- DC
Cruz, O’Hearn, Simonelli, Oliver and Duval represent the seller HFF closes $54 million sale of high-rise apartments in Franklin Township, NJ
ISSUE HIGHLIGHTS Volume 28 Issue 19 October 14 - 27, 2016 Insurance/Title 8-9A Southern NJ 5-13B Southeastern PA 5-15C 6 things corporate tenants need to know about the new lease accounting rules
F RANKLIN, NJ – Hol- liday Fenoglio Fowler, LP (HFF) announced that it has closed the $54 mil- lion sale of The Harrison, a 316-unit, 20-story apartment property in Franklin Twp. HFF marketed the property on behalf of the seller. The Harrison is situated at 575 Easton Ave. less than one mile from Rutgers University and downtown New Bruns- wick. Originally built by the seller in 1974 and most re- cently renovated in 2015, the 11.4-acre property offers views of the Raritan River, Rutgers Stadium and downtown New Brunswick, and is accessible to major highways, including Interstates 95 and 287 and Routes 18 and 1. The Har- rison has 38 studio, 178 one- bedroom and 100 two-bedroom units. Various unit renova- tions have occurred through- out the past eight years, with the buyer planning to continue further upgrades. The proper- ty’s amenity package includes a newly-renovated clubhouse, outdoor pool, parking garage, playground, dog park, fitness center and 2-in-1 basketball/
By Debra Stracke Anderson, CCIM, SIOR, Sloan Street Advisors/ ITRA Global
10A
The Harrison
For speaking and sponsorship information, please contact: Linda Christman at 781-871-3456 or lchristman@marejournal.com Philadelphia Industrial & Development RE Summit Contractors Summit November 10, 2016 New Jersey Real Estate Capital Markets Summit November 11, 2016 UPCOMING CONFERENCES October 24, 2016 Philadelphia Construction &
tennis court. The 95%-leased property also features 24/7 concierge service. The HFF investment sales team representing the seller was led by senior managing director Jose Cruz , manag-
through unit renovations,” said O’Hearn. “The seller built a great asset, which is now going to be further upgraded to compete with some of the new supply in downtown New Brunswick.” n
ing director Kevin O’Hearn , directors Stephen Simonelli and Michael Oliver and as- sociate director Marc Duval. “This transaction reflects the strong demand for qual- ity buildings with upside
LCDC names Nason Construction general contractor fornext phase of LighthouseCove
general contractor for the next phase of development at the Lighthouse Cove resort i n D e w e y Beach. The next phase of construction will include 27 additional luxury con- d o m i n i um units, includ- ing expanded parking, rooftop pool and plaza. Nason Construction special- izes in preconstruction servic- es, construction management, design-build, general contract- ing and sustainable practices. “We are excited and proud to be working with such a quality company like Nason Construc- tion,” said E. Thomas Harvey, III , president, LCDC. “Their Thomas Harvey
vision and commitment to quality, integrity and customer service is consistent with our own business principles. This collaboration will continue our delivery of a quality product for Dewey Beach and the regional tourism industry.” “We are excited and hum- bled to be a part of this trans- formational project in this great beach town. The mixed use construction segment is booming across the country, and we are honored to be involved in this trend”, said Thomas Nason, II , C.E.O./ president, Nason Construc- tion, Inc. “As Delawareans, we want the best for our home state, but we also want to pro- vide the best to those coming from other states that make Dewey the vacation and lei- sure destination that it is. The
expanded and improved Resi- dences at Lighthouse Cove will attract a wide range of people to this already bustling community and provide them with a breathtaking condo- minium with luxurious ame- nities, surrounded by quality retail and great restaurants that will make them proud to have their second home here.” Project financing will be provided by M&T Bank . “The Lighthouse Cove project is an exciting development in Dewey Beach that will trans- form part of the waterfront along Rehoboth Bay,” said AllisonKerwin , M&T Bank’s manager of Commercial Real Estate in Delaware. “As a community-focused bank, we are pleased to support devel- opment like this that provides quality residential options.” n
DEWEY BEACH, DE — Lighthouse Cove Develop- ment Company (LCDC) announced that Nason Con- struction will serve as the
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Financial Digest................................................5-13A New Jersey................................................. Section B Pennsylvania.............................................. Section C
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Captains of Industrial. NAI Mertz has been an industry leader in industrial and commercial real estate on both sides of the Delaware River and beyond for over 35 years. Contact our team of specialists today to find out how we can help you achieve your strategic commercial real estate goals.
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HFF New Jersey Closes the Largest Office Deal in 2016
hfflp.com
Novo Nordisk’s North American headquarters | Property Sale | 761,824 SF Class A office campus | Princeton, NJ | Closed August 2016
HFF NEW JERSEY 200 Campus Drive, Suite 410 Florham Park, NJ 07932 (973) 549-2000
Jose Cruz Senior Managing Director (973) 549-2011
Andrew Scandalios Senior Managing Director (212) 632-1821
Kevin O’Hearn Managing Director (973) 549-2018
Grace Braverman Director Real Estate Analyst (973) 549-2004
©2016 Holliday Fenoglio Fowler, L.P. (“HFF”) and HFF Securities L.P. (“HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 23 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF. Holliday Fenoglio Fowler, L.P. a New Jersey licensed real estate broker.
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MAREJ A dvertising D irectory 1031 Crowdfunding............................................ 7A Barley Snyder..................................................... 2C Barry Isett & Associates.................................. 14C Bussel Realty Corp............................................. 1B Capstan............................................................. 17C CIRC DE. .......................................................... 14A Cocannon Miller. .............................................. 14C Commercial Mortgage Capital........................... 6A Cooper-Horowitz............................................... 13A CREW NJ.......................................................... 20B CRT NJ. ................................................... 21A, 17B Cushman & Wakefield. ...................................IC-B Deerwood Real Estate Capital........................... 4A E.B. Cohen.......................................................... 8A Earth Engineering.............................................. 2C Environmental Systems................................... 21A Fowler Companies............................................ 21A GBCA. ............................................................... 10C Gebroe-Hammer Associates............................... 4B Griffin Industrial Realty.................................... 8C Hartz Mountain Industries................................ 3A Heller Industrial Parks...................................... 6B HFF NJ............................................................... 1A Hillcrest Paving & Excavating........................ 21A Hinerfeld Commercial............................... 21A, 1C Hutchinson Mechanical...................................... 8B Investors Real Estate Agency.......................... 21A Kaplin Stewart. .................................................. 9A Kearny Bank....................................................... 3B Landmark Commercial. ..................................... 3C M&T Bank. ....................................................... 11A Marcus & Millichap............................................ 4A MBA-NJ............................................................ 12A Mericle Commercial Real Estate...................... BC Meridian Capital Group.................................BC-B Mid Atlantic Valuation. ..................................... 2C Morris County EDC.....................................18-19B NAI Mertz........................................................IC-A NAI Summit............................................... 21A, 2C PennCap Properties. .......................................... 9C Poskanzer Skott Architects.............................. 15B Provident Bank...............................................BC-A Redwood Realty Advisors................................... 5B Regal Bank........................................................ 10A RT Environmental.............................................. 6C SEBCO Laundry Systems.................................. 2B SNJ AI..........................................................12-13B Somma Associates.............................................. 2B Subway.............................................................. 21A The Berger Organization. ................................ 21B The Kislak Company........................................ 14B Torcon.................................................................. 4C WCRE.................................................................. 9B Whitesell........................................................... 11B Whitesell............................................................. 4A Wolf Commercial Real Estate............................ 7C
Mid Atlantic R eal E state J ournal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Associate Publisher ................................................................ Steve Kelley Associate Publisher .............................................................Alissa Aronson Associate Publisher ..........................................................Barbara Holyoke Associate Publisher ...................................................................Kim Brunet Senior Editor/Graphic Artist .................................................Karen Vachon Production Assistant/Graphic Artist ...........................................Julie King Office Manager .................................................................... Joanne Gavaza Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, 312 Market St. Rockland, MA 02370 USPS #22-358 | Vol. 28 Issue 19 Subscription rates: $99 - one year, $148 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
Mid Atlantic Real Estate Journal
Anurag Sharma
8 Tips to Becoming Cyber Secure
W
ith the ever chang- ing technologies of today, data breaches
and cybersecurity are at the forefront of our minds, and rightfully so. The number of successful cyberattacks in the U.S. has grown 144% in the past four years. Attacks are happening daily, with 62% of these attacks targeting small-to-mid-sized businesses (SMBs), including those within the commercial real estate industry. Does your company have a data security policy in place? If the answer is yes, your entity is among the 36% of SMBs that do. If the answer is no, your company is at risk of losing a lot should a breach or attack happen. Breaches are costly. They impact revenues, reputa- tion and branding as well as your valued clients. So what are some quick tips for protecting your organiza- tion? Tip #1: Create complex pass- words that are easy to remem- ber. Everyone has heard this before – make passwords com- plex and use a different one for every website and application. The longer and more complex the password, the more difficult it is to hack. Choose something that is easy to remember, like a favorite song lyric, that is not easily forgotten. Suggestions: Take the first letter from each word of that song lyric to get 8-9 letters for a password. Then add a number
and special character to it. Interested in testing how secure a password really is? While it is advisable not to use an actual password, individu- als can test one that is similar in length and nature by going to howsecureismypassword. net. Remember, giving your actual password out to a third party website, just to test its strength, is never a good idea! Tip #2: Think before you click Do not fall for a “phishing attack.” Never click a link or open an attachment that was unexpectedly received. Scams today look very convincing, coming in the form of voice- mails, eFaxes, invoices, social media, ADP theme or from the IRS. If something is not expected or the recipient has to think twice about the contents, do not open it. If opened, hack- ers gain entry to the contents of your computer. Contact the IT department if an email is suspect, or just delete it and report it as SPAM. Tip #3: Prevent email fraud Since January 2015, there has been a 270% increase in email fraud instances. There have been over 17,642 victims and $2.3 billion in losses be- tween October 2013 and Febru- ary 2016, the most prominent of which was Ubiquity Net- works, which became a victim
of a $46.7 million “CEO email fraud.” Scam emails are not as ob- vious as ALL CAPS or dol- lar signs saying “YOU WON CA$H $$$$.” Today, they can be very convincing. Be cau- tious of mimicked email ad- dresses. Be wary of email-only wire transfer and/or urgency requests. If it is not expected or the address appears a bit unusual, it is probably fake. Do not hesitate to make a call to verify legitimate business partners and reasons. Being conscientious of what is opened and who is sending it can help you avoid a $25,000 to $75,000 loss, which is the aver- age loss per scam. Tip #4: Protect your comput- er environment against viruses and malware Does each computer have a security program? Are they up to date? The best ways to steer clear of viruses and malware are to use an industry-leading anti-virus software solution. There are many types that do not have to break the bank. Having a level of defense can go a long way. On all anti-virus software, enable the “auto update,” “au- to-protect” and “personal fire- wall” to ensure background protection at all times and that continued on page 18A
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M id A tlantic R eal E state J ournal Led by Mayor Lester Taylor III & Richard Spengler, chief lending officer of Investors Bank East Orange POA hosts “State of the City of East Orange: Revitalization Investment Initiatives”
AST ORANGE, NJ — Embracing and capital- izing on urbanism was the theme of a presentation led by East Orange Mayor Lester Taylor III and Richard Spengler , chief lending officer of Investors Bank , at a recent gathering of commercial real estate industry leaders. The program, entitled “State of the City of East Orange: Revi- talization Investment Initia- tives,” was hosted by the East Orange Property Owners Association (EOPOA) as the keynote address at its Second Annual Membership Meeting. Spengler opened up the meeting by focusing on the role of Investors Bank as an active lender in markets like East Orange. The bank had one of its highest concentrations of multi-family units in 2011 in the city, which continues to be one of the top two markets in which it provides financing. “At Investors Bank, multi- family has been a great as- set class that has fit well within our lending profile. Comparatively, East Orange also has been one of the best performing municipalities in our portfolio,” said Spengler, who noted the bank had over $100 million in commercial loans citywide. Following Spengler’s dis- cussion on lending trends, Mayor Lester elaborated on the importance of apartment- building investment as a lead- ing economic driver within East Orange. In addition, he discussed the role of the collab- orative partnership between the City of East Orange and EOPOA as well as successes to date. “The East Orange Property Owners Association is vital to helping our city truly live its goal as a destination city,” said the mayor. “Collectively, this group is committed to enhanc- ing the quality of life not just for their tenants, but the city as a whole.” Established in 2015, EOPOA is a consortium of private in- vestors, developers, lenders and commercial real estate professionals committed to enhancing the city’s housing stock by partnering with city officials as well as community- based organizations. The asso- ciation is dedicated to advanc- ing local revitalization initia- tives through the repurposing of vacant and abandoned land as well as rehabilitation of underutilized properties. E
“Our association seeks to forge, strengthen and expand upon private/public partner- ships with local officials, eco- nomic development agencies and community groups in order to enhance East Orange’s quality of life for all,” said Peter Shapiro , EOPOA presi- dent and a founding member. East Orange is well on its way to becoming New Jersey’s newest, most dynamic destina- tion. Today’s newly construct- ed and completely renovated apartment buildings have replaced formerly abandoned buildings to complement the character and history of each distinct neighborhood.
“Our like-minded proper- ty owners seek to enhance the opportunities for growth, lower the barriers to entry and attract new, established investors as well as experi- enced property owners and developers to the city,” added Shapiro. “We subscribe to the philosophy that ‘a rising tide lifts all boats.’ By improving the city’s regulatory environ- ment and raising awareness, tax burdens can be reduced by spreading them over a larger base. In turn, this increases valuations and enhances the quality of life for apartment- building tenants and single- family homeowners alike.” n
Shown from left: Peter M. Shapiro, EOPOA president and managing member of Shapco Property Management; Richard Spengler, chief lending officer of Investors Bank; Mayor Lester Taylor III; Isaac Fran- kel, EOPOA vice president and managing partner of Creative Capital Group, LLC; and Calvin W. Souder, Esq., an EOPOA legal advisor.
4A — October 14 - 27, 2016 — M id A tlantic
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M id A tlantic R eal E state J ournal For Allendale, NJ-based PCT, a Caladrius Company PoskanzerSkottdesignsclean room expansion/upgrades
Leading the Real Estate Investment Market Contact us today to access the largest inventory of properties.
A LLENDALE/RIDGE- WOOD, NJ — Pos- kanzer Skott Archi- tects (PSA) of Ridgewood, NJ has designed an expansion for Allendale, NJ-based PCT, a Caladrius Company. PCT is a leading development and manufacturing company that focuses exclusively on the cell therapy industry. The design, which includes addi- tional clean rooms and other upgrades, will improve PCT’s capability to provide com- mercial grade cGMP manu- facturing capacity, and most importantly, meet compliance requirements for product dis- tribution into the European Union. “The expanded design pro- vides additional space to house growing demand for our ser- vices, including expanding our capability to process, manu- facture and develop EU-com- pliant cell therapy products,” said Robert Preti, PhD, presi- dent and co-founder of PCT. “We thank PSA for their past and ongoing support to grow PCT’s infrastructure alongside the advancement of the cell therapy industry.” PSA designed the original Allendale facility in 2008, with WASHINGTON — Buoyed by a steadily improving labor market and strong demand for multifamily housing, com- mercial real estate activity should remain on an upward trajectory, with a growing share of it is expected to be in smaller markets, according to the National Association of Realtors quarterly commer- cial real estate forecast. National office vacancy rates are forecast by Realtors to fall 1.5% to 10.4% over the coming year as employment gains boost demand for office space. The vacancy rate for industrial space is expected to decline 0.7% to 8.7%, and retail availability to decrease 1.0% to 10.5%. Only vacancies in the multifamily sector are ex- pected to edge higher over the next year, from 5.9% to 6.1%, as new apartment construction comes onto the market. Lawrence Yun , NAR chief economist, said: “Ongoing overseas weakness and the slowdown in business invest- ment despite historically low interest rates held second quarter growth at a tepid and
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plans to build out in phases. Phase One included four clean room suites and a freezer farm unit with multiple liq- uid nitrogen freezers. PSA subsequently designed two additional clean rooms which were done in 2016. Recently completed stages of the work include redesigned warehouse and storage space with plans to move and upgrade bath- rooms and locker rooms. The two additional clean rooms included in this new design will bring the facility up to a total of eight which are fully compliant with FDA norms and five which are compliant with requirements set by the European Medicines Agency (EMEA). PCT expects con- struction on the latest expan- sion to be completed in 2017. disappointing pace,” he said. “Only steady job creation, solid consumer spending and residential construction – al- beit not enough of it – kept the economy afloat during the first half of the year.” Strengthening local job mar- kets has fueled sustained demand for commercial space and has pushed vacancy rates down in all commercial sectors. However, a growing concern from Realtors, who mostly have clients that rely on fi- nancing to secure deals, is that underwriting standards have stiffened in light of increased regulatory scrutiny. With new construction out- side of the multifamily sector taking a breather during the first half of the year, overall demand outpaced supply and suppressed inventory lev- els in many areas. This was evident in the latest Realtors Commercial Real Estate Mar- ket Survey, which measures quarterly activity from NAR’s commercial members. The survey revealed that inventory shortages are the number one concern for Realtors, which is
“We take great pride in the quality and longevity of our relationship with PCT,” said partner Barry Poszkanzer, AIA . “PCT is an exciting com- pany and we look forward to providing additional support and services as the company expands, and as compliance regulations require.” PCT is the only GMP-compli- ant cell therapy external man- ufacturing partner with two facilities located on both east and west coasts of the United States. They offer cGMP (Cur- rent Good Manufacturing Practices) infrastructure for the manufacturing of cell-ther- apy based products including: quality systems, streamlined technology, transfer, storage, logistics, cell and tissue pro- cessing. n in turn pushing price growth upward. Prices for commercial properties increased 5.3% in the second quarter compared to a year ago, with the aver- age transaction cost at $1.4 million. “While inventory constraints and strong appreciation in apartment and retail proper- ties pushed up prices in large commercial markets last quar- ter, overall sales volume was still down as investors looked for better deals and higher yields in smaller cities,” said Yun. “As a result, investments and leasing activity in middle- tier and smaller markets led the way and are expected to maintain their momentum in coming months.” According to Yun, the de- mand for apartments will continue to drive multifamily housing construction, albeit at a more moderate pace, as a growing share of builders shift from apartments to sin- gle-family homes. Expected completions being added in coming years should begin to moderate rents and nudge vacancies higher. n
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Real Estate Journal — October 14 - 27, 2016 — 5A
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Silver Arch Capital originates $10.75m land loan for Jersey City
10-year Freddie Mac loan was provided by Capital One MeridianCapital inks $71.9m in financing for 741-unit portfolio
the financial district in lower Manhattan.” Despite the ideal location, traditional lenders continue to shy away from undeveloped properties. “Silver Arch Capital Part- ners sees opportunities when others tend to turn their backs. If the borrower has a strong track record, we will take the long view regarding value-add potential to the point where the loan can be refinanced with a conduit or CMBS loan or by a portfolio lender. The traditional lender, in contrast, will tend to have a greater fo- cus on current cash flow. “The great location coupled with the Marriott brand name and the experience of the people behind the respected Tramz Hotels Group enabled us to provide them with great terms and a quick closing.” Tarrunumn Murad along with her husband Tajjammal Murad founded Tramz Hotels Group in 1987. “We are thrilled to have se- cured this financing through Silver Arch Capital Partners and happy they saw the in- credible potential of this area and this project just as we did,” said Murad. “We appre- ciate the confidence they have placed in us.” n
HACKENSACK, NJ —The rapid development currently underway on the Jersey City, New Jersey waterfront will soon feature another new flag- ship property. The develop- ment of a 276-room Marriott hotel will proceed, thanks to a $10.75 million refinancing loan originated by Silver Arch Capital Partners , a Hackensack, NJ-based private lender. Wh e n c omp l e t e d , t h e 202,495 s/f hotel, developed by Statue of Liberty Harbor North Development Urban Renewal, LLC , will consist of a full service restaurant, a bar and lounge area plus associated services such as concierge, salon, meeting/ban- quet rooms and a full service fitness center. Located in Liberty Harbor North, the 15,300 s/f parcel is located at 155 Luis Munoz Marin Blvd., Hudson County. “We see waterfront areas as particularly attractive,” said Jeffrey Wolfer , president and CEO of Silver Arch Capi- tal Partners. “Jersey City is one of the most desirable areas on the east coast. The property is in close proximity to nearly 6 million s/f of office space, 5,000 residential units and is just across the Hudson River from
N
One Multifamily Finance and was negotiated by Meridian senior vice president, Barry
takes pride in being a partner of choice for both borrowers and lenders, providing well executed and timely solutions across a range of property types, funding scenarios and geographies. Our team has the relationships and the industry experience to serve as a trusted resource for both borrowers seeking capital, and the institutions that can provide it.” n rate and the interest-only fea- tures of this loan, Meridian ar- ticulated Navarino’s position as a well-run family-owned real estate company with the proven ability to source transactions with solid upside and closely manage those properties to maximize cash flow and value,” said Lefkow- itz. “This transaction is also an example of how Meridian worked closely with Capital One to close a complex trans- action where the sponsorship had both a domestic preferred equity partner as well as for- eign investors in the capital stack,” he added. n •1031 exchange buyers who do not have the required funds to secure an exchange property. “Inspired by clients and contacts in the real estate in- dustry who have approached us for assistance with de- posit funding, we have cre- ated a success-based pricing structure that is sensitive to the buyer’s all-in costs,” said Cohn. Currently, the founders are financing this new venture from their own resources, with institutional backing and crowd funding as the next development in their growth. n
EW YORK — Merid- ian Capital Group , America’s most active
Lefkowitz , and vice pres- ident, Steve H a l p e r t , who are both based in the c omp a n y ’ s Iselin, NJ of- fice. “ B r i d g e -
debt broker, a r r a n g e d p r e f e r r e d equi ty and $71.9 million in acquisition financing for the purchase of a six prop- er ty , 741 -
Barry Lefkowitz
Steve Halpert
port, CT-based Navarino Cap- ital effectively doubled the size of its portfolio with the acquisition of this portfolio. In order to obtain the 80% loan- to-cost financing, a favorable
unit, multifamily portfolio located in central Connecticut on behalf of Navarino Capi- tal Management LLC . The 10-year Freddie Mac loan was provided by Capital
Tremont Realty Capital arranges $5m financing for 128-site housing community
of the property at a 3.76% fixed interest rate for 10 years, 2 years interest-only, followed by 8 years of amortization on a 30-year schedule. According to John Chase , director of capital markets for Tremont, “Tremont Realty Capital structured financing that allowed our client to recapture equity while satis- fying the payoff deadline of the existing note. Tremont “Countless talented entre- preneurs are forced to pass on buying opportunities because they do not have immediate funds available for the deposit. With our platform, they will now have the ability to tie up deals while they raise the required equity,” said Modell. “Now investors will have the power they need to proceed with all real estate deals being considered.” This platform is geared toward borrowers of varying profiles, including: •Entrepreneurs beginning their real estate career. •Experienced investors, often presented with several opportunities, whose immedi- ate funds may be unavailable
LEWES, DE — The An- napolis office of Tremont Realty Capital , a division of The RMRGroup , announced that it has structured capital for the refinance of Donovan- Smith Manufactured Housing Community, a 128-site com- munity located in Lewes, DE. The non-recourse loan, fund- ed through a relationship lender, represented approxi- mately 70% of appraised value
NorthMarq Capital arranges financing for The Bottle Building at Brewers Hill
New firm BCRM Group funds due diligence deposits NEW YORK, NY — BCRM Group LLC , a real-estate deposit funding startup, an- nounces it will fund earnest money deposits for residential and commercial real estate acquisitions in the United States. property and wants to ensure money is sitting in a secure, escrow account during the lending period. to tie up every deal being considered. •Financial investors with a preference for delaying the internal rate of return clock by funding deposits off the balance sheet.
In response to the unad- dressed demand for capital, owners Ben Cohn and Randy Modell formed BCRM Group to provide capital for 30 to 90 days. The company offers buy- ers immediate financing for soft deposits, enabling them to sign contracts and close on properties. The company can lend for as long as 12 months, charging a monthly fee of one percent. BCRMGroup is a soft money lender, and the day the con- tract becomes hard is the day the loan needs to be paid. The company will never own a
The Bottle Building at Brewers Hill
year amortization schedule. NorthMarq arranged financing for the borrower through its re- lationship with a regional bank. “The project is the former bottling building for the Gun- ther Brewery in the Brewers Hill neighborhood of East Bal- timore. In 2005, the building was redeveloped into a retail/ office mixed use under historic preservation guidelines,” said Ferrell. n
BALT IMORE , MD — Nancy Ferrell , senior vice president/managing director, and Bill Libercci , senior vice president/senior director of NorthMarq Capital ’s Balti- more office secured permanent financing for The Bottle Build- ing at Brewers Hill, a 50,000 s/f mixed-use property located at 3600 Boston St. in Baltimore. The transaction was structured with a 10-year term and 25-
6A — October 14 - 27, 2016 — Financial Digest — M id A tlantic
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F inancial D igest
Recognizing those who have contributed to the fight against substance use disorders Freedom House to honor Anthony R. Slimowicz, Esq. and Mark M. Scott in October
C
ders. This year’s recipients will be Anthony R. Slimow- icz, Esq. , Crum & Forster ,
York and Young People in Recovery. She has been a featured spokesperson for the New York State Governor’s Combat Heroin Campaign and featured in numerous press events and conferences. Seats are limited but still available at the banquet hon- oring Slimowicz and Scott which will be held onWednes- day, October 19th commenc- ing at 6:00 pm at Fiddler’s Elbow Country Club in Bed- minster, NJ. Anyone inter- ested in attending the event should contact Tracy Moran, Freedom House marketing
and development coordinator, at 908-617-5492 or tmoran@ freedomhousenj.org. Net pro- ceeds from the event will ben- efit the programs and services offered by Freedom House of New Jersey. Freedom House of New Jersey, founded in 1986, pro- vides three major programs for those suffering from sub- stance use and co-occurring disorders: long-term residen- tial treatment in a halfway house setting to adult males; The Family Afterward a tran- sitional program that provides intensive case management for women who are recovering from alcoholism and/or drug addiction and who are seek- ing reunification with their children; and the outpatient program, which began in 2014, for men and women who are in need of treatment, but also need to maintain their careers and family life during the recovery period. Freedom House has provided men with room, board, substance use disorders treatment services, life skills training and educa- tion, job seeking skills and assistance with job search and all transportation to and from work. Once working, resi- dents are required to make a contribution toward their program fee, saving a third for expense after they leave the house. 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 Publisher/CEO Linda Christman lchristman@marejournal.com Section Publisher Barbara Holyoke bholyoke@marejournal.com Section Editor Julie King editor@marejournal.com Financial Digest
across systems to empower others and inspire change. Cortney is a dedicated ad- vocate who often speaks of hope and the need for more recovery supports in our com- munities. She is currently the director and founder of WRise Consulting, offering expertise in addiction, mental health, wellness and recovery. In this position she has consulted for corporate businesses, federal agencies, and national and state organizations. Cortney has also worked extensive- ly with organizations like Friends of Recovery- New
LINTON, NJ —For 17 years Freedom House, a Hunterdon County
e x e c u t i v e vi ce pres i - d e n t a n d M a r k M . Scott , Com- m e r c i a l Mo r t gage C a p i t a l , president This year’s guest speak-
based non- profit which serves the entire state of NJ, has been recog- nizing indi- viduals who have made a significant contribution
Mark M. Scott
Anthony R. Slimowicz
er is nationally recognized advocate Cortney Lovell. She is recognized as a dynamic leader who works diligently
through their support, in- volvement and leadership in the community and fight against substance use disor-
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Real Estate Journal — Financial Digest — October 14 - 27, 2016 — 7A
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1031 Crowdfunding, LLC Student Housing – The Countercyclical Investment
A
markets, we ensure we have a good entry point from a price perspective. Then we institute our added value program that includes furnishing the units, replacing old appliances, as well as upgrading the fitness centers and pool decks. When we add our resident-first man- agement approach to the phys- ical improvements made to the asset, we find students will pay more to live in an improved complex in direct proximity to a major college or university.” Such is the case with Cam- pus Edge, a student housing complex adjacent to Kennesaw
State University Marietta Campus. “With the extensive experience Vie Management has in student housing and with student housing becom- ing a core asset class, we feel this strategic partnership will benefit both parties,” said 1031 Crowdfunding Founder and CEO, Edward Fernandez . “1031 Crowdfunding will pro- vide the equity from the in- vestors and Vie Management will provide a core, turn-key, strong student housing as- set for those investors.” This project adds value for students and investors alike. Once the
s university students have returned to their schools, real estate
upgrade process is complete, every unit will contain high quality furniture and stainless steel appliances, an upgrade students polled said would be a premium option for which they would pay higher rent. When asked why he invests in student housing rather than traditional multi-family apartments, Rosenblum said, “Pricing for student hous- ing assets is generally more favorable than conventional multi-family because it’s an extremely operationally inten- sive business, which limits the pool of buyers. Every year you
turn over 60-70% of your rent roll, which presents risk. But there are benefits associated with that risk, including the ability to increase your entire rent roll yearly if you add value to the complex.” At 1031Crowdfunding.com, we specialize in helping people find solutions quickly. For more information on student housing or to view the Cam- pus Edge DST, please visit 1031Crowdfunding.com. E d w a r d F e r n a n d e z is founder/CEO of 1031 Crowdfunding, LLC based in Orange County, CA . n
i n v e s t o r s h a v e b u s - ily watched o c c u p a n c y r a t e s , r e - s e a r c h e d student pop- ulation num- b e r s , a n d examined lo- cal housing
Edward Fernandez
needs, all in an attempt to take advantage of the rental capital those students will pay this year. According to Real Capital Analytics, $5.7 billion in stu- dent housing transactions oc- curred between January 2016 and August 2016, a $2 billion increase over student housing transactions made last year during the same period. So what is the draw? For many it is the ever- increasing rate of enrollment and constrained university budgets limiting their abili- ties to meet rising demands for student housing. Accord- ing to the National Center for Education Statistics (NCES), enrollment in degree-granting postsecondary institutions was 13.2 million students in 2000, 17.3 million in 2014, and is projected to increase to 19.8 million by 2025. Others invest in student housing because it caters to a recession resistant market. The NCES reported that dur- ing the 31 percent growth of enrollment from 2000-2014, only a 4 percent decrease oc- curred between 2010 and 2014 as a result of the 2008 reces- sion. University enrollment also tends to be countercycli- cal to the rest of the economy; when jobs are scarce, workers seek out new degrees and advanced training to qualify themselves for new jobs. Beyond meeting demand, off-campus, private student housing complexes often offer students a preferable option to on-campus housing. The mod- ern student housing complex gives students a living space that is specifically designed for them with a variety of desir- able amenities. Ari Rosenblum, a 15-year investor of institutional-grade student housing and Chief Executive Officer of Vie Man- agement, has a programmatic approach to successful student housing investing. “By seeking out smaller assets in secondary
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8A — October 14 - 27, 2016 — Title/Insurance — M id A tlantic
Real Estate Journal
www.marejournal.com
T itle /I nsurance Capacity Excess LLC
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Barings Real Estate Advisers completes acquisition of ACRE Capital Holdings
CHARLOTTE, NC — Barings Real Estate Ad- visers , formerly known as Cornerstone Real Estate Advisers , one of the world’s largest real estate-focused investment managers, an- nounced that it has complet- ed its acquisition of ACRE Capital Holdings LLC , the
parent company of ACRE Capital LLC (“ACRECapi- tal”) , the agency lending sub- sidiary of Ares Commercial Real Estate Corporation . The ACRE Capital platform will be renamed as Barings Multifamily Capital and will be a subsidiary to Barings Real Estate Advisers. The transaction, valued at $93 million, was previously an- nounced on June 29, 2016. “The acquisition of Barings Multifamily Capital is a dem- onstration of Barings’ ability to source not only direct real estate investments but also attractive real estate oper- ating company investments for our clients. The array of capital solutions that we can provide within the multifam- ily and healthcare sectors positions us very well to al- locate capital up and down the capital stack and grow the coverage and expertise in an important property sector for Barings Real Estate Ad- visers,” said Scott Brown , global head of real estate at Barings. Barings Multifamily Capi- tal originates and services multifamily, senior hous- ing and healthcare facility loans by utilizing programs overseen by governmental agencies and government- sponsored entities. The plat- form, which is highly com- plementary to the Barings Real Estate Advisers other origination and investment organizations, is one of only 19 lenders that hold licenses with Fannie Mae , Freddie Mac and the Federal Hous- ing Administration . Barings Multifamily Capi- tal will report to Jamie Hen- derson , head of structured real estate investments at Barings Real Estate Advis- ers. He said: “Barings has a bullish stance regarding the real estate fundamentals of both the multifamily and healthcare sectors due to a variety of structural and demographic factors. The addition of Barings Multi- family Capital broadens our reach into these important sectors.” n
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Real Estate Journal — Title/Insurance — October 14 - 27, 2016 — 9A
www.marejournal.com
M id A tlantic
T itle /I nsurance
By Neil Stein, Kaplin Stewart Demystifying Title Insurance in the 21st Century
T
damages and attorney fees. Another problem is that many consumers actually
his will not be an arti- cle about the merits of title insurance. After
for insurers to deny claims and litigate with their cus- tomers. Unlike life insur-
the underwriting costs. The lower the monetary amount of the transaction, the lower the monetary premiumwhich is charged for the title insur- ance policy. Lastly, title insurance is distributed directly by insur- ers, through agents or “ap- proved attorneys.” In many states, it is not uncommon for a law firm or a builder to have an affiliate which is a title agent. Most consumers do not understand the risks associated with each. How- ever, the consumer some- times comes upon a news story about kickbacks and
other compensation illegally offered for the referral of title business by those in the real estate industry. There has been more regu- latory oversight of the indus- try of late and instances of kickbacks, scams and over- charging are far fewer. None- theless, at least for now, the title insurance process and its cost is unlikely to change and therefore customers will continue to question its ne- cessity and legitimacy. Neil Andrew Stein is a co-founder and principal of Kaplin Stewart in Blue Bell, PA. n
thirty years of counsel- ing clients in complex commercial real estate t r a n s a c - tions, I un- derstand all too well its
“To buy, lease or to finance commercial real estate without title insurance is akin to jumping from an airplane without a parachute.”
believe that title insurance is an insurance product, when it is actually a contract of indemnity. The insurer is not required to pay money if the issue can be solved another way. Therefore, the claims process is often com- plex and it is not uncommon
ance, where the insurer may ask about the applicant’s health or require a medical examination prior to issuing the policy, title insurers will sometimes defer extensive underwriting of the transac- tion after a claim is made. This is principally because of
Neil Stein
importance. To buy, lease or to finance commercial real estate without title in- surance is akin to jumping from an airplane without a parachute. The first policy of title in- surance was issued in 1876 in Philadelphia, Pennsylva- nia. Today, title insurance is available in all 50 states and is frequently available in foreign countries. The need for title insurance first arose to help protect home buyers from being swindled by crooks who sold proper- ties they didn’t own. Today, the industry is dominated by just a few underwriters col- lectively generating approxi- mately $14 billion a year for a product that many people do not understand. So why are there still many sophisticated real estate buy- ers and lenders who view title insurance as an unnecessary expense or even a scam? First, one would think that in this age of digital technol- ogy, the condition of title to any property should be relatively easy to determine. Unfortunately, the digitiz- ing of title records has been slow to evolve and is far from complete. Therefore, the title insurance process remains, to a certain extent, mired in the old days of physical records searches through the dusty books of time. Second, the cost of title insurance is not uniform, but varies from state to state and at times, from transaction to transaction. In most states, rates are pre-determined and regulated by state gov- ernment. Nonetheless, over- charging has been known to occur. The Pennsylvania Supreme Court has ruled that title companies which overcharge for title insurance may be liable to consum- ers under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, including penalties of up to triple the actual financial
Firmly Rooted in the Law and in the Community We are well grounded in every facet of real estate law, from acquisition to construction. We are committed to serving the needs of our clients and our communities.
Contact: NEIL A. STEIN • nstein@kaplaw.com 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-941-2469 • www.kaplaw.com Visit our Real Estate Blog: www.philadelphiarealestatelaw.com Visit our Construction Blog: www.pennsylvaniaconstructionlawyer.com Other Offices: Cherry Hill, NJ 856-675-1550 • Philadelphia, PA 215-567-3120 Kaplin Stewart A t t o r ne y s a t L aw
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