R EAL E STATE J OURNAL the most comprehensive source for commercial real estate news
Creative Financing Spotlight ISSUE HIGHLIGHTS Volume 25 Issue 11 June 14 - 27, 2013
Retaining Cushman & Wakefield as property manager JMC Holdings acquires $40 million, 800 Corporate Dr. from the Silver Companies
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TAFFORD, VA — JMC Holdings, LLC announced its $40 mil-
grossing U.S. Defense Contrac- tors. With its location 35 miles south of D.C. and its adjacency to Quantico Marine Corps Base, we are thrilled about the acquisition and relative yield it provides.” 800 Corporate Dr. is one of four brand new class A office properties located within the 85-acre Quantico Corporate Center. The office campus features 450,000 s/f of office space built to date, and a selection of onsite retail and restaurant offerings. JMC Holdings was repre- sented by Kameron Zitel- li of Berko & Associates throughout the transaction. The Silver Companies was represented as seller by Da- vid Newman , a VP at Sil- ver Companies, and by Joe Pfahler of Coldwell Banker Elite . ■
NEWTON, NJ — NAI James E. Hanson, a New Jersey-based commercial real estate firm announced that it represented both par- ties in the sale of a 109,751 s/f industrial complex at 75 Mill St. in Newton. The property, which con- sists of four buildings on 4.16 acres, changed hands for $1.45 million. NAI Hanson vice president Sig Schorr lion acquisition of 800 Cor- porate Dr. from the Silver Companies. 800 Corporate Dr. is a 135,732 s/f class A office property, situated on a 7.5-acre parcel of land at Quantico Corporate Cen- ter in Stafford County, VA (QCCS), 600 yards from Ma- rine Corps Base Quantico. The deal marks the NYC- based investment company’s first venture outside the New York market. JMC Holdings purchased the newly constructed prop- erty, which is fully leased by seven tenants that will remain in place under their current lease agreements. As part of the acquisition, JMC Holdings will retain Cushman & Wakefield as
800 Corporate Dr.
11-16A
property manager for the building. “JMCHoldings has been look- ing to expand its investment portfolio beyond NewYork. 800 Corporate Dr. provided a well- timed opportunity to capital- ize on a dynamic market with
tremendous tenant demand for class A office space,” said Matt Cassin , founder of JMC Hold- ings. “The long-term viability of the companies based at 800 Corporate Dr. also appealed to us; two of the largest tenants have consistently ranked as top
Gerber/Somma locks-up $2m sale
NAI Hanson represents both parties in sale of 109,751 s/f industrial complex in Newton, NJ
FC-B
LVEDC continues mission under new Leadership
5C
Directory
Upcoming Spotlight June 28, 2013 - MID YEAR REVIEW Financial........................................ 11-19A New Jersey .................................Section B Northern New Jersey....................... 5-11B Pennsylvania ..............................Section C Central PA........................................ 5-12C
75 Mill Street, Newton, NJ
and sales associate Joseph Vindigni oversaw the trans- action. The seller was Newton Industrial Park, LLC. The buyer, Darlington Heritage Properties, LLC, intends hold the site for investment
opportunity because there is a high return with additional upside potential.” The two-story property has 21 units with ceiling heights totaling 15 feet, five tailgates and one drive-in. The facility has a parking ratio of 2.5 per 1,000 s/f. ■
purposes. “At closing, the property was approximately 80 per- cent leased with approxi- mately 22,000 s/f of available space,” Schorr said. “This situation afforded the buyer a great investment
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Inside Cover A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal
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2A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal MAREJ a dvertisers d ireCtorY All-Rite Construction ...................................... BC-B Barley Snyder .......................................................9C Benchmark..........................................................13C Berger Organization.............................................6B BL Companies................................................... IC-C Brubacher Excavating..........................................9C Bussel Realty Corp. .......................................... IC-B Carl Berger Assoc., Inc. ......................................16A Deerwood ............................................................17A Entech Digital Controls .......................................2B Gerber/Somma Assoc..........................................11B Greater Reading ...................................................2C Harmon & Davies.................................................7C Hartz .....................................................................9B Heller Industrial Parks........................................4B Hinerfeld .........................................................IBC-C Investors Real Estate ...........................................3B Kaplin | Stewart ..................................................2A Keast & Hood Co. ...............................................13C Kennedy Funding ...............................................13A Keystone................................................................1C Landmark .............................................................9C Lebanon Valley .....................................................5C LMS Commercial R.E. .......................................10C M. Miller & Son ....................................................6A Meridian Capital Group.......................................8B Montecalvo............................................................3B NAI Summit..........................................................3C NAICIR ...............................................................12C Network Commercial ...........................................4B Nicolls....................................................................5A NorthMarq ..........................................................10B Penn’s Northeast ..................................................2C Provident Bank..................................................IC-A Real Property Capital, Inc. ................................15A Regal Bank..........................................................12A Rittenhouse...........................................................3A ROCK ....................................................................6C Rose Metal Systems .............................................9C SEBCO Laundry Systems....................................2B Sheldon Gross Realty, Inc. ...................................2B Sorce Companies ..................................................1B The Green Group.......................................... 6A,14A Thompson Management.......................................2B Tim Sullivan .........................................................3A TriState ...............................................................22A Wolf Commercial R.E. ........................................14B Wyalusing Business Park ....................................3C
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Mid Atlantic R EAl E StAtE J oURnAl Publisher ............................................................................linda christman Publisher ...............................................................................Joe christman Section Publisher ................................................................elaine fanning Section Publisher ....................................................................Steve Kelley Senior Editor/Graphic Artist ................................................ Karen Vachon Office Manager ...................................................................Joanne Gavaza Contributing Columnists ........................................................ashish patel Mid Atlantic R EAl E StAtE J oURnAl ~ Published Semi-Monthly P.O. Box 26 Accord, MA 02018 (Mail) 312 Market Street, Rockland, MA 02370 (Overnight) Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, P.O. Box 26, Accord, MA 02018 USPS #22-358 | Vol. 24 Issue 11 Subscription rates: $99 - one year, $198 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY mare Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
Mid Atlantic Real Estate Journal
By Ashish Patel How Threatening Is The Housing Market To Apartment Complexes?
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here’s been plenty of talk in the news lately about the rebounding
housing market, leading many in the apartment industry to wonder how they’ll be affected. The good news is that experts conclude they won’t be affected much. Here’s what those in the know know: Few people are leaving their apartments to make a home purchase A Chicago-based research company that tracks people’s reasons for leaving an apart- ment says that few people leave in order to purchase a home. Further backing up survey data is the fact that the percentage of home purchases made by first-time home buy- ers has stagnated since the expiration of the Home Buyer Tax Credit. we have a long way to go Before people in the rental industry despair over the double-digit increases in home sales we’ve been seeing lately, it is a good idea for them to remember just how low the
housing market sunk. Given the housing market’s low at the peak of the financial crisis, achieving double-digit increas- es doesn’t require too much. People are still underwater on their homes and there is still a high number of foreclosures. Rentals are still important. Urban living is attractive Cities used to be hotbeds of crime, and people fled them for the safety of the suburbs. Today, with high gas prices, lowering crime rates in cities, and the cultural attractions of urban centers, people are leav- ing the suburbs to move back to the cities. Often, because of
high property values in urban centers, people who want to live in them have no choice but to rent. The housing market has come a long way in just a few short years, and this article is in no way meant to discredit its improvements. Rather, this is to show that despite its improvements, multi-family homes and apartment com- plexes intended for rent still have a major role to play in people’s lives. Ashish Patel is chief execu- tive officer and president of Pilera. n
To advertise, call 1-800-584-1062
Mid Atlantic Real Estate Journal — June 14 - 27, 2013 — A
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M id A tlantic R eal E state J ournal In The Third Circuit Court of Appeals State property rights victory for Kaplin Stewart against the railroad
Specializing In
Commercial - Industrial - Retail - Land
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LUE BELL, PA — Marc Kaplin, Esq. and Pamela Tobin,
tation, Inc.’s failure to control the storm water runoff from its railroad track adjoin-
versed the trial court’s deci- sion, holding that the federal regulation did not authorize CSX to discharge its storm water directly onto the Mall’s property. The Appeals Court concluded that the regulation was never intended to give the railroad the authority to disregard state property rights. The Third Circuit’s decision is a vindication of state rights and a reminder that landowners have a cause of action against adjoining property owners who do not properly control their storm water. n
Esq. of Kap- lin Stewart in Blue Bell, PA , h a v e s e c u r e d a precedent - setting state rights vic- tory in the ThirdCircuit Court of Ap-
ing the Mall property. The trial court agreed with C S X t h a t it was im- mune from liability un- der the Fed- eral Railway Safety Act,
Properties for Sale or Lease Large or Small
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49 U.S.C. € 20106. Marc Kaplin argued the Mall’s case before the Third Circuit Court of Appeals which re-
peals for their client, the Mac- Dade Boulevard Mall. The lawsuit was filed as a result of a dispute over CSX Transpor- MBA Hotel Brokers arrange $4.5m sale
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YORK, PA — MBA Hotel Brokers Inc. , a member of Hotel Brokers International, has closed the sale of the Country Inn & Suites in York, PA. Charlie Fritsch , presi- dent of MBA Hotel Brokers Inc. represented the seller, Hospitality Lodging Investors LP, in the $4.5 million sale. Charlie Fritsch also procured the buyer, Dasnudas LLC. The Country Inn & Suites is located at 245 Saint Charles Way York, PA. This 67 key, 3 story hotel was built in 2000. It has excellent visibility from Interstate 83 and is near cor- porate offices. The hotel has been a steady performer and is expected to continue this trend. Bill Nuttall of Hospitality Lodging Investors said, “Char- lie and MBA Brokers show a patient yet tireless effort in marketing a property ... their database of potential buyers and sellers and their extensive knowledge and experience is very impressive and effective.” Charlie Fritsch remarked, “It’s always a pleasure to work with hotel industry profession- als like Bill Nuttall, Dennis Goodwin and Denny Pearson at Hospitality Lodging In- vestors. We worked through every challenge to arrive at the goal, a successful transaction close.” n
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4A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal www.marejournal.com M id A tlAntic R eAl e stAte J ouRnAl A uctions
SVN – Miller Comm’l. RE orchestrates transaction Avalon Plaza in Salisbury, MD sells via online auction
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ALISBURY, MD — Brent Miller, CCIM, CPM , managing direc-
contiguous buildings totaling 33,770 s/f located on US Rte. 13 in Salisbury, MDwith national- ly anchored tenants including Outback Steakhouse, Chico’s and Talbots. The live online auction was held in Chambers at the Bankruptcy Court; four qualified bidders were present in the Court Chambers and five qualified bidders attended via Sperry Van Ness’ online inter- net bidding platform. Kayvan Mehrbakhsh, CCIM , manag- ing director for the Sperry Van Ness office in Fairfax, VA rep- resented the buyer. The final cash bid was $5,925,000. Merrill Cohen of Cohen, Baldinger and Greenfeld in Bethesda, MD said, “I wanted to offer my congratulations and sincere appreciation in the Avalon Plaza, LLC Bankruptcy
Case. Brent, you and your team exhibited a high level of thoroughness and a great degree of professionalism. Many of the interested bidders commented on your team’s re- sponsiveness with answers to their questions regarding the property, market conditions and demographics all impor- tant to buyers of operating retail centers.” SVN-Miller is an Accred- ited Management Orga- nization (AMO). Our team includes a highly-trained staff of Certified Property Man- agers (CPM), Brokers who hold the prestigious Certified Commercial Investment Member (CCIM) designation, and members of the Society of Industrial and Office Real- tors (SIOR). n
tor of Sperry Van Ness – Miller Com- mercialReal Estate an- nounced that Avalon Plaza irecently sold at auc t i on.
Brent Miller
Merrill Cohen , the Trustee for Avalon Plaza , appointed Louis Fisher, III , national director and David Gilmore, managing director, both SVN Auction Team Advisors, as marketing agents/auctioneers, and Brent Miller, CCIM, CPM as the local headquarter bro- ker. SVN-Miller also served as the court appointed property manager. Avalon Plaza consists of three
Commercial Real Estate Auction Industrial Zoned with 2IÀFHVDQG:DUHKRXVHV ,QGXVWULDO5RDG*OHQ5RFN3$ :HGQHVGD\-XQH# 30
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704 North King Street, Wilmington, DE June 25, 2013 · 11:00 am Beautiful space with a plethora of offices, courtyard & common areas. Near federal, state, & county offices. Don’t miss this prime opportunity to invest in resurging Wilmington!
7HUPV $GHSRVLWUHTXLUHGGD\RIDXFWLRQ%DODQFHGXHLQGD\V $%X\HU·V3UHPLXPZLOOEHDGGHGWRÀQDOVDOHSULFH Visit our website www.FortnaAuctioneers.com for more info & photos of the property! 3UHYLHZ 0RQGD\-XQHIURPDP²QRRQ + Income Producing + CBD with High Visibility + Underground Parking + Multiple Alternative Uses + Motivated Sellers! For more information call Eugene Davidzon at 703.982.0852! 877.895.7077 | ameribid.com 10% Buyers Premium. 3% Broker Participation. See Website for Details. www.marejournal.com Mid Atlantic Real Estate Journal — June 14 - 27, 2013 — A M id A tlantic R eal E state J ournal A uctions Includes Bakken residence suites, a turnkey stabilized employee housing facility Sheldon Good & Company to auction 30+ acres “oil boom” site in North Dakota N ew York, NY — Sheldon Good & Company , America’s and a current occupancy of 87%. Each unit comes with standard features including a kitchen with oven/range, refrigerator, microwave, solid surface countertops, washer/ dryer, bathroom (tub/shower), outdoor deck and gas bar- beque grill. The units are fully furnished and equipped with kitchenware, sheets and blankets, a 46” flat screen TV, and include parking and elec- trical hook-ups for 14 semi- trucks and one RV electrical hook-up. In addition to the 30+ acre Bakken Residence Suites par- cel, the auction provides an opportunity for a prospective bidder to acquire a second par- cel. Parcel two is an additional contiguous 44 acres that will be available to the winning bidder for $968,000 ($22,000 per acre). “This region is experienc- ing a tremendous population increase as a result of the oil boom and housing is expected to remain in high demand for decades,” said John Cuticelli Jr. , CEO of Sheldon Good & Company. “Bakken Residence Suites provides investors with the opportunity to acquire a high-end stabilized employee housing facility, which gener- ates substantial income, as well as future development land in the heart of the Bakken and Three Forks oil formations”. The purchase of a Bidder’s Information Packet is a re- quirement in order to register and submit an offer. A detailed Bidder’s Information Packet (BIP) has been assembled and contains information related to the property, the auction and the terms of sale. The BIP is available for $30.00 and is accessible in digital format at: (a) all On-Site Inspections; (b) from the office of Sheldon Good; (c) via e-mail, mail or fax order. This auction is being conducted subject to the Terms of Sale as stated in the Bidder’s Informa- tion Packet and the Purchase and Sale Agreement. A 5% Buyer’s Premium will be added to the High Bid Price, Per the Terms of Sale. The Seller will pay a 1% referral fee to the Re- altor/Broker whose registered buyer closes on the property. Please refer to the Buyer/Broker registration requirements in the Terms of Sale, found in the Bidder’s Information Packet. On-site inspections are by ap- pointment only and will be held on June 19, 26, and July 10. The auction line is (800) 962-0939; fax (212) 213-9802. n real estate auctioneer, has been retained to auction a 30.9-acre site located in Wat- ford City, North Dakota. The property, located at 2345 High- way 85 N, Watford City, North Dakota, includes Bakken Resi- dence Suites, a stabilized high-end, employee housing facility located in heart of the Bakken oil boom, one of the largest oil fields in the United States. The live, open outcry auction will take place at Grand International Hotel in Minot, ND onWednesday, July 17, with registration starting at 10:00 a.m. The auction will commence at 11:00am. Since 2008, the Bakken and Three Forks oil boom has re- sulted in close to 450 million barrels of oil being recovered. A recent April 2013 report published by the U.S. Geologi- cal Survey (USGS) states the available oil and natural gas is double the reserves previously thought to be available in the Bakken and Three Forks for- mations. The USGS Report now estimates the reserves to be at least 7.4 billion barrels of oil and 6.7 trillion cubic feet of natural gas. Watford City had a reported population of 1,700 in 2010 and current reports estimate the population has swollen to over 5,000. Most of the population increase is a result of oil-field workers chasing high-paying new jobs. According to the Minneapolis Federal Reserve, the region is anticipated to grow 7,000 to 10,000 more jobs per year. This increase in job growth is in ad- dition to the 17,000 currently unfilled jobs in the Bakken region. The current and ex- pected job market will secure a long-term need for employee housing keeping the rentals at the Bakken Residence Suites in high demand. The auction offering of 30+ acres consists of Bakken Resi- dence Suites, a high-end em- ployee housing rental facility constructed in the third quar- ter of 2011 on 15 acres and is comprised of 61 cabins. The balance of the property con- sists of a 5-acre development site with highway frontage and a 10.9-acre development site for additional employee housing. The turnkey offer- ing generates substantial in- come, $2,374,825 NOI (2012), averaging $160 per night Thursday, June 27 @ 4pm ON SITE The property does not have a physical address, but is located next to: 11239 Acton Lane, King George, VA 22485 • 24.66 +/- acre approved subdivision in King George, VA • Public water and conventional septic system ABSOLUTE AUCTION-24 ACRE APPROVED SUBDIVISION IN KING GEORGE, VA • This property is well located close to the Naval Surface Warfare Center Dahlgren Divi- sion, Rt. 301, Rt. 205, Rt. 3, Harry Nice Bridge into Maryland, and much more!! • Tax Map: 25-21A; Deed Book 436-773; Zoned A-2 • Property plat is located at “Files” tab on upper left side of page • OSE reports are located at “Files” tab on the upper left side of page or by click- ing the following link: OSE Reports We will also be selling 2 Stratford Harbour/Stratford Bay Estates Lots from his location as well ABSOLUTE AUCTION-2 BUILDING LOTS IN STRATFORD BAY ESTATES, MONTROSS, VA Thursday, June 27 @ 4pm These lots will be sold OFF SITE at the property adjacent to 11239 Acton Ln., King George, VA • Lot 26 is 1.59 acres and Lot 27 is .62 acres • Both lots have public water; conventional septic for lot 26; lot 27 has not been perked • Tax Map: 22E-26 & 22E-27; Deed Book 789, Pg. 1258 • Lots will be offered individually or together • Only $5,000 Suggested Starting Bid!! ABSOLUTE AUCTION-4-BR / 2.5 BA HOME ON 1.9 ACRES IN KING GEORGE, VA Thursday, June 27 @ 6pm ON SITE 13459 Spruce Drive, King George, VA 22485 • 4 BR/2.5 BA cedar sided ranch style home (3,024 +/- sf. w/ 1,512 sf above grade) • Kitchen (all appliances convey); large family room w/fireplace and vaulted ceiling; living room w/wood burning stove; dining room; full partially finished basement; 2 car attached garage; home built in 1985 • Well built home on 1.938 acres. 50x30 shop w/ electricity & water. • Only $50,000 Suggested Starting Bid!! ATTN REALTORS: Pre-registered (by 5 pm 6/26/13) broker participation will be compensated!! Home Tour: Thursday, June 20 @ 6pm SHARP. Please contact Kelly Strauss for more information or a private preview of the home (540-226-1279). Please contact Kelly Strauss for more information: 540.226.1279 Nicholls Auction Marketing Group www.nichollsauction.com VAAF 729 A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal www.marejournal.com M id A tlantic R eal E state J ournal Nalbandian, managing director, arranges loan NorthMarq arranges $3.36m mortgage for ground lease W ILLOW GROVE, PA — Greg Nal- bandian , manag- ing director of NorthMarq’s New Jersey regional office, arranged a first mortgage loan in the amount of $3.36 million for the refinance of a 27 year ground lease to a 150 room, fully renovated, limited service Marriott Res- idence Inn. Financing was based on a 5-year termwith a 25-year amortization sched- ule through NorthMarq’s relationship with a regional MMSON_MidlanticRealEstate_B&W_FINAL_Layout 1 4/5/13 1:08 PM Page 1 Marriott Residence Inn bank. “The sponsor required a maximum LTV loan with prepayment flexibility in the event they elected to sell the ground lease,” said Nalbandian. “Working ex- clusively with this repeat borrower, NorthMarq was able to structure an 80% LTV, non-recourse, five-year loan well below 4.0% with flexible prepayment that was completely open at par during the last two years of the loan.” n High Assoc. Ltd. announces transactions Elizabethtown, PA — The property at 221 Ha- nover St. in Elizabethtown has been sold to Jonathan and Lori Hirst for use as an auto repair shop. Sellers Jay Dupler and Jim Eberle were represented in the sale by Denise Cass of High Associates Ltd. Greg Grogan from RE/MAX As- sociates of Lancaster repre- sented the buyers. Susan and Robert Otto Jr. have purchased the property at 101 N. Cameron Street, City of Harrisburg, from Jane and Charles Green. The property consists of a 5,200-square-foot building on approximately one-half acre of land. Judy Pierce of HighAssociates Ltd. handled the transaction. Kellie Harrison, owner of Kenpo Karate, has leased 2,600 s/f of space at Cape Horn Square, Red Lion, for the re- location and expansion of her business. Pierce handled the transaction. n Don’t get burneD. get WHAt’S CoMIng to You. ® M. MILLER & SON Over 50 Years of Committed Service to the Policyholder FIRE | WATER | WINDSTORM | COLLAPSE COMMERCIAL, INDUSTRIAL, RESIDENTIAL LICENSED PUBLIC ADJUSTERS | SINCE 1960 1211 Liberty Avenue Hillside, NJ 07205 Toll Free: 877.664.5537 www.mmillerson.com PROUD MEMBERS OF Mid Atlantic Real Estate Journal — June 14 - 27, 2013 — A www.marejournal.com Miles, Mudd and Geiger represent one of DC’s leading landlords Cassidy Turley secures $124 million in permanent financing for Paramount’s 425 Eye Street, NW W ASHINGTON, DC — CassidyTurley , leading commercial Dente Restaurant and a wine and spirits shop. “Paramount Group has been a leader in the development of the Mt. Vernon Triangle,” said Miles, executive manag- ing director of Cassidy Turley. “Their handsome new design of the building’s exterior and main lobby made an important statement about the quality of development expected for Mt. Vernon Triangle.” “Lenders were attracted to Paramount’s sponsorship,” said Mudd, executive manag- ing director of Cassidy Turley. “Paramount has an enviable record of development and investment in the Washington area, including the Waterview Building in Rosslyn, as well as Liberty Place, 1899 and 2099 Pennsylvania Ave., among others.” “We are delighted that this future.” The company’s acquisition of Hunting Point illustrates its strategy, Adler pointed out. In partnership with The Laramar Group, Lubert-Adler purchased this 530-unit com- plex just south of Old Town Alexandria for $78 million, or about $147,000 per unit, from the Virginia Department of Transportation (VDOT). VDOT acquired the property via eminent domain in 2002 to allow for construction of the new Woodrow Wilson Bridge, which required demolition of one of the three towers. Despite its superior loca- tion, unit interiors and ame- nities have been untouched for years, and rents are 30-40 percent below market rate. “This was a flat tire that we can transform into a class A apartment community,” remarked Adler. “There is a sentiment in the market that multifamily properties are overpriced and there are no longer opportunities to generate attractive profits. We have a contrary view: $124 million in financing has been secured for further in- vestment in 425 Eye St., a pivotal office property within the region,” said Albert Be- hler, president and CEO of Paramount Group. “Para- mount Group is committed to the Washington, DC, of- fice market and to delivering superior service to our ten- ants. This additional financing for our property will ensure we maintain 425 Eye St. in at the very highest standard, consis- tent with entire Paramount portfolio of nationally signifi- cant office properties. We are grateful to the Cassidy Turley team for their stellar service in this matter.” After a competitive bidding process, Bank ofAmerica was selected to be the lender based on their attractive terms on a five year, floating rate loan. n stabilized assets may be over- priced, but value-add assets are on the rise because of the overleveraged environment since 2008. We believe we have demonstrated this thesis through the portfolio we have assembled in today’s market conditions.” Over the next three years, the new ownership plans to invest about $14 million in capital improvements includ- ing new lobbies, corridors, rooftop entertainment areas, building systems, mechanical repairs, façade improvements, and riverside pool amenities. Individual apartments will be renovated with new kitchens, baths, windows, flooring, and other upgrades. Hunting Point enjoys a com- manding view of the Potomac River and the new Wilson Bridge, which is easily acces- sible from the property. Just minutes away by car – and also reachable by scenic wa- ter taxi – is the new 300-acre National Harbor mixed-use complex on the Maryland side of the Potomac River. n real estate services provider in the U.S., announced that Christian Miles, Philip Mudd and Bradley Geiger have se- cured $124 million in perma- nent financing for Paramount Group’s 425 Eye Street, NW, in Washington, DC. The 365,800 rentable s/f class A office building is 86% leased, a large portion of which is to the Board of Veteran’s Af- fairs on a long term basis. The property underwent a major renovation in 2010, including new electrical and mechanical systems and a new exterior glass and a granite curtain wall. It has achieved LEED EB Gold designation, and has new and expanded ground- floor retail, which is leased in part to chef Roberto Donna’sAl ALEXANDRIA, VA — With the $78 million acquisition of Hunting Point, a 530-unit apartment complex on Po- tomac River in Alexandria, VA, Lubert-Adler of Phila- delphia, PA has amassed a multifamily portfolio valued at approximately $2 billion for its domestic institutional investors. The company’s Fund VI, VI-A and VI-B co-investment pool, launched in January of 2010 with over $1 billion in equity, has now acquired, among several asset classes, some 70 multifamily proper- ties totaling over 20,000 units, valued at over $2 billion. Most of the assets were acquired in the last 18 months. “In 2010, we made a stra- tegic decision based on the belief that multifamily rental apartments provide one of the best opportunities to create risk-adjusted superior re- turns, because a substantial portion of the overall return is in the form of current yield,” explained Dean Adler , CEO and co-founder, Lubert-Adler 425 Eye Street, NW Lubert-Adler acquires $78 million multi-family complex Hunting Point Partners, L.P. “We aimed for overall returns of 17-20 percent, with10-12 percent of that target coming from cur- rent yield.” “In order to execute that strategy, we sought out one-off middle-market acquisitions through local entrepreneurs, focusing on transactions that are too large for local opera- tors but smaller than those that would interest the very large funds,” Adler went on. “Our goal was to buy assets opportunistically, preferably from sellers who are not in the everyday business of im- proving real estate, and then work with our local partners to increase current yield by renovating and reposition- ing the assets. Now that we have achieved our initial goal, we plan to continue this value-add program into the A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal www.marejournal.com M id A tlantic R eal E state J ournal Cyber Tech is exposed to a social collaborative floor plan: CyberPoint International invites new design B altimore, MD — They might be build- ing secure software Nothing. ADVERTISE TODAY! CALL 800-584-1062 Without advertising a terrible thing happens. applications on a daily basis but what Cyberpoint LLCwas not building were your stan- dard cubicles in their newly designed Cyber Technology & Innovation Center. Their 3,600 s/f space was based on the desire for “a space where cubes don’t thrive.” The cy- ber security firm turned to The Verve Partnership to implement designs for this new venture. This state of the art facility designed with interdisciplin- ary collaboration and global The source for commercial real estate news in the Mid Atlantic Area. R EAL E STATE J OURNAL Mid Atlantic Real Estate Journal Linda Christman, Publisher/CEO 800-584-1062 or 781-871-5298 • fax 781-871-5299 www.marejournal.com — Call or fax today for a FREE SAMPLE COPY! — Floor plan well equipped conference rooms which promote joint efforts and give team mem- bers a relaxed space to aid in fostering well-thought out initiatives. The entry has impact which connectivity in mind includes a demonstration lab, a test and integration lab, a com- munity space, and of course, INDUSTRIAL FLEX SPACE Collaboration area RT.41 informs visitors “they have arrived at the home of a leader in cyber security.” The wood floor “path” leads to the technology screen insert in a metal grate, representing the strength of secure pro- tection. The majority of the space is open to provide relaxed collaboration in the heart of the space. The custom “har- vest” tables were designed to work together or separate to provide maximum flexibility. Adjacent to the kitchen is an- other technology screen, low lounge furniture and floor to ceiling whiteboard. The social areas encourage participa- tion and camaraderie among co-workers. The trend of anti-cubicle of- fice space has reached far and wide in the design commu- nity, even appearing in shows like the offices of Slugline in Netflix’s House of Cards. “When everyone can com- fortably sit at it — we found that all ideas are being brought to the table.” n COMMERICAL OFFICE SPACE - F irst Class Office Building - 24,400 SF gross area - Brand new driveway - High speed Fios Cable ready - Central HVAC - Professionally Maintained - 24x7 digital survelliance MIDDLE OF Chesco Business District Only 3,200 SF LEFT *Private entrance with double glass doors *Completely renovated in 2011-12 *Gorgeous Wood flooring *Combination of big n’ small rooms Rent : $3,000 per month +NNN terms SIMPLY CALL for showing www.singer-properties.com Mid Atlantic Real Estate Journal — June 14 - 27, 2013 — 9A www.marejournal.com Commercial-Industrial Realty Council www.circdelaware.org 2013 Board of Directors President J. Gregory Ellis Patterson-Woods Associates Vice President of Delaware Treasurer Katherine L. Silicato, CPA Gunnip & Company, LLP Secretary Bayard J. Snyder, Esq. Bayard & Associates Committees / Directors Education Chair: Dan Lesher Patterson-Woods Associates Legislative Chair: J. Gregory Ellis Patterson-Woods Associates Program Chair: John Birmingham Cushman & Wakefield MidCoast Community Bank Benjamin J. Berger, Esq. Berger Harris, LLC Jim O’Hara NAI Emory Hill-Retail Div. Donald Robitzer The Commonwealth Group Bert Root, V Harvey Hanna & Associates Marvin Sachs Bellevue Realty Co. Science & Engineering Legislative Lobbyist C. Scott Kidner C. S. Kidner & Associates New Castle County Economic Dev. Liaison (open) New Castle County Chamber Liaison Bob Chadwick, Director NCC Economic Dev. Council State of Delaware Economic Dev. Liaison Jeff Stone State of Delaware, DEDO City of wilmington Economic Development Liaison Jeff Flynn Mayor’s Office of Economic Development Ex-Officio Directors Business Manager Janet S. Pippert CIRC / Landmark John Birmingham Cushman & Wakefield of Delaware Membership Chair: James Manna BrightFields, Inc. Directors Jeremy Abelson $*3$"OOVBM(PMG0VUJOHt4DSBNCMF June 10, 2013 (MON) tOPPO4IPUHVO4UBSU DuPont Country Club, 1001 Rockland Road, Wilmington, DE 19803 Register Online: www.circdelaware.org / janet@circdelaware.org $*3$&WFOUT : "QSJM
$*3$.FFUJOHXJUI$PVOUZ&YFDVUJWF5PN(PSEPO ;ĨƌŽŵdŽƉ>ĞŌ͕ĐůŽĐŬǁŝƐĞ͗ϭͿ,ŝƌď,ŝƌnjĞů͕DŝŬĞ:ĂŶŝƐ͕ ŵŝůLJƌĂŬĞ͕ϮͿ&ƌĂŶŬ͕:ĂŶĞƚWŝƉƉĞƌƚ͕ĂŶĚEĞǁĂƐ- ƚůĞ ŽƵŶƚLJ džĞĐƵƟǀĞ dŽŵ 'ŽƌĚŽŶ͕ ϯͿ dŽĚĚ ƌĞĐŬ͕ /͕W ĂŶĚ>ŽƌƌĂŝŶĞ^ŚĞůĚŽŶ͕ϰͿĞĐŬLJ,ĂƌƌŝŶŐƚŽŶ͕ DŝĐŚĞůĞ ŚLJŶŽǁĞƚŚ ĂŶĚ :ĞĂŶŝŶĞ >ŽƐŝŶŽ͕ ϱͿ WĂŵ DŽƩĞƌ ĂŶĚ :ŽŚŶ ĞWƌŽƉŚĞƟƐ͕ ϲͿ dĞĚ EƵƩĞƌ ĂŶĚ <ĞǀŝŶDĐ'ŽŶĞŐĂů͘ WŚŽƚŽƐĐŽŵƉůŝŵĞŶƚƐŽĨWĂƚ&ŽƌĞƐƚĞƌĂŶĚ ^ddKĸĐĞ^ŽůƵƟŽŶƐ͘DŽƌĞƉŚŽƚŽƐĂƚ͗ ƐƚĂƚŽĸĐĞƐŽůƵƟŽŶƐ͘ĐŽŵͬŶĞǁƐͲLJŽƵͲĐĂŶͲƵƐĞͬ 10A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal www.marejournal.com INDUSTRIAL OFFICE RETAIL FLEXIBLE SPACE SOLUTIONS FOR YOUR BUSINESS Contact us today to learn more Operating and managing 3 million square feet of industrial, commercial, and retail space in the mid-Atlantic region. 405 E. Marsh Lane, Suite 1 Newport, DE 19804 Phone: (302) 323-9300 www.HarveyHanna.com www.marejournal.com Mid Atlantic Real Estate Journal — June 14 - 27, 2013 — 11A F inancial D igest F eaturing C reative F inancing Deal includes office buildings, 18 acres at Tysons Corner Meridian Group fund buys SAIC’s headquarters campus in Tysons Corner www.marejournal.com Mid Atlantic Real Estate Journal — June 14 - 27, 2013 — 11A B ETHESDA,MD — The Meridian Group an- nounced an agreement concentration of retail space between D.C. and Miami. “Tysons will increase its at- traction to employers due to its Beltway access, new HOT lanes, and four new Metro stations,” Lane added. “The SAIC property is at the front door of the newTysons Central 7/Greensboro Metro station and it has the closest existing buildings to Metro anywhere in Tysons.” Meridian’s purchase in- cludes SAIC’s 600,000 s/f three-building headquarters complex. SAIC, one of the larg- est employers and government contractors in the Washington metropolitan area, will lease back one of the buildings for seven years. The other two buildings will be vacated within a year. Meridian plans a $20-mil- lion renovation on those two buildings. Among the sig- nificant upgrades: new lobbies and common areas, elevator cabs, HVAC systems, and pedestrian walkways and pla- zas near the Metro station. A fourth building with a surface parking lot on Greensboro Drive is currently vacant and will be demolished for rede- velopment. SAIC has filed plans to re- develop the property with an additional 3 million s/f of mixed uses, including new office, residential, retail, and hotel uses. Meridian will take over the processing of these plans and development of the property. “In addition to a $20 million renovation to rebrand and reposition the three-building complex, we are highly at- tracted to the beautiful caf- eteria and conference center in the SAIC complex, which will be major on-site amenities for other tenants,” said David Cheek , president of Meridian. “We are also excited about the development opportunities at this location and plan to create value through the new devel- opment plan.” Meridian’s fund, Meridian Realty Partners I, is one of the largest equity funds focused on real estate in the Washington metropolitan area. n with significant upside poten- tial. That strategy has worked extremely well and today their portfolio is a well-bal- anced mix of multi-tenanted and single tenant buildings ranging in size from 25,000 s/f to >1 million s/f. As per Cronin, “the lender went above and beyond in addressing the Borrower’s needs. There were several un- expected issues that cropped up during the due diligence and closing process that the lender handled in a highly professional and pro-active way so that all parties’ in- terests were addressed and resolved to everyone’s satis- faction.” Jeanne Cronin of Q10NY together with Larry Links- man of Bridge Funding originated and placed the loan. n with Science Applications International Corp. (SAIC) to purchase its landmark 18-acre corporate headquarters cam- pus at Tysons Corner. Meridian, a real estate in- vestment and development firm based in Bethesda, is buy- ing four office buildings total- ing 900,000 s/f from SAIC The purchase is being made through Meridian’s $160-mil- lion discretionary real estate fund -- Meridian Realty Part- ners I. “We are delighted to have this opportunity to acquire SAIC’s landmark campus,” said Gary Block , manag- ing director of The Meridian Group. “This new property is uniquely positioned with a great location adjacent to Metro and retail amenities, and it fits our investment strategy for value-add transac- tions very well.” The property is located on Route 7 at the new Tysons Central 7/Greensboro Metro PHILADELPHIA, PA — Jeanne Cronin , manag- ing director of Q10 | New York Realty Advisors an- nounced the closing of a first mortgage loan in the amount of $29,000,000 secured by a 14-building industrial port- folio located in Northeast Philadelphia, PA. The non- recourse loan was written for a 10-year term based on a 30- year amortization schedule. The interest rate was fixed at 4.22% for the term of the loan. The loan was a par loan. The properties are owned, managed and leased by a prominent Philadelphia area family who has been in the real estate business for sever- al decades and has amassed a substantial real estate portfo- lio over that period. They are savvy buyers with a focus on underperforming properties 18-acre campus at Tysons Corner opportunity in Tysons Cor- ner, which is the downtown of Northern Virginia and the 12th largest office market in the country,” said Bruce Lane , executive vice president and managing director of Me- ridian. “It also has the largest station, which is expected to open in early 2014. Bound- ed by Westpark Drive and Greensboro Drive, the prop- erty sits in a major submarket of Tysons known as “The Hill” near Tysons Galleria Mall. “We are excited about this Q10 | NewYork RealtyAdvisors closes $29mfirst mortgage loan secured by a 14-building Phila. industrial portfolio 14-building industrial portfolio located in Northeast Philadelphia, PA 12A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal www.marejournal.com C reative F inancing Specializing in multi-family, Regal Bank is ready to lend. $2,100,000 34 unit multi family building Roselle, NJ $2,000,000 12 unit multi family building Hoboken, NJ $775,000 15 unit 4 story walk up Jersey City, NJ $1,000,000 13 unit walk up Passaic, NJ •Non-recourse loans available up to $4.5 million • Low interest rates • Extended amortization • Flexible prepayment options Livingston, Roseland, Florham Park & Millburn regalbanknj.com Equal Housing Lender. Equal Opportunity Lender. Member FDIC. Mid Atlantic Real Estate Journal — June 14 - 27, 2013 — 13A www.marejournal.com c ReAtive F inAncing WINSNOTHING. In order to capitalize on opportunity, you have to operate at breakneck speed. But traditional lenders continue to move at their own leisurely pace. So call Kennedy Funding. We offer 24-hour commitments and closings in as little as 5 days. You’ll be up to speed with millions of dollars; while others are just getting out of the gate. Over $2 billion in closed loans–how can we fund you? BORROW $1 MILLION TO $50 MILLION PLUS. NOBODY CLOSES FASTER THAN KENNEDY. land development and acquisitions, bankruptcies, discounted payoffs, note purchases, workouts and foreclosures Learn all you need to know about closing your loan at KennedyFundingLendingLounge.com HOW CAN WE FUND YOU ? 14A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal www.marejournal.com C reative F inancing By Ralph Anderson and Michael McCabe, The Green Group Grouping your investments to save you tax dollars T for a taxpayer to be classified as a real estate professional, they must materially participate in ticipated actively. axpayers looking to de- duct real estate losses are limited in the way Judy; they are part-owners in 25 rental real estate properties, all of which generates losses. They spend 11 hours each per year dealing with each prop- erty, for a total of 550 hours. Judy also owns her own real estate brokerage firm, where she puts roughly 240 hours into a year. When testing whether or not James or Judy meet the material participation test, each property is treated like a separate activity and is tested individually, therefore they are each only spending 11 hours a year on the potential audited property and neither one par- • Ownership • Location • Interdependencies Advantages Grouping Grouping related active or passive activities is a technique that can convert otherwise pas- sive activities into non-passive activities. This combines them into a single activity, making it easier to clear the hurdles in being classified as a real estate professional. There are impor- tant factors to be considered in determining whether multiple activities can be grouped as a single activity. The major fac- tors are: • Similarities & differences • Control a real estate activity and must spend at least 750 hours in total on such activ- ity. They also must spend half of their time dealing they can use them due to passive ac- tivity limi- tations, IRC Section 469. Professional real estate agents, how- ever, can de- James and Judy consult with their CPA, and he/she recom- mends that the couple should elect to group their rental ac- tivities together. Since they have cumulated 550 hours, they will pass the material participa- tion test. Additionally, Judy now meets the 750 hour test because the 550 hours from the proper- ties added to the 240 hours from the brokerage will now permit them to utilize the losses. Disadvantages However, there are some potential disadvantages. Once a taxpayer elects grouping, it remains in effect for all future tax years. This means, when a passive activity is substantially disposed of, any suspended loss- es (losses that were disallowed in prior years due to passive activity limitations) become active and can be used to offset taxable income. In James and Judy’s case, however, the sale of a single property won’t release the suspended losses because it would not be a substantial part of the now-single activity. If James and Judy sold a property that had $50,000 in accumulated losses, before grouping, the losses would have been able to offset other active income. After grouping, because it was only 1 of 25 properties, those losses are not available for them to take until a significant portion of the other properties have been sold. When making the grouping election taxpayers must dis- close to the IRS the multiple activities to be grouped as a single activity. This disclosure is important as it enables the IRS to review the grouping strategy employed for appro- priateness. While this election has po- tential to unlock powerful tax savings for real estate or other professionals, it’s important to consider how it fits into your fi- nancial future. Grouping can be a powerful tool or a big mistake if you do not have appropriate guidance. If you would like to knowmore and discuss further, please contact our office. Ralph Anderson, CPA is a managing partner at The Green Group, a tax and financial services consult- ing firm. Michael McCabe is a staff accountant at The Green Group. n Ralph Anderson Michael McCabe with real estate properties to be considered a real estate pro- fessional. An Example Imagine a couple, James and duct these as ordinary active losses instead of as passive losses. Doing so allows them to utilize these losses to offset other active income. In order
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