R EAL E STATE J OURNAL the most comprehensive source for commercial real estate news
Investors Bank provides financing for Historic Office Building Progress Capital closes three loans totaling $86.2 Million
ISSUE HIGHLIGHTS Volume 26 Issue 16 Aug. 29 - Sept. 11, 2014
M Commercial Real Estate Law Experts
The building’s Neo-Gothic ar- chitecture is visible for blocks because of its two-story cop- per mansard roof decorated with terra cotta gargoyles and eagles. The family is planning a renovation of the lobby and common spaces for the com- ing year while preparing for the opening of the Belgian Beer Café, who will anchor the building’s first floor retail. JERSEY CITY, NJ — A $27.5 million construction loan was arranged by Kathy Anderson to develop a five- story apartment building that will contain 265 units in addi- tion to 5,700 s/f of retail space. The rate is 30 day LIBOR plus 275 bps, floating for 24 months with two 12 month extension options and 25% limited re- course. Located directly across from the Mana Contemporary Fine
Art Complex, the building will benefit from the housing needs of many in the art community. HOBOKEN, NJ — A port- folio of multi-family properties was financed by Brad Do- menico , EVP of Progress Cap- ital in the aggregate amount of $23.7 million for a single own- er. Brad Domenico negotiated a rate of 2.99% for years 1-5 increasing to 3.99% for years 6-10 based on a 30 year amor- tization, non-recourse for all but one of the properties. The remaining property located at 901 Bloomfield Ave. required a construction loan to redevelop an existing Church into seven luxury condominiums. The lender advanced funds for the acquisition of the Church and provided enough time for the owner to secure the required approvals for the repositioning into condominiums. n
ANHATTAN, NY — A $35 million fixed rate loan was ar-
ranged by Kathy Anderson , founder of Progress Capi- tal for the 20 story Historic Landmark Office Building located at 220 Fifth Avenue. The non-recourse loan has a term of 15 years based on a 30 year amortization. The funds were used to refinance an existing CMBS mortgage with Berkadia Commercial Mortgage . This iconic office building has been owned by the same family since 1991. The owners worked with Prog- ress Capital over a 6 month period exploring all options available including CMBS, Insurance Companies and Regional Banks. The own- ers finally chose to accept a loan with Investors Bank which provided the flexibil-
3-8A
Governor’s Conference on Housing and Economic Dev.
220 Fifth Avenue
ity and personal service they required. Formerly known as the Croisic Building, 220 Fifth Ave. was constructed in 1912.
9-20B
Properties will be managed by Investment Real Estate Management Investment Real Estate’s Gilliland & Barry broker sale of 957 unit portfolio in Baltimore, Maryland
Section C
To Register www.marejournal.com 2014 Conference Schedule Sept. 18 NJ Apartment/ Multifamily Summit Oct. 16 NJ Construction Summit Oct. 17 PA Apartment / Multifamily Summit
management expertise to first generation assets. The only marketing strategy previous-
BALTIMORE, MD — In- vestment Real Estate, LLC announced the transaction where control of the Security Mini Storage and Beltway Mini Storage facilities was trans/ ferred to new entity. John Gilliland and John Barry represented both seller and buyer in the transaction. The properties will be managed
ly employed was on-site signage with a phone num- ber! All new systems are now in place for revenue m a n a g e - men t , web based mar- ket ing and l e a d g e n - eration, 24- hour rental capabilities, rental trucks, tenant insur- ance plans,
John Gilliland
Directory
Owners, Developers & Managers..Section B Green Buildings............................. 21-27B Shopping Centers..........................Section C
Beltway Mini Storage
A number of improvements are under way by Investment Real Estate Construction including new signage, office refurbish- ment, completion of the new roofing project, perimeter fenc- ing and installation of key pad operated gates. Moove In Self Storage is excited to move into the great- er Baltimore market. These properties offered a great opportunity to bring IREM’s
by Investment Real Estate Management (IREM) and operated under the trade name Moove In Self Storage. The properties are located in Baltimore, near the inter- section of Interstates 695 and 70. Combined, they total 957 units with 69,508 s/f of rentable space. The properties contain 13 single story drive-up build- ings constructed of split face block with metal roll up doors.
John Barry
retail sales, auction proce- dures, on-call maintenance and professionally trained on-site management. “This transaction was one of the most creative that we crafted in our 17 years of sell- ing self storage facilities,” said John Gilliland, broker. n
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JOIN TO LEARN MORE ABOUT WHAT IREM® CAN DO FOR YOUR CAREER, VISIT WWW.IREM.ORG/JOINIREM OR, CONTACT YOUR LOCAL CHAPTER:
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Mid Atlantic R eal E state J ournal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Publisher/Senior Account Executive ................................. Elaine Fanning Section Publisher .................................................................... Steve Kelley Senior Editor/Graphic Artist .................................................Karen Vachon Production Assistant ....................................................................Julie King Office Manager .................................................................... Joanne Gavaza Guest Columnist ...................................................................... Rich Murphy 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. Rockand, MA 02370 USPS #22-358 | Vol. 26 Issue 16 Subscription rates: $99 - one year, $198 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
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Rich Murphy
UPREITS: Tax-Driven Conversions For PropertyOwners
O
ne of the more under- discussed aspects of REITs are how they
can benefit a seller of real estate. By contributing a prop- erty to a REIT you can achieve many of the same benefits as- sociated with a §1031 exchange including deferral of gain rec- ognition. For the owner looking to monetize their investment in a tax advantaged manner with the possibility of additional up- side this option deserves some additional examination. Of the different types of RE- ITs that exist, one sticks out as being particularly useful to sellers of real estate. The UP- REIT. An UPREIT (Umbrella Partnership REIT) structure is one that has a REIT at the top of the structure and a partner- ship, which directly owns the real estate below it. Thus, the REIT simply owns an interest in the underlying partnership and not title to the actual properties themselves. (See figure 1) Some REITs, known as DOWNREITs will acquire some properties outright, and also have interests in a lower tier partnership, which directly owns properties. This article will focus on the UPREIT how- ever it’s worth pointing out that the outcome for a contributor of property from a tax perspective is the same with an UPREIT as it is a DOWNREIT. The major question is why the seemingly convoluted structure? One of the mechanisms by which these UPREITs acquire properties in their lower tier partnership (the “OP” or op- erating partnership) is by contribution. That is to say, an owner contributes their property into the OP in return for an ownership interest in the partnership, usually referred to as “units”. These units are typically transferable one for one with shares of the REIT’s stock. The number of units received for the property is negotiated in much the same way it would be if the property were being sold for cash. For example, if the property being contributed had a fair market value of $1Mil and the stock of the REIT was trading for $25/Share than the contributor of the property
are just that, stocks. While it is helpful to think of them as real estate mutual funds they tend to behave as stocks not as real estate. This should come as no surprise; however it’s worth mentioning as many people use them as a way of exposing their portfolio to real estate. Strictly speaking REITs may not be best option for accomplishing this as they track with the S&P 500 much more closely than they do any real estate benchmark (i.e. interest rates). With that said, probably the most obvious benefit of this characteristic over a tra- ditional piece of real estate is liquidity. Under the best circumstances, a real estate in- vestment will take 90-180 days to monetize. By contrast, an OP unit holder could convert his units and sell his shares within days or weeks. This inherent liquidity is one of the biggest differences between holding an actual property versus be- ing an OP unit holder or REIT shareholder . Management, or the absence of having to do it is yet another. A REIT is very much an oper- ating business. In other words it has staff, managers and officers, and their abilities or lack thereof will play a large role in the success or failure of the REIT. Far more so than say the management team of a mutual fund to which REITs are often compared. REITman- agement can greatly influence the operating results of their properties by executing leas- ing plans, utilizing leverage, and engaging in other property level management strategies in a way that a mutual fund manager cannot influence the underlying businesses that they own shares in. The fund manager will time the buying continued on page 12A
would likely receive 40,000 units. As a function of the tax rules at work governing such a transaction, this is in and of itself not a taxable event. It is not until, the now partner converts his or her units into shares of REIT stock that he/ she must recognize any gain . The benefit here is that you can defer the recognition of gain on the sale of your prop- erty until you want while at the same time largely locking in your profit (provided the value of the REIT shares don’t fall). Further, there is the possibil- ity of additional upside in the deal. For instance, using our example above, if the share price had risen to $30/ share when we converted our units to shares we could achieve an ex- tra $200K profit by redeeming stock worth $1.2Mil versus the $1Mil that we agreed to back at the initial contribution. Obvi- ously, the same math works in reverse too. One might ask “How is a such a transaction more ad- vantageous than say a §1031 exchange?” It all depends on who you are and what you’re looking for. (See Table 1 for Pros/Cons) For example, if you only own a single property, the entirety of your risk associated with real estate is concentrated in that one asset. By contributing that prop- erty to the REIT and receiving OP units in return you are effectively now diversifying that risk across all the proper- ties in the REIT of which your property is now one. This abil- ity to diversify, and therefore decrease risk is a common motivation amongst not only property contributors but also REIT investors in general. One thing to bear in mind however is that REIT stocks
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C ommercial R eal E state L aw E xperts By Derek P. Dissinger, Barley Snyder Act 117 signed into law amending the Mechanic’s Lien Law and easing construction lending
A
few months ago we published an article titled, “Pennsylvania
ate Bill 145 of 2014 into law on July 9, 2014 as Act 117 of 2014. This is welcome news for developers, banks and title companies. The key provision of Act 117 (“the Act”) is that it gives an open-end mortgage, where at least 60% of the loan proceeds secured by the mortgage are used for “costs of construc- tion”, priority over mechanic’s liens filed after the bank’s mortgage is recorded. This fixes the current problem created by the Pennsylvania Superior Court’s Opinion in Commerce Bank/Harrisburg,
N.A. v. Kessler, where the developer already owns the real estate and has started construction before the bank’s mortgage is recorded. For example, under the law prior to the Act, if a devel- oper purchased real estate, hired an excavator to begin site work, and then, after site work was underway, obtained a construction loan, the me- chanic’s lien that would result from the excavator not being paid (and any subsequent, unpaid contractors) would have priority over the bank’s mortgage unless 100% of the
proceeds of the loan secured by the open-end mortgage were used for “hard costs”. Many developers will acquire real estate and begin con- struction using equity prior to obtaining a construction loan, so the Kessler case created a headache for title insurance companies, who were asked to insure the priority of the bank’s mortgage over me- chanic’s liens. Now, under the new provi- sions of the Act, if, for example, a bank extends a $1,000,000 mortgage to a developer, as little as $600,000 can be used
for both hard and soft con- struction costs and as much as $400,000 can be used to refi- nance existing debt, and both the bank and title company can have some comfort as to the priority of the mortgage. The Act should ease the anxi- ety that previously existed for title companies providing me- chanic’s liens coverage. Banks should be expected to include specific language in their mortgages regarding use of funds in compliance with the Act, because title companies regularly ask to review the mortgage they are insuring when issuing construction- related endorsements. Unfortunately, while wait- ing for the Act to pass, the Ti- tle Insurance Rating Bureau of Pennsylvania (TIRBOP) adopted new title insurance endorsements which became effective July 1, 2014. The purpose of the new endorse- ments is to mitigate the in- creased risk to title companies resulting from the Kessler case and significantly increas- es the cost of construction lending. To receive the same coverage which would have been given to an open-end construction mortgage prior to the Act, borrowers will now pay a 20% increase over the applicable non-sale rate. If the bank is willing to accept limited mechanic’s lien cov- erage (explained below), the borrower will now pay a 10% increase in premium. These increases are in addition to TIRBOP endorsement 1015, which already carries a 10% increase. For example, if a de- veloper obtains a $5,000,000 loan and a corresponding loan policy of title insurance with full mechanic’s lien coverage and common construction- related endorsements, the total increase in premiumwill be almost $5,000. The limited mechanic’s lien coverage which carries a 10% premium over the ordi- nary non-sale rate is offered through a new endorsement, TIRBOP endorsement 1500. This endorsement limits the bank’s coverage to the amount of the loan secured by the mortgage advanced for con- struction. Each time the bank makes an advance, the bank will be required to receive a date-down endorsement, TIR- BOP endorsement 1520, to in- crease the amount of coverage continued on page A
House and Senate pass bills to ease construction l e n d i n g . ” The article d e s c r i b e d Senate Bill 145 of 2014 which con-
Derek Dissinger
templated amendments to the Mechanic’s Lien Law of 1963 authored to ease construction lending. Fortunately, Gover- nor Tom Corbett signed Sen-
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C ommercial R eal E state L aw E xperts By Jeffrey L. Silberman, Esquire, Kaplin Stewart
The ups and downs of selling outparcels
A
lthough the market seems to be picking up, for various reasons
level of review could be less intensive than a subdivision, some municipalities now treat subdivision and condo as the same process. The third alternative is creating a financial subdivi- sion. A financial subdivision is an animal created by some municipalities’ zoning and/or land development ordinances. In this case, an owner is al- lowed to sell and mortgage separate lots within a single zoning parcel, but the zoning requirements continue to be applied to the larger parcel, not the individual lots. This Committed to Your Goals Regardless of what route is taken to create the lots, in each scenario, the newly created parcels need to be subjected to some sort of reciprocal easement agree- ment (an “REA”) so that the parcels can continue to enjoy the rights that existed before the parcels were created. Since there is only one REA document that will govern the center, each owner, and the tenant of the parcel, takes a bite of the apple in negotiating the REA, and the developer finds itself ping-ponging back and forth between various parties, each trying to make their best deal in one document. In addition, the tenants who pre-dated the REA have their own concerns about having their deals changed by an REA. Finally, and perhaps most importantly, the REA must be detailed enough to make sure that each parcel owner does not violate the leases on other parcels. This is easy to manage when a center owner administers all the leases, but far different when there are multiple landlords who may not even know what terms are in leases off of its parcel. Selling outparcels can work, but it takes careful consideration and planning to make sure your bright idea is not darkened by the details. Jeffrey L. Silberman, Es- quire is a principal in the Real Estate Transactional group of Kaplin Stewart in Blue Bell, PA. n seems to be the best of both worlds, but not many mu- nicipalities understand and permit this.
the pace of d e v e l o p - ment of new s h o p p i n g centers re- mains slow- er than the glory days of the early to mid 2000s.
Jeffrey Silberman
A product that remains at- tractive is redevelopment of “value add” centers. In many cases, the prices are lower because the center is not fully performing, governmental ap- provals are easier because the municipality is interested in cleaning up eyesores and the population is already there, as opposed to waiting for it to come in a newer, developing area. However, developers/ owners are challenged to find ways to finance the acquisition of centers that are not fully leased. An effective way of squeez- ing money out of a center needing redevelopment is selling the outparcels. Of- ten, outparcels are leased to national restaurants, banks, convenience stores and drug stores that attract buyers hungry to buy assets at low cap rates. Unfortunately, many centers are a single, unsubdivided parcel, so sell- ing outparcels is not as easy as it sounds. The first issue to deal with is how an outparcel will be created as a parcel that can be legally sold separate from the balance of the center. One alternative is legally subdividing the center under the applicable subdivision ordinance. For this to occur, all of the parcels created by the subdivision must meet the code, which is not always easy. There are various criteria that each lot must meet, and it is not unusual for the owner to find that its plan does not comply with code. Another possibility is cre- ation of a condominium. In Pennsylvania, creation of a land condominium–meaning drawing horizontal lines on a plan to create condominium units comprised of land only – has become more diffi- cult. Recent court decisions require a property owner to obtain consent from the municipality to sell condo- minium units. Although the
The guy on the left spent lots of money to hire a bunch of experts whose ideas never took flight. The guys on the right hardly took notice – they were too busy flying their idea. If they were law firms, which one of these guys would you rather work with? Contact: Jeffrey L. Silberman • jsilberman@kaplaw.com 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610.941.2518 • www.kaplaw.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 n e y s a t Law Total commitment works wonders. Talk to us first.
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Left : Campbell Soup World Headquarters, Camden, NJ; Top Right : Meadowlands Hospital, Secaucus, NJ; Bottom Right : Mack-Cali Realty Corp, King of Prussia, PA
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Meet Our Speakers & Moderators
Alan R. Hammer , Partner — Brach Eichler, LLC Hammer joined Brach Eichler, LLC immediately after graduation in 1971. He is former Managing Partner and a member of the Executive Committee and Real Estate Practice Group. He has concentrated his practice in the areas of investment real estate transactions and tax appeals. In 1972 he acquired his first apartment house and has been personally active in the acquisition, ownership, management and operation of investment properties, primarily apartment complexes, throughout NJ and EPA. Most of his properties are managed by Affiliated Management Company or Kriegman and Smith, Inc. Timothy Touhey , CRE Team Leader — Investors Bank Touhey is in charge of expanding Investors Bank’s Commercial Real Estate Finance Group into the southern and Central New Jersey, Philadelphia and Delaware markets. Tim brings to Investors broad expertise in financial services, construction, housing and urban development, government affairs, and relationship building across many industry sectors. During his career, Tim has advised and served several of New Jersey’s Governors, including Chris Christie, Jon Corzine, Richard Codey, and Christine Todd Whitman. Jose Cruz , Senior Managing Director — HFF New Jersey Cruz is a Senior Managing Director in the New Jersey office of HFF with over 21 years of experience in commercial real estate. He specializes in investment sales in New Jersey, New York State and Connecticut. Over the course of his career, Cruz has been involved in over $18.4 billion of office, industrial, retail, multi-housing and land sales. Cruz joined the firm in March 2010. Prior to HFF, he was the Executive Director of Cushman & Wakefield’s New York Area Investment Sales Group where he spent more than 17 years. Israel Schubert , Managing Director, head of New Jersey office — Meridian Capital Group Schubert joined Meridian in 1996 and has been a Managing Director since 1998. Schubert manages Meridian’s Iselin, NJ office and previously managed the company’s office in Englewood Cliffs. Under Schubert’s direction, Meridian’s New Jersey office focuses primarily on serving borrowers in the NJ, PA, DE and MD markets. Adam Altman , Managing Member — KABR Group Altman is a real estate investor and entrepreneur with over 10 years of experience on both the buy and sell-side of the business. Altman is a real estate investor and entrepreneur with over 10 years of experience on both the buy and sell-side of the business. Before joining KABR, Altman was a senior member of the Acquisitions and Development group for a multi-billion healthcare company. In that capacity, Altman managed and sold troubled assets within the firm’s real estate portfolio and identified real estate sites on which to build and operate healthcare facilities. Mark M. Scott , Founder and Principal — Commercial Mortgage Capital Corporation Scott established Commercial Mortgage Capital Corp. (CMC) in 1996. Since then he has arranged over $6.1 billion dollars of debt and equity for his clients. His focus over a 25-year career has been multifamily finance. Scott continues to expand CMC’s strong commercial lending platform in New Jersey and the Tri-State Region. In April 2009, Mark appeared on Bloomberg TV as a guest speaker regarding commercial real estate finance. He is regularly quoted by CNN in their commercial real estate columns, has appeared on WABC-TV Viewpoint New York, and is a regular contributor to GlobeSt. com, Mid-Atlantic Real Estate Journal, Wall Street Journal and Real Estate Forum. Jeffrey Squires , Vice President — The Kislak Company Squires joined The Kislak Company, Inc. in 2007 and specializes in the sale of multifamily and other investment properties throughout northern New Jersey. After his first year with Kislak, Squires received the company’s prestigious Rookie of the Year award, which recognizes a newer salesperson who records the greatest achievements during the year. He was promoted to vice president in 2009 becoming one of the youngest salespeople in Kislak’s then 104-year history to earn that distinction. He was also recognized in Real Estate New Jersey as one of “Tomorrow’s Leaders,” which recognizes thirty up-and-coming real estate professionals under the age of 30. Patrick Gniadek , Vice President of Investments — AvalonBay Communities, Inc. Gniadek is responsible for all acquisition and disposition activity in East Coast markets. Patrick has been involved with over $10B in total transaction activity over the course of his twenty-five career. Gniadek began his career in 1991 as a CPA in the commercial real estate industry and is a gradute of Indiana University Bloomington. Paul Heilmann , Senior Vice President — Columbia Bank Heilmann is the Senior Vice President (SVP) of Commercial Real Estate Lending and Commercial Construction Lending at Columbia Bank, one of New Jersey’s leading community banks with total assets of $4.5 billion and 44 branches. Heilmann is a member of the Bank’s Commercial Loan Committee and Senior Loan Committee. His responsibilities include oversight of two lending groups. Prior to joining Columbia in 2004, he was the SVP of Commercial Lending at Penn Federal, a Newark, NJ based bank for 10 years. Kathy Anderson, Founder and President — Progress Capital Advisors Progress Capital Advisors is a mortgage brokerage firm that specializes in commercial real estate loans, joint venture relationships and private equity. Since its inception, Progress Capital has closed in excess of $30 Billion in transactions with regional banks, insurance companies, hedge funds and investment banking firms involving all aspects of the capital structure including debt, equity and hybrid capitalization. Kathy is also a Director at Regal Bank headquartered in Livingston, NJ. John Motzel , Senior Vice President — Berkadia Commercial Mortgage Motzel serves as a Senior Vice President of originations for Berkadia Commercial Mortgage. Based in New York City and Shrewsbury, NJ, Motzel is actively involved in originations of multifamily and commercial real estate financing throughout the United States. Berkadia Commercial Mortgage is a leading principal and intermediary providing debt and equity solutions for multifamily and Whitmer serves as Senior Director of the Metropolitan Area Capital Markets Group in C&W’s East Rutherford, New Jersey office. Part of a 13-member team, Mr. Whitmer is responsible for managing, underwriting, and marketing investment properties for sale and arranging joint ventures in the suburban markets surrounding New York City. While he handles all asset types, his focus is on multifamily transactions. His clients include pension fund advisors, REITs, and a range of domestic and foreign private investors. Kevin Sheehan , Managing Director — Greystar Sheehan is the Managing Director for the Northeast region of the company, handling operations from the mid-Atlantic up through New England, including over 2100 units in NJ. His role includes property operations, third party business development, client relationships, and assisting Greystar’s investment and development platform expand throughout the region. Prior to joining Greystar, Kevin was President of Property Operations for Bainbridge, an East Coast owner, developer, and manager of apartments. Before Bainbridge, he was Senior Vice President at Bozzuto, overseeing 12,000 units in the DC Metro area, Philadelphia, and New Jersey. Brian Hosey , Regional Manager — Marcus & Millichap Commercial Real Estate Hosey is regional manager of Marcus & Millichap’s New Jersey office. Hosey joined the firm in September 2010. In 2012 he was named “MVP” of the Manhattan office and received his first sales achievement award. Mr. Hosey joined the management team in February 2013 as sales manager of the Manhattan office. In April 2014 he was promoted to regional manager of the New Jersey office. Prior to joining the firm, Hosey worked as a talent agent in the music business. He graduated magna cum laude from Syracuse University with dual bachelor’s degrees in business and communications. Nat Gambuzza , Director of the National Multi Housing Group — Marcus and Millichap Real Estate Investment Services Gambuzza is Vice President of Investments, founded The Gambuzza Group and is Director of the National Multi Housing Group of Marcus and Millichap Real Estate Investment Services. The Gambuzza Group was formed in order to provide clients a depth of brokerage that is unparalleled in the industry. Gambuzza is an authority in the field of multi-family and mixed-use property transactions. He has a long list of loyal clients including private investors, lenders, and institutionss of various net worth. He has worked on complicated transactions including portfolio sales and uses creativity to find ways to meet his clients’ goals. Gambuzza’s vast knowledge and attention to detail made him a leader in the industry. Tracey Goldstein , Member — Feinstein, Raiss, Kelin & Booker, L.L.C. Goldstein concentrates her practice in real estate litigation. She has handled matters in the New Jersey State and Federal Trial Courts, in the Appellate Division and in the New Jersey Supreme Court. She regularly represents property owners, managers and developers of real estate. Goldstein serves on the Board of Directors of the New Jersey Apartment Association (NJAA) and counsels NJAA on emergent landlord tenant issues and key legislation. She has presented seminars on a variety of issues including fair housing, bedbugs and residential and commercial evictions. She has served as a panelist at seminars presented by NJAA, the New Jersey Institute of Continuing L egal Education, the Division on Civil Rights, Hudson County Bar Association, New Jersey Affordable Housing Management Association and the Property Owners Association. Marty Josephs , President — Ingerman Management Company Marty Josephs manages the daily operations for a portfolio of nearly 60 rental properties. His responsibilities include supervising a staff of senior executives, handling all personnel matters, overseeing leasing and marketing, approving annual budgets, monitoring monthly financial performance, and assuring compliance with all local, state and federal regulatory requirements. commercial real estate nationwide. We serve as an national FreddieMac, Fannie Mae DUS and HUD Seller/Servicer. Brian J. Whitmer, CCIM , Senior Director — Capital Markets Group Cushman & Wakefield Of New Jersey, Inc.
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Real Estate Journal — August 29 - September 11, 2014 — 9A
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M id A tlantic R eal E state J ournal Tropp &Merkin negotiate 5 year 4.56% fixed rate loan Eastern Union Funding arranges $14.5m in financing
R EAL E STATE J OURNAL themostcomprehensive source forcommercial realestatenews
2014 Conference Schedule
B
year. Through that meet- ing, we were able to arrange this phenomenal deal,” Tropp
The acquisition is a ma- jor landmark for Cohen In- vestment Group, a recently- launched company founded by industry veteran Hugh Cohen in August 2013. Cohen has a background in leasing, sales, investment, acquisition and mezzanine lending, and has completed over $500 million in leasehold transactions in the course of his career. “Working with David Mer- kin, Marc Tropp and Abe Bergman was very produc- tive,” Cohen said of the trans- action. “They helped guide us through the entire process.” n
Bethesda, MD — The Cohen Invest- ment Group purchased
September 18
NJ Apartment / Mulitfamily Summit
October
16
NJ Construction Summit
said. “What bet ter way to quantify the success of the show t h a n t h i s monumental purchase?” T o w n Point Center
a prominent building in the heart of Norfolk, VA, in a $14 . 5 million deal which closed Friday, Au- gust 1, 2014. Town Point
October
17
PA Apartment / Multifamily Summit
November 13
NNJ Retail & Restaurant Summit
December 11
NJ Real Estate Capital Markets Summit
For Speaking/Sponsorship information:
Marc Tropp
David Merkin
Linda Christman, Publisher/CEO Mid Atlantic Real Estate Journal Direct: 781-871-3456 lchristman@marejournal.com www.marejournal.com
Contact:
is roughly 90 percent occupied by successful regional and lo- cal tenants, several of whom just exercised loan renewal options.
Center is a 131,259 s/f struc- ture located along Norfolk’s highly traveled office corridor. Finalizing the deal was a loan from two senior real estate professionals repre- senting the Maryland arm of Eastern Union Funding Marc Tropp and DavidMer- kin negotiated five year 4.56 percent fixed rate loan through a Wall Street lender. “We connected with Hugh Cohen , from the Cohen In- vestmentGroup , at the ICSC show in Maryland earlier this NorthMarqCapital’s Westchester office secures two transactions in NY WESTCHESTER, NY — Robert Ranieri , senior vice president/managing direc- tor of NorthMarq Capital’s Greater Westchester NY/CT regional office secured financ- ing for two transactions in New York, totaling a combined $6.875 million . Cedar Plaza: This 63,591 s/f office property, located at 20 Cedar St., New Rochelle, NY was refinanced at $6,000,000. The transaction was struc- tured with a 10-year term and 25-year amortization schedule. Northmarq Capital arranged financing for the borrower, Cedar Plaza Associates LLC through its relationship with a regional bank. Sidney Frank Importing Company is the major tenant of the property. North Salem Center: This 23,300 s/f mixed-use property, located at 56-62 June Rd., North Salem was refinanced at $875,000. The transaction was structured with a 7-year term and 30-year amortization schedule and was arranged for the borrower, North Salem Brothers Realty, LLC through NorthMarq’s relationship with a regional bank. Major tenants of the property include the US Postal Service and M&T Bank. n
Register:
Eastern Union Arranged Financing For
Mount Vernon Square Apartments Baltimore, MD $4,600,000
• Refinance • 7Year Term • Non-Recourse
Negotiated by MarcTropp 347-678-8491 Senior Managing Director Michael Obadia 202-617-3131 Vice President
10A — August 29 - September 11, 2014 — M id A tlantic
Real Estate Journal
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M id A tlantic R eal E state J ournal
For phase 2 of the Pearl in Edgewater CMC arranges $20m senior secured construction loan
Multiple class B industrial transactions Metz of Bussel Realty completes 145,500 s/f
EDISON, NJ — Bussel Re- alty corp. (brc) announced VP Jordan Metz completed
•20,000 s/f lease renewal by Ultimate Sea foods for five years at 2401 East Linden Ave. in Linden. •17,500 s/f new lease by Luxor Linens for five years at 1416 East Linden Avenue, Unit C, in Linden. •16,500 s/f lease renewal by Time & Again Antiques for five years at 1416 East Linden Avenue, Unit D in Linden. •14,000 s/f new lease by El- egant Furnitur for five years at 2500 Brunswick Ave.in Linden. •10,000 s/f new lease by Ben- jamin’s Bakery for five years at 1057 Pennsylvania Ave./One West Baltimore in Linden. •2,500 s/f new lease by Bags USA for three years at 1230 E. Elizabeth Ave. in Linden. Metz will market the sale of 2345 East Linden Ave., in Lin- den, NJ. 2345 East Linden Ave. is a 42,000 s/f fully-functional bakery facility, situated two streets parallel to Rte. 1-9, in one of the most highly-sought after industrial locations in NJ near Port Newark/Elizabeth. n
dgewater, NJ — Mark Scott’s Com- mercial Mortgage Capital (CMC) announced E
Pearl condominium in Edge- water. CMC also previously arranged a $35 million Phase 1 loan for the project, which is now over 50% sold. Located at 45 River Rd. in Edgewater, the Phase 2 property is a vacant five- story commercial building, which will be converted into a six-story residential prop- erty comprised of 63 for-sale ultra-luxury condominium and nine registered bidders. “We had very good interest in this farm from the day we began promoting, all the way through sale day,” said War- ner Real Estate & Auction President and Founder, Rich- ard Warner. “Our clients, the co-executors of the estate were very pleased with the outcome. The farm was becoming too costly to maintain and a date- certain auction event allowed them to sell the property for the estate in eight weeks and move on with their lives.” In other news, Warner Real Estate has added two sales associates to their growing Woodstown office staff: Charlie Joyce , a life long Salem County resident and farmer has joined Warner Real Estate & Auction Com- pany as a sales associate. Joyce has successfully sold
units. Originally designed by world-renowned architects Skidmore Owings & Mer- rill for Lever Brothers in 1953, the Pearl is being transformed by Lessard De- sign Associates and Alan Tanksley Interiors to include full-height windows, the fin- est natural finishes and the latest sustainable systems, as well as panoramic Hudson River views. n and represented buyers in the sale of commercial, resi- dential and investment prop- erties in Salem, Gloucester, Cumberland counties and Ocean City, NJ. Neal Sheppard , owner of N. Sheppard Construc- tion has joined Warner Real Estate & Auction Company as a sales associate and auc- tioneer. He plans on focusing his real estate practice on invest- ment properties, foreclosures and the sale of area farms. According to Warner, “Ne- al’s extensive background in construction and business coupled with his unquestion- able integrity make him a perfect fit for our company. We are thrilled he has joined our company and feel he will be a great asset to our customers and clients.” n Coach was represented by CBRE vice chairman Greg Tosko along with Matthew Corpuel and Kevin Dud- ley . Fidelity National Informa- tion Services also extended the lease on their 28,975 s/f office, located at 400 Com- merce Blvd. Fidelity was represented in the transac- tion by Bo Hoban of Orion Realty Group and Peter Rossi of Newmark Grubb Knight Frank . n
seven long- t e rm l ea s e t r a n s a c - t i o n s a n d one sale over the course of the past two mo n t h s a t the Exit 13A submarket in NJ, totaling 145,500 s/f.
that it re- cently closed a $20 mil- lion senior s e c u r e d c o n s t r u c - tion loan for Phase 2 of the highly successfully
Jordan Metz
The seven leases and one sale, comprised of three re- newals, four new transactions, and one sale were all signed in “rapid succession” over the past seven weeks, according to BRC. Metz of BRC was responsible for the deals. Transactions completed by Metz over the past two months include: •35,000 s/f sale to COS Phones at 785 Rahway Ave.in Union. •30,000 s/f lease renewal by SGF Freight Services Inc., for five years at 551 New Point Rd. in Elizabeth. Pittsburgh, PA — Lawrence O’Brien has joined the York office of Mid- Atlantic Valuation Group, Inc. as an associate. He has had a 15-year career in com- mercial real estate sales and property management. Christian Stott has joined the Wayne office of Mid-At- lantic Valuation Group. Stott and selling of the underlying securities of the Fund in such a way as to maximize the net asset value of the fund, but his influence on those actual businesses that are owned is marginal. REIT management is involved in each property at a much more intimate level and thus can have a far greater influence on returns. Simplifi- cation and predictability are two other advantages. Beyond not having to manage the properties, the OP unit holder can rely on regularly scheduled cash distributions/dividends that likely will rival the cash flow they were previously gen- erating from their property. This lends itself to being part of an easy to administer port- folio whereby the investor is simply getting for a check. Ad- ditionally, most REITs publish
Mark Scott
Warner Real Estate sells 228-acre farm for Albert M. Bell Estate at auction for $1.075million
WOODSTOWN, NJ — War- ner Real Estate & Auction Company , recently completed the non-distressed auction of a 228 +/- acre farm with a 4-bedroom farmhouse, 2 pole barns and irrigation pond in Quinton and Lower Alloway Creek Twps. The auction by order of the co-executors of the estate of Albert Bell took place Friday, April 25th. The farm included three tracts, the largest tract being 135 +/ -preserved acres and the three tracts were of- fered separately and in their entirety. The prices realized by selling the three parcels separately by “bidder’s choice” was $900,000 and $1,000.000 plus the buyer’s premium for the farm in its entirety. A highly visible marketing campaign produced more than 40 inquiries, 18 property tours CARLSTADT, NJ — Rus- so Development announced the lease renewals for Coach and Fidelity National Infor- mation Services. Coach, Inc. has maintained office and warehouse space at 410 Commerce Blvd., within Russo’s corporate park, since 1990. This month, they ex- tended their lease of the 65,090 s/f back office/ware- house unit, making them Russo’s longest-term ten- ant in the business campus. as a result of the new advance. This endorsement carries a fee each time it is issued. The bank will need to give the title company the advance request and lien waivers signed by the applicable contractors to receive this endorsement.
Mid-Atlantic Valuation Group adds O’Brien & Stott to Wayne and York offices
Christian Stott
Lawrence O’Brien
is a licensed appraiser trainee in PA n
Prominent Russo Development tenants extend lease terms
continued from page 2A UPREITS: Tax-driven conversions for . . .
supplemental data well beyond what is required in their SEC filings. This data provides insight, and in many cases, property level detail of how the REIT is performing. From the perspective of in- vestors and analysts alike, there is no other industry that does as good a job at providing information to its investors as the REIT industry does. Given all that, it may not be a perfect fit for everyone, so who could benefit from such a strategy? Portfolio owners looking to es- cape day-to-day management responsibilities, family trusts for much the same reason, or as we mentioned earlier perhaps the owner of a large single as- set who wants to diversify his or her real estate holdings. Rich Murphy is manag- ing director of Calkain Companies n
400 Commerce Blvd.
Hopefully, TIRBOP will now again adjust its rates and policies in light of the Act, but the earliest this can be expected to occur is July 1, 2015. In the meantime, the implementation of the Act is a positive step towards making construction lending easier for all parties involved. Derek Dissinger is an attorney with Barley Sny- der, where he counsels his clients in a variety of real estate and finance & creditors’ rights issues. He is also a licensed title agent. n Act 117 signed into law amending the Mechanic’s Lien . . . continued from page 4A
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