6A — November 23 - December 6, 2012 — Mid Atlantic Real Estate Journal
www.marejournal.com
M ID A TLANTIC R EAL E STATE J OURNAL
Measured optimism is the mood at Real Estate Conference
NOLA, PA — RSR Realtors announced that Drayer Physical NAI CIR reps tenant in 4,500 s/f lease RSR Realtors completes 23,900 s/f in transactions E
Continued from page 2A a market to serve. Every project must create value and take market share from competitors. The goal is to draw tenants because that is where other retailers are doing business. “That goal guides our deci- sions,” Sokolov told the 200 people at our conference, called “Real Estate in 2013 – A Primer for an Extended Recovery. So where are the players who came to our conference from locations extending from Florida to Massachu- setts finding their opportu- nities? One of our panel modera- tors, P. David Bramble, Man- aging Partner of MCB Real Estate, LLC in Baltimore, observed that investors seemed particularly keen on distressed properties, but were taking a conservative approach to underwriting them to provide yields as deals progress. Panelist Rick J. Band, Senior Vice President of CAPREIT, Inc. in Rockville, Maryland., said his company is finding stable opportu- nities in the Midwest and Southeast – particularly in B and B+ class multi-fam- ily properties in secondary markets and blending them to provide a solid return for investors. However, CAPREIT is staying away, generally, from the big-city primary markets. Band reported that properties in these markets are not a good fit for his company because they tend to attract large institutional investors. Panelist John M. Prugh, President and Chief Execu- tive Officer of Alex. Brown Realty, Inc. in Baltimore, said the suburbs and second- ary markets are his firm’s main focus. But he saidAlex. Brown is staying away from markets where unemploy- ment is high and growth is slow. Prugh said he expects to see slow, progressive growth in real estate over the next 12 to 24 months, but he does not anticipate a rapid recovery. Vincent J. Costantini, a panelist and Chief Execu- tive Officer of The Roseview Group in Boston, said that on the development side, activity is slow, but where it is happening, there are good opportunities. He also thinks the single-family home mar-
ket is coming back and that he is seeing top homebuilders acquiring large tracts of land for future development. Ge n e r a l l y, h owe v e r, Costantini thinks the cur- rent U.S. market is divided into “haves” and “have-nots.” He is seeing a huge pent-up demand to buy good proper- ties, particularly in gateway markets like New York City. In other markets, prices are down. To secure these good properties, he said, investors not only have to be lucky, but smart. The market also still has its share of risks – but smart investors may be able to turn those risks into opportuni- ties, our panelists said. Luke Dann, Managing Director and Chief Credit Officer of LNR Property LLC in Miami Beach, said the number of loans his company handles in special servicing is up significantly, and not just for undesirable proper- ties. Investors looking to unload good but over-lever- aged properties are turning to special servicing as well. Dann said there are also still many over-leveraged properties on the horizon. Many properties purchased at the height of the market in 2006 and 2007 were bought with 10-year loans. Those loans will not mature until 2016 and 2017. “Maybe there won’t be a tremendous train wreck,” Luke said, “but there is po- tential for it.” Still, savvy investors will find opportunities. Some of these loans may very well be refinanced, assuming the economy strengthens and capital markets respond. In other cases, investors may find opportunities by buy- ing some of these distressed properties. More generally, our speak- ers said that the presence of distressed properties often has consequences for every- one in a given market. Panelist Geoffrey Wood, Vice President of Asset Man- agement for CW Capital in Washington, D.C. said that often when a distressed property is re-priced, he sees the market re-set for rents. According to Wood, this means that other nearby properties won’t see a return to the full value of rents until the distressed property fills with tenants. One key to a successful deal in this market, other panelists said, is making
sure to leave something for the next buyer. The next in- vestor has to see some upside in the asset to invest. Jonathan B. Schultz, Pres- ident of Onyx Equities, LLC in Woodbridge, New Jersey, said the biggest problem he sees is people not defining the buyer for a given prop- erty or determining why the property should be bought and how the deal is going to evolve. The key, Schultz said, is understanding your exit strategy. “To me, this will be the most opportunistic time in the real estate industry and we all need to be ready for it,” he said. “You don’t need a lot of deals to make a lot of money. You just need to be properly focused.” Back at CAPREIT, Band said his company is thinking ahead to 2016-17. He said CAPREIT’s deals tend to be closed with 10-year financ- ing, with the goal of tying up the assets and generating double-digit cash-on-cash yields to ride out potential problems. Other panelists said in- vestors are turning to solu- tions such as selling proper- ties through online auction sites. Some panelists encour- aged investors to consider deals involving public-pri- vate partnerships, known as P3s, a growing trend in Virginia, Texas, Florida and Puerto Rico for projects such as roads, courthouses and schools, and a well-estab- lished practice in Europe, Canada and Australia. Owen J. Rouse, Jr., a panel moderator and Senior Vice President of Manekin LLC in Columbia, Maryland, said the speakers at the confer- ence definitely expressed a current of optimism, but emphasized that every geo- graphic location is different and therefore, requires a different approach. “The recovery is lumpy,” Rouse said. “Live with it.” I’d have to say that’s a pretty fair assessment. Howard R. Majev is a Partner at Saul Ewing LLP, resident in theFirm’s Baltimore office, and Co- Chair of the Firm’s Real Estate Practice Group. Saul Ewing LLP is a full service law firm with 240 lawyers in 11 offices in Pennsylvania, Mary- land, Massachusetts, New Jersey, Delaware, New York and the District of Columbia. ■
Therapy has leased 4,500 s/f of office spaceat 2250 Millennium Way in Eno- la from Mil- l e n n i u m Partners . IdaMcMur-
2250 Millennium Way
Stewartstown from State- wide Properties LP. Russ Bardolf of Rock Commer- cial Real Estate represent- ed the tenant. Jim Koury and Andrew Lick of RSR represented the property owners. Skynet Property Manage- ment has purchased a 14,000 s/f building at 1841 N. Third St. in Harrisburg from MJ Trust Properties . Greg Rothman of RSR Realtors represented the seller. Koury and Lick represented the buyer. ■ office building in Fairview commanded the sales price of $1.225 million. Sgambati andAlan Cafiero had the listing to market the property on behalf of the seller. The property is leased on a net basis with little to no management effort required on the part of the new owner. It was the new owner’s pri- mary objective to buy a net leased asset in the north- ern New Jersey area and by acquiring this property they will enjoy a stable and growing cash flow from an es- tablished and proven tenant within the medical profession in an excellent location. ■ ing. Facilities Management was previously located at 1616Walnut Street in Center City. Steve Gartner , president of Metro Commercial Real Estate , cooperated with Per- naFrederick and represented Facilities Management Ser- vices in finalizing the terms of the lease that will com- mence March 1, 2013. The second agreement was the renewal of an existing lease for some 3,605 s/f on the eight floor of 1608Walnut occupied by the law offices of Michael Hanamirian and Sidney Leabman. ■
Andrew Lick
ray of NAI CIR represented the tenant. Andrew Lick of RSR Realtors represented the property owners. In the Light Ministries has leased 2,000 s/f of commercial space at 500 Kelker St. in Harrisburg Hamilton Health Center. Lick of RSR Realtors handled the transaction. Memorial Enterprises has leased 3,400 s/f of medical office space at Cornerstone Plaza at 200 Bailey Dr. in UNION, NJ — Marcus & Millichap Real Estate Investment Services has announced the sale of 2317 Rte. 22, a 16,235 s/f retail property located in Union. The asset commanded a sales price of over $5.5 million. Ben Sgambati , a VP of investments together with Alan Cafiero , a senior as- sociate and David Cafiero , an investment specialist in Marcus & Millichap’s NJ of- fice, had the listing to market the property on behalf of the seller. They also secured the buyer. In a separate transaction Open MRI of Fairview, a 5,526 s/f net leased medical PHILADELPHIA, PA — PernaFrederick Com- mercial Real Estate has represented 1608 Walnut Associates, L. P. , the owner of 1608 Walnut Street here, in arranging two office lease agreements for approximate- ly 16,643 s/f having an ag- gregate rental exceeding $1.6 million. One of the multi-year agreements brokered by Joe Viturello , a vice president of PernaFrederick, involved the relocation of Facilities Management Services of Pennsylvania to 13,038 s/f on the fourth floor the build-
Marcus & Millichap NJ office sells 16,235 s/f retail building
PernaFrederick represents 1608 Walnut Associates in two office leases
Made with FlippingBook - Online magazine maker