- DC

178 unit class A property offers great upside potential SELARealty Investments acquires Crest Ridge in West Orange for $40.5 million

ISSUE HIGHLIGHTS Volume 29 Issue 19 Oct. 13 - 26, 2017 Insurance / Title Spotlight Horvath & Tremblay sells Tgi Fridays in Homestead, PA 9-10A


est Orange, NJ — SELARealty In- vestments , the Fort

L e e b a s e d investments and property management company an- nounced its r e c e n t a c - quisition of Crest Ridge Apartments,

Tal Steinberg

178 unit class A property lo- cated in West Orange. The complex offers beautiful Man- hattan skyline views, Pool and many more amenities, and is located in one of the nicest areas in Essex County. At 5.4% going in cap rate the purchase price was $40.5 million with over 98% occupancy at time of acquisition. Tal Steinberg managing partner for SELA Gaithersburg, MD — Buchanan Partners has teamed with Miami-based real estate investment firm Elion Partners to acquire a 700,000 s/f industrial portfolio in suburban Washington, DC for $81.15 million. The port- folio comprises 14 buildings just off Rte. 28 in the northern Virginia submarkets of West- fields, Chantilly, and Dulles. The seller was a joint venture of Ares Capital Corpora- tion and Adler Group .

Crest Ridge Apartments

Realty Investments said: “We are extremely proud to add the Crest Ridge to our growing portfolio; the previous owners, who were the original builders, spared no money building it and maintaining it over the years in such a great shape. They held

it for 50 years and we intend to hold it for 50 more. The property offers great upside potential to our investors with renovating units, improving the pool area, adding a gym and gradually increasing rents over the years which are now under market”

AdamZweibel andGreg Pine both from Gebroe Hammer represented both the sellers and buyers. “Adam and Greg both did an amazing job bringing this deal to my attention and handling all the obstacles along the way” said Steinberg. n


BuchananPartners &ElionPartners purchases 700,000 s/f Northern VA industrial portfolio

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Philadelphia Office & Industrial Real Estate Summit For speaking and sponsorship information, please contact: Lea at 781-740-2900 or lea.christman@marejournal.com


700,000 s/f industrial portfolio in suburban Washington, DC

options than traditional office buildings or retail centers, at a better price.’ The new ownership plans to make capi- tal improvements, including landscaping and amenities, while continuing to lease and manage the properties. “This asset class aligns with our investment strategy of acquiring supply-constrained properties at or below re- placement costs,” said Juan DeAngulo , managing prin- cipal, Elion Partners. “With sound operating fundamen-

tals, we are excited to embark on this strategic joint venture with Buchanan Partners and look forward to continuing to grow our investments in this region.” T h e n e w l y a c q u i r e d 14-building portfolio is spread across three different office parks along the Rte. 28 cor- ridor: 3680-3863 Centerview Road in Dulles Business Park, 14420-14434 Albemarle Point Place inWestfields North; and 14280-14290 Sullyfield Circle in Sullyfield Business Park. n

“With rising raw land pric- es, a strengthening submar- ket, and accelerating residen- tial demand, we set out to find high-quality buildings that could be positioned as best- in-class industrial space for tenants serving this rapidly evolving area,” said Colin Dove , senior project man- ager at Buchanan Partners.” Added Buchanan Partners principal Brian Benning- hoff : “Class A industrial buildings like these provide many tenants more useful

Financial Digest................................................5-10A DelMarVa.......................................................11-14A New Jersey................................................. Section B Pennsylvania.............................................. Section C

Upcoming Spotlights Executive Women in Business Healthcare/Medical Office Retail Design


Inside Cover A — September 15 - 28, 2017 — M id A tlantic

Real Estate Journal


Real Estate Financing

Real Estate Journal —October 13 - 26, 2017 — 1A


M id A tlantic


Walgreens Ewing, NJ $10,974,667

Walgreens Hillside, NJ $8,590,000

Pep Boys Irwin, PA $1,510,000

CVS Raleigh, NC $4,225,000

Red Lobster Uniontown, PA $2,255,000

Fresenius Farmville, NC $3,550,000

TGI Fridays Homestead, PA $4,650,000

Walgreens Cherry Hill, NJ $8,900,000

Hamilton Mill Shopping Center Buford, GA $3,084,000

Closed $3,100,000,000 in Recent Transactions

Transactions 760 in 28 States

Ranked #1 Industry Leading Team

www. Ho r v a t hT r emb l a y . com Main: 781-776-4000 | Fax: 781-823-0245 | info@horvathtremblay.com

2A —October 13 - 26, 2017 — M id A tlantic

Real Estate Journal


Mid Atlantic Real Estate Journal

Mid Atlantic R eal E state J ournal Publisher, Conference Producer ...................................... Linda Christman Associate Publisher ................................................................ Steve Kelley Associate Publisher ...................................................................Kim Brunet AVP, Conference Producer . ................................................. Lea Christman Senior Editor/Graphic Artist .................................................Karen Vachon Office Manager ......................................................................Miriam Buttrick Contributing Columnists ...................................................... John Vazquez 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, 350 Lincoln St., Suite 1105 Hingham, MA 02043 USPS #22-358 | Vol. 29 Issue 19 Subscription rates: $99 - one year, $148 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion 781-740-2900 | Fax: 781-740-2929 www.marejournal.com

Leading the Real Estate Investment Market Contact us today to access the largest inventory of properties.

John Vazquez

The Route to Talent

J.D. Parker Manhattan

Brian Hosey New Jersey (201) 582-1000 Bryn Merrey Washington, D.C. (202) 536-3700

T he word “talent” began its illustrious ascent as a unit of currency in ancient Greece, and while today’s talented individual may command more money than a less-talented counterpart, the mindset of the 21st Century worker appears to be more fo- cused on lifestyle than money. Central to lifestyle, of course, is where you live and work. “Now, your job moves for you, you don’t move for your job,” said Verizon’s senior vice president of Global Real Estate, John Vazquez. “It’s a bifurca- tion of how we look at real estate.” For Verizon, that means go- ing to where the talent is and assembling their brand there. “We have to establish brand awareness and legitimacy in each market we enter,” said Vazquez. Selling the Verizon Story Worldwide In this global marketplace, Verizon attracts and retains talent by stressing its transfor-

(212) 430-5100 Brenton Baskin Philadelphia (215) 531-7000

The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal

Offices Throughout the U.S. and Canada


mational story. The company has been true to its path of staying ahead of trends and working to build a new and exciting world. Once strictly regarded as telecom, Verizon is now more about technology, moving into entertainment and media with acquisitions like AOL in June 2015, and soon, Yahoo in summer 2017. And technology jobs are booming. Boston alone exports 17,000 technology degree candidates for jobs every year. “Our development strategy is 5G, not just fiber. 5G wireless is now as good as fiber,” said Vazquez. Verizon will not be the world’s first wireless carrier to move into 5G (fifth genera- tion). It represents a bold move toward significantly higher

speed and response time. The first commercial use is slated for later this year, which is three years ahead of the com- mon industry prediction of 2020. (source: www.makeuseof) Going Where the Talent Is… Or Wants To Be While real estate has always been driven by the corporate business model, today’s real estate professional needs to understand and apply that model with a business-side mindset, according to Vazquez. In addition, real estate needs to understand and respond to the talent market. When Verizon considers ac- quiring new space, it first looks at where the talent is. Building in the suburbs may seem more continued on page 10A


Phase I ESA | Property Condition Assessments | Energy Consulting Construction Risk Management | Capital Planning Seismic Risk Assessments | Phase II Subsurface Investigation ALTA & Zoning Reports | Asbestos & Lead Surveys

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.

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“With CPC’s lending expertise I’m not just buying a building, I’m revitalizing the block.”

Kaplin Stewart Attorneys at Law

Contact: Barry A. Furman • bfurman@kaplaw.com 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-941-2529 • www.kaplaw.com Visit our Real Estate Blog: www.philadelphiarealestatelawyer.com Visit our Construction Blog: www.pennsylvaniaconstructionlawyer.com Other Offices: Cherry Hill, NJ 856-675-1550& Philadelphia, PA 215-567-3120

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Real Estate Journal —October 13 - 26, 2017 — 3A


M id A tlantic

M id A tlantic R eal E state J ournal Refinanced nonrecourse mortgage loan for $4.4 million Griffin Industrial Realty closes on $5.9 million mortgage loan

Recently Closed Loans


indsor, CT — Griffin Industrial Realty, Inc. (Grif-

fin) announced that two of its subsidiaries closed on the refinancing of a nonrecourse mortgage loan (the Existing Loan) with Webster Bank (Webster) that was collater- alized by 5 and 7 Waterside Crossing, two multi-story office buildings aggregating 161,000 s/f in Griffin Center in Wind- sor, CT. Immediately prior to the refinancing, the Existing Loan had a balance of $5.9 million. The refinanced nonrecourse mortgage loan (the “NewLoan”) is for $4.4 million, has a five year term with principal pay- ments based on a twenty-five year amortization schedule and is also collateralized by 5 and 7 Waterside Crossing. The New Loan has a variable interest rate based on the one-month LIBOR rate plus 2.75%, but Griffin entered into an inter- est rate swap agreement with Webster that effectively fixes the interest rate on the New Loan at 4.72% over the term of the New Loan. The Existing Loan had a variable interest rate that was effectively fixed at 3.86% through an interest rate swap agreement with Webster. Grif- Unity Bank’s $1.5 million SBA loan to fund reno. at One Centre Square EASTON, PA — Unity Bank has provided a $1.5 mil- lion Small Business Adminis- tration (SBA) loan to Palmer Twp. residents William “Billy” Cornish and Gregory Melhem to fund the recent renovation of their Easton nightclub and restaurant previously known as Drinky’s. The business was recently reopened as One Centre Square. “We had a good run with Drinky’s, but felt the Lehigh Valley needed a venue to at- tract artists and performers of all types from rap to rock to country,” said Cornish. “One Centre Square, with a capac- ity of 900 people, really helps fill a void.” “We have been customers at Unity Bank for many years and appreciate them working with us to help bring the vision for One Centre Square to life,” said Cornish. “Unity really made the process as easy as it could possibly be.” n

$7,250,000 $4,800,000


Retail Center Refinance

Office Portfolio Refinance 204-Unit Multifamily Refinance

Philadelphia, PA Pottsville, PA Macon, GA 75% LTV, 10/30, 4.90%, Non-Recourse 65% LTV, 10/20, 3.75%Fixed 75% LTV, 10/30, 4.53%, Non-Recourse

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5 and 7 Waterside Crossing

fin used cash on hand of $1.0 million and $0.5 million that had been held in escrow by

Webster to repay a portion of the Existing Loan in connection with the refinancing. n

Mid Atlantic Real Estate Journal ExecutiveWomen in Real Estate and Allied Fields Oct. 27, 2017 • Deadline: Oct. 13, 2017 Wednesday 18th

ExecutiveWomen are effecting change and taking leadership roles. Be a part of this very special issue by telling us about your background and success stories! Contact LindaChristman 781-740-2900 lchristman@marejournal.com

4A —October 13 - 26, 2017 — M id A tlantic

Real Estate Journal


M id A tlantic R eal E state J ournal Horvath, Tremblay, Ahrens and Danielson orchestrate sale

Horvath&Tremblay sells Tgi Fridays inHomestead, PA and Cvs in Raleigh, NC for $8.87 million H omestead, PA & Raleigh, NC — Bob Horvath, Todd

of Homestead. TGI Friday’s benefits from its location near the Waterfront Shopping Cen- ter a 1.3 million s/f open aired shopping center. Situated on the Monongahela River, the center is home to a vibrant collection of store, restaurants, hotels, and community events. As a sign of commitment to this location, TGI Fridays recently underwent extensive renova- tions totaling $500,000 and renewed the lease for an addi- tional 15 years which includes scheduled rental escalations in the primary term and option periods. Bob Horvath, Todd Tremblay and Kyle Danielson procured the buyer to close the property at a sale price of $4.65 million. CVS in Raleigh, NC closed at a sale price of $4.225 mil- lion, a 4.5% cap rate. Brian Ahrens, Bob Horvath and Todd Tremblay procured the 1031 exchange buyer to complete his exchange requirement. CVS Pharmacy will occupy a newly constructed, 11,945 s/f property situated on a 1.6 acre parcel located at Lake Boone Trail at Landmark Dr. CVS will operate under a new corporate guaranteed 20-year lease with four, five year options and 5% rental escalations in the option periods. The property is located on a hard corner with great visibility within an area that is currently undergoing extensive redevelopment. This CVS is an outparcel to a new 245-unit multi-family and retail mixed- use development. Located di- rectly adjacent to the property is the Rex Healthcare Hospital. The 665-bed hospital is one of Raleigh’s largest employers with over 1,100 physicians who treat over 34,000 inpatients each year. Also located in close proximity to CVS are Food Lion, Chick-fil-A, McDonald’s and Starbucks. Horvath & Tremblay is one of the most active and success- ful Investment Real Estate Brokerage firms in the United States. Our advisors specialize in the sale of single tenant net- lease assets and retail shop- ping centers. They have expe- rience successfully structur- ing sale lease-back programs, portfolio dispositions, and 1031 exchanges. Horvath & Trem- blay is dedicated to being the best source of information and expertise in the marketplace for private investors, develop- ers, institutions, and industry professionals. n

Tremblay, Brian Ahrens and Kyle Danielson of Horvath & Tremblay have success- fully completed the sale of TGI Fridays in Homestead, PA and CVS in Raleigh, NC for com- bined sales of $8.875 million. TGI Friday’s occupies a free standing, 8,242 s/f building located along Waterfront Dr., just east of Homestead Grey’s Bridge. The property experi- ences traffic counts in excess of 45,000 vehicles per day and is located in a dense com- mercial and residential area

Bob Horvath Todd Tremblay

Brian Ahrens Kyle Danielson

TGI Fridays in Homestead, PA

Bid Nov. 2 nd THRU Nov. 8 th AUCTION


Only $100,000 Starting Bid!

13,879± SF, 2 Unit Retail Complex Property Location: 110 Fih Street, SALEM, NJ 08079

• Pro Forma NOI - $58,011/ 2017 - 10 CAP • Assessed Value: $556,400 Taxes: $19,320.99 / 2017 • 7,769± SF – Leased to Family Dollar • 1.47± Acres, Parking for 75 vehicles

• Minimal Landscape and Maintainence Required • Water, Sewer, Gas, Electric

INSPECTION: Begins: Nov. 5 th at 12 - 2 PM

ALL bidding will be ONLINE ONLY at WarnerRealtors.com

856.769.4111 WarnerRealtors.com

F inancial D igest F eaturing I nsurance /T itle

Real Estate Journal —October 13 - 26, 2017 — 5A


M id A tlantic

NYmultifamily transaction is largest SBL transaction in the FreddieMac program’s history Sabal Capital Partners closes $129 million portfolio of Freddie Mac small balance loans

B ronx, NY — Sabal Capital Partners, LLC , a diversified fi-

capital into each property. The Brooklyn properties included: • 1060 Hancock Street • 1315 Sutter Avenue • 135 Dupont Street • 187 Rochester Avenue • 1904 Nostrand Avenue • 4515 Snyder Avenue “Greystone’s depth of knowl- edge in the Brooklyn real estate market and experience with Freddie Mac’s Small Balance Loan platform generated a very positive result for our cli- ent, Greystone and our partner Freddie Mac,” said Cristi. “We have been very successful at executing portfolio refinances with the Freddie Mac Small Balance product and it contin- ues to be extremely competitive term loan. After suffering a couple va- cancies and with a short term remaining on the anchor ten- ant lease, the sponsor needed to recapitalize to secure funds to re-lease/reposition the prop- erty. He was also seeking the ability to earn out funds at sta- • 802 Park Place • 809 Park Place “Completed on time within an aggressive schedule, this closing is an enormous accom- plishment for Sabal in one of the most competitive markets in the world,” said Pat Jack- son , chairman and CEO of Sabal Capital Partners, LLC. “We coordinated a marathon two days of individual loan closings, an outstanding test of Sabal’s resources given the strong pipeline of other loan fundings that were happening concurrently.” Rather than a bulk transac- tion, each of the 34 refinance loans in the portfolio were independently analyzed, un- derwritten and closed. This process included site inspec- tions conducted with five third parties, appraisals and envi-

in the New York market.” “We’re very pleased to join our strong partner Greystone in this transaction, which high- lights Freddie Mac’s growing small balance portfolio busi- ness,” said Stephen Johnson , vice president, Small Balance Loan Business at Freddie Mac Multifamily. “These transac- tions—which are pools of indi- vidual, small balance loans— are becoming a larger part of our overall production. They represent a vital opportunity to fully utilize our strategic advantage—specifically, our ‘hands-on’ approach to assess- ment, valuation and execution. Our approach, combined with portfolio scale, means more affordable units at a lower cost, with the same on-time delivery.” n “The upgrade and rehabilita- tion of the properties in this portfolio, which are comprised of nearly 100%workforce hous- ing, will provide families with a nice and affordable place to call home in an area with an extremely high cost of living,” said Isaac Kassirer , president at Emerald Equity Group. “We are extremely grateful and impressed with how efficient and seamless this monumental refinancing process has been bilization to monetize some of the value creation. Cronheim was successful in structuring a debt facility that offers both an IO bridge period with fundings for tenant improvements, leas- ing commissions and capex followed by a sizable earn-out during an amortizing period. n ronmental reports, reviewwith the Freddie Mac credit division and commitment letters as well as legal review, title analy- sis and loan documents for each property. All of this was enabled through SNAP, the company’s proprietary servic- ing portal.

with the teams at Sabal and Freddie Mac at the helm.” The Bronx portfolio is repre- sentative of Emerald’s impres- sive work in the multifamily sector to source, renovate and manage large and complex portfolio transactions. With this transaction, Emerald has once again successfully per- formed on their acquisition and turnaround strategy for their affordable housing investment thesis within a period of two years. Sabal Capital Partners, LLC recently was ranked the fast- est Seller/Servicer of Freddie Mac Small Balance Loans for the first half of 2017, a gold standard of closing efficiency and execution enabled by the company’s SNAP portal. ROCHELLE PARK, NJ — To further create oppor- tunities for property owners and deve l - opers, Case Real Estate C a p i t a l , LLC (Case) will now orig- inate lower- i n t e r e s t loans in the $2 million to $8 million range for proper- ties nearing stabilization. “As banks continue to pull- back in terms of lending on commercial real estate, pri- vate lenders like Case are providing a needed infusion of turnaround capital for a multitude of projects,” said Sanford Herrick , founder and managing principal of Case. “We have some of the best rates available in the market today for our ‘bridge light’ program aimed at prop- erties nearing stabilization.” Case’s new small loan pro- gram covers all asset types, including office, retail, in- dustrial, manufacturing, hospitality, self-storage and selected entitled land. Typi- cally, these loans will have an initial term of one to two years with extension options Sanford Herrick

“We are delighted to play a role in this unique transaction, which will ensure that more than 800 affordable rental units are preserved as work- force housing in the Bronx,” said David Brickman , execu- tive vice president and head of FreddieMac Multifamily. “This is the largest Small Balance Loan transaction in Freddie Mac SBL history, and it un- derscores the flexibility, re- sponsiveness and streamlined process that are synonymous with our program. We thank our strong lending partner Sabal, the entrepreneurial principals at Emerald Equity Group who made this possible, and look forward to continuing to create unique solutions that expand workforce housing.” n “We do everything in-house from approvals to servicing and have the expertise to get to a ‘yes’ quickly,” Herrick said. During the course of his 30+-year career, Herrick has orchestrated investments in more than $5 billion worth of commercial real estate. Case is introducing another new program that finances other lenders’ first mortgages and notes with interest rates at around 6% for up to 80% of the face value; the existing lender retains servicing. “We provide aggressive senior fi- nancing to reduce the holders’ exposure,” Herrick added. Since its establishment in 2013, Case has been providing financing solutions for transi- tional commercial assets, con- centrating on deals in the $2.5 million to $40 million range for properties in the metro New York area and South Florida. “The destruction caused by Hurricane Irma has also created the immediate need for reconstruction and the financing of it,” said Chris Mavros , managing director, CFO and principal of the com- pany. “Case is positioned to be a strategic partner in this massive effort.” n

nancial ser- v i c e s f i rm specializing in rea l es - tate, lending and banking, t o d a y a n - nounced the closing of a $129 million

Pat Jackson

multifamily portfolio of Freddie Mac Small Balance Loans in Bronx, New York for Emerald Equity Group . Encompassing more than 850 total units, it is the largest single Small Bal- ance Loan (SBL) transaction processed through the Freddie Mac SBL program since its inception in 2014.

Greystone refinances $20.849m 8-propertymultifamily portfolio in NY

Case Real Estate Capital launches small loanprogram of up to two years.

B r o o k l y n , N Y — Greystone hasprovidedmillion in Freddie Mac financing on

an 8-proper- ty portfolio in Brooklyn. T h e l o a n s were or i g i - nated by An- thony Cristi of Greystone’s New York of- fice.

Anthony Cristi

The refinanced properties, which all contain between six and 35 units, all received five- year fixed rate Freddie Mac Small Balance Loans which include an additional 15-years floating and 1 year of interest- only at 80% LTV. The property owner, Steve Lubin, received $6.1 million in cash-out pro- ceeds and plans to reinvest Linden, NJ — Cronheim Mortgage has secured a $10 million convertible bridge facility for two adjacent in- dustrial properties totaling 267,000 s/f. The seven-year loan offers a two-year variable rate interest only period fol- lowed by a five-year fixed rate

Cronheim Mortgage secures convertible bridge facility for Linden industrial complex

6A —October 13 - 26, 2017 — Financial Digest — M id A tlantic

Real Estate Journal


F inancial D igest $5.965m arranged for gut renovated Newark central business district mixed-use asset Progress Capital Advisors’ Domenico secures financing through Sabal Capital at a 75% loan to value N EWARK, NJ —While there has been some softening in multi-

f ami l y d e - ve l opment s throughout t h e US a s mo r e s u p - ply hits the ma r k e t i n Q4, Newark is experienc- ing a surge in

sales, acquisitions and con- struction lending particularly within this sect or. Recently, Progress Capital Advisors Brad Domenico completed Brad Domenico

127 Halsey St.

Multi-family asset in the suburban Weequahic neighborhood the financing of a re-positioned mixed used asset at 127 Halsey St., the intersection of Halsey St. and Raymond Ave., in the heart of the downtown Central Business District. The borrow- er, having previously acquired the property in 2016, completed gut renovations of the building in August of 2017 and sought to enter into a permanent mortgage.

Working with Sabal Fi- nancial , Domenico arranged a $5.965 million non-recourse loan with 24 months interest- only, representing a 75% loan to value. The loan is secured by the aforementioned property – a four story mixed-use building with five one-bedroom and 11 two-bedroom loft style apart- ments with three St. level retail units. Currently a Krauzer's convenient store and restau- rant Harvest Table occupy the retail space. The loan is structured on a 20 year term with an initial rate of 3.95% fixed for 7 years and 30 year amortization. The borrower can choose to pay off the loan early with a 5-5-4-4- 3-2-1-1 declining pre-payment schedule with no penalty if the loan is satisfied in the last three months of the term. In a second transaction, Do- menico arranged $3.4 million non-recours e loan to acquire a multi-family asset in the subur- ban Weequahic neighborhood. The loan is secured by a six- story building with 58 units including four studio, 27 one- bedroom and 17 two-bedroom apartments. At a purchase price of $4.5 million and with borrower equity of $1.2 mil- lion this loan represents a 75% loan to purchase. The term of the loan is 12 years at a rate of 3.625% fixed for 7 years and a declining pre-payment schedule. n

Real Estate Journal — Financial Digest —October 13 - 26, 2017 — 7A


M id A tlantic

F inancial D igest

By Brendan Coleman, Walker & Dunlop A Changing Money Game for New Construction - The Rise of the Capital Stack


Payments of this nature add up quickly and can build up quickly once a project is com- pleted, when properties are still building both their occupancy and the resulting income. Because developers are in- cented to pay off equity funding sources as soon as possible, bridge loan financing has be- come an increasingly attractive option. This solution allows pre- payment options as well as the ability to convert to permanent debt once the project achieves a certain level of occupancy. The Bottom-Line Increasing numbers of de-

velopers are now coming to the conclusion that they need full-service partners with the contacts, expertise, and creativ- ity to navigate this increasingly complicated process. These ex- perts bring a team with access to multiple funding sources to lock down the best bank loans for initial construction, then leverage their contacts to identify and connect with the right equity partner to close the “funding gap.” Overall, in the Mid-Atlantic and nationwide, the funding cycle has become much more complex for developers. There

cross the Mid-Atlantic, the multifamily mar- ket continues to ex-

are challenges at each step, from construction funding and stabilization to ultimately se- curing a permanent loan. All of this change has made the composition of the capital stack more important than ever in development and new construction. It is now impera- tive to work with a commercial real estate finance company that has full-service expertise and can be a ”true consultant” and help developers make the right choice at every stage. Partnering with such a skilled firm to develop a streamlined strategy ensures a leg-up on

the competition, ultimately leading to more returns and success. About the Author Brendan Coleman is a managing director and the head of Walker & Dun- lop’s Combined Origination teams based in Bethesda, MD. He is primarily respon- sible for new loan origination and specializes in Fannie Mae and Freddie Mac multifamily products, while also developing other lending relationships for the company’s Mid-Atlantic Debt and Structured Finance Group. n

pand, but the money game is shifting for new construc- tion projects. Be caus e o f these shifts, the region’s d e v e l o p e r s mu s t ha v e

Brendan Coleman

new strategies to successfully finance their projects and maxi- mize profits. The Financing Shift From 2010 to 2015, banks were the largest source of con- struction financing, typically providing loans for near-total construction costs at a rela- tively cheap rate of 2.50% on top of LIBOR. Now, due to changes in regulations, the previous 75-80% leverage has dropped to about 65%, and developers are paying almost twice the interest rate due to rising spreads and increase to the LIBOR index. The new, more conservative approach to bank financing has caused loans to become smaller and more expensive than before. This, paired with rising construction costs, has created a “funding gap”, forc- ing multifamily developers to seek alternative approaches to finance their visions. The Quest for Equity in Construction Funding Because bank financing sim- ply does not stretch as far as it once did, developers face the challenge of funding total construction costs while also ensuring future returns. Most employ one of two options: • Take the funds out of their own pockets; or • Find additional equity partners. Neither choice is ideal; fund- ing a project in-house dimin- ishes returns and increases risk – not an attractive combination. On the other hand, develop- ers who choose not to self-fund must find additional capital to get the project built, which requires navigating a segment of the market where they may not be well-versed. Moreover, developers who choose institu- tional or preferred equity part- ners to provide funds often find that these relationships come with trade-offs such as: higher rates than traditional bank financings, in the range of 12- 15%; or a required ownership stake with balance accrual.

Delivering the deal.

Understandingwhat’s important.

At M&T Realty Capital Corporation, we understand that speed and certainty of closing complicated transactions is important for commercial real estate clients. We have more than 160 years of experience building relationships, providing seamless execution, and tailoring financing solutions to meet your unique needs. With $3.4 billion in commercial and multifamily loans closed in 2016 alone, M&T Realty Capital Corporation offers the know-how and experience you need to close deals with confidence. To find out how we can deliver for you, call 1-800-737-2344 or visit learnmore.mandtrcc.com.

Equal Housing Lender. ©2017 M&T Realty Capital Corporation. M&T Realty Capital Corporation is a wholly owned subsidiary of M&T Bank.

8A —October 13 - 26, 2017 — Financial Digest — M id A tlantic

Real Estate Journal


F inancial D igest Secures 10-year, fixed-rate loan through Principal Commercial Capital for The Grove at Shrewsbury

HFF expands debt placement team in Washington, D.C. office

ASHINGTON, DC — Holliday Feno- glio Fowler, L.P. (HFF) has expanded its debt placement team in its Wash- ington, DC office with the hiring of managing director Dan Martin , senior directors Christopher Hew and Jamie Leachman and the promo- tion of Nicole Brickhouse to director. The team will focus on debt and equity place- ment origination in the Mid- Atlantic with a specific focus of multi-housing and agency transactions by Leachman and Brickhouse. W

Leachman has more than 13 years of commercial real estate experience and most recently worked with Newmark Knight Frank as a managing director. Prior to that, he was a partner on the debt and struc- tured finance team at CBRE. Leachman holds a Master of Business Administration from Darden School of Business and a Bachelor of Science from the University of Virginia. Brickhouse has been with HFF since 2013 and has more than seven years of commercial real estate finance experience. Prior to joining the firm, she was a sustainability project manager at Cassidy Turley. She is an active member of Commercial Real Estate Women (CREW) , National As- sociation of Industrial and Of- fice Properties and she is a com- mittee member for Real Estate Emerging Leaders. Brickhouse has a Master of Real Estate from Georgetown University and a Bachelor of Arts from American University. “We are really excited to expand our team with Dan, Chris, Jamie and Nicole, four individuals who not only bring with them a wealth of experi- ence across all property types and financing options, but who are also culturally a great fit for the firm and our office,” said Sue Carras, senior managing director and co-head of HFF’s Washington, DC office. Shrewsbury, NJ — Hol- liday Fenoglio Fowler, L.P. (HFF) announced a $43.6 mil- lion refinancing for The Grove at Shrewsbury, a fully leased lifestyle center totaling 148,000 s/f in Shrewsbury. The HFF teamworked on be- half of the borrower, Federal Realty Investment Trust, to secure the 10-year, fixed-rate loan through Principal Com- mercial Capital . The HFF debt placement team included senior managing director Jon Mikula and associate Connor Milanaik . The Grove at Shrewsbury (The Grove) consists of 35 high-end retailers like Wil- liams-Sonoma, Pottery Barn, Bluemercury, Lululemon, An- thropologie, Madewell and Starbucks. The Grove provides a “town center” shopping ex- perience with gardens, brick walkways, varied storefronts, outdoor seating and flowering trees situated at 597 Broad St. (Rte. 35) in Shrewsbury, which is 25 miles south of NYC. n

the National Association of Office & Industrial Prop- erties . He holds a Master in Business Administration from George Mason University and a Bachelor of Science from the University of Maryland. Hew also joins HFF from Walker & Dunlop and prior to that, GE Capital Real Estate. He brings with him more than 12 years of commercial real estate finance experience. Hew graduated from Johns Hopkins with a Master of Science in Real Estate and from Southern Connecticut State University with a Bachelor of Science.

The Grove at Shrewsbury

Martin has more than 20 years of commercial real estate experience and joins HFF from Walker &Dunlop where he was a senior vice president in their

mortgage banking group. Prior thereto, he spent 17 years with GECapital Real Estate. Martin is a member of the Mortgage Bankers Association and


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Real Estate Journal — Financial Digest — Insurance/Title —October 13 - 26, 2017 — 9A


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I nsurance /T itle

Christopher Jeffery joins company as account administrator New Day Underwriting Managers promotes Maydelis Torres to Vice President B The Hartford Insurance Com- panies as well as worked with several insurance carriers and agencies.

ing specialty intermediary of environmental and con- struction-related professional liability insurance. A recent college graduate, Jeffery will support NewDay’s operations, claims and policy servicing, while also assisting in the company’s sales and account management efforts. “We were immediately im- pressed by Chris’s work ethic and commitment to learn- ing the industry,” said Jef- ferey Lejfer, CPCU New Day’s CEO. “He has diligently sought to supplement his stud- ies with a deep understanding

of insurance sales, forms, and distribution networks. This position will provide him with the ability to learn our product lines and in-depth methodol- ogy for fulfilling customer needs and our company with the opportunity to groomChris into a long-time, seasoned ex- ecutive on our staff.” Prior to New Day, Jeffery served as an intern at McCo- nkey & Co. Insurance & Ben- efits in York, Pa. A resident of Freehold, NJ, he holds a Bachelor of Science in Man- agement from York College of Pennsylvania. n

ORDENTOWN, NJ — Maydelis Torres has been promoted to vice president of the real estate practice at New Day Under- writing Managers LLC , a specialty intermediary of en- vironmental and construction- related professional liability insurance coverages. For the past four years, Torres has leveraged her vast underwrit- ing, brokerage, and insurance management experience to foster relationships and fur- ther the growth of the com- pany’s successful real estate practice. “Mae has been instrumental to our growing presence in the environmental sector,” said John Heft, MS, CRIS , senior vice president and director, real estate practice at New Day Underwriting Managers. “Her in-depth knowledge of the environmental casualty and Pollution Legal Liability coverage forms have combined with the dedicated work of our staff to position New Day as the premier industry re- source for business partners nationwide.” Torres joined New Day with more than 26 years of property AmTrust Title appoints Casson as vice president / agency manager New York, NY — Am- Trust Title Insurance Company (AmTrust Title) announced that James Cas- son has joined the company as vice president/agency manager covering the Mid- west as part of AmTrust Title’s growing national pres- ence. Casson brings to his new position decades of sales, ser- vice andmanagement leader- ship in the title insurance sector, with considerable experience throughout the Midwest and Central Plains. Prior to joining AmTrust Title, Casson was vice presi- dent and regional agency manager for First American Title Insurance Company where he was responsible for managing some 1,100 agents throughout the na- tion’s heartland. Typically, his efforts ensured that the firm would consistently lead in gaining regional market share thanks to a strong at- tention to client service. n

A resident of King of Prus- sia, Pennsylvania, Torres holds a B.S. in Management from St. Joseph’s University. She is also an active outdoors- man, who was selected to serve as a National Referee for the Rowing Events for the 1996 Summer Olympics in Atlanta. Christopher Jeffery has been named an account ad- ministrator at New Day Un- derwriting Managers, a lead-

Maydelis Torres

Christopher Jeffery

and environmental casualty industry experience. Prior to this position, she served as a Technology and Life Sciences Underwriter and Middle Market Manager for the Pennsylvania territory at

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10A —October 13 - 26, 2017 — Insurance/Title — Financial Digest — M id A tlantic

Real Estate Journal


I nsurance /T itle By Derek Dissinger, Barley Snyder Mechanic’s Liens Laws Between the States: Know the Differences

T he Mason-Dixon Line not only is the imagi- nary border dividing the

enforce the lien. This creates problems for title insurance agencies insuring title to the property because of the uncer- tainty in determining whether every contractor who has done work in the last six months has been paid. For loan policies, Pennsyl- vania has enacted laws to pro- tect banks. The state created exceptions to the priority of a mechanic’s lien for purchase- money mortgages and “open- end” construction mortgages. However, there is still an issue for owner’s policies where the seller built the building being

sold or did substantial renova- tions in the six months prior to the sale. For example, if I buy from you and you stiffed work- ers, the contractor can still file a mechanic’s liens on my house after closing. In this case, title companies need to obtain lien waivers, construction budgets, proof of payment and indemni- ties from sellers and general contractors. But in Maryland and other states, the lien has priority from the date the lien is filed, not when the work was done. For title insurance companies in Maryland, it is fairly easy to

insure throughmechanic’s liens because the title company does a title search, and if there are no liens filed before closing, it can issue insurance over me- chanics lien. In Pennsylvania, it is an issue because the lien would relate to the date the work is done, not when the notice of claim is filed. Familiarity with these issues when entering into agreements of sale can make a future clos- ing much easier. Obtaining lien releases and waivers from contractors and having con- struction budgets available for review can make it much easier to insure through mechanic’s liens. Also, working with a title company that understands the ins and outs of the mechanic’s lien law canmake a transaction much easier on all of the parties to the transaction. Uncertainly regarding what requirements are needed to insure through mechanic’s liens can delay clos- ing for the buyer and seller, and in some cases, cause financing approvals or settlement dates in agreements of sale to expire. If you have any questions about the differences – obvious or subtle – in the laws between Maryland and Pennsylvania, or if you know of a big difference that has caused issues for you that I didn’t write about, please feel free to reach out to me. Derek Dissinger is an as- sociate at Barley Snyder, which has seven offices throughout central Penn- sylvania and Maryland. He is licensed to practice law in both Pennsylvania and Maryland. He can be reached at ddissinger@ barley.com or at 717-553- 1075. n cost-efficient, but when the talent is urban and striving to stay that way, space in a city hub is the better choice. And when business costs equate to 80 percent/employee salaries and 20 percent/real estate, “it justifies the higher cost,” said Vazquez. New York has some of the best talent in the world, and so do California and London. “New York is definitely a talent draw,” said Vazquez. Gradu- ates of the top schools in the nation flock to New York every year to experience all the city has to offer and to learn from the best professionals in their continued from page 2A continued on page 12A By John Vazquez

buyers and sellers and contrac- tors know, mechanics liens and the threat of mechanic’s liens can create uncertainty and cause problems in purchase, refinance and construction loan situations. The key difference between the treatments of mechanic’s liens in different states is when the lien attaches to the real estate. In Pennsylvania, a me- chanic’s lien has priority from the date the contractor “com- mences construction.” From that date, the contractor has six months to file a claim and then there are certain steps to

land of Penn- sylvania and Ma r y l a n d , but also often is the bound- ary between d i f f e r enc es in laws. Buy- ers, sellers, developers,

Derek Dissinger

contractors and banks doing business in both states should be aware of some of the basic differences. As banks, title companies,

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Real Estate Journal —October 13 - 26, 2017 — 11A


M id A tlantic

BCT Architects is the architect for the project RPAI selects Kinsley Construction to provide general contracting services for Circle East inMD

owson, MD – Kin- sley Construction Inc. has been selected by Retail Properties of America, Inc. (RPAI) to provide general contracting services for the first phase of the Circle East redevelopment project at the Towson Circle shopping center. Kinsley will convert the for- mer Hutzler Brothers depart- ment store into an outward facing retail complex with below grade parking. The project includes interior reno- vations and extensive façade and hardscape improvements. GreenBench Companies is T Rising Sun, MD — JLL Capital Markets Philadelphia closed the sale of Rising Sun Towne Centre, a 146,852 s/f, grocery-anchored shopping cen- ter located in Rising Sun, Cecil County. Anchored by Martin’s FoodMarket, Rising Sun Towne Centre is 100% occupied by a host of national and regional tenants including Big Lots, Dol- lar Tree, Pet Valu, ATI Physical Therapy and McDonald’s. Vastgood Properties ac- quired the shopping center from Brixmor Property Group for $22.775 million. JLL managing director Jim Galbally and managing direc- tors Bill Moylan led the team Frederick, MD — Matan Companies an- nounced the sale of their Pros- pect Hall Luxury Apartments, a 376-unit, class A, multifam- ily community located at 909 Mansion Dr. in Frederick. Prospect Hall, which opened in September 2014, was sold to HASTA Capital. The seller was represented by Chris- topher Doerr and William Harvey of Walker & Dun- lop . Walker & Dunlop also arranged the financing for this transaction. “We acquired the Prospect Hall site in 2013 with a vision

the owner’s representative, and BCT Architects is the architect for the project. This phase of the Circle East project is scheduled for completion by June 2018. Kinsley Construction is a master builder headquartered in York, Pennsylvania with offices in Baltimore and Hag- erstown, Maryland; Reading, Pennsylvania; and Herndon, Virginia. Kinsley delivers solutions through preconstruc- tion, construction manage- ment, general contracting and design-build services for clients throughout the Mid- Atlantic region. n approximately $11.6 million, our team carried out light op- erations and continued evalu- ations to determine long-term highest and best uses,” said Brian McLaughlin of Lan- tian. “We explored a number of strong scenarios that lever- aged the campus’s signature buildings and almost pastoral setting, while we examined emerging market conditions in the suburban Maryland environment.” “Ultimately, an opportunity arose to dispose this property and we considered this the best course of action for the long-term objectives of Lan- tian. The new owners acquired a strategically-positioned site with the potential to function in a variety of uses to sat- isfy the specialized real estate needs of different audiences,” said Robert Elliott, Jr. , CEO of Lantian. “We intend to deploy the funds gained from this sale to advance the development of several of our existing land holdings, includ- ing the Shady Grove Neigh- borhood Center, a mixed-use development in Rockville. We also remain extremely active in our pursuit of new proper- ties and near-term develop- ment opportunities that fit our acquisition profile and that enable us to build long-term value.” n

Rendering of the Circle East project courtesy of BCT Architects, LLC

JLL closes sale of Rising Sun Towne Centre for $22.775 million

Lantian Dev. completes sale of 62 acre campus inBethesda

Bethesda, MD — Lan- tian Development, LLC , a full-service real estate in- vestment and development company headquartered in Bethesda has completed the sale of a 62-acre campus on 6511 Princess Garden Park- way in the Lanham section of Prince George’s County, that formerly functioned as the Washington Bible College. The sales price was $16.5 million. Consisting of nine buildings comprising approxi- mately 150,000 s/f of space, the buyer was Washington Education Zone, LLC, a for- eign investment group. John Gibb, Danny Sheridan and Bernie McCarthy of JLL represented the selling entity, The International Learning Hub, LLC. Located adjacent to the Capital Beltway and just south of MD Rte. 295, the master-planned campus was developed in phases from the 1940s through the 1980s and consists of a mix of buildings that were utilized for admin- istrative offices, classrooms, a student lounge, dormitory space, bookstore, cafeteria with dining hall, a library and an assembly hall. Lantian purchased the prop- erty in 2015. “Following our acquisition of the unique property for

Rising Sun Towne Centre

tors targeting grocery-anchored assets throughout Northeast and Mid-Atlantic. Investors were especially attracted to this asset because of Martin’s excellent sales history, consis- tent occupancy and established tenants.” n Prospect Hall offers the buyer a stabilized opportunity in a strong rental market that has high barriers to entry.” The seller, Matan Companies, was the developer of the prop- erty, Grimm + Parker was the architect and Morgan Keller, Inc. was the contractor. Prospect Hall Apartments is comprised of 13 garden- style buildings offering one and two-bedroom apartment homes, ranging in size from 762 to 1,254 s/f. Unit features include gourmet kitchens, walk-in closets, and built-in bookcases. n

on the sale. “Rising Sun Town Centre attracted tremendous interest from both private and institu- tional capital as well as private real estate investment trusts,” said Galbally. “We continue to see strong interest from inves-

MatanCompanies sells Prospect Hall Apartments

909 Mansion Dr.

to reposition the former school and historic landmark site by developing a class Amultifam- ily community,” said Laura Murrer , senior asset manager for the Matan Companies. “With that vision realized,

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