April 2024

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ISSUE HIGHLIGHTS Volume 36, Issue 4 April 2024 ACCORDIA SETS SIGHTS ON MARKET RESURGENCE AND DIVERSIFICATION

OODBRIDGE, NJ Hackensack Meridian Health W The facility is part of a larger development of Metropark Station by DOR Hackensack Meridian Health breaks ground on health & wellness center

is revolutionizing healthcare.” The complex qualifies for the multi-use platform under the New Jersey Economic Development Authority’s ASPIRE program, which sup - ports transformative develop - ment projects that incorporate community benefits such as those featured in this devel - opment: connecting people to healthcare more efficiently; stimulating mass transit use; and providing at least 20% low income housing. “Convenient access to a wide array of medical services at a mass transit hub comple - ments Hackensack Meridian Health’s efforts to address how social determinants of health are impacting health equity,” Garrett said. “This location will bring Hackensack Merid - ian’s best in class doctors and care to a location accessible to all, including those whose pri - mary form of transportation is mass transit.” MAREJ

(HMH) is breaking ground on a first of its kind health care facility at a mass transit hub. The groundbreaking at Me - tropark Station in Woodbridge, will provide convenient ac - cess to comprehensive care to thousands of New Jersey, New York and Northeast residents each day. The facility is part of a larger development of Metropark Sta - tion by DOR , a consortium led by Russo Development , that was awarded a $110 million tax credit grant. The impetus for the development came from NJ Governor Phil Murphy’s push to modernize transporta - tion hubs throughout the state, making them multi-use loca - tions, allowing people to live, work and play in one location. When it opens next year, the Hackensack Meridian Health and Wellness Center will offer

By Jason R. Bogart

Hackensack Meridian Health and Wellness Center

2-3A

more than 60,000 s/f of health - care services just steps from the mass transit hub. Services will include primary care, medical specialties, surgical specialties, a sports and spine center of excellence, advanced imaging, phlebotomy, rehabilitation ser - vices, a retail pharmacy, and an urgent care. “Hackensack Meridian Health is committed to ex - panding access to quality

healthcare, meeting patients where they are,” said Robert C. Garrett , CEO of Hacken - sack Meridian Health. “60,000 people travel through Me - tropark Station each month as a hub for New Jersey Transit and Amtrak, soon these pas - sengers will have access to quality care steps from their commute. The expanded, easy access is one of the major ways Hackensack Meridian Health

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Olshan Properties secures long-term loan extension and assumes management of Fair Oaks Mall in VA

FAIRFAX, VA — Olshan Properties , a real estate de - velopment and management firm, has successfully secured a long-term loan extension on Fair Oaks Mall located in Fair - fax. With this development, Ol - shan assumes the management of the 1,557,000 s/f property, signaling a new era of strategic

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Fair Oaks Mall (F&B) experiences to breathe new life into the property. “The loan extension marks a significant milestone in Olshan’s commitment to the long-term success of the prop - erty,” said Zach Bornstein , CEO, Olshan Properties. “We are dedicated to insuring Fair Oaks Mall leverages its strategic location and strong community presence to cre - ate a dynamic and engaging environment for visitors, the

planning and rejuvenation for the iconic mall. Situated at the intersection of Interstate 66 and US Route 50, Fair Oaks Mall occupies a prime location catering to a densely populated area, offer - ing ample opportunities for growth and revitalization. Ol - shan recognizes the immense potential of the property and is poised to leverage its expertise in curating vibrant mixed-use, retail and food & beverage

community and our tenants.” Drawing from its successful track record in managing com - plex properties across the coun - try, Olshan brings a wealth of experience in incorporating a mix of uses at its projects. With a keen focus on innovation, community engagement and governmental desires, Olshan aims to transform the Fair Oaks Mall into a premier desti - nation that reflects the evolving stakeholder needs. MAREJ

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M id A tlantic R eal E state J ournal Publisher, Conference Producer ..............Linda Christman VP, Conference Producer .............................Lea Christman Editor/Graphic Artist ......................................Karen Vachon Contributing Columnists...............................Jason R. Bogart, Accordia Mid Atlantic R eal E state J ournal ~ Published Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 117 HMS Halsted Dr., Hingham, MA 02043 USPS #22-358 | Vol. 36, Issue 4 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 www.marej.com

Jason R. Bogart

A New Chapter: Accordia Sets Sights on Market Resurgence and Diversification n an ever-evolving real estate landscape, standing still is not an option. As the principal of Accordia, I’ve observed firsthand the shifts and opportunities in the market as we enter 2024. About six to nine months ago, we were con- ducting regular pipeline calls with some of the major institu- tions’ acquisition teams. It was obvious that based on their reactions, there was not a lot of activity. Now with investment activities coming back to life, the liquidity is starting to perco- late again. There are billions of dollars sitting on the sidelines ready to invest in commercial real estate. These observations have led Accordia to a pivotal moment. For us, moving for- ward means rebranding and focusing on a strategic expan- sion that is poised to redefine our trajectory and enrich our investment portfolio. “For Accordia, it’s all about a new era of real estate opportunity.” I

The commercial real estate market has always been dynamic, yet honestly, the changes I have witnessed recently are unprecedented. As the Accordia team ana- lyzes the patterns of 2024, one thing is clear—this is a year of growth and robust opportunity. With interest rates stabilizing and inflation rates declining, we’re on the cusp of a renewed surge in investment activity. A crucial aspect of our strategic plan involves re- assessing deals that were once out of reach. What was once an overly high-priced market is starting to reca- librate into realistic pricing expectations bringing old opportunities back to the

forefront—providing us with the chance to leverage our agility and experience. Now brokers are chasing us on investments that we were chasing two years ago. A ma- jor reason is that low-cost debt is coming home to roost, which puts pressure on existing own- ers, because they will need to invest additional equity into their real estate, or their cash flow is going to get significantly reduced by increased debt ser- vice payments. Basically, all this means that the real estate market is primed and ready for an upswing, and Accordia is right at the helm. We’re prepared to navigate through this period of economic re- alignment with precision continued on page 24A

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 • kaplaw.com Other Offices: • Cherry Hill, NJ 856-675-1550 • Philadelphia, PA 215-567-3120 Kaplin Stewart Attorneys at Law

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Stay tuned. We’re about to redefine real estate.

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Greenwich Street 497 is located in the heart of Hudson Square Atkins Cos. collaborates with renowned surgeons to bring luxury plastic surgery center to NYC

N EW YORK CITY, NY — Atkins Compa- nies , a multigenera- tional commercial real estate development, investment, and property management firm, and renowned plastic sur- geons, Dr. Oren Tepper, Dr. Evan Garfein and Dr. Arthur Perry announce the opening of Greenwich Street 497, a luxury aesthetics and plastic surgery center, located at 497 Greenwich Street in NYC. Located in the heart of Hud- son Square, one of New York City’s most sought-after neigh- borhoods, the two-story plastic

surgery center is a distinctive destination for elite plastic sur- geons and discerning clients. Under the leadership of Dr. Tepper, Dr. Garfein and Dr. Perry, Greenwich Street 497 merges luxury and hospitality with state-of-the-art outpa- tient plastic surgery care and advanced surgical expertise. Further enhancing the space is Greenwich Street Surgical, a collective of Operative Room suites for many of New York’s top plastic surgeons that is lo- cated within Greenwich Street 497. With a comprehensive ar- ray of surgical and non-surgical

facial and body treatments offered by the region’s top doc- tors, Greenwich Street 497’s holistic approach to patient care ensures each individual’s needs are meticulously met. “Every aspect of Greenwich Street 497 has been carefully designed with our patients’ experience in mind, from ini- tial consultation through re- covery,” said Dr. Tepper. “We thank Atkins Companies for their work to bring our vision to life in Hudson Square and we look forward to welcoming patients to our new space to experience a truly unmatched level of care.” Cory Atkins , principal at Atkins Companies added, “Greenwich Street 497 high- lights the endless potential available through collabora- tion between healthcare pro- fessionals and experienced real estate developers. We are deeply proud of our work with Dr. Tepper, Dr. Garfein and Dr. Perry to bring this new model for the future of aesthetic and plastic surgery care to the Tri-State Area.” A pioneer in the field of 3D surgical innovation, Dr. Tepper has earned numerous national and international awards for his work to balance traditional beauty concepts with modern- day cutting-edge technology. He currently serves as the director of Aesthetic Surgery and Craniofacial Surgery pro- grams at Montefiore and as an Associate Professor of Plastic Surgery at Albert Einstein College of Medicine. A colleague of Dr. Tepper at Montefiore, Dr. Garfein serves as the Chief of the Division of Plastic Surgery at Montefiore and Professor of Surgery at Albert Einstein College of Medicine. He is an internationally recognized expert in the field of complex breast and body surgery, and notably played a key role in helping pass a New York State law in 2010 to make breast reconstruction more accessible to underserved women with breast cancer. Also partnering with Dr. Tepper and Dr. Garfein is Dr. Arthur Perry, host of WOR radio’s long-running “What’s Your Wrinkle” program, who brings expertise in surgical and noninvasive facial rejuve- nation, as well as experience as a government regulator on New Jersey’s State Board of Medical Examiners. MAREJ

Greenwich Street 497

M id A tlantic Real Estate Journal — April 2024 — 5A

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Mid Atlantic R eal E state J ournal ’ s S pring P review

FEATURING:

Jared Donnamiller, PE AKF Group

Jason Crimmins, CCIM, SIOR The Blau & Berg Company

Jonathan Glick Sheldon Gross Realty

Thomas Loredo Sunrock Distributed Generation

Christopher Moore, CCIM LMT Commercial Realty/ CORFAC International

Joseph Latina, SIOR LMT Commercial Realty/ CORFAC International

Diane Schaefer, CES Exchange Solutions

INSIDE:

Thomas Loredo, Sunrock Distributed Generation............................................................................................6A Diane Schaefer, CES, Exchange Solutions......................................................................................................7A Joseph Latina, SIOR & Christopher Moore, CCIM, LMT Commercial Realty/CORFAC International..............8A Jonathan Glick, Sheldon Gross Realty.............................................................................................................9A Jason Crimmins, CCIM, SIOR, The Blau & Berg Company...........................................................................10A Jared Donnamiller, PE, AKF Group................................................................................................................11A

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By Thomas Loredo, Sunrock Distributed Generation Navigating operating expenses and energy reduction mandates your Net Operating Income (NOI).

ne of the biggest chal- lenges that any busi- ness faces is to control

tenants must track and report their yearly consumption of electricity. The required re- porting of this information will be tracked and recorded by submitting information on the US Environmental Protection Agency’s Energy Star Portfolio manager tool. This first year’s report is what will establish the baseline of your future energy consumption levels. As an example, in 2023, the State of New Jersey mandated that owners and tenants of buildings larger than 25,000sf must track and report (bench- mark) their yearly electric con- sumption (gas and water will also be benchmarked). This is a State requirement that cannot be avoided, and many facilities and their owners are currently working to meet this first year’s reporting requirement. However, this is only the beginning. Most insiders agree that the next step, after the benchmark year is filed, will be a mandatory reduction in a facility’s purchase of utility (grid) supplied electricity. The estimates are that these man- datory reductions will be in the order of 10-20% per year. What does this mean? As an example, if your facil- ity consumes 1,000,000kWh (kilowatt-hours) of utility electricity in your benchmark year, and a 15% reduction is then mandated, you will need to reduce your next years’ electric consumption to 850,000kWh of grid supplied electricity. Non-compliance with both the benchmarking reporting and meeting the reduction requirements are anticipated to be met with significant financial penalties. The question now is how do I meet these new require- ments, what is involved, when must I start and what will this cost me? How can I comply? These questions, and the related costs can be readily addressed as there is a silver lining here… It’s your roof! By utilizing your roof to in- stall solar, you can adopt a no money out-of-pocket solution available to address the bench- marking and energy reduc- tion mandates, and solar will reduce operating expenses, saving you significant money on a yearly basis. How do I accomplish this? continued on page 24A

Energy Consumption is now in focus for State and Locally imposed mandatory benchmarking. Based upon the amount of utility electricity (electricity from the grid) that a facility is currently consuming on a yearly basis, state and lo- cal governments across the country are beginning to and have already mandated that commercial buildings and facilities ‘benchmark’ their yearly electric use. This means that building owners and their

its yearly op- erating ex- penses. Whether it is the on- going main- tenance of infrastruc- ture or equip- ment, or the ever-rising

Thomas Loredo

costs by the public utility com- panies that service a facility, increasing yearly operating expenses are a real impact on

M id A tlantic Real Estate Journal — Financial Digest — 1031 Exchange — April 2024 — 7A

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economically significant region stretching from Boston to Wash- ington, D.C. The proximity to By Joseph Latina, SIOR & Christopher Moore, CCIM, LMT Commercial Realty/CORFAC Int’l. Exploring industrial land and building pricing in Northern Delaware I n recent years, the price increases of industrial land in Delaware have been

the Delaware River. The state boasts an excellent transporta- tion network, including major highways, railways, the Port of Wilmington, and the Delaware Memorial Bridge. Due to these favorable loca- tional conditions, there have been several recent industrial developments in Northern Del- aware. The 3.8 million square foot Amazon distribution cen- ter constructed on the former General Motors Boxwood Road site in Newport has caused concern with local government and constituents related to un- checked “by-right” industrial

development. As a result, the county and state have become more hostile to industrial de- velopment triggering recent changes to the industrial zon- ing approval process in the form of building size regula- tions and required site and green space improvements. These new restrictions have created additional layers and added more time in obtaining entitlements, thereby creating increased carrying costs for de- velopers. This is driving devel- opers to build larger buildings to gain economies of scale and control costs, when in reality

the market is in desperate need of smaller industrial and flex buildings to accommodate small and mid-size businesses. This, coupled with increased labor and construction costs has increased the cost of new development with finished costs approaching $175 psf as opposed to a much lower cost of $100-$125 psf just a few years ago. Many investors and develop- ers from surrounding markets such as New Jersey, New York and Pennsylvania have been pushing up demand for existing industrial warehouse buildings. The market has seen prices grow from $60-$80 psf just 4-5 years ago to over $150 psf currently. Triple-net rents have also risen in the last 5 years from $5-$7 psf/annu- ally with most landlords now asking $11-$12 psf/annually for industrial base rents. The current market for un- improved zoned industrial land in New Castle County, Delaware, has a wide range of prices from as low as $150,000 per acre for more challenging properties to as high as $1+ million per acre depending on location, buildable acreage, and access to roads and utili- ties. Industrial zoned land with improvements and utilities but without substantial improve- ments have been trading as high $400,000 to $750,000 per acre in some instances and smaller infill lots or assem- blage parcels have reached as high as $1 million per acre for heavy industrial zoned laydown yards and land near the Port of Wilmington. Land prices in more development friendly markets like Middle- town, Delaware, are trading at consistently higher prices due to a more predictable and shorter approval process. The size and shape of the parcels appear to be impact- ing values as well, with larger parcels traditionally trading at a slightly discounted rate. The presence of flood zones, wetlands, dense forestry, and topography are also crucial to ultimately determining the value of Industrial land. Un- derstanding buildable versus non-buildable acreage is an important part of a buyer’s due diligence process as non- buildable acreage has very little value. Unfortunately, these in- creased costs are ultimately continued on page 9A

the subject of interest and scrutiny, re- flecting broad - er trends in the state’s economy and real estate market. One of the primary driv-

three adjoin- ing states, the Port of Wilm- ington, and Philadelphia International Airport en- hances the at- tractiveness of industrial development

Joseph Latina Christopher Moore

ers of the state’s industrial land prices is its strategic location within the Northeast Corri- dor, a densely populated and

in Northern Delaware. New Castle County serves as a focal point for industrial activity, with its strategic position along

We see deals from your perspective.

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S pring P review By Jonathan Glick, Sheldon Gross Realty 2024 Real Estate Market Outlook: A shift towards tradition and opportunity M ost of the clients Shel- don Gross Realty rep- resented during 2023 These were owned primarily by private companies and in- vestors, all with strong entre- preneurial inclinations.

Businesses want employees to be on-site more often than during the past several years, while workers are focused on comfort, collaboration, and socialization. On the industrial side, the focus during 2024 will largely be on inventories – with a specific emphasis on them returning consistently to whatever sizes companies deem appropriate. The overall office market will continue to struggle dur- ing 2024, with the supply of vacant, available space far outstripping demand. That said, office property tenants

and investors will be able to find outstanding opportu- nities … assuming they’re willing to look hard, without rushing the process. One continuing trend will be the repurposing of large office parks and obsolete, multi- story general office buildings. Speaking of vacancies, the volume within the industrial sector is continuing the steady climb that’s been ongoing for about the past four quarters. But interestingly, the price for industrial properties is so far holding fast, and we’ve yet to see signs of decline. It’s an un-

usual situation, and one that bears careful watching. Overall, those in the office sector will be able to find value-added deals … with the caveat being that patience will be essential. The deals will be out there, but it will take a bit of time to track them down. On the industrial side, the inven- tory will steadily increase, so tenants will have access to low- er rents and investors will see higher cap rates. Again, the watchword will be patience. Jonathan Glick is executive vice president at Sheldon Gross Realty. MAREJ

– along with the major- ity of trans- actions we completed – were tied to the selling or leasing either of office space or industrial properties.

I anticipate that during 2024 we’ll see something of a return to a pre-Covid style of business. Will it be 2019 all over again? Definitely not – but with the pandemic slipping further into the past, the marketplace will manifest a significantly more traditional look. With office space, we’re in a period of trial and error in terms of how prop- erties are utilized, both related to scheduling and redesign.

Jonathan Glick

Sheldon Gross Realty inks 3,659 s/f lease in Freehold, NJ

Let Us Help You Find the Perfect Location for Your Business

absorbed by the end-users and passed on to the consumer. Controlling these costs could certainly assist in our ongoing battle to combat inflation. The good news is that after two consecutive years of tre- mendous growth followed by a mild contraction in 2023, the local industrial market is approaching stabilization this year. Joseph Latina, SIOR, and Christopher Moore, CCIM are managing principals at LMT Commercial Realty/CORFAC International. MAREJ continued from page 8A Exploring industrial land and building pricing in . . . The space will serve as a fabrication shop for Holland Marble, which uses granite and other materials to create, deliver and install countertops. Sheldon Gross Realty has represented the ownership of Fairfield Industrial Park – which is comprised of nine buildings totaling a combined 165,000 s/f – in nearly 40 dis- tinct transactions. MAREJ Fairfield Industrial Park FREEHOLD, NJ — A 3,659 s/f location in Freehold’s Fair- field Industrial Park has been leased by Holland Marble. The deal was brokered by Sheldon Gross Realty executive VP Jonathan Glick and assis- tant VP Matthew Leonelli , with the tenant represented by Michael Desero of Starker Commercial Realty .

PRICE REDUCED

FLEMINGTON – FOR SALE or LEASE 4,064 +/- Sq. Ft. Free Standing Building Currently a Restaurant. Downtown Business Area

FREEHOLD – FOR LEASE 7,000 +/- Sq. Ft. Office Suite For Lease

All glass Vestibule / 7 Spacious Offices / Conference Room 24 designated parking spaces and overflow spaces available

WEST ORANGE – FOR LEASE 5,172 +/- Sq. Ft. Office Divisible

SOUTH BRUNSWICK – FOR LEASE 1.97 +/- Acres – Outside Storage G reat site for equipment or vehicle storage

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WANT TO IMPROVE YOUR INVESTMENT? CONSIDER OUR PROPERTY MANAGEMENT SERVICES: Maximize the financial return on your properties with the help of our property management services. CONTACT US FOR A FREE CONSULTATION – 973-325-6200

SHELDON GROSS REALTY, INC. REALTORS ● Corporate Real Estate Services 80 Main Street, West Orange, NJ 07052 Tel. 973-325-6200 - Fax. 973-325-9090 www.sheldongrossrealty.com

The information contained herein has been obtained from sources considered reliable, but no guarantee of its accuracy is made by this company. Subject to errors, omissions or withdrawal without prior notice.

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By Jason Crimmins, CCIM, SIOR, The Blau & Berg Company State of Commercial Real Estate for 2024 and Vision for 2025

2 024 has been a year of adjustments thus far for industrial investors,

Since that time, IOS rents have decreased by approxi- mately 40%; however, in the last two months, these rents have stabilized. Warehouse rents have also stabilized, as more TI (Tenant Improve- ments) and abatements are offered as landlords are ad- justing to the market and realizing that such offerings are increasingly necessary to secure a tenant. Warehouse vacancy rates have increased from 5.5% to 6%. There is sustained de- mand in and around the port areas, as last-mile e-commerce

operators value proximity. Tenants coming off long leases are still experiencing sticker shock over renewal rates, and some are seeking space outside their preferred locations for cost reasons. Election years often prove to be historically slow, and 2024 is shaping up to be the same. Many want to see where fiscal policy is headed before making long-term commitments. With interest rates high, and uncer- tainty in the overall economy, the motto right now is “Survive until 2025”. Jason Crimmins, CCIM,

SIOR, is the president and broker of record for The Blau & Berg Company, an independent, full-service

commercial real estate bro- kerage firm providing ser - vices in the industrial, re- tail, and office spaces. MAREJ

brokers, ten- ants, and landlords. The rapid change in the market since the effects of COVID-19 and the pan- demic created an explosion

The Blau & Berg Company secures leases totaling ± 7,395 s/f

Jason Crimmins

in demand for supply chain space, resulting in a meteoric rise in associated costs that peaked in April 2022.

Libella Court

SHORT HILLS, NJ — The Blau & Berg Com- pany has secured the lease of ± 7,395 s/f of industrial flex space at 24 & 26 Libella Court, Newark. Blau and Berg’s Jason Crimmins, CCIM, SIOR, Alessan- dro (Alex) Conte, CCIM, SIOR, and Peter Murano, Jr., SIOR , acted as the list- ing brokers for both leases, and represented the new tenant at 24 Libella Court. The facility has two ad- ditional available spaces: 32/34 Libella Court, which totals ± 8,125 s/f and 28 Libella Court which offers ± 3,625 s/f. The new tenant at 24 Li- bella Court will be Associ- ated Imports, Inc. The new tenant at 26 Libella Court, who will use the space for warehousing, was represent- ed by Guzin Bayraktarlar from United Real Estate . In a seperate transaction, The Blau & Berg Company has arranged the lease of a ± 4.3 AC property at 646 Frel - inghuysen Ave. in Newark. Laura Crimmins, SIOR , of The Blau & Berg Company, represented the new tenant, ARB Parking EWR INC. Dean Brody from Jones Lang LaSalle represented the landlord, 646-693 Frel - inghuysen Avenue LLC. The property sits just north of Newark Liberty International Airport, con- veniently located between interchanges 14 and 13a of the New Jersey Tpke. and Rtes. 1 & 9. ARB Parking, which offers secure 24-hour parking at several major US airports as well as a luxury fleet of vehicles to transport travelers to and from the air- port, will add the land to its portfolio of Newark Airport parking facilities. MAREJ

Elizabeth Metropolitan Logistics Center 103,912 and 196,087 Sq. Ft. Industrial Opportunity

830 Morris Turnpike, Suite 201, Short Hills, NJ 07078 973.379.6644 www.blauberg.com .

103,912 Sq. Ft. BUILDING 1 19.75 Acres TOTAL ACREAGE 84 Spaces TRAILER PARKING

196,087 Sq. Ft. BUILDING 2 53 Tailboards LOADING

299,999 Sq. Ft. COMBINED SQ. FT. 174 Spaces AUTO PARKING 185 Ft. TRUCK COUNT Q2 2024 ESTIMATED DELIVERY

40’ Clear CLEARANCE

M id A tlantic Real Estate Journal — Financial Digest — 1031 Exchange — April 2024 — 11A

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By Jared Donnamiller, PE, AKF Group Conversions and Affordable Housing: A Blueprint for the Future

T he evident need for more affordable housing and the increase in com-

local lawmakers to change the incentives for developers. This ultimately creates more afford- able housing units for the fami- lies that need them and takes the glut of underutilized office space out of the market. Collab- orative solutions between the different cities, states, develop- ers, and design teams can leave a lasting impact that becomes a blueprint for the future. Jared Donnamiller, PE is a partner at AKF, an MEP/ FP Engineering & Inte- grated Services firm with offices throughout North America. MAREJ

with new technology. All these options are being reviewed with a focus on viability, cost,

lawmakers are putting finan - cial incentives in place to make the conversions viable and

lobby upgrades, amenities, decarbonization upgrades, and MEP system upgrades. Top tier developers and land- lords are entering the market with properties that are in desirable locations and contain upwards of one million square feet. This has the potential to offer great mixed-use and dedi- cated residential properties in central urban locations at rates that account for most family income ranges. The large-scale success of these conversions through 2024 and into 2025 may be a catalyst for more state and

mercial office building va- cancy rates in many ma- jor US cities has created a confluence of storms with a potential resolution to benefit fami - lies in need of

The support of lawmakers at all levels and the creative approach from design and construction teams may provide a solution that offers owners and developers an alternative to defaulting on existing loans while creating affordable housing options to benefit city residents.

energy usage, and phasing, among other factors. We have seen a significant uptick in activity in this mar- ket in 2024 as more building owners are challenged with increased vacancy rates and

provide affordable housing. While class A+ office properties are still seeing strong interest, the less desirable are getting less traction. The less desirable properties are also in more need of attention in terms of

Jared Donnamiller

housing and owners of mostly vacant office buildings. The support of lawmakers at all lev- els and the creative approach from design and construction teams may provide a solution that offers owners and develop- ers an alternative to defaulting on existing loans while creating affordable housing options to benefit city residents. Converting commercial of- fice spaces to residential has been limited to date. Current financial hardships and zoning requirements associated with the conversions has limited the viability of this approach to many owners. Law makers at the state and local levels are working on solutions to make these options pencil as well as updating zoning require- ments to make more large floorplate office buildings work for residential occupancy. Washington, DC is specifically offering a Housing in Down- town (HID) Program that will offer 20-year tax abatements to developers and owners who convert their office buildings to residential and include a minimum of 10% of the units for affordable housing. The challenge with the adaptive reuse approach is not limited to cost of construction but extends to design chal- lenges for architects and en- gineers tasked with turning a dated commercial office build - ing into a desirable place for families to call home. AKF’s involvement is specifically focused on mechanical, elec- trical, and plumbing (MEP) upgrades to the systems and decarbonization of the exist- ing buildings. The original construction date and existing MEP systems in place differ across the viable properties which require a custom design approach. There is a fine bal - ance between reusing and re- purposing existing MEP infra- structure vs. integrating new technology or fully replacing

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12A — April 2024 — M id A tlantic Real Estate Journal

www.marej.com

F inancial D igest

M id A tlantic Real Estate Journal — April 2024 — 13A

www.marej.com

EST NEW YORK, NJ — JLL has ar- ranged the $150 mil- New Jersey multi-housing project on Hudson River waterfront secures $150M in financing JLL’s Mikula, Cadranell, Klein and Carroll arranges the financing for RB3 W

lion construction financing for RB3, a to-be-built, 426-unit, 11-story luxury apartment building located on the Hud- son River Gold Coast in West New York. The property, which will be the only rental building directly on the waterfront, is part of the 200-acre, master- planned community known as Port Imperial and will offer residents spectacular, unen- cumbered views of the midtown Manhattan skyline. JLL worked on behalf of the borrower, Canoe Brook De- velopment , to secure the five- year, fixed-rate loan through The Northwestern Mutual Life Insurance Company. With an anticipated comple- tion of Q4 of 2026, RB3 will feature studio, one- and two- bedroom units with modern kitchens, quartz countertops, stainless-steel appliances, wood-style flooring, tall ceiling heights, large balconies, wide windows and in-unit washers and dryers. The property will boast a best-in-class amenity package, which will include a state-of-the-art fitness center with five separate special- ized rooms, a residential club

Jon Mikula

Jim Cadranell

Steven Klein

Ryan Carroll

room, private work offices and coworking spaces, a sundry shop, a dog salon, a virtual reality room, a golf simulator, a kids’ playroom, a sky lounge, a resort-style pool, and more. Situated at 30 Avenue at Port Imperial, RB3 is strategically located less than a three-block walk to the NY Waterway ferry, and a 0.4 mile walk to the Hudson-Bergen Light Rail Station, offering residents direct access to midtown and downtown Manhattan and the surrounding area. It will be im- mediately north of the Lincoln Tunnel entrance, three miles from downtown Hoboken and seven miles from the George

RB3

Washington Bridge. In addition to RB3’S impressive regional accessibility, the property of- fers residents walkability and will sit on an eighteen-mile waterfront walkway, spanning from Fort Lee to Jersey City, with substantial retail and entertainment centers located along River Rd. Additionally, Port Imperial

currently consists of over 7,500 rental and for-sale apartments and townhomes, 150,000 s/f of retail, two Marriott hotels, two public garages and over 20 acres of public space, including parks, sports fields, outdoor retail plazas and a riverfront walkway that extends two- miles long. Upon completion, Port Imperial will represent

one of the largest and most valuable single-planned devel- opments in the history of the state of New Jersey. The JLL Capital Markets Debt Advisory team was led by senior managing di- rectors Jon Mikula, Jim Cadranell and Steven Klein and Associate Ryan Carroll . MAREJ

Freddie Mac recognizes FCP as 2024 multifamily impact sponsor

savings projects and seeks opportunities to build resil- iency while supporting the livelihoods of its residents and tenants. FCP is a privately held real estate investment com- pany that has invested in or financed more than $12.9 bil - lion in assets since its found- ing in 1999. FCP invests directly and with operating partners in commercial and residential assets. The firm makes equity and struc- tured investments in income- producing and development properties. Based in Chevy Chase, MD, FCP invests both its commingled, discretion- ary funds and separate ac- counts targeted at major real estate markets in the United States. MAREJ

CHEVY CHASE, MD — FCP announced its recog- nition by Freddie Mac as a 2024 Multifamily Impact Sponsor. The Impact Spon- sor cohort comprises spon- sors who have shown sig- nificant results in providing affordable housing options, offering resident-centered services, and/or implement- ing sustainability practices at their properties. “FCP values its partner- ship with Freddie Mac and is honored to be recognized by them as a 2024 Multifamily Impact Sponsor, the highest level of recognition for Fred- die Mac borrowers,” said FCP senior vice president, Elizabeth Cotter . “This honor acknowledges FCP’s longtime commitment to the

Holly Spring Meadows in Maryland, owned by FCP and financed by Freddie Mac.

preservation of affordable housing as well as programs for resident services and we are very grateful to our team

and property management partners for their dedication in earning this recognition. We congratulate our fellow

cohorts of the 2024 program.” FCP focuses on value-cre- ating initiatives through resident services and utility

14A — April 2024 — Financial Digest — M id A tlantic Real Estate Journal

www.marej.com

F inancial D igest

Kennedy has sunk to a new low

interest rate

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Recently closed $2,700,000 Debt Payoff/Working Capital Dhaliwal TC Landing LLC Edgewood, WA

We kicked Pressure to the curb and delivered a $2.7 million land loan for 578 multi-family units and 31,500 sq.ft. of commercial space at just 8% interest! A deal that once again shows our commitment to being reliable and staying competitive when it comes to funding. With over $4 billion in closed loans, why would you go anywhere else?

Call 1-800-342-8500 or visit KennedyFunding.com

land, development and acquisitions, bankruptcies, discounted payoffs, note purchases, workouts and foreclosures

M id A tlantic Real Estate Journal — Financial Digest — April 2024 — 15A

www.marej.com

F inancial D igest Golden Tree Lending’s Zhang connects Dhaliwal TC Landing with NJ-based direct private lender Kennedy Funding closes $2.7 Million land loan in Tacoma, WA suburb at 8% interest rate E NGLEWOOD, NJ — When it comes to secur- ing a land loan, even With an estimated cur- rent population of just under 10,000, Edgewood is part of finish line,” Urrego said. “No matter the challenge, we have the experience and knowledge that other lenders are unable to close or are unwilling to touch. Leveraging the merits

“Edgewood sits just east of Tacoma, the third-biggest city in Washington state, and quite close to the tech and cultural capital of Seattle,” Wolfer said. “This makes housing and retail a good use of property, where both the population and employment opportunities are growing.” About Kennedy Funding Kennedy Funding is a global direct private lender special- izing in bridge loans for com- mercial property and land acquisition, development, workouts, bankruptcies, and foreclosures. MAREJ

the savviest borrowers can expect to face some challenges. That’s why Dhal iwal TC Land- ing, LLC came to Ken- nedy Fund-

“There are countless moving parts in any transaction, and this one was no exception,” said Edwin Urrego, executive loan officer, Kennedy Funding. “Our team has a track record of adaptability because we see our clients’ vision. We’re happy to have deftly navigated the challenges and successfully closed for another satisfied borrower.”

necessary to understand every borrower’s unique circum- stances and build solutions that get them to their goals.” Since its founding in 1987, Kennedy Funding has built a reputation for closing deals

of the deal itself, the Kennedy Funding team looks for rea- sons to say yes to borrowers. “Kennedy is a great organi- zation with a lot of integrity,” Zhang said. “Edwin and Kevin make a strong team.”

the larger South Sound region, which is located just by the Puget Sound waterway. Residents are drawn to the city’s small-town feel and prox- imity to the greater Seattle Tacoma area.

Edwin Urrego

ing to close a $2.7 million loan to build a mixeduse property in the Tacoma, WA, suburbs. Loan proceeds will assist with payoff and working capital for the development of 12.2 acres at 1926 Meridian Ave. East in Edgewood, WA. “Borrowers don’t always un- derstand the process and there were a lot of hurdles along the way,” said Jackson Zhang of Golden Tree Lending , who connected Dhaliwal TC Land- ing with the New Jersey-based direct private lender. “We faced environmental issues and problems with the developer agreement,” he said, “but Kennedy Funding did everything they could to get the loan to the closing table.” Notably, the $2.7 million loan was secured at an 8% interest rate. “Our work isn’t just to close deals, but to secure favorable terms,” said Kennedy Funding CEO/president Kevin Wolfer . “The strength of this deal allowed us to secure a good interest rate.” Development of this project has been long in the mak- ing. In 2019, the borrower purchased the collateral in four individual and contigu- ous tax parcels for $3 million, with assemblage costs of $6.3 million. The borrower worked extensively with the town to approve construction plans for the development, called Dhaliwal Landing. “There are countless moving parts in any transaction, and this one was no exception,” said Edwin Urrego , execu- tive loan officer, Kennedy Funding. “Our team has a track record of adaptability because we see our clients’ vision. We’re happy to have deftly navigated the challeng- es and successfully closed for another satisfied borrower.” “For more than 35 years, we’ve been the go-to lenders for creative problem-solving that helps borrowers reach the

16A — April 2024 — Appraisal — M id A tlantic Real Estate Journal

www.marej.com

A ppraisal By Carlo L. Batts, MAI, Rittenhouse Appraisals Make a designated real estate appraiser your ally

T here are many roles in the commercial real estate industry, each

company balance sheets. An important ally and part- ner for investors, developers,

ation and analytic skills of all types of properties. The MAI designation is the highest level

decisions. Their boots-on- the-ground approach and expertise provides firsthand perspectives and essential guidance, especially during a changing market. Having a designated real estate appraiser on the team brings a crucial role to how well and often a commercial real estate company hits their goals. Well beyond providing an impartial opinion of value for a property based on a par- ticular use, these individuals provide expertise and analysis that impact a portfolio at differ- ent times and in different ways.

These services are essential to making informed decisions on whether to invest further or sell. This information is also vital when it comes to evalu- ating property expenses. Es- pecially as markets continue to shift, keeping a close eye on current property value can be a driver in managing and limiting operating expenses. For example, is the property assessment accurate? This di- rectly impacts the real estate taxes to be paid and affects the income analysis. Do insur- ance and liability coverages accurately reflect the proper standard of value? Has a thorough and detailed OpEx analysis been conducted? Commercial real estate ap- praisers also help set transac- tion expectations. Having the opinion of an impartial, third- party that understands the major waves and nuances of a market goes a long way in set- ting effective pricing strategies and can help bridge the gap between fantasy and realty. With the right set of expec- tations based on an appraisal report, all concerned parties in the transition can negotiate with confidence. In addition, the insights a designated ap- praiser brings to the table are especially necessary in the proper handling of unique or complex properties. The vast network and im- portant referrals an appraiser can bring a team should also not be overlooked. Whether for an expected or unexpected need, experienced appraisers have navigated lots of muddy waters and have deep under- standing of local government, who to turn to when legal guidance is needed, and more. In conclusion, having an ongoing and close relationship with a designated commercial real estate appraiser is a best practice for real estate pro- fessionals. Having open and regular communication with them is crucial to gaining the most of their expertise and services, and ultimately creating the synergies and op- portunities to further build a portfolio of commercial assets. The Appraisal Institute has a searchable directory of desig- nated valuation professionals. Carlo L. Batts, MAI, is the principal of Rittenhouse Appraisals, a regional com- mercial real estate valua- tion firm based in Center City Philadelphia. MAREJ

one with its own set of re- sponsibilities. Collaboration with the nec- essary indi- viduals in this ecosystem is paramount to successful completion of

Collaboration with the necessary individuals in this ecosystem is paramount to successful completion of transactions, disposition of assets, expense management, and overall in maintaining the health of real estate assets and company balance sheets.

and operators, especially dur- ing changing market times, is a designated commercial real estate appraiser. A designated appraiser means the individ- ual has invested considerable time on improving their valu-

of professional certification an appraiser can achieve through the Appraisal Institute. These individuals serve as a frontline observer, provid- ing analysis and insights which lead to more informed

Carlo L. Batts

transactions, disposition of assets, expense management, and overall in maintaining the health of real estate assets and

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In 2023: $1.3 Million in Real Estate Tax Savings in the Delaware Valley

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