udson County, NJ — Gebroe-Ham- mer Assoc iates ’ H 118-building, 2,137-unit portfolio encompasses six separate packages Gebroe-Hammer arranges $327.9M Gateway portfolio multi-family sale units, amounting to an annu- alized inventory growth rate of 3.7%. Over the same period, the Northern NJ metro growth rate has been 1.4%. managing director Joseph Brecher procured the buyer, Optimum Holdings LLC.
ISSUE HIGHLIGHTS Volume 30, Issue 11 June 8 - 22, 2018
marked the highest concentra- tion of for-sale stabilized assets in Hudson County ever to come to market at a time when ask- ing rents for this apartment submarket are expected to advance upward of 6% over the next couple of years.” The largest of the six pack- ages involved a total of 67 buildings sold for $190.65 mil- lion in West New York (47 buildings/993 units), Jersey City (12 buildings/175 units), North Bergen (6 buildings/76 units) and Guttenberg (2 build- ings/28 units). While this trade registered a $150,000 per-unit price, the second largest pack- age averaged a $165,000 per- unit price, selling for $97.021 million. In total, the latter involved 35 buildings and 588 units throughout Jersey City’s Journal Square and Jersey City Heights neighborhoods. In both transactions, Nicolaou repre- sented the seller and executive
seni or v i ce p r e s i d e n t N i c h o l a s Nicolaou has finalized the disposition of a 118-build- i ng , 2 , 137 - unit Hudson County multi-
“Jersey City’s urban infill neighborhoods are reaping the benefits, so to speak, of westward expansion that is extending redevelopment fur- ther away from the Gold Coast waterfront,” added Nicolaou. “In turn, this is drawing a new post-undergrad millennial ten- ant pool with two-to-three-year- old professional careers who crave the affordability, transit accessibility and lifestyle of the ‘Brooklyn of NJ.’” According to REIS, the Hudson County apartment submarket has 54,820 units, amounting to 23.5% of the total metro inventory, and is the largest of the seven com- petitive Northern New Jersey submarkets. In the 10-year period beginning with Q2 2008, new additions to the submarket have totaled 16,568
“The out-of-state seller rec- ognized the time was right to shed these assets,” added Nicolaou. “Hudson County’s ‘boom’ years are far from being fully realized and multi-family investors – from private indi- viduals to institutional entities – are seeking to either gain entry or expand their holdings through the purchase of exist- ing product or development- deal acquisitions.” Rounding out the portfolio sale was another Jersey City/ Journal Square deal garner- ing $190,000 per unit; two separate Union City transac- tions totaling 10 buildings/164 units averaging $140,000 per unit; and a West New York five-building, 105-unit pack- age sold for $15.15 million. square footage they need for their growing operations, plus gives them a modern, first-class facility in an ideal location for ecommerce fulfilment in the New York metropolitan area.” 1000 High St. is one of three new industrial buildings known as the ePort Logistics Center that Duke Realty owns just off NJ-440 (I-287) and east of I-95 in Perth Amboy. The building features 36’ clear height, 44’-6” x 55’ column spacing, 63 dock doors, and 2 drive-in doors. Outside of the building is a 130’ truck court and parking for 218 automobiles and 117 trailers. Ken Lundberg with NAI Hanson and Julie Huang with ACJ International Re- alty represented 4PX Express in the lease, while Duke Realty was represented by Ben Rosen and Caitlin English and its listing agents Thomas Mona- han, Stephen D’Amato and Larry Schiffenhaus with CBRE.
family portfolio on behalf of a single seller, a private unnamed investor. In total, the Gateway portfolio was broken out into six separate packages sold for a combined total of $327,846,200. The properties are located throughout Jersey City, West New York, North Bergen, Gut- tenberg and Union City. “The Gateway Portfolio in its entirety and as separate pack- ages presented an extremely rare multi-family investment opportunity,” said Nicolaou. “It
D2 Capital Advisors arranges $34.7M
NAI Hanson & ACJ Int’l. Realty reps. lessee in 354,250 s/f transactions Duke Realty signs lease with 4PX Express for ePort 1000 in Perth Amboy, New Jersey
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Perth Amboy NJ — The New Jersey office of Duke Re- alty has leased ePort 1000, its 354,250 s/f warehouse at 1000 High St. in Perth Amboy to 4PX Express USA, a 3PL focused on ecommerce fulfillment and logistics solutions. Duke Realty acquired ePort 1000 in Novem- ber 2017 as part of a 3.1 million
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s/f New Jersey industrial port- folio purchase that includes six completed buildings and two development sites located along the I-95 corridor. “4PX Express had been look- ing for a larger facility for their operations for several months.
We were pleased to learn of their space needs and be able to propose our new ePort ware- house as a solution,” said Ben Rosen , vice president of leas- ing and development for Duke Realty in New Jersey. “This building provides 4PX with the
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CIGAR FACTORY 35-11 9 TH STREET LONG ISLAND CITY, NEW YORK A 120,684 square foot office building The undersigned arranged the above financing.
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COLLABORATIVE CULTURE RELATIONSHIP FOCUSED DEFINED EXPERTISE
Pep Boys Irwin, PA $1,360,000
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KFC Erie, PA $750,000
Pizza Hut Kingston, NY $675,000
Post Road Medical Office East Greenwich, RI $5,600,000
Family Dollar Providence, RI $1,619,718
Citizens Bank Smithfield, RI $4,030,000
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Mid Atlantic Real Estate Journal
Mid Atlantic R eal E state J ournal Publisher, Conference Producer ......................................Linda Christman AVP, Conference Producer . .................................................Lea Christman Associate Publisher ................................................................Steve Kelley Associate Publisher .................................................................. Kim Brunet Associate Publisher ............................................................ Miriam Buttrick Senior Editor/Graphic Artist ................................................ Karen Vachon Contributing Columnists ........ Glenn Ebersole, CVM Professional; Kristina Pumphrey, PE, Precis Engineering Director of Process Engineering Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Hingham, 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. 30, Issue 11 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
Design-Build Project Delivery System: A Strategy to Gain Best Value for Construction Projects T he design-build proj- ect delivery system has been around for thou- sands of years. And construction management has grown to be more popular and is increasing its presence in private sector construction projects. Yet design-bid-build still is an option that the public sector almost always uses and some private sector clients still con- tinue to believe is the only way to get the best price. For many years, design-bid- build was an obvious choice for many types of construction projects. However, there is a change in the thinking in build- ing construction projects. Architectural and engineering designs are continuing to adapt to the design-build and con- struction management delivery systems. The unique challenges of construction projects have precipitated this change in thinking, and now design-build often is the preferred method for construction projects. Design-bid-build is the tradi- tional method that most people think of and have some experi- ence with in construction. Ba-
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sically, the owner has a vision and ideas about the needs and budget for the building. That vi- sion is provided to the architect retained to design the building. This worked well years ago when general contractors had a large number of employees in dozens of trades such as car- penters, masons, electricians, plumbers, concrete finishers, finish carpenters, roofers, steel erectors, welders, equipment operators, drywall finishers, painters, etc. An owner would select an ar- chitect and then would develop a complete set of bid drawings and specifications. The documents were sent to several general contractors for bidding. The general contractor bid- ders knew the costs and had data and production rates, etc. in house to use to prepare reasonably accurate bids. The
drawings were tighter, the bid process was tighter and the results were better. However, there has been a transformation over time in the number of employees and in-house services of general contractors. General contrac- tors that previously had large numbers of employees in every trade now have significantly fewer employees, and oftenmost employees are management and general-trade skill people who can do many different things. Architectural firms also have evolved by changing from large numbers of architects, engi- neers and designers to a sig- nificantly lower number of these employees. Many times, the en- gineering is subcontracted to an engineering firm. This creates a fragmented design process that affects the critical coordination continued on page 4A
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real estate auctions
Commercial Properties Nationwide Auctions Throughout June
• 1712 Hanson Rd Operating convenience store with three gas pumps. Property is clean and pumps have recently been replaced. Restaurant inside convenience store. Nominal Opening Bid: $250,000 Auctions: 3pm, Thu Jun 28 on site
• 250 Ring Road 36,000+/- sf operating theater on 8+/- acres with month to month lease. This theater is located next to Northpark Mall. Nominal Opening Bid: $250,000 Auctions: 4pm, Thu Jun 28 on site
• 120 Fairfield Road 91+/- acres of industrial/office vacant land, floodplain and wetland area with estimated 1.25+/- acres of land with development potential (subject to wetlands delineation). Nominal Opening Bid: $250,000 Bid Online Only at auction network.com June 26 - 28
• 325 Front Street 1850 Victorian in center of historic district with beautiful hardwood flooring, high ceilings, huge windows with arches. Nominal Opening Bid: $25,000 Bid Online Only at auction network.com June 19 - 21
• 6003 Financial Plz 20,016+/- sf two-story, free-standing office building. Built in 1985. Approx 1.89ac lot with curb cut on Financial Plaza Drive and highly visible from I-20. Zoned C-3 General Commercial Use. Approx 104 parking spaces. Auction Coming in June
• N9320 St Rd 73 Former Clearwater Supper Club is a turn- key operation. 4,870+/- sf building on approx. 2.5 acres. Double-sided bar seats 50+, with space for 90 in the dining area. Nominal Opening Bid: $100,000 Bid Online Only at auction network.com June 10 - 14
LA DANIEL NELSON RE LIC BROK.0995680155-ACT. WILLIAMS & WILLIAMS AUC LIC AB-237. MD DANIEL NELSON RE LIC 639143; WILLIAMS & WILLIAMS RE LIC 639143; LARRY MAKOWSKI AUC LIC CITY OF BALTIMORE AU0000019. MS DANIEL NELSON RE LIC B-19691; WILLIAMS & WILLIAMS AUC LIC 569F. NJ PETER COSTANZO AUCTIONEERS, INC. PETER COSTANZO, BROKER (732) 776-7222. WI DEAN C. WILLIAMS RE LIC 53610-090. BUYER’S PREMIUM (BUYER’S FEE IN WI) MAY APPLY. 800.801.8003 • williams auction .com
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660 White Plains Rd. Tarrytown, New York $30M loan placed on Houlihan-Parnes Realtors, GHP&RDManagement 296,780 s/f office building T
arrytown, NY — Br yan Hou l i han , James Houlihan and Andy Greenspan of Houli- han-Parnes Realtors, LLC announced the placement of $30 million of mortgage financing on the class A office building located at 660 White Plains Rd. Tarrytown, New York. The property was purchased in early 2017 by members of GHP Of- fice Realty, Houlihan-Parnes Realtors, and RDManagement. Since acquiring the property the owners, have invested millions of dollars in capital improve- ments and various building up-
grades including a new state of the art fitness center and newly renovated lobby. By January 2018 the owner had increased occupancy from 78% to 98%. The loan was structured into two facilities to preserve an existing below market rate and provide for additional funds to complete all renovation and tenant buildouts. The loan is for a term of 12 years with the initial rate fixed for 7 years. The property enjoys a robust and diverse tenant roster. Main ten- ants include: Prestige Brands, ENT and Allergy Associates, and KeyBank National Asso-
stage. This can lead to change orders, cost increases and time extensions. More importantly, this dis- jointed process can result in an adversarial relationship between the owner, architect, engineer and general contrac- tor. Plans and specifications become very cumbersome and generalized (because of liabil- ity concerns), and this makes it difficult, if not impossible, to complete a well-developed ac- curate bid. This also results in working with a great amount of data and information that arrive at the last hour to the general contractors, including numbers from firms the contractor has never worked with before. And there is increased risk of start- ing a project with unknown team members with mixed and matched scopes of work. The perception that this process is good and the owner is getting the lowest price is inaccurate. Design-build is evolving as the method of choice because it solves many of the problems mentioned above. Although many of the parameters noted above cannot be changed as to where the construction industry is today, they can be managed and processed more efficiently. Design-build puts everyone on the same team from the begin- ning, and this is an advantage. A general contractor that is more like a manager than a builder usually leads design- build. The general contractor is at the center and a single point of accountability where it can do what it does best - manage. The design-build process re- duces adversarial relationships, increases efficiency, decreases cost, provides a single point of accountability and statistically produces less litigation. The perspective of best value is a more strategic way to view the choice of a project delivery system than simply considering the lowest price. Glenn Ebersole is the Busi- ness development manager for CVM Professional and CVMNEXT Construction in King of Prussia. ciation. The borrower was rep- resented by Elizabeth Smith of Goldberg Weprin Finkel Goldstein, LLP. Title was in- sured by All New York Title Agency. continued from page 2A Design-Build . . .
660 White Plains Rd.
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Merrimac Gardens sells in Portsmouth, VA Firoozabadi & Azarbarzin of Greysteel brokers $37.5m multifamily sale to Blue Ocean
perfectly reflects our invest- ment strategy – to acquire properties that are well-locat- ed, easily accessible to employ- ers, with strong walkability scores that provide desirable floorplans and community amenities for our residents. We firmly believe The Homes of Towne Plaza has all of the above. Our team is looking for- ward to executing our plan and enhancing what is already a great residential community”. In a second transaction, Greysteel arranged the sale of Merrimac Gardens, a 216-unit multifamily property located in Portsmouth, VA. Greysteel director, Rawles Wilcox ; investment associates, Jared Emery and Brenden Hill , and Firoozabadi negoti- ated the transaction on behalf of the seller. Built in 1965, Merrimac Gardens is comprised of 27 two- story buildings each containing eight units. The Property offers a unit mix of 80 one-bedroom units, 120 two- bedroom one- bathroom units, and 16 three-
bedroom one- and one-half bathroom units. Units feature hardwood floors or wall-to- wall carpeting, built-in pan- tries, linen and entry closets, and walk-in closets in select units. Common area ameni- ties include a swimming pool, playground, off-street parking, and on-site laundry facilities located in each building. Merrimac Gardens is a gar- den-style multifamily com- munity situated in a charming residential section of Ports- mouth, Virginia. The Property is a few miles from some of the largest federal employers in the region, including the Nor- folk Naval Shipyard, the Navy Medical Center Portsmouth, and Joint Base Langley-Eustis. Residents are also surrounded by a wealth of shopping, dining, grocery, and entertainment amenities in the nearby area. “The purchase of Merrimac Gardens provides the buyer with a stable, cash-flowing asset to bolster their growing Hampton Roads holdings,” Wilcox said. provide superior service to our clients.” White brings 13 years of commercial real estate ex- perience representing both landlord and tenant clients in transactions that encom- pass all facets of commercial leasing. She most recently served as vice president with CBRE’s Global Corporate Services Group. Prior to her entrance into the DC market she held positions at Cushman & Wakefield, Divaris Real Estate and GVA Advantis in Richmond, VA. White’s involvement with commercial real estate began with the Washington Business Journal as an award-winning senior reporter. White remains involved in the Washington community as an active vol- unteer with Miriam’s Kitchen and DC Central Kitchen.
arford County, MD — Greysteel has arranged the sale of
a 417 - un i t multifamily c ommun i t y to Baltimore- based Blue Ocean . Greysteel
president & C E O , A r i Firoozabadi and senior in- vestment as- sociate, Ari Azarbarzin represented t he s e l l e r , Weiss Broth- ers LLC, in the property’s first change of ownership since being constructed in 1964. KeyBank Real Estate Capital provided a $29.3 million bridge loan to a joint venture between Blue Ocean and JCR Capital for the ac- quisition. The property, known as The Homes of Towne Plaza, is lo- Ari Firoozabadi Ari Azarbarzin Bethesda, MD — Hol- liday Fenoglio Fowler, L.P. (HFF) announced the sale of Flats at Bethesda Ave., a trophy mixed-use residential and retail property located in the heart of Bethesda. The HFF team marketed the property on behalf of the seller, a joint venture between StonebridgeCarras, PN Hoffman, Buvermo and Northwestern Mutual , and procured the buyer, a fund managed by BlackRock Real Assets. The HFF team representing the seller included Stephen Conley , a licensed Maryland real estate broker, Sue Car- ras, Walter Coker, Brian Crivella, John Owendoff and Jordan Lex . Completed in 2015, Flats at Bethesda comprises 162 luxury apartment units and nearly 40,000 s/f of ground-
The Homes of Towne Plaza
cated in Harford County, MD. The low-density, townhome and garden-style community, sits on app. 40 acres and con- sists of one-, two- and three- bedroom units. Located in the Joppa submarket, the property sits only steps away from the Baltimore County line and less than 4 miles fromWhite Marsh and a dense employment base of large manufacturing and distribution facilities as well as business and industrial parks.
“With Blue Ocean’s forth- coming comprehensive reno- vation plan, Homes of Towne Plaza will be positioned to offer unrivaled management services, amenities, and unit upgrades relative to the local submarket,” said Azarbarzin. The purchaser, Blue Ocean, continues the rapid growth of its multifamily portfolio in Maryland. According to Jona- than Ehrenfeld (president of Blue Ocean) “This acquisition
HFF announces sale of Flats at Bethesda Ave. in Bethesda, MD
NKF recruits White to join its agency team
Washington, DC — Newmark Knight Frank (NKF) announced that Su-
z a n n e Whi te has j o i ne d t he firm as a di- rector in its Washington, DC office. In her new role, White will be par tne r i ng
with NKF’s chairman, asset services, Brendan Owen and Associate MorganMonroe to focus on landlord representa- tion services in the Washing- ton, DC metropolitan area. “Suzanne has an impeccable reputation in the industry,” said NKF’s Owen. “Combined with Morgan Monroe’s lead- ership and expertise and my decades of experience, we look forward to working together to
Flats at Bethesda Ave.
floor retail. The property, which has a Walk Score of 98, is situated along Bethesda Row proximate to 11.3 million s/f of existing office space with 1.7 million s/f of additional class A space planned, as well as 533,000 s/f of high- end retail, entertainment
and nightlife amenities. The transit-oriented property is a five-minute walk to the Metro Red line at Bethesda Station and a 10-minute drive to the Capital Beltway (I-495), which provides convenient access to the entire Washington, D.C. region.
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A S H I NGTON , DC — Morning Calm Manage- Previously underperforming investments acquired by firm quickly gaining momentum Morning Calm Management signs 110,000 s/f across two of its DC area properties W fice Plus, Inc.
“The market has responded well to our operating approach since we first entered the re- gional marketplace less than two years ago,” said Mukang Cho , CEO and managing principal at Morning Calm. “Our goal now is to complete the repositioning of these assets while continuing to provide first-class service to our tenants and implement the planned capital improve- ments.” In February, Morning Calm purchased 500 E. Pratt from TIER REIT, Inc. of Dallas, TX for $60 million. The 13-story, 280,000 s/f Class A property, which is the newest office building along Pratt St., in Baltimore’s Inner Harbor, was developed in 2004 by the Trammell Crow Company. At the time of acquisition, 500 E. Pratt was 93 percent occupied by blue chip tenants such as CohnReznick LLP, Saul Ew- ing LLP, Deloitte, JLL, UBS, and McGuire Woods LLP. It is now 95 percent occupied and considered fully stabilized. Cushman & Wakefield arranges sale of Columbia office/flex building BALTIMORE, MD — Cush- man &Wakefield represented Howard MD Green – New, LLC, in its $5 million sale of The Woods at Broken Land to Brinklow Properties, an af- filiate of AmericanWood Fibers (AWF). Cushman&Wakefield Senior directors Richard Thomas, CCIM , and Matt Melnick represented the seller, along with colleagues Courtenay Jenkins, SIOR , executive director, and Linn Worthing- ton , associate. Allan Riorda of Lee & Associates represented the buyer. AWF will occupy 18,500 s/f in the 38,292 s/f, single-story flex building at 9740 Patuxent Woods Dr. in Columbia, MD. Chesapeake Lighting occupies 13,000 s/f at the building, as well, leaving 6,000 s/f remain- ing to lease. “This property created a unique investment opportu- nity for Brinklow and AWF,” Melnick said. “Here, they can be owner/occupiers while also having the benefit of a long- term, creditworthy tenant like Chesapeake Lighting at the building.”
ment (Morning Calm) , the real estate investment and management owner of Green- belt’s Capital Office Park and Landover’s Metro Plex I & II, signed 110,000 s/f of leases at these properties over the past six months. The largest leases were at Capital Office Park – with a 21,243 s/f expansion and renewal for Joseph, Green- wald & Laake, P.A.; 10,690 s/f for new tenant Cipriani & Werner, P.C.; and, a 9,908 s/f expansion and renewal for Of-
Capital Office Park
Metro Plex I
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Located at 748 East Main St. in Salisbury, MD SVN | Miller Commercial Real Estate inks retail sale S
“We were blessed to have been introduced to Chris Davis who listed and sold our business in a very short time. He is extremely talented and respected in the community and demonstrates the high- est level of professionalism and integrity,” said Craig DeVage. “Chris’ knowledge and expertise made the en- tire process as stress free as possible. His execution was seamless. I would highly recommend Chris to any business owner considering selling or buying.”
ALISBURY, MD — SVN | Miller Com- mercial Real Estate senior advisor Chris Davis represented both the buyer and seller in the sale of the DeVage’s Subs and Donuts property. The restaurant has reopened as Kellyn’s Kafe, owned and operated by An- drewHanna. Hanna has been in the restaurant business for 30 years and plans to build on the DeVage’s concept while maintaining 748 East Main St. as a Salisbury staple for quality food and service. Easton, MD — Willow Construction has begun work on The Country School, a private school in Easton. Work began on Monday, April 23rd, and is expected to take 16 months to complete the project and be ready for the 2019-2020 school year. The project consists of three phases. Phase one includes construction of a new parking lot and drop off/pick up lanes and associated site work. Phase two consists of construc-
Andrew Hanna, owner of Kellyn’s Kafe, with senior advisor Chris Davis.
Willow Construction begins construction on Phase 1 of new private school in Easton, MD
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tion of a new, two story, 20,000 s/f brick building to house the upper school. The last phase of
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Baltimore County Department of Economic & Workforce Development What makes Baltimore County special? Everything.
altimore County is Maryland’s second- largest county, offer- ing a convenient, comfortable blend of historic neighbor- hoods, waterfront living, rural landscapes and urban main streets, all within a short drive or light-rail ride to downtown Baltimore City. With the overall cost of liv- ing below other northeastern cities, Baltimore County offers a combination of affordable liv- ing, new development projects and a variety of attractions all in a dynamic metropolitan area. Our Economic Growth Only 1% of all the counties in B
than 21,000 businesses, includ- ing: McCormick, T. Rowe Price, Stanley Black and Decker, Guinness Open Gate Brewery & Barrel House, Tradepoint Atlantic and Social Security Administration. There are also many major development projects underway Guiness Open Gate Brewery & Barrel House
economy is driven by national leaders and regional busi- nesses that span every major industry sector. With an envi- able business climate and a strong and diversified economic base, Baltimore County is now Maryland’s second largest job center and is home to more Metro Centre at Owings Mills
Oregon Ridge Park
the US have a triple AAA-bond- rating, and Baltimore County is one of them. Our stable eco- nomic growth, strong business partnerships, and infrastruc- ture investment demonstrates our commitment to growing our future. Baltimore County’s dynamic
in Baltimore County. Towson, MD has seen a $1B investment in new office, residential, retail and hotel space, making our county seat a hub for business and entertainment. In Owings Mills, MD, a $550M mixed-use development at Metro Centre now allows quick access to the highway and metro sta- tion while also providing local residents and businesses with new options for dining, living and working. Additionally, Sparrows Point, MD has seen a dramatic increase in economic activity with the development of Tradepoint Atlantic, the largest multi-modal indus- trial redevelopment site in the United States. This 3,200-acre logistics park is home to ten- ants including Under Armour, FedEx Ground, Amazon, Royal Farms and many more. Our Schools and Universi- ties The Baltimore County Public School System has an enroll- ment of more than 105,000 students, ranking it as the 26th largest school system in the United States. More than 87 percent of graduates imme- diately go on to pursue higher education, and graduates re- ceived $107 million in scholar- ships. In addition, almost 40 percent of its high schools were regarded among the best in the nation by Newsweek magazine. When it comes to higher education, Baltimore County is home to Towson Univer- sity, the second-largest public university in Maryland, the University of Maryland Balti- more County (UMBC), three campuses of the Community College of Baltimore County, as well as Stevenson University, Loyola University Maryland, and Goucher College. Something for Everyone Baltimore County is just minutes from Baltimore’s In- ner Harbor, professional sports stadiums and world-class mu- seums and theaters. Also, with more than 200 miles of shoreline and 70 marinas and yacht clubs, Baltimore County is a destination for boaters and fishermen alike. Residents and continued on page 20A
Baltimore County, Maryland
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Baltimore County Executive Don Mohler and the Baltimore County Council
F inancial D igest F eaturing C reative F inance
Real Estate Journal — June 8 - 21, 2018 — 9A
M id A tlantic
Kennedy Funding Financial closes $2 million loan
To refinance existing debt & recapture equity in storage facilities Progress Capital’s Anderson negotiates $36Mincomm’l. loans
or other extenuating factors most conventional lenders don’t examine,” Wolfer said. “Since these apartments will be located in a very popular neighborhood, funding a con- struction loan to build more housing was an easy decision for us to make.” Plans for the property in- clude four two-bedroom, one- bathroom units and four one- bedroom, one-bathroom units. The future new development is located near community parks, restaurants, movie theaters, concert venues, and shopping. A waterfront park is scheduled to open in June on the neighborhood’s former Domino sugar factory site. The property is a few blocks away from the J, M, Z and L subway lines and located near the Brooklyn-Queens Express- way (I-278), an ideal location for public transportation rid- ers and drivers alike. “A loan fromKennedy Fund- ing Financial enables the bor- rower to transform this empty property into a revenue-gen- erating investment,” Wolfer said. “With prime access to transportation, shopping, and recreation, these apartments will pique the interest of many potential renters.” Kennedy Funding Financial, is a nationwide direct private lender specializing in bridge loans for commercial property and land acquisition, develop- ment, workouts, bankruptcies, and foreclosures. The prin- cipals of the company have closed over $3 billion in loans to date.
ENGLEWOOD CLIFFS, NJ — A property that sat empty for a decade in one
of New York City’s hottest n e i g h b o r - ho ods wi l l now become housing. Kennedy Funding Fi- nancial , the Eng l ewo od
second property, located in Yonkers at 280 Fullerton Ave., is a five-story 190,000 s/f self- storage facility constructed in 2012. The combined loans repre- sent a 66% loan to value for both properties. The proceeds of the loans include significant cash out that Tomassetti and his partners plan to reinvest in future real estate acquisi- tions adding to the Storage Fox brand. Previously, Anderson negotiated both the construc- tion loans and first mortgages on the aforementioned proper- ties. “Having worked with Kathy for over 10 years now, she has proven integral in securing the
financing we need to position Storage Fox and my personal commercial real estate hold- ings for future growth. Her knowledge of financing options and market trends allow us to focus on growing our portfolio while maintaining a healthy return on our investments,” said Tomassetti. KathyAndersonworkedwith Signature Bank to secure a 7 year fixed rate at 4%, 25 year amortization and no prepay- ment penalty. The borrower was represented by Chris Read, Esq. of the Amato LawGroup and the bank was represented by Gene Martin, Esq. of Sankel, Skurman & McCartin, LLP .
ueens, NY — Man- ag i ng pa r t ne r o f Progress Capital,
Kathy An- derson , ne- gotiated two $18 million commercial m o r t g a g e l o a n s f o r Dino Tomas- setti, manag- ing partner of
Cliffs-based direct private lender, closed a $2 million loan to LZBC Next Level Re- alty, LLC. The borrower will use proceeds from the loan to fund the construction of an eight-unit, four-story walk-up building at 100 Scholes St., a 2,500 s/f property in the Wil- liamsburg neighborhood of Brooklyn, NY. “Housing is in very high demand in New York City,” said Kevin Wolfer , CEO of Kennedy Funding Financial. “Building apartments in one of the hottest rental markets in the United States is a very smart use of this real estate.” Williamsburg is one of the most in-demand neighbor- hoods in New York City, with the average monthly rent for a 2-bedroom apartment hover- ing around $3,200. According to Wolfer, Kennedy Funding Financial takes factors such as neighborhood popularity into account when evaluating loan applications. “As a direct private lender, our process allows us to look beyond the application, so we can close a loan based on the merits of the deal itself
Storage Fox, Inc., to refinance the existing debt and recap- ture equity in two self-storage facilities. Constructed in 2013, 30-46 Northern Blvd. in the Long Island City section of Queens is a 12-story 123,000 s/f mixed-use building. The
Meridian’s Ackerman & Sonnenschein arranges $15M in construction financing for The Davenport
Somerville, NJ — Me- ridian Capital Group ar- ranged $15 million in construc-
tion financ- ing for The Davenport, a multifamily property in Somerville, on behalf of de- veloper Rob- ert Weiss of Weiss Prop- erties . Located at 21 Davenport St., The Dav- enpor t wi l l feature four stories with 60 one- and two-bedroom luxury rental
21 Davenport St. rendering
The 30-month construction loan features a prime-based floating rate and was provided by a regional balance sheet lender. Meridian managing di- rector, Shaya Ackerman , and senior vice president, Shaya Sonnenschein , negotiated the financing for this transac- tion. Based in the company’s NYC headquarters, Ackerman and Sonnenschein specialize in transitional loans across all property types with a focus on structured finance, bridge loans, and value-add business plans. This unique team has distinguished themselves advis- ing sponsors on all aspects of a transaction’s capitalization and has assembled full capital stacks for numerous complex repositioning and development plans. “Shaya Ackerman and Shaya
Sonnenschein are both profes- sional and have a tremendous grasp of the financial market,” said Weiss. “I am glad we were able to continue our relation- ship with the financing of The Davenport.” This closing comes on the heels of another successful transaction between Weiss Properties and Ackerman and Sonnenschein, who previous- ly arranged $46 million in construction and permanent financing for The Avery, a 450- unit apartment community in Burlington County. Somerville is experiencing a substantial economic and popu- lation upswing, with Main St. seeing the most robust growth, as host to the area’s largest concentration of retail shops, local amenities, and high-end restaurants.
units. With direct access to ma- jor highways and a plethora of shopping and dining in the area, the property will attract young professionals looking for a new, modern, and easily accessible place to live. Communal ameni- ties will include a recreational area, a state-of-the-art fitness center, storage lockers, and a common-area lounge. In addi- tion to retail shops and high- end dining, Somerville has one of the best education systems in the state, having been awarded the District of Distinction and Best Practice Award.
10A — June 8 - 21, 2018 — Creative Financing — Financial Digest — M id A tlantic
Real Estate Journal
C reative F inancing
Building features 51 new apartments and new commercial space in Downtown Syracuse CPC, Empire Building, Mayor Walsh, & Partners celebrate transformationof historicEmpireBuilding S
and new economic opportunity are so important to the future of cities like Syracuse,” said Andrew D’Agostino , vice president & Mortgage Officer at CPC. “I’d like to thank our partners fromEmpire Building LLC for choosing to work with us to finance their project. And my thanks to Mayor Walsh, and to Comptroller DiNapoli and our funders at the CRF for their commitment to invest- ing in housing opportunities throughout the state.” "We are pleased to be an investor and part of this initia- tive in the heart of the Syracuse
Central Business District," said State Comptroller Thomas P. DiNapoli who is also trustee of the New York State Common Retirement Fund. "Securing a sound investment return for the more than one million members, retirees and ben- eficiaries is my priority, but it is even better when we can invest money right here in New York. Our partnership with the Community Preservation Corporation provides opportu- nities to enhance the quality of all housing and helps revitalize communities." "The Empire Building is an important mixed-use project for the Salina St. corridor and we are excited for this historic building see new life," said Robert Simpson, president of CenterState CEO. "This project also builds on the momentum and progress we have seen across our center city. We con- gratulate the partners that en- abled the redevelopment of the Empire Building as it undoubt- edly will attract new downtown residents and contribute to a more vibrant community." To finance the project, CPC provided both a $8.4 million construction loan as well as a $7.6 million SONYMA-in- sured permanent loan funded through the company’s partner- ship with the New York State Common Retirement Fund. The project also qualified for federal and state historic tax credits that will generate $2.4 million in equity. Built in 1910 as a cinema show palace, the building was home to one of the city’s first movie theaters. The theater was demolished in 1961, and originally stood in the back of the building where the parking lot is now located. The building was converted into retail and office space in 1987. As a nonprofit housing fi- nance company with a long history of serving communi- ties throughout New York State, CPC works with their partners who understand the importance of investing in projects that help breathe new life into neighborhoods and connect them with their his- toric past. Historic buildings, including former theaters like the Empire Building, as well as industrial buildings like mills, factories, and warehouses, which were once hubs of ac- tivity throughout New York can be put back into use as continued on page 12A
provides 51 rental apartments and more than 6,000 s/f of com- mercial space, adding to the ongoing revitalization of the community. “The new housing and retail that are created by projects like this bring more people downtown, and are serving as catalysts for other investments here in the downtown area and surrounding neighbor- hoods,” said Syracuse Mayor Ben Walsh. “The transforma- tion of The Empire shows us what the future of Syracuse can look like, while still con- necting us to the history that
helped make our city great. My congratulations to the develop- ment team, and my thanks to CPC, Comptroller DiNapoli, CenterState CEO and all of our partners for supporting a shared mission to continue the revitalization of our historic downtown community.” “Our old, historic theaters, factories, and warehouses were engines of economic activ- ity that drove the growth and prosperity of our City and the surrounding region. Projects like The Empire, that put these properties back into use as re- sources of high-quality housing
yracuse, NY — The Community Preser- vation Corporation (CPC) , Empire Building LLC, Syracuse Mayor Ben Walsh, Office of New York State Comptroller Thomas DiNapoli, CenterState Corporation for Economic Opportunity, and partners held a ribbon cutting this morning to celebrate the transformation of the 107-year old historic Empire Building into a mixed-use residential development. Located at 472 South Salina St., in the heart of the Syracuse Central Business District, the new The Empire
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Real Estate Journal — Financial Digest — Creative Financing — June 8 - 21, 2018 — 11A
M id A tlantic
C reative F inancing
By Terri S. Johnson, CRE, Capstan Tax Strategies All in Good Time: Implementation of new tax law depends on project timing
rom the moment the new Tax Cuts and Jobs Act (TCJA) passed,
established PATH Act rules would apply. As such, the acquisition would not be eli- gible for Bonus depreciation. If there was a written bind- ing contract signed on or after 9/28/17, the property would have been acquired firmly during TCJA-time, and therefore TCJA Bonus rules would apply, giving you 100% Bonus. Furthermore, in this post-TCJA era, the requirement that the original use of the asset must com- mence with the taxpayer no longer applies, meaning that
“new-to-you” assets would also be Bonus-eligible. One important point to keep in mind is that under the aforementioned Reg. 1.168(k)-1(b)(4)(ii), a contract is only binding if it is enforce- able under state law. You may wish clarify relevant state law with your attorney. NEW CONSTRUCTION – BONUS RATE DRIVEN BY DATE “SUBSTAN- TIAL” CONSTRUCTION BEGUN If “substantial” construc- tion began before 9/28/17,
pre-established “phase- down” rules would apply – i.e. the old 50%/40%/30% Bonus rates would be in play. If construction began on or after 9/28/17, the property would be considered a TCJA- era project and associated 100% Bonus rules would be in play. We’ve been hearing a lot about this issue, and we’ve helped a number of clients understand how specific time frames may affect their tax savings. As with most tax issues, the facts and circum-
stances of each project will determine the most advanta- geous outcome. We encour- age clients to consult with their CPA and/or attorney to determine the critical dates involved in their projects. Terri S. Johnson, CRE is a co-founder and partner at CapstanTax Strategies. Terri works closely with commercial real estate owners and accounting firms to provide practical, creative, and customized engineering-based tax solutions.
the r e was a flurry of q u e s t i o n s about how t h e TCJA would affect owne r s o f real estate. Signed into law late De-
Terri S. Johnson
cember, this legislation rep- resents the first major tax reform in over three decades, and stands to impact virtu- ally every US taxpayer. Bonus depreciation for 2017 was fixed at 50% under the PATH Act, and people are naturally excited about the TCJA boosting it to 100% for new and used assets with a depreciable MACRS life of 20 years or less. This provi- sion of the TCJAwas retroac- tive, and may apply to filings for TY 2017. Sounds good. However, you need to dig a little deeper to understand the practical application of the dates. The TCJA states the fol- lowing: If a written binding con- tract for the acquisition of property is in effect prior to September 28, 2017, the property is not considered acquired after the date the contract is entered into (Act Sec. 13201(h)(1) of the 2017 Tax Cuts Act). And that’s all it says. This is the total sum guidance from the IRS right now, and the final interpretation of these “written binding contract rules” is still uncer- tain. Until the IRS releases further guidance on this mat- ter, it seems that the most reasonable current inter- pretation should be based on guidance the IRS issued the last time they did a mid-year split of Bonus rates (Reg. 1.168(k)-1(b)(4) and Revenue Procedure 2011-26). This is subject to change at any moment, but for now , this is the guidance we’ve been following: ACQUISITIONS OF REAL ESTATE – BONUS RATE DETERMINED BY DATE OF WRITTEN BINDING CONTRACT If there was a written bind- ing contract signed before 9/28/17, the acquisition tech- nically took place before the TCJA era, and the pre-
CAPSTAN our strength. your tax savings. You know how to close a deal.
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