large. • Advocacy The Appraisal Institute is active in advocacy efforts on behalf of its professionals and the industry at large. Primar- ily through its office in Wash- ington, DC, the organization communicates regularly with legislators and regulators to encourage the adoption of appraisal policies that best serve the public interest. n a section of the MARE Journal P.O. Box 26, Accord, MA 02018 781-871-5298 • 800-584-1062 fax 781-871-5299 www.marejournal.com Section Publishers Barbara Holyoke bholyoke@marejournal.com Steve Kelley skelley@marejournal.com Section Editor Julie King jking@marejournal.com Financial Digest
he Appraisal Insti- tute is a global pro- fessional association
of real estate appraisers, with nearly 22,000 professionals in almost 60 countries through- out the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional de- velopment of property econom- ics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and con- ducts its activities in accor- dance with applicable federal,
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By Carlo Batts, MAI, Rittenhouse Appraisals Use the best tools for superior results
ver the past decade, the use of geographic information systems (GIS) in com- mercial real es tat e has g r o w n b y l e a p s a n d bounds. To- day, retail- ers, can use GIS to de- cide where to open new stores by analyz- O Carlo Batts Molinari honored as ‘Volunteer of Distinction’ CHICAGO, IL — Edward Molinari, SRA , of Sewell, NJ, was recognized as the Appraisal Institute ’s April “Volunteer of Distinction” for Region VI. The Appraisal Institute is the nation’s largest profes- sional association of real estate appraisers; Region VI con- sists of Delaware, Maryland, New Jersey, Pennsylvania and Washington, DC. Molinari is a member of the Southern New Jersey Chapter. “Ed Molinari is an outstand- ing example of the high stan- dards held by Appraisal In- stitute professionals,” said Appraisal Institute president Scott Robinson, MAI, SRA, AI-GRS . “We feel fortunate to have volunteers like Ed, who are willing to devote their time and talent to helping their com- munities and advancing the valuation profession.” Since 2015, Molinari has served the Southern New Jer- sey Chapter as president, a position he also held in 2002. From 2009-14, he served as alternate regional represen- tative. Molinari was chapter secretary and chair of the Candidate Guidance Commit- tee in 2014; vice president and chair of the Public Relations Committee in 2001; second vice president in 2000; chair of the Education Committee from 1999-2000; and treasurer and chair of the Finance Committee in 1999. He also has served on the national Education Com- mittee since 2015 and from 2007-08, Nominating Commit- tee in 2009, Regional Educa- tional Liaisons Subcommittee in 2004 and Continuing Edu- cation Committee from 2003- 04. He joined a predecessor organization of the Appraisal Institute in 1988, and received his SRA designation in 1991. n
helps businesses clarify data through the lens of a map, so they canmake better business decisions. Rittenhouse Appraisals uses Esri products to analyze real estate trends and activ- ity. They also use it with a mix of demographic data to project market changes and provide a map-based fundamental demand analysis. Rittenhouse Appraisals is based in Center City Phila- delphia and services the en- tire Mid-Atlantic Region. In addition to providing ap- praisal services, Rittenhouse also provides consulting, site
ing traffic patterns, income, and demographic data over combined maps. Another ex- ample of the use of GIS is by pharmacies to complete their site selection process, using the GIS mapping platform to analyze sales trends. It has even allowed some of them to develop a flu index. Rittenhouse Appraisals uses GIS systems to help clients better understand the competitive market and opportunities of capitaliza- tion by providing geographic analysis of demographic data, intermixed with local real estate and municipal data.
Other services provided to market participants by Rit- tenhouse Appraisals using GIS data includes helping the client understand the strengths and weaknesses of a location. That is done by ar- raying data that is pertinent to the ownership and tenants. GIS systems allows users to make the most of a location and mix data from a plethora of sources – and lay it all out on a map. The Esri (Environmental Systems Research Institute) platform accommodates solu- tions to see where data is and how everything connects. It
analysis, site visits and draw inspections. The staff at Rittenhouse Ap- praisals includes individuals who have attained the high- est designation available in the commercial real estate industry. They provide a custom analysis for proper- ties that include an in-depth examination of factors that are pertinent to its value and performance. Carlo L. Batts, MAI, is principal/chief appraiser at Rittenhouse Apprais- als. He can be reached at 267.314.8635 or c.batts@ rhappraisals.com. n
Serving the Philadelphia Metropolitain Area
COMMERCIAL INDUSTRIAL MULTIFAMILY RETAIL
APPRAISALS MARKET STUDIES CASH FLOW ANALYSIS TAX APPEAL LITIGATION
www.rhappraisals.com
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OODBURY, NJ — Edward T. Mo- linari, SRA was President of Molinari & Associates and the SNJ Chapter of the Appraisal Institute Ed Molinari, local appraiser, invited to teach appraisal courses in Saudi Arabia W
recently invited by the gov- ernment of Saudi Arabia, in agreement with the Ap- praisal Institute , to teach appraisal licensing courses in Saudi Arabia. Molinari taught Basic Appraisal Procedures in three cities: Riyadh, Jeddah, and AlHasa over a period of three weeks. The Saudi gov- ernment is in the process of li- censing real estate appraisers and has an agreement with the Appraisal institute to provide the education and approved instructors for the Saudi ap-
praisers. Mr. Molinari is an approved instructor for the Appraisal Institute and one of only a few who have taught outside the United States. “Teaching this course in Sau- di Arabia was a truly unique yet rewarding experience for me. It was physically and mentally demanding to teach 5 days straight, then fly to the next city, and start over for an- other class.” saidMolinari “But the government staff and all of the students were very appre- ciative and especially friendly. I taught the course in English and they had a translator who simultaneously translated what I said into Arabic.” Molinari is president of Molinari & Associates, P.C. located in Woodbury, NJ. He has been an instructor for the Appraisal Institute since 2004, teaching various licens- ing and continuing education courses on-line and in the classroom. He has also as- sisted with the development and review of courses for the Appraisal Institute and has been a guest speaker for law firms, assessing groups, and other organizations. He has appeared as an expert witness and testified before several courts, condemnation hear- ings, tax boards, and zoning boards. He has extensive expe- rience in land valuation, ease- ment valuation and litigation support. Molinari has been an appraiser since 1986 providing real estate appraisals and con- sulting for all property types in southern New Jersey. He is a graduate of Rowan University with a degree in Economics and resides with his wife in Mantua Township. He is also currently the president of the Southern NJ Chapter of the Appraisal Institute, serving over 180 people in the state. n
New Jersey Realty Advisory Group, LLC Commercial Valuation and Litigation Support
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