- DC
S Transit development sets record for highest sale price per unit in Essex County Kislak completes $32.77m sale of The Gateway indowntownSouthOrange, NJ OUTH ORANGE, NJ — The Kislak Company, Inc. announced the re-
ISSUE HIGHLIGHTS Volume 28 Issue 17 September 16 - 29, 2016
Appraisal 8-21A Northern NJ 5-13B Central PA 5-7C
Eugene Diaz Center there as well. The campus sale is expected to close Sept. 30 , cont in- gent upon fi- nancial and development approvals for the medical school facility by both municipalities. “Following more than 22 months of comprehensive diligence and complex nego- tiations, we are delighted to have reached this important transactional milestone,” said Prism’s Eugene Diaz , princi- pal partner. “With the coopera- tion of Roche, we have secured an outstanding long-term an- chor tenant and new business magnet for this campus.” According to Diaz, growing demand for 24/7 convenience living is resulting in better- balanced business centers that provide a mix of hous- ing options and appealing amenities. n vice president Joni Sweet- wood represented the sellers and Sweetwood and sales asso- ciate Julie Gralla represented the purchaser, a private inves- tor and longtime Kislak client. With a per unit price well over $500,000, the sale of The Gateway exceeded the previ- ous record for the highest sale price per unit for an apartment building in all of Essex County by more than $100,000 per unit according to data available from CoStar. “From start to finish, this was an extraordinary project and sale,” said Edward Ayuso II, the founder and principal of EEA Industries.” “The Gateway was truly a transformative project for South Orange Village,” said Sweetwood. “For years prior to Ed’s involvement, the site was a long-shuttered car dealer. It sat vacant and in disrepair, negatively impacting the west side the Village.” n
cent $32.775 million sale of TheGateway, a new highly- a c c l a i m e d transit-ori- ented devel- opment with 57 l uxu r y apartments a n d 9 , 0 0 0 s/f of class A retail space in downtown S o u t h O r - ange, Essex County. The property is located im- me d i a t e l y
Meridian Capital arranges $33.7m for a 275,000 s/f SC
Joni Sweetwood
The Gateway
apartments, 48 two-bedroom apartments, three ground floor retail spaces and on-site park- ing. At the time of closing, the property’s apartments were fully occupied. Two of the retail spaces were occupied and the third retail space was recently leased to a new tenant.
Kislak marketed the prop- erty on behalf of the sellers and longtime Kislak clients, EEA Industries, LLC and Sound- viewReal Estate Partners, and their affiliates, South Orange Commons Tenant, LLC and South Orange Commons III Urban Renewal, LLC. Senior
Julia Gralla
west of the South Orange train station at 9West South Orange Ave., approximately 18 miles from Manhattan. Completed in 2014, the prop- erty includes nine one-bedroom
10A
For speaking and sponsorship information, please contact: Linda Christman at 781-871-3456 or lchristman@marejournal.com Philadelphia Industrial & Development RE Summit UPCOMING CONFERENCES October 7, 2016 NJ Commercial Real Estate Leadership Summit October 17, 2016 NJ Retail, Restaurant, Hotel & Mixed Use Summit November 11, 2016
PrismCapital Partners, Hoffmann-La Roche sign purchase & sale agreement for 116-acres
NUTLEY/CLIFTON, NJ — In a blockbuster acqui- sition play, PB Nutclif I, LLC , an affiliate of locally based Prism Capital Part- ners (Prism) signed a pur- chase and sale agreement with Hoffmann-La Roche Inc. (Roche), to purchase the 116- acre former North American Headquarters campus span-
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ning the Twp. of Nutley and City of Clifton. At the same time, Hackensack Meridian Health and Seton Hall Univer- sity committed to leasing two major buildings and 16 acres at the property. Prism will implement sub- stantial improvements to con- vert the leased buildings to
accommodate the needs of the new Seton Hall-Hackensack Meridian School of Medicine. In addition, Seton Hall will co-lo- cate its College of Nursing and School of Health and Medical Sciences to the site, and Hack- ensackMeridian plans to create a National Health Institute- designated Clinical Research
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C ommercial R eal E state O rganizations ’ E vents C alendar
SEPTEMBER 19-22 – CCIM PA/NJ/DE CI 101: Financial Analysis for Commercial Real Estate Time: 8:30 AM – 5:00 PM Location: Brandywine Realty Trust Address: 555 East Lancaster Ave., Suite #100, Radnor, PA www.ccimpanjde.com SEPTEMBER 19 – SIOR NJ Event: Joint Meeting with NJCRE and Sponsors Time: 5:30 PM – 8:30 PM Location: Ninety Acres - Natirar Address/City: 2 Main St., Peapack-Gladstone, NJ www.siornj.org SEPTEMBER 20 – CCIM NJ/PA/DE Event: CI 101: Post-Class Networking Time: 5:30 PM – 7:30 PM | Location: TBD Address/City: Radnor, PA P: 610-416-2970 E: donna@panjdeccim.com www.ccimpanjde.com SEPTEMBER 20 – SMPS CENTRAL PA Event: A/E/C Golfing “Fore” Business-4 Person Scramble to Benefit Leg Up Farm Time: 12:30 PM – 7:00 PM Location: Conestoga Country Club Address/City: 1950 Stone Mill Rd., Lancaster, PA www.smpscentralpa.org SEPTEMBER 21 – NAIOP PHILADELPHIA Event: Retail on Market-The Rise of the New Gallery Time: 5:30 PM – 8:00 PM Location: 801 Market Street Address/City: Philadelphia, PA Cost: $25 Members & Developing Leaders $40 Nonmembers P: 267-579-2901 E: info@naiopphila.org www.naiopphila.org SEPTEMBER 21 – SMPS PITTSBURGH Luncheon: Developers Forum – Show Me the Money! Time: 11:30 AM – 1:30 PM Location: Rivers Club Address/City: 301 Grant St., Pittsburgh, PA Cost: $45 Members $65 Nonmembers $75 Walk-ins www.smpspittsburgh.org SEPTEMBER 22 – CORENET NJ Event: The Anatomy of an Office: An essential guide to understanding construction Time: 6:00 PM – 8:30 PM Location: Morris Corporate Center IV (4th Floor) Address/City: 389 Interpace Parkway, Parsippany, NJ Cost: $45 Members $95 Nonmembers $20 Young Leaders (35 & under) E: newjersey@corenetglobal.org www.corenetglobal.org SEPTEMBER 22 – NJIFMA Event: Monthly Meeting-Tour of Bell Works, Holmdel Time: 4:00 PM – 6:00 PM Location: Bell Works Address/City: Holmdel, NJ P: 908-585-6871 E: admin@njifma.org www.njifma.org SEPTEMBER 22 – ULI PITTSBURGH The Brew House Artist Lofts: A Place to Live, Work & Play Time: 5:30 PM – 7:30 PM Location: The Brew House Artist Lofts Address/City: 211 South 21st St., Pittsburgh, PA P: 412-381-7767 Cost: $15 Members $30 Nonmembers www.pittsburgh.uli.org SEPTEMBER 22 – USGBC NJ Event: LEED v4 Update Time: 12:00 PM – 4:00 PM Location: Wyndham Worldwide Address/City: 14 Sylvan Way, Parsippany, NJ www.usgbcnj.org
SEPTEMBER 26 – IREM DELAWARE VALLEY Event: Annual Golf Outing Time: 10:00 AM – 7:00 PM Location: Commonwealth National Golf Club Address/City: 250 Babylon Rd., Horsham, PA E: admin@irem3.org www.irem3.org
SEPTEMBER 29 – NAIOP NJ Event: Chapter Meeting: CEO Perspective Time: 5:00 PM – 8:00 PM Location: Maritime Parc Address/City: 84 Audrey Zapp Dr., Jersey City, NJ Cost: $125 Members $195 Nonmembers/ NAIOP Scholars Free P: 732-729-9900 www.naiopnj.org SEPTEMBER 29 – NNJ AI Event: Marketability Studies: Six-Step Process & Basic Applications Time: 8:00 AM – 4:30 PM Location: Paris Inn Address/City: 1292 Alps Rd., Wayne, NJ Cost: $215 Members $225 Nonmembers P: 201-796-1171 E: nenjai@aol.com www.nnjchapter-ai.org SEPTEMBER 29 – SMPS DC Event: Developing a Strategic Marketing Plan: Essential to Your Firm’s Success Time: 11:30 AM – 1:30 PM Location: George Mason University School of Public Policy Address/City: Founders Hall Classroom 113, 3351 Fairfax Dr., Arlington, VA www.smpsdc.org OCTOBER 3 – SMPS DC Event: The Children’s Inn at NIH Family Dinner Time: 5:00 PM – 8:00 PM Location: The Children’s Inn at NIH Address/City: Building 62, 7 West Dr., Bethesda, MD P: 202.942.4463 E: mblum@mgac.com www.smpsdc.org OCTOBER 12 – CIRC DE Event: Monthly Membership Luncheon Time: 11:30 AM – 1:30 PM Location: Clarion Hotel The Belle Address/City: 1612 N. Dupont Hwy., New Castle, DE Cost: $35 Members $45 Nonmembers www.circdelaware.org OCTOBER 13 – CCIM PA/NJ/DE Event: Developers Forum & Crystal Ball Awards Time: 5:00 PM – 8:00 PM Location: Villanova University Address/City: Villanova, PA E: info@panjdeccim.org www.ccim.org OCTOBER 15 – FOODSTOCK 2016 Event: 7th Annual Foodstock Picnic & Food Drive Time: 1:00 PM – 7:00 PM Location: Freehold Independent Firehouse #1 Address/City: Freehold, NJ
SEPTEMBER 26 – SADV Event: Membership Meeting Time: 5:00 PM Location: Marriott Hotel
Address/City: 111 Crawford Ave., West Conshohocken, PA Cost: $35 in advance; $45 after RSVP date & no shows
P: 610-649-7238 E: info@sadv.org www.sadv.org SEPTEMBER 27 – CREW NJ Event: Networking & New Member Event Time: 6:00 PM – 8:30 PM Location: PruCenter in Newark Address/City: Newark, NJ P: 609-585-6871 E: khassan@crewnj.org www.crewnj.org SEPTEMBER 27 – CREW PITTSBURGH Event: Lunch Program: Key Tactics to Finding Good Real Estate Deals Time: 11:30 AM – 1:30 PM
Location: The Engineers’ Society of Western PA Address/City: 337 Fourth Avenue, Pittsburgh, PA Cost: $40 Members $70 Nonmembers E: admin@crewpittsburgh.org www.crewpittsburgh.org SEPTEMBER 27 – ULI PHILADELPHIA Event: Disruptive Technology, Ten Million People, and a Warmer Planet www.philadelphia.uli.org SEPTEMBER 28 – CIANJ Event: EBC Roundtable Meeting Time: 8:00 AM – 9:30 AM Location: PSEG Training & Development Center Address/City: 234 Pierson Ave., Edison, NJ Cost: Members Free/$80 Nonmembers www.cianj.org SEPTEMBER 28 – POA NJ Event: Jersey City Rent Control & Hudson County Market Update with Networking Time: 6:30 PM – 8:30 PM Location: Liberty Prime Steakhouse Address/City: 111 Montgomery St., Jersey City, NJ P: 732-780-1966 www.poanj.org SEPTEMBER 29 – CORNET PHILADELPHIA Event: 4th and Final Table Talk Series Time: 5:30 PM – 7:30 PM Location: Avison Young Address/City: 5 Tower Bridge, 300 Barr Harbor Drive, Suite 150, West Conshohocken P: 267-428-6434 E: Philadelphia@corenetglobal.org www.corenetglobal.org SEPTEMBER 29 – DVGBC Event: 2016 Groundbreaker Awards Time: 6:00 PM – 9:00 PM Location: Cira Green Address/City: 80 S. 30th St., Philadelphia, PA Time: 8:15 AM – 10:30 AM Location: The Union League 140 S. Broad St., Philadelphia, PA
E: rwswish@aol.com www.foodstocknj.org
NOVEMBER 1 – CREW LEHIGH VALLEY Event: 2nd Annual CREW LV Legacy Summit Time: 8:00 AM – 1:15 PM
Location: Lehigh Country Club Address/City: Allentown, PA Cost: $75 Members $100 Guests E: infolv@crewlehighvalley.org www.crewlehighvalley.org
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
Cost: $125 Members $200 Nonmembers www.dvgbc.org
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MAREJ A dvertising D irectory Applied Bank..........................................................26A Appraisal Institute - Delaware Chapter...............20A Appraisal Institute - Metro NJ Chapter...............16A Appraisal Institute - Northeast NJ Chapter. .......17A Appraisal Institute - Southern NJ Chapter.....18-19A Arcara Realty Advisors..........................................29A ARD Appraisal........................................................15A Bussel Realty Corp...................................................1B Capital Markets Real Estate Network....................3C Capstan.....................................................................2B Caryl Communications...........................................29A Castle Lanterra Properties......................................6A CIRC Delaware.......................................................28A Cooper-Horowitz...................................................BC-A CREW Lehigh Valley. .......................................14-15C CREW NJ................................................................21B CREW Philadelphia. ..............................................16C Cushman & Wakefield. .........................................IC-C Deerwood Real Estate Capital...............................11A Earth Engineering....................................................2C Environmental Systems.........................................29A Fowler Companies..................................................29A Gebroe-Hammer Associates.....................................7B Harvey, Hanna & Associates.................................25A Heller Industrial Parks..........................................11B Hillcrest Paving & Excavating..............................29A Hinerfeld.......................................................... 29A, 1C Integra Realty Resources.......................................13A Investors Real Estate Agency................................29A Investors Realty, Inc.. ............................................27A Kaplin Stewart. ........................................................4A Kearny Bank...........................................................10B Keystone....................................................................4C Landmark Commercial Realty. ...............................7C Marcus & Millichap..................................................4A Mericle Commercial. ............................................BC-C Meridian Capital Group....................... 1A, 3A, 5A, 7A Morris County EDC................................................20B NAI Summit..................................................... 29A, 2C New Jersey Realty Advisory Group.......................14A NJHMFA.................................................................15B NorthMarq Capital.................................................12B PennCap Properties. ....................................... 29A, 9C Poskanzer Skott Architects....................................13B PREC......................................................................IC-C Principal Commercial Capital. ..............................10A Progress Capital Advisors........................................8A Provident Bank.......................................................22A Redwood Realty Advisors.........................................6B Rittenhouse Appraisals..........................................12A ROCK Commercial...................................................6C RT Environmental Services, Inc..............................3B SADV.......................................................................17C SEBCO Laundry Systems........................................2B Somma Associates....................................................8B Subway....................................................................29A Sudler......................................................................14B The Berger Organization. ........................................9B The Henley Group..................................................21A The Kislak Co.. .........................................................4B The Traffic Group...................................................24A WCRE........................................................................2B Whitesell...................................................................4A
Mid Atlantic R eal E state J ournal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Associate Publisher ................................................................ Steve Kelley Associate Publisher .............................................................Alissa Aronson Associate Publisher ..........................................................Barbara Holyoke Associate Publisher ...................................................................Kim Brunet Senior Editor/Graphic Artist .................................................Karen Vachon Production Assistant/Graphic Artist ...........................................Julie King Office Manager .................................................................... Joanne Gavaza Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, 312 Market St. Rockland, MA 02370 USPS #22-358 | Vol. 28 Issue 17 Subscription rates: $99 - one year, $148 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
Mid Atlantic Real Estate Journal
Laurence Fundler
The Story of Lucky: Section 1031 Exchanges Can Be Used In The Context of the Sale of Tangible Personal Property T he provisions of Sec- tion 1031 of the In- ternal Revenue Code are available and commonly employed to defer capital gains tax liability when a taxpayer purchases "like- kind" real property to re- place property sold. Al- though this scenario is quite familiar in real estate trans- actions, it is worth noting that the same opportunities and rules of Section 1031 that apply to the sale of real estate also can apply to the sale of tangible personal property such as coins, art- work or other collectibles. The following "feel good" story illustrates the value of this proven but somewhat lesser known tax planning strategy, and is based on our recent experience with a client who we'll refer to as "Lucky" for reasons that are self-evident. Approximately fifty years ago, Lucky spent $70 on the purchase of a counterfeit replica of a rare and expen- sive gold coin. The coin sat in a box for many years, vir- tually forgotten and never seeing the light of day. Then, not too long ago, Lucky dis- covered that his so-called counterfeit coin was actually not a replica but was, in fact, an authentic rare and expen- sive coin. The coin was also in great condition. After learning of the coin's authenticity and value, Lucky decided to sell it and use the proceeds to diversify his coin holdings by pur- chasing multiple coin sets. Lucky's accountant astutely advised him that a 28% cap- ital gains tax rate applies to the sale of collectibles - including coins, artwork, stamps, etc. - which would take a significant bite out of
the proceeds. Lucky wanted to know his options to either eliminate or minimize the 28% capital gains tax on the sale of the coin. The good news is that Lucky was "in luck" again when we advised him that Section 1031 can be applied in the context of collectible tangible property, such as the sale of his rare coin, if the proceeds are used to purchase replacement "like- kind" coins. The following simplified overview provides more de- tail on the viability and versatility of a Section 1031 exchange in connection with the sale of certain tangible property. A Section 1031 exchange allows a person to sell one or more appreciated assets (real property or tangible personal property) and defer the payment of capital gain taxes by acquiring one or more replacement properties of "like-kind." Section 1031 allows for the repositioning, diversification or consolida- tion of investments while de- ferring the payment of capital gains taxes to a later time. There are specific require- ments and deadlines that must be followed in order for a sale transaction to qualify for Section 1031 treatment. Importantly, the relinquished property and the like-kind replacement property must have either been held for investment or used in a trade or business. In addition, in order to defer all of the gain, the taxpayer cannot actually or construc- tively receive the sales pro-
ceeds. There are various ways in which a Section 1031 exchange can be structured in order to qualify for defer- ral treatment. Because of the many rules and restrictions involved, it is critical that one consult with a tax advi- sor prior to engaging in a Section 1031 exchange. Turning back to Lucky, the proceeds on the sale of his "counterfeit-turned- authentic" gold coin were significant, and were placed directly in the hands of a qualified intermediary and then used to purchase re- placement "like-kind" coins in a transaction that quali- fies under Section 1031. Lucky was successful in deferring approximately $154,000 of capital gain taxes until he sells the re- placement coins - unless of course he engages in a sec- ond Section 1031 exchange at that time and further defers the taxes. If Lucky holds onto the coins until he dies, his estate will receive a stepped-up basis for the coins, and all of the deferred gain will forever escape capital gains taxes. If you own valuable tan- gible property or collect- ibles, the capital gains tax on sale can be significant. If you want to diversify or consolidate your holdings, consider a Section 1031 ex- change to defer the capital gains tax until a later time, or perhaps forever. Laurence Fundler is a member of Greenbaum Rowe Smith & Davis' Tax, Trusts & Estates Department. n
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M id A tlantic R eal E state J ournal Real Estate org. is headquarted in Philadelphia, PA Binswanger brokers sale of 156,000 s/f industrial facility
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N EW HAVEN , CT — On behalf of C. Cowles & Company, Binswanger announced the sale of a multi-story 156,000 s/f industrial facility on ap- proximately 2.57 acres. The property is located at 83 Water St. in New Haven, Connecticut. The buyer, Amerco Real Es- tate Company purchased the property for $6 million. The company plans to develop the property for a combination of self-storage and vehicles
rentals under the U-HAUL brand name. The 156,000 s/f, five-story industrial building with over 100 surface parking spaces features highly desirable ar- chitectural amenities includ- ing original wood flooring, exposed brick and stone and large perimeter windows, much of which Americo in- tends to preserve. The site offers easy access to and tremendous visibility from I-91, I-95 and Rte. 34 and is located approximately one
mile from Yale University and Yale New Haven Hos- pital. Jim Panczykowski , ex- ecutive vice president in Binswanger’s Connecticut office, brokered the transac- tion for the seller. Headquartered in Phila- delphia, PA, Binswanger is an international full-service real estate organization with offices worldwide throughout the United States, Canada, Latin America, Europe, the Middle East, and Asia. n
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Since 1991, Meridian has worked tirelessly to earn our stellar reputation by setting the industry standard for service excellence, honesty, integrity and always delivering value for our clients and lending partners. DOING THINGS RIGHT
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M id A tlantic R eal E state J ournal Program supports higher education for residents of the firm’s properties Castle Lanterra Properties announces winners of academic scholarships
UFFERN, NY — Castle Lanterra Properties (CLP) has announced three winners of the firm’s inaugural academic scholar- ship program for residents and dependents living in the company’s properties throughout the East, South and Midwestern U.S. “We were honored and pleased to receive many strong applications from stu- dents who recognize the value of community and continue to work diligently to pursue their goals,” said Elie Rieder , the company’s founder and CEO. Since 2009, CLP has amassed S
a portfolio of more than 7,300 residential units, valued at over $1 billion. Applicants were asked to provide academic history re- cords and submit an essay dis- cussing an issue of personal, local, national or international concern and its importance to them. Demonstrated leader- ship, school and community activities, work experience and career goals were also im- portant considerations during the selection process. Yolanda Toby, a manage- ment major with an emphasis on Hospitality at Howard Uni- versity in Washington, DC,
was awarded a $5,000 schol- arship. A resident of CLP’s Harbor Pointe in Bayonne, NJ and a graduate of Talent Unlimited High School in New York City, Toby is currently gaining experience in event sales through a summer in- ternship and is also planning to obtain an MBA in Finance following her graduation in 2017. According to Toby, who does extensive volunteer work and is a trained ballerina, “I am ecstatic about receiving this award. It’s a great honor and great opportunity, and it is wonderful that Castle Lan- terra Properties is doing this for their residents.” JaMia Sneed, a resident of CLP’s Heights at Skyland community in Tuscaloosa, Ala., is studying respiratory therapy at Shelton State Com- munity College in Tuscaloosa and was awarded a $1,000 scholarship. A graduate of Hillcrest High School in Tus- caloosa, she was inspired for a career in respiratory therapy by the patient-to-patient con- tact and the fact that “many of the respiratory therapists I’ve spoken to have been in the profession for as much as 30 years. I was impressed by that.” Also awarded a $1,000 scholarship was Chauntea Robinson, an English major at Illinois State University in Normal, Ill. A resident of CLP’s Midpointe community in Chicago, she is a sophomore with a passion for reading and writing. “It’s exciting to learn about the resident students and their educational goals”, said Rieder. “We are very gratified to help support their current pursuits as they work toward a college degree. Our objective is to continue to strengthen CLP’s community connection by recognizing and rewarding the hard work of our resident students and their families.” “In collaboration with our regional property managers, we were able to generate tremendous interest and en- thusiasm among residents of our properties when the scholarship was announced in January of this year,” said Jim Brady , vice president of property management and operations at CLP. “We look forward to continuing this program – and our overall community outreach efforts – in the years ahead.” n
Yolanda Toby, $5,000 award recipient, being congratulated by Elie Rieder, Founder and CEO of Castle Lanterra Properties.
CONTACT | 212.201.8055 | info@castlelanterraprop.com | castlelanterra.com
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25 YEARS OF
Since 1991, Meridian has closed loans for all property types, in 47 states, ranging from less than $1 million to over $1 billion. No matter the deal, our unmatched experience provides an unparalleled advantage in closing loans for our clients. CLOSING IT ALL
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M id A tlantic R eal E state J ournal
Sterling High School Board of Education orders sale of pool and fitness facility Max Spann Real Estate & Auction schedules auction of Former YMCA in Voorhees, NJ
120 Britton Place
You Dream It. We Finance It. That’s Progress.
V
OORHEES, NJ — A former YMCA in Voorhees Township
is being put on the auction block in September by order of the Board of Education. The property is no longer needed for public use. Max Spann Real Estate & Auction Co. , one of the na- tion’s leading auction houses, has scheduled the auction for Wednesday, Sept. 21 on site. The property is located at 120 Britton Place in Voorhees. “The facility is in great shape and in a high-profile location. It is ready made for a commer- cial fitness gym, rehabilitation or an emergency care facility,” said Bob Dann , the executive vice president and chief oper- ating officer of Max Spann. “The property already has a lease in place on the pool, so it would be an immediate income producer.” The facility, which con- sists of two buildings totaling 40,881 s/f, features an indoor pool, a wrestling room, an ex- pansive gym and basketball courts and has a fully wired security monitoring system. The facility sits on a 2.93-acre property, which offers 88 park- ing spaces and is convenient fromWhite Horse Pike, Route 42 and I-295. The property is being sold by order of the Sterling High School Board of Education. n
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Progress Capital Advisors The Funding Source
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F inancial D igest F eaturing A ppraisal
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24-month term placed with Procida’s 100 Mile Fund Progress Capital secures $68.5m for Phase II of Gull’s Cove Condo Complex in Jersey City
ERSEY CITY, NJ — Kathy Anderson of Prog- ress Capital Advisors has arranged a $68.5 million construction loan for a valued client to begin Phase II of Gull’s Cove, a nine-story, 107 unit condominium tower. This is the final stage of the Gull’s Cove Condominium Complex located in Jersey City’s Liberty Harbor North redevelopment area across from Liberty State Park. The location provides convenient access into New York City while offering stun- ning views of its skyline. In 2004, Progress Capital arranged the initial $81 mil- lion loan for the construction of 331 units in Phase I. After the financial crisis, the owner decided to delay Phase II until the market timing was correct. The combination of limited in- ventory along the Gold Coast combined with continued low J VIRGINIA BEACH, VA — Greystone , a real estate lend- ing, investment and advisory company, announced that it has provided $33.25 million in FHA-insured financing for the construction of The Choices at Holland Windsor, a multi- family development project in Virginia Beach. The loan was originated by Donny Rosen- berg , and is Greystone’s first new construction transaction to utilize HUD’s 2016 MAP Guide standards for a lower Mortgage Insurance Premium (MIP) threshold based on Green and Energy Efficiency Multifamily Housing requirements. The Choices at Holland Windsor will consist of 252 residential market rate units spread across seven buildings in the Holland Rd. / Windsor Oaks intersection of Virginia Beach. To qualify for the Green and Energy Efficiency Housing MIP reduction, a real estate project must produce a State- ment of Energy Design Intent (SEDI) score of 75 or higher. The Choices at Holland Wind- sor produces a SEDI energy
interest rates, has created the perfect environment to absorb these units quickly. The Phase II construction loan is an inter- est only 24-month term that was placed with Procida’s 100 Mile Fund. “We are finding that with the Basel III HVCRE rules and the tightening of con- struction credit especially for condominiums, often times a non-traditional bridge lender is better suited for a developer’s capital needs,” said Anderson. Gull’s Cove II is expected to be completed late 2017 and pre- sales are underway. The project will include 1, 2 and 3 bedroom apartments, duplexes and tri- plexes ranging in size from 678 s/f to 2,170 s/f. The two buildings are adjoined by a ground-level row of retail shops. Amenities include 24/7 concierge, fitness center, community room, com- mon outdoor patio and covered on-site parking. n
Gull’s Cove Condominium Complex
Greystone provides $33.2mFHA-insured financingforVirginiaBeachdevelopment
Houlihan-Parnes affiliate arranges a $7.5m loan for a full-service hotel
The Choices at Holland Windsor
score of 89, and the project’s design satisfies EarthCraft Multifamily Certification, a green standard recognized by HUD. Features of the new construc- tion that contribute to meeting these green standards include advanced framing techniques with insulated corners; ENER- GYSTAR appliances; advanced interior and exterior LED light- ing; and construction materials made from recycled content, among others. “While the loan process for The Choices at Holland Wind- sor was well underway when HUD released the 2016 MAP Guide, the borrower was able to take advantage of the re-
duced MIP before closing,” said Phiet Nguyen , deputy chief FHA underwriter and head of the 221d4 underwriting team at Greystone. “Recognizing the many benefits of building an environmentally friendly property, while HUD was still reviewing the final application, the developer and his consul- tants made a concerted effort to improve the project’s design and construction materials to meet the EarthCraft Multifam- ily standard. HUD’s incentive for reducing overall energy use by offering a lower annual MIP is an industry game changer; it’s beneficial for everyone in- volved in this project, investors and residents alike.” n
Full Service Hotel, Nassau County, NY
sistently operated at higher than average occupancy levels by offering upgraded rooms and a wide range of ameni- ties including a full service restaurant, a banquet facility, an abundance of on-site park- ing and a swimming pool. The non-recourse loan was placed with a NY-based bank for a term of 10-years. The inter- est rate was fixed at 4.0% for the first 5–yrs. As per Cronin, “the lender was very accom- modating in addressing the borrower’s needs with regard to the timing of the closing.” n
NASSAU COUNTY, NY — Jeanne Cronin and Zeev Douek of Q10 New York Realty Advisors , an affiliate of Houlihan-Parnes Real- tors, LLC , have arranged a $7.5 million permanent loan on a full service hotel currently operating under the Best Western flag. The property is well located on Sunrise Highway in downtown Rockville Centre a short walk from many local businesses, stores and restaurants as well as the Rockville Centre train station. The property has con-
10A — September 16 - 29, 2016 — Financial Digest — M id A tlantic
Real Estate Journal
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F inancial D igest
Y Lefkowitz and Grunberger negotiate transaction Meridian Capital arranges $33.7m for a 275,000 s/f SC
Principal Commercial Capital arranges $820,000 in comm’l mortgages for local investor
enough equity to purchase the new location with NO cash out of pocket, including closing costs. The loans provided up to 75% LTV and 30-year amor- tization, without the need for the borrower to provide tax returns. Principal Commercial Capi- tal Group remains committed to serving the main street investors nationwide. n Procida crosses $350m milestone ENGLEWOOD CLIFFS, NJ — Procida Funding ’s 100 Mile Fund has recent- ly cleared the $350 million threshold of lending origina- tions since the Fund’s start in 2011. This is an important milestone for the fund, which has seen rapid growth and high dividends for investors over the past five years under the leadership of president and CEO William Procida . When asked to explain the fund’s remarkable returns, Procida said the following: “We do not chase trends- we focus on developers of low-risk projects in sub-markets like Nyack, NY or Beacon NJ. Many lenders do not understand that the price basis and stability in those mar- kets reduces risk.” The fund’s hefty 14% (average) return to investors is evidence that the 100 Mile Fund not only under- stands market dynamics, but is positioned to capitalize on them. The 100 Mile Fund is a mid- dle-market real estate invest- ment vehicle focused on de- velopment and bridge loans. The fund exclusively loans to borrowers and projects within 100 miles of the fund’s offices next to the George Washington Bridge- hence the name “100 Mile Fund.” The fund’s typi- cal borrower refinances with conventional long term debt an average of 14 months after re- ceiving a loan fromProcida. The fast pace and quick turnover of the fund’s business has consis- tently rewarded investors. “We like to support develop- ers that have the insight and skill to undertake projects that help complete a neighborhood,” said Procida. “When we find a worthy site that has fallen into disrepair, and transform it to reach its full potential, we not only improve the look, increase safety, and raise the financial value for those who live and work there, we also create a rate-able property for the municipality where there was once just an eyesore.” n
MONMOUTH COUNTY, NJ — Principal Commer- cial Capital Group (PCCG) announced the closing of a total $820,000 in commercial mortgages on three commer- cial buildings in Monmouth County, NJ for a success- ful real estate investor. The subject mixed use buildings including a 2-unit property, 5-unit property and 10-unit property. The borrower was looking to leverage current proper- ties in order to purchase the 10-unit mixed use building to grow his portfolio. PCCG was able to arrange financing to do a refinance cash out on two buildings which providing
ORK, PA — Meridian Capital Group , Amer- ica’s most active debt broker, arranged $33.7 million in permanent financing for a shopping center located in York. The seven-year loan, provid- ed by a balance sheet lender, features a competitive fixed rate of 3.90% with a five-year extension option. This trans- action was negotiated by Me- ridian senior vice president, Barry Lefkowitz and vice president, SamGrunberger , who are both based in the com- pany’s Iselin, NJ office. The Crossroads Shopping Center is a 274,445 s/f shop-
Crossroads Shopping Center
ping center, located at 351 Loucks Rd. in York, PA. Situat- ed on Rte. 30 at the intersection of I-83, retailers benefit from the center’s superior location. “The Crossroads is a regional
shopping destination situated conveniently near major high- ways, which enables national retailers to service the entire marketplace from one central location,” said Lefkowitz. n
Real Estate Journal — Financial Digest — September 16 - 29, 2016 — 11A
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F inancial D igest
Thomas Didio represents the borrower, Russo Development HFF secures $73m financing for class A multi-housing community in Harrison, NJ
ARRISON, NJ — Holliday Fenoglio Fowler, LP (HFF) announced that it has secured $73 million in fi- nancing for V e r m e l l a H a r r i s o n , a 398-unit, class A, mid- rise multi- housing community in Har- rison. HFF worked on behalf of the borrower, Russo Develop- ment (Russo) , to place the 10- year, fixed-rate loan through John Hancock Real Estate Finance Group . Vermella Harrison is located at 1100 Frank E. Rodgers Blvd. South in Harrison’s wa- terfront redevelopment area, also known as the Riverbend District. Situated on a three- acre site, the transit-oriented property is 800 feet from the Harrison PATH station, ap- proximately six miles north of Newark Liberty Interna- tional Airport and convenient to Interstates 280, 78 and 95 providing access around H Thomas Didio Applied Bank announces Carmen Facciolo Jr. as new director WILMINGTON, DE — Applied Bank announced the appointment of Carmen Estate Services, Inc. and vice president of Emory Hill & Company , the construc- tion division. Carmen has also served as NAI director for Em- ory Hill Real Estate Services since the company’s affiliation with NAI Global in 1997. “Carmen’s vast experience in real estate and construc- tion will add a valuable per- spective to the Bank and our Board of Directors,” said Applied Bank chairman and CEO Rocco Abessinio . “His extensive knowledge will be very beneficial to the further growth of the Bank’s real es- tate and construction financ- ing divisions.” n Carmen Facciolo Facciolo Jr. t o App l i ed Bank’s board of directors. C a r m e n c u r r e n t l y serves as the president of NAI Emory Hi l l Rea l
Additionally, a 4,000 s/f ame- nity center is located adjacent to the main lobby and features a clubroom, conference room, bar and pool tables. The HFF debt placement team representing the borrow- er was led by senior managing director Thomas Didio . “The ability to lease this property as quickly as Russo did is a testament to both the quality of the asset and its proximity to New York City train access,” said Didio. “HFF is pleased to have helped Rus- so Development secure a long- term permanent loan for such a first-class development.” n
northern New Jersey and into Manhattan. The five- story property has 120 stu- dio, 260 one-bedroom and 18 two-bedroom units averaging 717 s/f surrounding a central parking structure, which al- lows residents direct access to each floor of the property. Community amenities include a 3,500 s/f fitness center with yoga studio; outdoor heated swimming pool; bocce ball court; putting green; rooftop dog run; rooftop terrace with pergolas, fireplace and grilling stations; large courtyards; con- cierge service; and personal storage lockers on each floor.
Vermella Harrison
12A — September 16 - 29, 2016 — Financial Digest/Appraisal — M id A tlantic
Real Estate Journal
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F inancial D igest /A ppraisal
By Joseph D. Pasquarella, MAI, CRE, FRICS, Integra Realty Resources - Philadelphia Philadelphia Commercial Real Estate Market Overview T
he commercial real estate market has enjoyed a seven-year bull run. Is i t coming to an end? Nationally, in many ma- jor U.S. mar- kets, real es- tate values returned to p r e - r e c e s - sion peaks, recovering 28%-30% over the past decade. Demand in Philadelphia’s multifamily sector is ex- pected to remain strong for the Joseph Pasquarella
foreseeable future across all submarkets; however, there is considerable supply risk looming on the horizon. Due to the fundamental demand
growth in this submarket and, until recently, the relative lull in new construction (with only 500 units delivered in 2015), landlords are able to command
very robust increases in rental rates with vacancy rates in 2014 and 2015 trending down to low levels. However, the Center City submarket will de-
liver just over 2,000 new units in 2016 (which is roughly 11% of existing supply) and another 2,000 units in 2017. Vacancy rates will rise over the next two years as this new supply is absorbed. The single-family story stands in contrast to the over- supply worries of the commer- cial multifamily market. While healthy sales are reported in the residential sector, con- cerns revolve around invento- ry shortages with scarce labor resulting in rising construction costs. The ongoing, relatively tight mortgage underwriting standards continue to dampen sales in this subsector. Partly contributing to tight underwriting standards, cur- rent interest rate levels pres- ent an unfavorable climate for single-family residential mortgage lenders. In Philadelphia’s retail sub- market, new construction is increasing. However, the new supply is meeting demand and we do not foresee oversupply in the Philadelphia retail mar- ket. The suburban community, neighborhood centers, and well- anchored centers have strong underlying market fundamen- tals, as vacancy is trending downward while rental rates are increasing. The extended Center City residential base has been growing rapidly and is projected to increase dramati- cally for the foreseeable future, spurring CBD retail. Foreign capital made a ma- jor splash into Philadelphia office investment in 2016. We anticipate growing investor demand in the CBD office seg- ment for class A core assets. In the suburbs, the market fundamentals are improving overall and are anticipated to moderately improve for the foreseeable future. The Philadelphia region, inclusive of Lehigh Valley, Southern New Jersey, and Central Pennsylvania indus- trial submarkets, remains a continued on page 14A
Real Estate Journal —Appraisal — September 16 - 29, 2016 — 13A
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Integra Realty Resources Philadelphia I l il l i
IRR - Philadelphia specializes in: il l i i li i
Our territories: Pennsylvania Territories: Philadelphia Metro Lehigh Valley Northeast Pennsylvania Central Pennsylvania i i l i r it ri : il l i tr i l rt t l i tr l l i
Commercial real estate r i l r l t t
Fundamental demand studies t l t i
Market and feasibility studies r t f i ilit t i
high-rise condominium towers i -ri i i t r
Burlington (Western Half) Camden rli t ( t r lf)
Due diligence studies ili t i
Ground lease & leasehold r l l l
Gloucester Cape May Salem Cumberland Mercer l t r l rl r r
Estate planning t t l i
Eminent domain i t i
Joseph D. Pasquarella, MAI, CRE, FRICS • Michael Silverman, MAI, CRE, MRICS • John P. Pasquarella, MAI Senior Managing Director Managing Director Managing Director J . r l , I, , I i l il r , I, , I J . r l , I i r i ir t r i ir t r i ir t r
Joseph D. Pasquarella, MAI, CRE, FRICS Senior Managing Director Phone: 215-587-6001 Email: jpasquarella@irr.com J s . s r l , I, , I i r i ir ct r : - - il: j s r l ir .c
Kendra Dautel r t l
Phone: 215-825-3753 Email: kdautel@irr.com : - - il: t l ir .c
14A — September 16 - 29, 2016 — Appraisal — M id A tlantic
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A ppraisal
O O D B R I D G E , NJ — New Jer- sey Realty Advi- Michael started his real estate appraisal career in 2004 NJ Realty Advisory Group congratulates Michael Nwosu on obtaining SRA Designation W Group the chance to offer you his deep expertise. adhere to a strictly enforced Code of Professional Ethics and Standards of Professional Appraisal Practice.
chael started his real estate appraisal career in 2004. In his previous career, he was a chemical engineer and a petrochemical engineer for 25 years, from 1976 to 2001, a career which he enjoyed very much and contributed much in the design, development, and manufacturing of new products. In 1995 he became interested in the appraisal industry and by 2009, after completing and passing the required courses, satisfying the requirements and passing the State Certified Residential Real Estate Appraiser Exams,
he began his second career as a residential real estate ap- praiser. He became an active member of the Metro New Jer- sey Chapter of the Appraisal Institute, which gave him the support and encouragement to seek the SRA designation. Thi s i s an impress i ve achievement for Michael be- cause it requires a level of education and experience that few professionals in our industry have reached. When you hire him you hire one of the most qualified appraisers in the profession, and it gives New Jersey Realty Advisory
To maintain this designa- tion requires members to fulfill continuing education requirements on an ongoing basis. This includes periodic attendance at and passing the exams for Standards of Profes- sional Practice courses. Today and throughout its 80-year history, the Appraisal Institute is the leading organi- zation for professional real es- tate appraisers. Reflecting its unbiased, objective approach to real property appraisal and analysis, members must
sory Group, LLC c o n - g r a t u l a t e s Michael U. Nwosu on o b t a i n i n g the SRADes- ignation for the Apprais- al Institute.
The Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accor- dance with applicable federal, state, and local laws. Michael provides a wide range of services relating to residential properties, in- cluding providing opinions of value, evaluations, reviews, consulting and advice regard- ing investment decisions, estate valuations and land matters, among others. New Jersey Realty Advisory Group is located inWoodbridge, NJ and provides a wide range of appraisal services to its cli- ents. Michael can be reached at 732-853-0271 or by email at emnwosu@njrag.com. n CHICAGO, IL — The mar- ket rent for a property, known as excess rent, amounts to an intangible asset and should be specifically identified by real estate appraisers, according to the article “Is Excess Rent Intangible?,” by Stephen D. Roach, MAI, SRA, AI-GRS . published this week in The Appraisal Journal . It reports that the amount of rent paid to occupy and use property is established by the lease or contract, and therefore is not an asset of the property itself. n Appraisal Journal publishes article on excess rent continued from page 12A Philadelphia Com- mercial Real Estate Market Overview. . . highly desirable market for both investors and space users going into the second half of 2016. Although the year-to- date transactional volume has decreased compared to 2015, we see a burst of recent assets hitting the market or coming under contract. Our findings, mentioned above, are depicted in the accompanying tables, which illustrate the fundamentals of each mentioned Philadelphia submarket. Joseph D. Pasquarella, MAI, CRE, FRICS is the Senior Managing Director of IRR-Philadelphia. n
Michael Nwosu
Michael has worked with New Jersey Realty Advisory Group since April 2015 and worked hard to obtain this prestigious designation. Mi-
New Jersey Realty Advisory Group, LLC Commercial Valuation and Litigation Support
Providing Professional Appraisal Services for Lenders, Property Owners, Government Agencies and the Legal Community of over 35 years Experience New Jersey Realty Advisory Group, LLC, is a full service Real Estate Appraisal Company servicing central and northern New Jersey. With over 35 years of experi- ence in the real estate business, we perform a wide variety of services for lenders, attorneys, government agencies, corporations and private individuals. Knowledge We know the market. We have worked extensively in Northern New Jersey and have appraised all types of properties from residential homes, large industrial and office buildings, to mom and pop investment properties. Trust We specialize in commercial, retail, industrial, multi-family of all sizes, special purpose properties and the mom and pop buildings located throughout northeast- ern New Jersey. We can handle all of your appraisal needs, delivering USPAP-compliant reports for financing, equitable distribution, eminent domain, inheritance tax or partial interest purposes.
2500 Plaza 5 Harborside Financial Center Jersey City, New Jersey 07311 (201) 499-7618
178 Main Street Woodbridge, New Jersey 07095 (732) 853-0271
Albert F. Chanese, SCGREA MAI Jennifer Barany, SCGREA Michael Nwose, SCRREA
www.njrag.com
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