- DC
Fund III is expected to accommodate $1.7 billion of total investments Federal Capital Partners closes $512 million FCP Realty Fund III, L.P.
ISSUE HIGHLIGHTS Volume 28 Issue 21 November 11 - 24, 2016 FINANCIAL DIGEST FEATURING THE LENDER’S DIRECTORY 5-24A Central NJ 7-13B “The pull back is well underway” By Mark Scott, Commercial Mortgage Capital For speaking and sponsorship information, please contact: Linda Christman at 781-871-3456 or lchristman@marejournal.com New Jersey Commercial Healthcare & Medical Properties Summit UPCOMING CONFERENCES December 8, 2016 Pittsburgh Commercial Real Estate Forecast Summit December 9, 2016 6A
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billion of total investments. Fund III has already closed 20 investments committing $332.4 million of fund equity and representing total value of $1.1 billion. FCP has grown to accommodate its increased assets under management, larger fund capacity and geo- graphic expansion, more than doubling its staff over the past several years. “FCP is extremely pleased with the response to the Fund III offering,” said FCP manag- ing partner, Esko Korhonen . “Since raising our initial fund in 2008, FCP has closed more
than 100 transactions, rep- resenting a range of invest- ments from structured loans and equity investments to the purchase of a public company, totaling an aggregate value in excess of $4.0 billion. We are excited at the prospects for our third fund given the opportunities created by the positive growth outlook for the Eastern U.S.” Korhonen continued, “FCP’s active investment pace is, in large part, due to our abil- ity to move quickly in mar- kets where we have deep knowledge and established
relationships. We have a proven track record closing complex transactions, in particular those that have a need for redevelopment and repositioning to fully achieve value. Our access to fully dis- cretionary capital also allows for the flexibility to invest throughout the capital stack as equity, preferred equity, mezzanine debt or any com- bination of the above.” FCP would like to acknowl- edge and thank Lazard for their assistance with the FCP Realty Fund III, L.P. fundraise. n
HEVY CHASE, MD — Federal Capital Partners (FCP) an-
nounced the c l o s i n g o f FCP Realty Fund I I I , L.P. (Fund III) , a $512.1 million fund t a r g e t i n g mu l t i f am- ily and com-
Esko Korhonen
mercial properties and struc- tured opportunities through- out the Eastern U.S. Fund III, when fully invested, is expected to accommodate $1.7
PackagingWholesalers to open distribution center in 293,493 s/f Mericle-owned facility
EAST UNION, PA — The Packaging Wholesalers, one of the nation’s largest suppliers of packaging materials to the supply chain industry, has announced plans to open a dis- tribution center in 293,493 s/f of industrial space at 63 Green Mountain Rd. in Humboldt Industrial Park, East Union Twp., near Hazleton. The building was developed and is owned by Mericle Commercial Real Estate Services . The company has scheduled a grand opening for December 1st and will use the facility to distribute more than 1,200 sizes of corrugated boxes and shipping materials such
63 Green Mountain Rd.
as tapes, stretch film, steel strapping and more. The firm expects to hire 40 plus employees. The Packaging Wholesal- ers is based in Elgin, Illinois where it operates a 500,000 s/f corporate headquarters and distribution center and also has a 300,000 s/f distribution center in Dallas, Texas. The company made the decision to lease space at 63 Green Mountain Rd. to improve de- livery lead times nationwide, especially to its customers on the east coast. Company founder and own- er Mike Hrbacek said the Mer- icle facility gives his company access to 42 dock doors in a modern industrial facility just minutes from I-81 and I-80.
“This building places us within three to four hours of the east coast’s population,” Hrbacek said. “The newware- house and offices will support our cost- cutting technological advances to our patent pend- ing delivered pricing program and will allow us to capitalize on aggressive pricing and quicker lead times through our nationally recognized tiered pricing program,” he said. The real estate transaction was coordinated by Mericle vice president Jim Hilsher and Jeff Lockard , senior as- sociate with the national real estate brokerage firm JLL . Hilsher said The Packag- ing Wholesalers is one of 16 companies that lease space in
Mericle industrial buildings in the Greater Hazleton area. Humboldt Industrial Park is one of the largest indus- trial parks in Pennsylvania and was developed by CAN DO, Inc . CAN DO presi- dent Kevin O’Donnell said the agency is excited that Packaging Wholesalers chose Greater Hazleton for its new- est distribution center. “Many companies have located to our area because of its strategic location to markets. We are also pleased that Mericle Commercial Real Estate has been successful in bringing yet another company to our community. Mericle has been a strong partner of CAN DO for many years,” O’Donnell said. n
Directory
Upcoming Spotlights Professional Services NY ICSC & Deal Making Construction Mgmt./Design Build Financial Digest................................................5-24A New Jersey................................................. Section B Pennsylvania.............................................. Section C
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C ommercial R eal E state O rganizations ’ E vents C alendar
NOVEMBER 12 – CREW LEHIGH VALLEY Event: 12th Annual Members Only Meeting Time: 11:30 AM – 1:30 PM Location: Historic Hotel Bethlehem Address: 437 Main Street, Terrace Room, Bethlehem, PA Cost: $12 Early Bird Members $38 Members-after September 30th E: infolv@crewlehighvalley.org www.crewlehighvalley.org NOVEMBER 12 – WIRRE Event: A Spotlight on Women-Owned Business Time: 6:30 PM Location: Provision No. 14 Address/City: 2100 14th St. NW, Washington, DC www.wirre.org NOVEMBER 14-17 – CCIM PA/NJ/DE Event: CI 102: Market Analysis for Commercial Real Estate Time: 8:30 AM – 5:30 PM Location: Brandywine Realty Trust Address: 555 East Lancaster Ave., Suite 100, Radnor, PA P: 610-416-2970 E: donna@panjdeccim.com www.ccimpanjde.com NOVEMBER 14 – NAIOP PITTSBURGH Event: Perspectives & Possibilities Time: 5:00 PM - 7:30 PM Location: JLL Center at Tower Address: 260 / 260 Forbes Ave, 18th Fl., Pittsburgh, PA Cost: Members Free/$35 Nonmembers www.naioppittsburgh.com NOVEMBER 14 – USGBC NJ Event: Dr. Forrest Meggers: Architecture-Engineering-Sus- tainability, Bridging the Gap for Maximum Performance Time: 4:00 PM – 8:00 PM Location: Princeton University Address/City: Princeton, NJ www.usgbcnj.org NOVEMBER 15 – CIANJ Event: EBC Roundtable Meeting Time: 8:00 AM – 9:30 AM Location: PSEG Training & Development Center Address/City: 234 Pierson Ave., Edison, NJ www.cianj.org NOVEMBER 15 – CORENET GLOBAL PHILADELPHIA Event: Sponsor Appreciation Event Time: 5:30 PM – 7:30 PM Location: Gran Caffe L’Aquila Address/City: 1716 Chestnut St., Philadelphia, PA E: Philadelphia@corenetglobal.org www.corenteglobal.org NOVEMBER 15 – CREW NJ Event: 3rd Annual Holiday Cocktail Party Address/City: 225 River St., Hoboken, NJ P: 609-585-6871 E: khassan@crewnj.org www.icrewnj.org NOVEMBER 15 – CREW PITTSBURGH Event: Tour of 3 Crossings: Walk the Crossings Time: 4:00 PM – 6:00 PM Location: 3 Crossings Address/City: 2645 Railroad St., Pittsburgh, PA Cost: $35 Members $40 Nonmembers E: admin@crewpittsburgh.org www.crewpittsburgh.org NOVEMBER 15 – NJ BANKERS Event: CFO Conference w/FMS, NY/NJ Chapters Time: 8:00 PM – 12:45 PM Time: 6:30 PM – 9:30 PM Location: W Hotel Hoboken
NOVEMBER 16 – BOMA NJ Event: Membership Meeting: Sparky Lyle Presents “The Importance of Team Work” Time: 5:30 PM Location: The Palace Somerset Park Address/City: 333 Davidson Ave., Somerset, NJ Cost: $97 Members $180 Nonmembers www.bomanj.org NOVEMBER 16 – CREW LEHIGH VALLEY Event: 12th Annual Meeting of CREW Lehigh Valley Time: 11:30 AM – 1:00 PM Location: Historic Hotel Bethlehem-Terrace Room Address/City: 437 Main St., Bethlehem, PA Cost: $38 Members Only E: infolv@crewlehighvalley.org www.crewlehighvalley.org NOVEMBER 16 – NAWIC Event: NAWIC 2017 MAGIC Roundtable Discussion Time: 4:30 PM – 7:30 PM Location: GBCA Training Room Address/City: 36 S. 18th St., Philadelphia, PA Cost: $20 per Person www.nawicphl.org NOVEMBER 17 – CIANJ Event: Technology for Business Roundtable: Workflow Automation, Work Smarter, Not Harder Time: 8:00 AM – 9:30 AM Location: Montclair State University Address/City: 1 Normal Ave., Upper Montclair, NJ Cost: $55 Members $85 Nonmembers www.cianj.org NOVEMBER 17 – CORENET GLOBAL NJ Event: Fall Harvest Cocktail Reception Time: 6:00 PM – 8:30 PM Location: McLoone’s Boathouse-Charles Room Address/City: 9 Cherry Lane, West Orange, NJ Cost: $85 Members $150 Nonmembers E: newjersey@corenetglobal.org www.corenetglobal.org NOVEMBER 17 – IREM DELAWARE VALLEY Event: 2nd Annual Holiday Gala & Chapter Awards Dinner Time: 5:30 PM – 9:00 PM Location: Tendenza Address/City: 969 N. 2nd St., Philadelphia, PA E: admin@irem3.org www.irem3.org NOVEMBER 17 – LVEDC Event: Grow Here: Addressing the Need for Smaller Space for Growing Companies Time: 4:30 PM – 6:30 PM Location: Victory Firehouse-Open Court Address/City: 205 Webster St., Bethlehem, PA Cost: Free-Registration Required www.lehighvalley.org NOVEMBER 17 – ULI PHILADELPHIA Event: Special – Pre ‘Forecast’ Cocktail Party Time: 5:30 PM – 7:00 PM Location: One Riverside Address/City: 225 S. 25th St., Philadelphia, PA P: 800-321-5011 www.philadelphia.uli.org NOVEMBER 17 – ULI PITTSBURGH Event: WLI/NLC Difference Makers Time: 5:00 PM – 7:00 PM Location: Omni William Penn – Terrace Room Address/City: 530 William Penn Pl., Pittsburgh, PA P: 724-687-0707 www.pittsburgh.uli.org
NOVEMBER 18 – CREW PHILADELPHIA Event: 18th Annual Fall Charitable Luncheon Time: 11:00 AM Location: Loews Philadelphia Hotel Address/City: 1200 Market St, Philadelphia, PA Cost: $125 Members $150 CREW Guest
www.crewphiladelphia.org NOVEMBER 18 – CRTNJ Event: Lunch Meeting:
“Construction Management Research” Location: Stevens Institute of Technology Address/City: Castle Point on Hudson, Hoboken, NJ www.crtnj.org NOVEMBER 18 – ULI PHILADELPHIA Event: Real Estate Forecast 2017 Time: 7:30 AM – 11:00 AM Location: The Union League Address/City: 140 S. Broad St., Philadelphia, PA P: 800-321-5011 www.philadelphia.uli.org NOVEMBER 30 – CCIM PA/NJ/DE Event: CCIM Chapter Developers Forum and Crystal Ball Time: 5:00 PM – 8:00 PM Location: Villanova University Address/City: Villanova, PA P: 610-572-1120 E: info@panjdeccim.com www.ccimpanjde.org NOVEMBER 30 – CORENET GLOBAL PITTSBURGH Event: Jingle & Mingle Holiday Party Time: 5:30 PM – 8:30 PM Location: Revel & Roost-Upstairs Address/City: 242 Forbes Ave., Pittsburgh, PA P: 724-687-0707 E: pittsburghchapter@corenetglobal.org www.corenetglobal.org DECEMBER 1 – BOMA PITTSBURGH Event: Annual Holiday Party Time: 11:30 AM – 2:00 PM Location: Duquesne University-Power Center Address/City: 600 Forbes Ave., Downtown Pittsburgh Cost: $55 P: 412-261-2328 www.bomapittsburgh.org DECEMBER 5 – IOREBA Event: Annual Holiday Party Time: Executive Meeting 5:00 PM – 6:00 PM; Holiday Party 6:00 PM – 10:00 PM Location: Highlawn Pavilion Address/City: 1 Crest Dr., West Orange, NJ www.ioreba.com DECEMBER 6 – IREM NJ Holiday Dinner, Toy Drive and Installation of 2017 Officers Time: 5:30 PM – 8:00 PM Location: Twin Brooks Country Club Address/City: 600 Mountain Blvd., Watchung, NJ Cost: $65 Members $85 Nonmembers E: irem1@comcast.net www.irem1.org DECEMBER 6 – NAIOP NJ Event: Seminar: Transportation and Logistics Update Time: 7:00 AM – 11:00 AM Location: NYSA Training Center
Address/City: 1210 Corbin St., Elizabeth Cost: $95 Members $130 Nonmembers www.naiopnj.org DECEMBER 7 – POANJ Event: Holiday Networking Event
Time: 6:30 PM – 8:30 PM Location: Wilshire Grand Address/City: 350 Pleasant Valley Way, West Orange, NJ P: 732-780-1966 www.poanj.org
Location: Hotel Woodbridge at Metropark Address/City: 120 S Wood Ave., Iselin, NJ P: 908-272-8500 | www.njbankers.com
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WHERE ARE YOUR REAL ESTATE DECISIONS TAKING YOU? Chart your course with CORFAC International, a commercial real estate network managed by independent, like- minded principals and agents worldwide. Navigating the commercial property markets as an investor, developer or tenant seeking office, industrial and retail assets has never been easier. Experience the client-centric service that local experts deliver every day for businesses like yours. Contact a CORFAC firm in your market today.
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RICHMOND, VA Porter Realty Co., Inc./ CORFAC International 804.353.7994 www.porterinc.com TYSONS CORNER, VA Donohoe Real Estate Services/ CORFAC International 703.734.1591 www.donohoerealestate.com WILMINGTON, DE Patterson-Woods & Asso- ciates/ CORFAC International 302.622.3500 www.pattersonwoods.com WASHINGTON, DC Donohoe Real Estate Services/ CORFAC International 202.333.0880 www.donohoerealestate.com
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MA REJ A dvertising D irectory Applied Bank............................................................8A ARD Appraisal........................................................11A Badger Daylighting..................................................2B Barley Snyder...........................................................2C Barry Isett & Associates.................................... IBC-C Beneficial Bank.........................................................7A Berkadia..................................................................14A Brasler Properties. ...............................................BC-A Bussel Realty Corp.................................................11B CASE Real Estate Capital.....................................16B CIRC DE. ................................................................26A Coastal Real Estate................................................29A Commercial Mortgage Capital.................................6A Community Preservation Corp..............................13A Concannon Miller............................................... IBC-C Construction Roundtable of NJ.............................29A Cooper-Horowitz.....................................................24A Corfac International.................................................1A CREW NJ................................................................21B Cushman & Wakefield. .........................................IC-B Deerwood Real Estate Capital...............................10A Denholtz Associates................................................19B Design Management Services..................................9B Earth Engineering....................................................2C Environmental Services.........................................29A Fowler Companies..................................................29A Gebroe-Hammer Associates.....................................4B Greyhawk..................................................................3A Heller Industrial Parks............................................6B Hillcrest Paving & Excavating..............................29A Hinerfeld ......................................................... 29A, 1C Investors Real Estate Agency................................29A Kaplin Stewart. ........................................................3A Kearny Bank.............................................................3B Keystruct Construction..........................................28A LF Driscoll. ...............................................................6C Marcus & Millichap..................................................3A Max Spann................................................................4A Mericle ..................................................................BC-C Meridian Capital Group................................ 15B, 17A Morris County EDC................................................18B NAI Summit..................................................... 29A, 2C NJECA......................................................................1B PennCap.................................................................IC-C Poskanzer Skott Architects....................................14B Provident Bank.......................................................15A Real Property Capital...............................................9A Redwood Realty Advisors.........................................5B Regal Bank..............................................................12A Rittenhouse Appraisals............................................3C Rittenhouse Realty Advisors. ..................................5C RT Environmental Services.....................................9C SEBCO Laundry Systems........................................2B Sidney E. Gable Associates............................. 17B, 8C SNJ AI................................................................18-19A Structuretone............................................................7C Subway....................................................................29A Sudler Companies. .................................................13B Team Resources........................................................2B The Aztec Corporation. ..........................................10B The Berger Organization. ....................................BC-B The Kislak Company................................................8B TRAIMAN.................................................................4C WCRE......................................................................16B Whitesell...................................................................2B Willow Management Corp.. ...................................29A
Mid Atlantic R eal E state J ournal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Associate Publisher ................................................................ Steve Kelley 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 21 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
Mid Atlantic Real Estate Journal
Matthew Gaudet–Walters
Austin Bocchicchio
Q&A withWalters Homes: Lessons Learned Four Years After Hurricane Sandy B ARNEGAT, NJ —Four years ago, one of the most destructive storms to hit the Northeast struck the Jersey Shore, bringing record winds and flooding that de- stroyed homes and lives. The images of Hurricane Sandy’s aftermath remain vivid memo- ries. But many shore residents have rebounded, and rebuilt their damaged homes, making them stronger and safer than they were before the storm. “We learned a lot of lessons from Sandy, and the most important is to be prepared for the unexpected,” said Mat- thewGaudet–Walters , sales representative and rebuilding expert for Walters Homes. “Af- ter Sandy, Walters Homes took steps to not only rebuild homes but to do so more resiliently.” Walters Homes has been streamlining the entire pro- cess for residents by handling everything from demolition to rebuilding brand-new homes. Since Sandy, the local resi- dential builder, by the end of the year, will have built 220 new homes in coastal locations ranging from Little Egg Har- bor Township to Manasquan. The new homes are elevated on pressure-treated pilings, FEMA flood compliant, Energy Star Certified, and stick built from the ground up. The Jersey Shore landscape has been forever altered by Hurricane Sandy with old cot- tages and bungalows replaced by spacious elevated homes. Walters Homes rebuilding experts, MatthewGaudet-Wal- ters and Austin Bocchicchio discuss some of these changes and the lessons that residents and builders have learned. Q: What changes in home construction have you seen at the Jersey Shore? Matthew: Teardowns have become commonplace and people are finding that it’s the less expensive route compared to undertaking a major renova- tion. In many cases, they’ve outgrown their old layout and want a more spacious, energy- efficient home. Austin: Those who’ve de- cided not to rebuild are selling lots, making it a great time
The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
protect them in the event of flooding. Q: What are some impor- tant lessons that builders learned since Hurricane Sandy? Matthew: Some of our cus- tomers are going through one of the most difficult times in their lives. They count on us to take them through the build- ing process and make it the best experience possible. By of- fering a turnkey product, we’ve simplified the experience, and in the end, it takes a lot of the pressure off the buyers. Austin: We’ve learned to be proactive when it comes to building a new home so that homeowners are better pre- pared during the next storm. The new energy code, for exam- ple, is evidence the industry is heading in the right direction, and building a high-quality home that is healthier and bet- ter for the environment. Q: Are there any interest- ing rebuild scenarios you could share? Matthew: We had a family in Ortley Beach that had a tragic beginning but a happy ending. A family’s entire house had completely washed away into the bay along with all of their belongings. We built them a new home that was not only a fresh start but it was a place where they could create new memories. (See photo) Austin: We built a fully custom home in Manahawkin for a homeowner in the RREM program (Reconstruction, Re- habilitation, Elevation, and Mitigation). His new home had to match the existing footprint. When I met with him at the property to get preliminary measurements, the back of the house was knee deep in water. His new 700 s/f house is elevated 11 feet in the air, so it’s out of harm’s way. It’s a compact house with an open layout and one of the best views of the bay that we ever built. n
for investors and future shore property owners to buy into the market. There is a decent amount of inventory available all along the coast, and a lot of new people are coming to us that have recently purchased property and want to build something new. Q: What factors should property owners consider when debating between rebuilding and renovating? Matthew: There are so many unknown factors and costs associated with a raise and renovate project. There are lots of considerations such as, will the foundation crack when it’s raised? Can I get a fixed price for the renovation portion of the project? In most cases, a builder cannot predict with 100% accuracy the final cost of a renovation project unless it’s been significantly marked up to cover unexpected costs. Contractors generally charge more to work around existing structures. Austin: Besides the fact that many times it’s less expensive to tear down and rebuild, the resale value is greater on a new home. So with new con- struction, people are getting a house that’s built to their specifications, meets FEMAs guidelines and is designed to Afamily in Ortley Beach had their entire house completely washed away into the bay. Walters Home built them a new home.
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M id A tlantic
M id A tlantic R eal E state J ournal Connects limited & general partners to a new investor class Real Liquidity tackles $5 trillion real estate liquidity problem
Leading the Real Estate Investment Market Contact us today to access the largest inventory of properties.
N
which they cannot quickly or efficiently get out,” said Real Liquidity CEO Kevin Guy . “To divest their equity in these assets, the sponsors and limited partners tradition- ally have had to first go to the existing shareholders and/or an inefficient private market where they are forced to take a significant discount in the value of their shares — some- times at 50 cents on the dollar, or even worse. It’s painful. Now there’s a better solution for sellers to get closer to fair market value.” In addition, Real Liquidity provides opportunity and a service to an accredited inves- tor class that never before had access to a private market that is estimated at $5 trillion. “Whether it’s a partner dis- pute, family reorganization, or different owner investment objectives,” Guy said, “at some point in the future, the goal of general and limited partners is the same — to liquidate some or all of their equity in an asset in which they have ownership.” The most common reasons a seller desires liquidity include: a partner/family dispute; a significant change-of-life event
or a different investment; or, typically, where one partner wants to divest their owner- ship interest in the asset while the other partner(s) want to remain an owner. “We took the time to get the right opinions from the best minds before developing the technology and processes,” Guy said. “Our advisory board members will be publicly an- nounced in the near future.” To provide a desirable mar- ketplace to a pool of accredited investors, the Real Liquid- ity team works with selected sponsors and management teams to onboard quality, seasoned, and cash-flowing assets. Although applicable to assets of nearly all sizes and values, most properties vetted through the process are in the $5 million - $50 million range. The vetting process includes performing in-depth due-diligence on each asset. Real Liquidity has begun conducting due-diligence for the first wave of properties, while continuing to attract other commercial properties in the Multifamily, Office, Retail, Hospitality, Industrial, and Mixed-use markets. n
EW YORK, NY — The $5 trillion private commercial real estate
investment market has l o n g b e e n plagued by the problem of illiquid- ity. General and limited partners are unable to ef-
J.D. Parker Manhattan
Brian Hosey New Jersey (201) 582-1000 Bryn Merrey Washington, D.C. (202) 536-3700
(212) 430-5100 Brenton Baskin Philadelphia (215) 531-7000
Kevin Guy
Offices Throughout the U.S. and Canada
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ficiently sell a fractional own- ership interest in their real estate syndicate — a group of investors that pool funds to purchase assets. Real Liquidity has as- sembled an experienced and diverse team of real estate, investment, legal and securi- ties professionals. The team’s primary goal is to change the way real estate is bought and sold by utilizing their proprietary, safe and secure, technology driven market- place. Their unique solution connects buyers with sellers that otherwise would not have access to each other. “Sponsors and limited part- ners often find themselves with their capital locked up in real estate assets from
Rowan College at Gloucester County, NJ
program, project & construction management construction consulting | commissioning
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. The Mid Atlantic Real Estate Journal is a monthly publication highlighting real estate transactions throughout the Mid Atlantic including : • New developments, ground breakings and reconstruction in the ODM (Owners, Managers & Contractors ) section • Mortgage and banking in our Financial Digest • Retail and new developments in Shopping Centers • Annual spotlights.
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M id A tlantic R eal E state J ournal
164,070 s/f class A property is situated in Orange County’s medical services hub Cushman & Wakefield brokers sale of Empire Blue Cross Blue Shield building in Middletown
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premier business and economic destination, and it drew strong attention from buyers.” The 21-acre site in Crystal Run Corporate Park serves as the Corporate Accounts Ser- vices location for Empire Blue Cross Blue Shield. It provides ample parking as well as a caf- eteria and fitness center. “Empire Blue Cross Blue Shield is the third largest em- ployer in Orange County and is committed to maintaining a strong presence in Middletown, a market driven by the medical and healthcare industries,” said DiTommaso. “The site’s office/ medical zoning offers the region a
GHP Office Realty sells 81 Main St. in Dobbs Ferry, NY best-in-class asset with the abil- ity to cater to either end-user.” Located immediately off of I-84 and Rte. 17, the property is ideally situated in one of the Mid-Hudson region’s rap- idly expanding commercial and medical corridors, anchored by the Orange Regional Medical Center. n
IDDLETOWN, NY — Commercial real estate services firm
Cushman & Wakefield has orchestrated the sale of 85 Crystal Run Rd. inMiddletown. A private entity acquired the 164,070 s/f class A property, home to Empire Blue Cross Blue Shield, from an affiliate of Madison International Re- alty and its operating partner. Cushman &Wakefield’s Met- ropolitan Area Capital Markets Group, headed by AndrewMe- rin , David Bernhaut , Gary Gabriel , and Brian Whit- mer and supported by Frank DiTommaso and Andrew
85 Crystal Run Rd.
property has been delivered to market for sale since it was developed in 1990,” said Me- rin. “It is a highly accessible, headquarters-quality location in the heart of Orange County’s
Schwartz , represented the seller and procured the buyer in the transaction. Cushman & Wakefield serves as leasing agent for the property. “This is the first time the
AUCTIONS November 30th
Retail Center, Mixed Use, Subdivision, Highway Commercial, Multi Family, Residential, and Lots Major Portfolio Offering Over 30 Opportunities
81 Main Street
DOBBS FERRY, NY — GHP Office Realty, LLC announced that it has sold 81 Main St., Dobbs Ferry, NY a 3,000 s/f former bank building, for $595,000 to Ward Capital Management, LLC of Rye New York. Andrew Greenspan , prin- cipal of GHP said “81 Main Street is a beautiful art deco building located in the heart of Dobbs Ferry’s central busi- ness district and was built in 1927 by Greenpoint Savings Bank. GHP acquired the build- ing through a foreclosure in 2013. Ward Capital Manage- ment subsequently leased the building from GHP and has performed extensive renova- tions to convert it into a mixed use building containing a residential unit on the newly constructed second floor and a retail unit on the ground floor.” The owner was represented by Greenspan and Bren- dan Hickey , associate at GHP. GHP’s legal representa- tion was provided by Jamie Schwartz, Esq. of James E. Schwartz, P.C . Ward Capital Management was represented by its principal, D’Wayne Prieto . Ward‘s attorney in the transaction was Christian Daglieri, Esq . of Montgom- ery McCracken Walker & Rhodes LLP . n
2,852± SF Retail Building on Route 22 Green Brook, Somerset County, NJ 6,270± SF Retail Strip Center Hopatcong, Sussex County NJ Income Producing Mixed-Use Building Hopatcong, Sussex County NJ High Visibility 1,800± SF Commercial Bldg Budd Lake (Mount Olive), Morris County, NJ 2 Gas Stations with Convenience Stores Bethlehem, PA
Greene Valley Fully Improved Development West Milford, Passaic County NJ 6.24± Ac Skyview Estates Residential Lot Sparta, Sussex County, NJ 2 Family House Income Producer
East Orange, Essex County, NJ .43± Ac Residential Building Lot Rockaway Twp, Morris County, NJ 8.15± Ac Residential Lot Kinnelon, Morris County, NJ
888-299-1438 / MaxSpann.com A licensed NJ & PA Real Estate Broker Robert L. Dann PA Auctioneer #AU005609 November 30th, 1 PM BY ORDER OF THE CITY OFWOODBURY, NJ 3 Single Family Homes and 17 Residential Lots Throughout the City
F inancial D igest F eaturing the L ender ’ s D irectory
Real Estate Journal — November 11 - 24, 2016 — 5A
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M id A tlantic
Hurricane Matthew elevates risk for 533 properties backing CMBS loans
Village Square is a 392,497 s/f, fully-leased retail center HFF handles $39.5m refinance for Pittsburgh power center
Morningstar Credit Ratings, LLC believes that 533 proper- ties, with an allocated property balance of $3.82 billion, may be at elevated risk following Hur- ricane Matthew because they are in the hardest-hit storm areas. The Federal Emergency Management Agency desig- nated these areas eligible for the highest level of federal aid. More specifically, FEMA designated 55 counties in the eastern por- tions of Florida, Georgia, North Carolina, and South Carolina as eligible for assistance to in- dividuals and households. The number of eligible counties has more than doubled since the immediate aftermath of the hur- ricane. Calls to the largest prop- erties in the metropolitan sta- tistical areas with the greatest commercial mortgage-backed securities exposure confirmed that all are open. The top five MSAs in North Carolina, South Carolina, Flor- ida, and Georgia account for 70.1% of the CMBS exposure to the hardest-hit areas. While FEMA continues to assess dam- age in the region, our analysis is based on the information reported on FEMA’s website as of October 19. Largest North Carolina Loans Spared While President Barack Obama declared a state of emergency in North Carolina, making federal funding to individuals and households available in the 27 counties hit hardest by the storm, we dis- covered that properties backing the largest loans in these areas were spared. We found 106 properties that back $1.26 bil- lion in loans in these counties, with 42.9% of this exposure in the Fayetteville MSA. Just four of these properties secure loans with balances of $25 million or more: Golden East Crossing in Rocky Mount, Carolina Premi- um Outlets in Smithfield, and Preserve at Grande Oaks and Addison Ridge Apartments, both in Fayetteville. While nu- merous area roads have been closed because of flooding, both Golden East Crossing, 2.6% of JPMCC 2007-CB18, and Caro- lina Premium Outlets, 5.0% of MSBAM 2013-C8, reopened for business on October 10, accord- ing to store representatives. We also confirmed with leasing rep- resentatives that Preserve at Grande Oaks, 2.6% of COMM
2014-UBS3, and Addison Ridge Apartments, 2.7% of CSAIL 2015-C4, are both open. Minimal Effect on Properties Backing Largest S.C. Loans We found that properties backing the largest loans in Hilton Head Island, South Carolina, were also spared. On October 8, the hurricane made landfall near McClellanville, South Carolina, in the south- eastern portion of the state, prompting the government to make federal funding avail- able to affected individuals and households in 17 hard-hit counties. We found 106 proper- ties that serve as collateral for $641.7 million in CMBS debt, with over 52% of this exposure in the Hilton Head Island- Bluffton-Beaufort MSA. Loans for two of these prop- erties, both hotels, have an outstanding balance exceeding $35 million and include The Westin – Hilton Head (JPMCC 2007-C1 and JPMCC 2008-C2) and Beach House Hilton Head (COMM 2015-LC23). Florida and Georgia Exposure FEMAmade assistance avail- able to four Florida counties. In the Daytona Beach area, the hurricane caused a four- to six- foot storm surge, which flooded some areas; wind speeds rose to at least 60 miles per hour, leaving damaged roofs and signs, downed trees and power lines, and power outages. We found 110 properties in three of the four eligible Florida coun- ties that serve as collateral for $599.7 million in CMBS debt, with over 94% of this exposure in the Deltona-Daytona Beach- Ormond Beach MSA. The loan for just one of these properties has an outstanding balance of at least $23 million. Although Savannah, Georgia, and much of the state avoided Matthew’s worst effects, the storm caused floods and power outages. There are 73 proper- ties across the seven Georgia counties eligible for individual and household federal aid that serve as collateral for $1.32 bil- lion in CMBS debt, with over 75% of this exposure in the Savannah MSA. Loans for five of these properties, consisting of three hotels, a mall, and an apartment complex, have an outstanding balance of at least $30 million. n
ITTSBURGH, PA — Holliday Fenoglio Fowler, L.P. (HFF) announced that it has ar- ranged a $39.5 million refi- nancing for Village Square, a 392,497 s/f, fully-leased retail power center in the Bethel Park area of Pittsburgh. HFF worked on behalf of the borrower, Oxford Develop- ment Company , to place the 10-year, fixed-rate loan with Goldman Sachs & Co. HFF will service the securitized loan, proceeds of which were used to primarily pay off a maturing loan. Village Square was built in 1982 and renovated in both 1997 and 2003. Anchored by Home Depot, Kohl’s, Burling- ton Coat Factory, Michael’s, Office Depot and Toys"R"Us, the two-story center is also home to a variety of national and regional tenants, includ- ing Half-Price Books, Sten’s Stride Rite Shoes, Famous Footwear and Avenues. Ad- ditionally, the center’s out- parcel pads are leased to Olive Garden, TGI Friday’s, Penn- zoil and PA Wine & Spirits. Situated in Bethel Park on 31.4 acres at 4000 Oxford Dr., Village Square’s locale at the P WASHINGTON, DC — Greysteel , a national com- mercial real estate investment services firm, has arranged $14.9 million in senior debt and preferred equity for the acquisition and construction of 1724 Kalorama Rd., NW, a vacant commercial prop- erty located in the infill Ad- ams Morgan neighborhood of Washington, DC, on behalf of Bellevue LLC. The financing includes a senior construction loan and preferred equity, which were provided by different inves- tors. The two-year construc- tion loan is nonrecourse in nature and features a fixed interest rate. This transaction was negotiated by Greysteel senior director, Brendan Scanlon , who is based in the
Home Depot at Village Square
intersection of Fort Couch Rd. and U.S. Rte. 19 places it in the heart of Pittsburgh’s South Hills, one of the most densely populated and affluent areas in Pittsburgh. The center is approximately 10 miles from downtown Pittsburgh. HFF’s debt placement team was led by managing director Claudia Steeb and execu- tive managing director John Pelusi .
“HFF appreciates the op- portunity to place this loan on behalf of Oxford Development with Goldman Sachs,” Steeb said. Oxford has been active in the South Hills area since 1962 when they broke ground with their inaugural project, South Hills Village Mall, and most recently with the renovation of the Crowne Plaza Hotel & Suites Pittsburgh South. n
Greysteel arranges $14.9m in senior debt and preferred equity for vacant property
1724 Kalorama Rd., NW
company’s Washington, DC office. The vacant office building will undergo a two-story addi- tion, and will be converted into a 48-unit multifamily property with four parking spaces. The property is located less than a block from a Harris Teeter market and approximately
two blocks from the 18th St. retail corridor. 1724 Kalorama is situated within walking dis- tance of the Columbia Heights, Woodley Park-Zoo, Dupont Circle, and U Street/African- American Civil War Memo- rial/Cardozo metro stations, served by the Green, Yellow, and Red lines. n
6A — November 11 - 24, 2016 — Financial Digest — M id A tlantic
Real Estate Journal
www.marejournal.com
F inancial D igest
By Mark Scott, Commercial Mortgage Capital The pull back is well underway
I
rationale. Many of the in- dustry reports indicate thou- sands of units coming online
construction, but to pullback on fully leased, stable, low per unit values appears to be foolish at best. Occupancy rates are near 100% in B and C grade apartments throughout northern NJ. A reason received from lenders is that the market for multifamily is so competi- tive that they do not want to loan at extremely low spreads and low rates that have been in the market this past year. They would rather lend on commercial properties, such as office and industrial, where they could get greater spreads. In my humble opinion, those
greater spreads come with greater risk. Refreshingly, not all lenders have exited the multifamily market. After a more exhaus- tive search than usual, we have been able to obtain sever- al competitive bids on deals we have been shopping this week. But the market is tightening. Reasons: The election? End of year slowdown? Lender having reached or exceeded their 2016 allocations? Risk aversion? Time will tell. Mark Scott is principal of Commercial Mortgage Capital. n Appraisal Institute concerned with Freddie Mac policy changes CHICAGO, IL — Cit- ing similarities to previous policies that “turned out to be disastrous for the entire economy,” the nation’s larg- est professional association of real estate appraisers today expressed “serious concerns” with changes to Freddie Mac ’s Loan Advisor Suite. Under its new policy an- nounced Oct. 24, Freddie Mac will waive appraisals in lieu of an “appraisal alternative” in a host of situations, includ- ing first-purchase loans. The Appraisal Institute’s Oct. 31 letter to Federal Housing Finance Agency director Mel Watt asked Freddie Mac to re-evaluate the new policy. “The policy change by Fred- die Mac appears to be oriented to purchase-mortgage transac- tions or transactions with the highest risk to the agency,” the Appraisal Institute said in its letter. “It has become standard practice to obtain a complete interior inspection appraisal to understand things such as property condition.” The Appraisal Institute’s letter noted that it has taken many years for the mortgage finance sector to recover, stat- ing: “Today, there is little doubt that markets are more secure because of most first- purchase mortgages utilizing real estate appraisals as a fun- damental tenet of residential mortgage risk management,” the Appraisal Institute’s let- ter said. “Reducing appraisal requirements sends the wrong signal to mortgage loan sellers about the importance of risk management practices.” n
mentioned in the Mid Atlantic Real Estate Jour- nal several months ago
shocked to hear that many smaller balance sheet lenders which I contacted have exited
that at least one o f our big regional lenders for the state of New Jersey n o l o n g e r wanted to do mu l t i f am - ily construc- tion and was
“I can understand lenders want to pull back on new construction, but to pullback on fully leased, stable, low per unit values appears to be foolish at best.”
throughout the metropolitan region. In some places, it is truly amazing, however “the herd effect” has begun. This past week, I was promoting the financing of two B grade “bread and butter” multifam- ily properties in solid locations in NJ. I was amazed and
the multifamily market or se- verely cut back. B grade multi- family apartments are primar- ily leased by those who “need” to rent. Most of the new apart- ments that are coming online are rented by people who “want” to rent. I can understand lend- ers want to pull back on new
Mark M. Scott
pulling back on newmultifam- ily lending and only lending to their premier existing clients. I can understand this
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For loans from $500,000 to over $500 million, Contact Mark Scott direct at 201.787.7111 or mscott@newcommercialmortgage.com
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Real Estate Journal — Financial Digest — November 11 - 24, 2016 — 7A
www.marejournal.com
M id A tlantic
F inancial D igest
RINCETON, NJ — From traditional ac- counting, auditing and P Client base ranges from small, entrepreneurial startups to billion-dollar companies Withum’s Real Estate Services Group focuses on management services for all asset types
role is real estate business succession planning. “While related to estate planning and wealth preservation, succes- sion planning has become an area of increased focus within commercial real estate and across all other industry sec- tors,” said Machinga, who is a CPA in New Jersey, Pennsyl- vania and Florida with over 20 years’ experience in profes- sional accounting. “Succession planning is one of today’s greatest financial challenges facing small-to- mid-sized real estate enti- ties, many of which lack a
retirement plan and/or exit strategy,” she added. “Once structured and implemented, the succession plan ensures harmony among family mem- bers and/or partners, safe- guards assets from creditors and preserves one’s wealth.” Withum’s client base is as diverse as its Real Estate Ser- vices Group offerings. Recent assignments include: •Tax and consulting services for a real estate development and property management company with $10 billion in active commercial real estate development and a strong resi-
dential development portfolio •Internal audit work for one of the nation’s largest REITS involved in the development, ownership and management of commercial real estate proper- ties with annual revenues of over $775 million •Audit, tax and consult- ing work for a family-owned 11-building, 800,000 s/f office park and other ancillary real estate investments with an- nual revenues of $22 million •Audit, tax and consulting services for one of the largest private developers/managers of commercial and residential
real estate in New Jersey, with over 5,000 residential units and several hundred thousand s/f of commercial space, consisting of residential apartments, condominiums and townhomes, retail and commercial centers and hotels •Audit, attest, tax and con- sulting services for an owner/ developer of commercial and residential real estate that owns and manages over 90 properties, including office, medical, retail and industrial flex space totaling 4+ million square feet located throughout the tri-state region. n
tax services to commer- cial real es- tate indus- try-specific management a d v i s o r y s e r v i c e s , t h e R e a l Estate Ser- vices Group
Rebecca Machinga
at WithumSmith+Brown (Withum), PC , assists clients in meeting their business and growth objectives, increas- ing profitability and reducing operating costs. Princeton, NJ-based Withum is a top-30 nationally ranked public ac- counting and advisory firm with 800 staff members and an- nual revenue of $140+ million. “From transactional exper- tise – assistance with acquisi- tions or debt restructuring – or on-going compliance – like au- dit and tax preparation – our client base has come to rely on us to help them achieve a position of strength,” said Rebecca Machinga, CPA, CGMA , Withum partner and practice leader of its Real Es- tate Services Group. The firm’s industry special- ists serve a wide range of commercial, residential and industrial property developers; owners/investors; managers; agents; and brokerage profes- sionals. Asset categories run the full spectrum and include office properties, industrial buildings, apartment-rental properties, condominium and townhome communities, retail centers, hospitality and mixed use and parking facilities. Withum also advises clients focusing on residential homes, golf-course communities and low-income housing. Property-related services include cost-segregation strat- egies, like-kind exchange strat- egies, budgeting and forecast- ing, cash-flow analysis, acqui- sition due diligence, property valuations, lease analysis and review and financing assis- tance. On the management side, Withum works with cli- ents in the areas of ownership planning and restructuring, internal accounting proce- dures, assurance services, tax compliance, insurance consulting, litigation support and employee compensation and benefits. One area in which Withum reports a surge in its advisory
While we can’t promise we’ll approve every business loan,
If you run a business and have ever needed a loan of any kind, you probably understand the above headline all too well. While many of the banks in the Philadelphia area try to act “local”, when it comes to calling the shots they’re anything but. Any decision of consequence happens in some headquarters thousands of miles away. A fact that can cost you both time and money. Beneficial Bank, on the other hand, has been serving the community and businesses of Philadelphia for over 160 years. Our loan committees are made up of people who live and work, right here, where you do. People with a keen knowledge of business here. we can promise the decision makers are right here in Philadelphia.
To learn more, contact Marty Gallagher, Chief Lending Officer, at 215.864.3540
All loan products subject to credit approval.
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