- DC
National Realty and Development Corp. acquired the property in 2001 Cronheim secures $92.5MM for 807,000 s/f Orange Plaza in Middletown, NY M IDDLETOWN, NY — Andrew Stew- art and Dev Morris
ISSUE HIGHLIGHTS Volume 28 Issue 9 May 13 - 26, 2016 NJAA Conference & Expo
have secured $92.5 million in financing for a power center located inMiddletown, Orange County. The loan was struc- tured with a 10 year term and 30 year amortization and was funded by American General Life Insurance Company, The United States Life Insurance Company in the City of New York, National Union Fire Insurance Company of Pitts- burgh, PA, and American Home Assurance Company, whom Cronheim represents as correspondent and servic- ing agent. The interest rate was locked 11 months prior to closing. Orange Plaza is an 807,000 s/f power center situated at the southeast corner of Rte. 211 and Dunning Rd. in Middle- town. Purchase, NY-based National Realty and De- velopment Corp. (NRDC) acquired the property in 2001 and subsequently began a four year repositioning of the subject which included the demolition of approximately 600,000 s/f of enclosed mall space and creation of a unique stacked layout, as well as the NEWCASTLE, DE — The Emory Hill Companies have announced that they recently completed phase two of the sale of the White Clay Corporate Center office
Section D
DelMarVa Featuring the 2016
Delaware Comm’l Real Estate Forecast Summit
Orange Plaza
construction of numerous outparcels. Currently, the subject is occupied by over 40 tenants including its anchors Walmart, Kohl’s, Burling- ton Coat Factory, and Home Depot. A variety of national, regional, and local retailers round out the tenant roster including Bed Bath & Beyond, Marshall’s, Ulta Cosmetics, Casual Male XL, Party City, Famous Footwear, Modell’s, and David’s Bridal, among many others. According to Andrew Stew- art, “this property has been
the dominant retail destina- tion in its submarket since it was redeveloped. NRDC exceeded all expectations here that need to be seen to be ap- preciated.”
JCPenney. Other well-known retailers in the trade area in- clude Petco, Lowe’s, TJ Maxx, Home Goods, Petsmart, Hobby Lobby, Big Lots, and Toys and Babies “R” Us.
11-19A
For speaking and sponsorship information, please contact: Linda Christman at 781-871-3456 or lchristman@marejournal.com Philadelphia Healthcare & Medical Properties Summit June 30, 2016 NJ Mid-Year Commercial Real Estate Forecast Summit UPCOMING CONFERENCES May 20, 2016 Delaware Commercial Forecast Summit June 16, 2016
The subject is proximate to Rte. 17 which experiences traffic counts of 46,000 vehicles per day. Located just east of Or- ange Plaza across Rte. 17 is The Galleria at Crystal Run, one of the largest enclosed malls in the region and one of the pri- mary retail centers in the local area. Tenants include Target, H&M, DSW, Macy’s, Sears, and Emory Hill sells White Clay Corporate Center Orange Plaza is managed by National Realty & Develop- ment Corp., a retail develop- ment and management firm in the Northeast. NRDC’s portfolio is comprised of 78 projects in 14 states, consisting of retail power centers, grocery- anchored community shopping centers, and corporate/indus- trial business parks. n
complex. Shelbourne Global Solu- tions, LLC, a privately h e l d f i r m h e a d q u a r - tered in New York Ci ty , pu r c h a s e d
spaces available in the 100 and 400 buildings. NAI Emory Hill director of brokerage and principal Neil Kilian, CCIM, SIOR , is the broker representing the landlord. “With its proximity to the University of Delaware and its new STAR (Science, Technology and Research) campus, the White Clay Cen- ter in Newark is a highly sought after office campus,” Kilian said. “We are seeing that Newark is becoming a rapidly growing city full of un- limited potential for economic development, and we are glad to be part of that expansion.” John Carpenter , of Cassidy Turley , represented White Clay Associates in the sale. Since early 2013, Shel- bourne has acquired more than 4 million s/f of class A office space. n
Directory
Neil Kilian
four of the seven buildings in the complex in 2015, and re- cently purchased the remain- ing three buildings to com- plete the acquisition. White Clay Center, an office and industrial campus, is located on White Clay Dr. just off Rt. 273 near downtown Newark. The square footage of all seven buildings totals 493,581 s/f. This marks Shelbourne’s second major investment in the area, having closed on University Office Plaza in mid-2015.
Upcoming Spotlights Industrial/Distribution Centers Safety & Security Retail Architecture/Construction/Eng. Financial Digest................................................5-10A DelMarVa • DC.................................................11-19A New Jersey................................................. Section B Pennsylvania.............................................. Section C NJAA Conference & Expo............................ Section D
One of Newark’s premier class “A” office parks, the properties’ major tenants include JP Morgan Chase, Citi Bank, Walgreens and First Data. NAI Emory Hill continues to handle the man- agement and leasing of the property; there are several White Clay Corporate Center
www.marejournal.com
Inside Cover A — May 13 - 26, 2016 — M id A tlantic
Real Estate Journal
www.marejournal.com
FAIRLESS HILLS TOWNE CENTER
Proposed Renovation
FAIRLESS HILLS TOWNE CENTER is a grocery-anchored retail shopping center offering approx. 300,000 sf (+/-) of RETAIL, OFFICE ANd mEdICAL SPACE FOR LEASE
RETAIL SuITES AVAILABLE 3,783 up to 88,450 sf (+/-) and Built-to-Suit Outparcel
Immediate Occupancy | Brokers Protected
401-499 South Oxford Valley Road | Fairless Hills | Bucks County | PA
AmENITIES INCLudE
CuRRENT TENANTS
• Fully signalized intersection with access from all surrounding areas • Built-to-suit retail, office and medical space designed to fit your needs • Separate utilities for each retail suite • Easily accessible via Routes 13, 413, the Pennsylvania Turnpike and Interstate 95
• NEW ACQuISITION, shopping center and offices under renovation • Located on 34.56 acres featuring 1,565 parking spaces • Prime commercial highway visibility
... ANd mANy mORE!
Property Owned and managed by
LARkEN ASSOCIATES LarkenAssociates.com
M id A tlantic Real Estate Journal — May 13 - 26, 2016 — 1A Howard Leon Parnes, partner of Houlihan-Parnes Realtors, passed away at age 86 on Thursday, April 21, 2016, leaving behind his devoted family. Mr. Parnes joined forces in 1967 with the long-established Houlihan firm run by James G. Houlihan and Daniel J. Houlihan. The firm, which became known as Houlihan-Parnes Realtors, celebrates its 125 th anniversary next month.
www.marejournal.com
Mr. Parnes was known in the industry for being active in purchasing and selling real estate for over 56 years, and he brought a wealth of experience to any transaction. He was involved in the acquisition, ownership and/or sale of over 5,000 properties, not only throughout the New York area but also throughout the United States and in the Caribbean. His extensive career covered virtually all types of investment real estate. He specialized principally in shopping centers and taxpayers, along with high-rise, mid-rise and garden apartment buildings. At Houlihan-Parnes Realtors, Mr. Parnes established a mortgage servicing company, as well as a management company to run his various properties in New York and nationwide. Mr. Parnes and his staff formed investor groups, arranged financing with the assistance of the Houlihan Parnes Realtors’ mortgage brokerage department, and performed the due diligence and handled the closings on over $3 billion dollars of real estate in the United States. A dedicated philanthropist, Mr. Parnes constructed three wings for an old age home, Hogar de Ancianos, in La Romana, Domincan Republic. This included building an infirmary with a medical office, a reception hall where patients may congregate and have social activities, a new kitchen and fully furnished dining room, as well as a dormitory with sleeping quarters. Mr. Parnes was also involved in the orphanage “Hogar de Nino” and donated money for the medical equipment of the Romana Central Hospital. Nearby at the Casa de Campo resort, he also developed many vacation homes and villas there as well. He was an avid fisherman, boater, wild-game hunter and enjoyed extensive international travel aboard his yachts, with many family and friends. Mr. Parnes, who personified the great American success story, rose from humble beginnings in Brooklyn and the Bronx to great heights. He was beloved by many in the real estate community. He served as a great mentor, friend and inspiration to many who came in contact with him. He will be deeply missed by his family and many friends, partners and business associates throughout the industry. Mr. Parnes was affiliated with The Bronx/Manhattan Board of Realtors, the Real Estate Board of New York, and the Westchester Board of Realtors.
2A — May 13 - 26, 2016 — M id A tlantic
Real Estate Journal
www.marejournal.com
MAREJ A dvertising D irectory ALPS Technology.............................................................. 23D AMBOY Bank..................................................................... 9D American Architectural Window & Door........................ 10D Apex Realty Advisory....................................................... 17A ARD Appraisal Co.............................................................. 5D ARROW Steel. .................................................................. 22D Assured Environments................................................. IBC-D Barley Snyder..................................................................... 2C Barry Isett & Associates.................................................. 11C Belfor................................................................................. 24D Berger | Harris. ............................................................... 13A Bussel Realty Corp............................................................. 9B Capstan Tax Strategies................................................... IC-B CIRC.................................................................................. 18A Columbia Bank...............................................................BC-D Concannon Miller............................................................. 11C Cooper-Horowitz, Inc.......................................................... 9A Cost Segregation Services Inc............................................ 6A CREW Lehigh Valley. ................................................. 10-11C CREW NJ.......................................................................... 16B Crystal Window & Door Systems...................................... 6D Cushman & Wakefield................................................... BC-B Deerwood Real Estate Capital........................................... 7A designpoint........................................................................ 11C DSM Commercial - Sussex County Office....................... 12A DSM Commercial. ............................................................ 17A E.B. Cohen.......................................................................... 4D Earth Engineering.............................................................. 2C Ehrlich, Petriello, Gudin & Plaza.................................... 21D Elliott-Lewis. ...................................................................... 8D Environmental Systems................................................... 21A Evolution Energy Partners................................................ 7C Fowler Companies............................................................ 21A Gebroe-Hammer Associates.......................................4B, 11D GriffinAlexander, PC.......................................................... 3D Harvey, Hanna................................................................. 19A Heller Industrial Parks.................................................... 10B HFF................................................................................... 17D Hillcrest Paving & Excavating........................................ 21A Hinerfeld.....................................................................21A, 1C Integrated Business Systems. ......................................... 14D Investors Real Estate Agency.......................................... 21A Jackson Cross Partners.................................................... 12A Jewel Electric Supply Co.................................................. 16D Kaplin Stewart. .................................................................. 3A Landmark Commercial...................................................... 2C LEW Corp.. ......................................................................... 2D Llenrock........................................................................... IC-C M & T Realty Capital Corp.............................................. 10A M. Miller & Son.................................................................. 7D Mainardi Management..................................................... 21A Marcus & Millichap............................................................ 3A Markward Group................................................................ 4C Massaro Properties............................................................. 6C Mericle Commercial Real Estate Services.................... BC-C Meridian Capital Group................................................... 17B Moonstone Environmental............................................... 11C NAI DiLeo-Bram & Co....................................................... 7B NAI Emory Hill. ............................................................... 16A NAI Mertz........................................................................... 3C NAI Summit...................................................................... 21A Onorati Construction. ...................................................... 13D Penn’s northeast................................................................. 5C PennCap Properties. ........................................................ 21A Poskanzer Skott Architects.............................................. 13B PREC................................................................................... 9C Prism................................................................................. 14B Provident Bank............................................................... BC-A Real Property Capital......................................................... 4A Red Marketing Communications....................................... 2B Redwood Realty Advisors................................................... 3B Regal Bank........................................................................ 12D RT Environmental Services............................................... 2B Specialty Building Systems............................................ IC-D SUBWAY Development.................................................... 21A The Berger Organization................................................... 1B The Kislak Co...............................................................6B, 1D ULI Philadelphia................................................................ 8C Warner Real Estate & Auction........................................ 12B WCRE.................................................................................. 4B Withum............................................................................. 15D
Mid Atlantic R eal E state J ournal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Associate Publisher ................................................................ Steve Kelley Associate Publisher .............................................................Alissa Aronson Associate Publisher ..........................................................Barbara Holyoke Associate Publisher ..............................................................Eric Ballenger Senior Editor/Graphic Artist .................................................Karen Vachon Production Assistant/Graphic Artist ...........................................Julie King Office Manager .................................................................... Joanne Gavaza Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, 312 Market St. Rockland, MA 02370 USPS #22-358 | Vol. 28 Issue 9 Subscription rates: $99 - one year, $148 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
Mid Atlantic Real Estate Journal
Industrial vacancy approaches historic low after year-over- year absorption gains Kevin Thorpe N John Morris EW YORK, NY — U.S. industrial mar- kets absorbed 57.8 million s/f (msf) of space in the first quarter of 2016, up 9.3% from the first quarter a year ago, according to Cush- man & Wakefield ’s first quarter industrial report. This marked 24 consecutive quarters of positive net oc- cupancy gains for the sector, placing the current expansion among the longest on record. It is also among the strongest. The U.S. industrial market shed over 182 msf of occu- pancy during the economic downturn, but it has ab- sorbed more than 990 msf in the expansion. The national industrial vacancy rate con- tinued to decline in the first quarter, falling by 20 basis points (bps) from the prior quarter and 70 bps from the prior year to 6.1%. Industrial vacancy is currently tracking at the lowest level of the past 30 years and is now a full 240 bps below the 10-year histori- cal average. Kevin Thorpe , Cushman & Wakefield’s chief econo- mist, says the outlook for the industrial sector remains promising, and he expects 2016 to be another year of strong growth. “Going forward, the demand drivers for industrial remain firmly intact,” Thorpe said. “Much of what drives demand for industrial space links to the U.S. consumer, and by most measures, the consumer is feeling confident and spend- ing. With the U.S. economy now showing signs of shaking off the first quarter blues and with the U.S. consumer on solid footing, the outlook for industrial demand remains robust. Our forecast calls for 2016 to be another year where net absorption surpasses the 200 msf mark, and consider- ing all that transpired in the first quarter, we are well on our way.” U.S. industrial rents in- creased 3.8% in the first quar- ter compared to a year-ago. Industrial rents increased in 68 of 79 markets tracked by Cushman & Wakefield from the first quarter of 2015 to the first quarter of 2016, with
speculative projects under construction totaled 109.9
over one-fifth of the country now reporting double-digit
“With the U.S. economy now showing signs of shaking off the first quarter blues and with the U.S. consumer on solid footing, the outlook for industrial demand remains robust. Our forecast calls for 2016 to be another year where net absorption surpasses the 200 msf mark” ~ Kevin Thorpe
msf, comprising 62.5% of the total 175.8 msf currently un- der construction. “Construction is certainly ramping up, but it remains well below what we observed at the peak of the last cycle,” said Jason Tolliver, Cushman &Wakefield Head of Industri- al Research, Americas. “Dur- ing the period of 2004-2009, we saw the delivery of over 776 msf of product. Compare that to this expansion, where from 2010-2016 we’ve wit- nessed 566 msf of deliveries and historic absorption, and it shows that nationally we aren’t overbuilding yet. We believe leasing activity should keep pace with new construc- tion in the majority of markets over the course of 2016.” In the first quarter of 2016, the top 10 strongest markets in terms of demand for in- dustrial space were Dallas/ Ft. Worth, with 6.8 msf of ab- sorption; Central New Jersey, with 5.1 msf; Chicago, with 3.9 msf; the Inland Empire, with 3.7 msf; Atlanta, with 3.3 msf; Detroit, with 2.8 msf; the Pennsylvania I-81/I-78 Distribution Corridor, with 2.7 msf; Philadelphia, with 1.5 msf; Greater Los Angeles, with 1.4 msf; and Phoenix, with 1.4 msf. Among the tightest mar- kets in terms of overall va- cancy included Denver and Greater Los Angeles, at 2.2%; Orange County, at 2.8%; San Jose, at 3.0%; East Bay, at 3.2%; Cincinnati, at 4.2%; Milwaukee and Portland, at 4.8%; Miami, at 4.9%; and Detroit, at 5.0%. n
gains. In many markets, industrial rents are now ei- ther at their historic high or quickly approaching it, and on a national level we are witnessing rental rate ap- preciation for every industrial product type. John Morris , executive managing director of logis- tics & industrial services for the Americas, also expects continued growth for the in- dustrial sector and notes that shopping-fulfillment-channel migration to e-commerce is giving rise to a net new user, supporting industrial funda- mentals. “Logistics is becoming a competitive service business focused as much on shipping direct to customers’ homes as shipping to brick-and- mortar stores,” said Morris. “Increasingly, businesses are doing their own e-commerce, and basic branded compa- nies are trying to guide their businesses more online. The transformation that branded companies are undergoing themselves – developing a direct relationship with con- sumers – is expected to lead to significant requirements for new industrial space across the country.” On the development front, 51.7 msf of industrial prod- uct was delivered in the first quarter with the majority of deliveries coming online in major industrial markets and primary inland distribution hubs. Developers continued to break ground on more speculative projects in many markets. In the first quarter,
To advertise, call 1-800-584-1062
Real Estate Journal — May 13 - 26, 2016 — 3A
www.marejournal.com
M id A tlantic
M id A tlantic R eal E state J ournal 64,000 s/f , three story class A office building in NY GHPOfficeRealty purchases 140 Huguenot St. for $6.4MM
Leading the Real Estate Investment Market Contact us today to access the largest inventory of properties.
N EWROCHELLE, NY — GHP Office Re- alty, LLC , an owner of office, flex and retail prop- erties in the tri-state region, announced its acquisition of 140 Huguenot St., New Rochelle, a 64,000 s/f , three story class A office building with a 34 car onsite parking garage and an additional 26 car parking lot. The building is 80% occupied. The GHP acquisition team was led by AndrewGreens- pan , principal of GHP. Greenspan said “We are bullish on New Rochelle and its future. 140 Huguenot St. represents our second large office building acquisition in New Rochelle. We also own 145 Huguenot St., a 300,000 s/f, eight story class A office building across the street which is currently 93% oc- cupied. The synergy between the buildings and the econo- mies of scale as well as the fact that we are running out of space at 145 Huguenot St. made 140 Huguenot St. an attractive acquisition target.” 140 Huguenot St. boasts such high quality tenants such as Mary Ann Liebert, Inc. and Monroe College. Additionally,
J.D. Parker Manhattan
Brian Hosey New Jersey (201) 582-1000 Bryn Merrey Washington, D.C. (202) 536-3700
(212) 430-5100 Brenton Baskin Philadelphia (215) 531-7000
Offices Throughout the U.S. and Canada
www.MarcusMillichap.com
140 Huguenot Street
Q
the GSA has been a tenant in the building since 1999. Greenspan added “We are planning to invest substan- tial capital into the building to bring it up to date and make it more energy efficient. Some of the capital upgrades will be to building systems, security and cosmetic up- grades to the facade and the lobby. We have approxi- mately 12,500 s/f of office, retail and/or medical space available for lease. In fact part of that vacancy is a 5,100 s/f former bank branch with street level access and great visibility which is perfect for
a retail user. The building is in a highly desirable location at the signalized corner of Huguenot Street and Har- rison Street, adjacent to New Roc City and Super Stop and Shop, one block from Trump Plaza and Main St. as well as .03 miles from the New Ro- chelle Intermodal Transpor- tation Center and Interstate 95 at Exit 16.” Elizabeth Smith, Esq . of Goldberg Weprin Finkel Goldstein LLP provided legal representation and Ray Cohen of Chicago Title Company provided title services for GHP. n
“Ask the Professor”
&
A
One of the key documents used in com- mercial real estate investment is the rent roll. The rent roll contains important rent- al information on all the tenants who are occupying or using space in the building for which rent is paid. This information is further identified and explained in each tenant’s lease. A basic rent roll may also include essential data about the property such as its total rentable square footage, identifying specific tenant spaces that are available for lease, property age, owner’s name and mailing address and tenants payment history. The amount of detail included in a rent roll will vary based on the owner’s needs for that information. Property managers, lenders, mortgage brokers and investors will find the rent roll to be a very useful report when requir- ing information about a tenant’s lease or payment status. QUESTION: All of the following infor- mation would typically appear in a rent roll except for: a) Base rent amount b) Lease term c) Number of square feet leased
Firmly Rooted in the Law and in the Community We are well grounded in every facet of real estate law, from acquisition to construction. We are committed to serving the needs of our clients and our communities.
d) Attorney’s name e) All of the Above ANSWER: “d”
Kaplin Stewart
Ronald M. Shapiro is Assistant Professor of Professional Practice in the Finance and Economics Department at Rutgers Business School ofNewarkandNewBruns- wickwhere he teaches real estate finance. Prior toRutgersBusiness School, Ron was SVP with Union Center National Bank.
A t t o r ne y s a t L aw
Contact: Mohammad A. Ghiasuddin • mghiasuddin@kaplaw.com 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-941-2546 • www.kaplaw. com Visit our Construction Blog: www.pennsylvaniaconstructionlawyer.com
Other O ces: Cherry Hill, NJ 856-675-1550 • Philadelphia, PA 215-567-3120
KS Ad 6X5.5 Tree Neil S.indd 1
1/29/15 11:42 AM
4A — May 13 - 26, 2016 — M id A tlantic
Real Estate Journal
www.marejournal.com
M id A tlantic R eal E state J ournal Part of master of science, finance & investment program Castle Lanterra Properties’ Rieder addresses NYU class N EW YORK , NY — Elie Rieder of Castle Lanterra
Recently Closed Loans
P r o p e r - ties (CLP) , offered his investment insight to a Real Estate Capital Mar- kets class at New Yo r k University
$5,350,000
$4,950,000 $7,776,000
Retail Construction Loan
18-Unit Multifamily Refinance Age-Restricted (55+) Construction Loan
Chesterbrook, PA Philadelphia, PA Warminster, PA 70% LTV, 18 Months, LIBOR + 185 bps 75% LTV, 7/30, 3.375%, Non-Recourse 75% LTV, 85% LTC, LIBOR + 275 bps
Real Property Capital is a Philadelphia based full service commercial mortgage banking firm with a regional focus and national capabilities. Our business model emphasizes client satisfaction through a high-touch, analytical approach that distinguishes us from the competition. Learn more about our distinct approach and proven track record of success at www.realpropertycapital.com. FOR MORE INFORMATION: R. Brenner Green, President 75 East Butler Avenue • Ambler, PA 19002 • 610-456-9644 • bgreen@realpropertycapital.com
Elie Rieder
(NYU). The class, taught by Adjunct Professor Constan- tine “Tino” Korologos, is part of NYU’s Schack Institute of Real Estate’s Master of Science, Finance and Invest- ment program.
“This class deals with capi- tal markets and deal struc- turing, and I was pleased
to be able to interact with the real estate investment industry’s leaders of tomor- row,” said Rieder, founder and CEO of the New York- based CLP. “I offered my insight on our firm’s recent transactions, focusing on deal metrics and investment over- views, followed by a question- and-answer session in which we discussed everything from CMBS loans, to preferred equity and creative ways to structure deals.” Rieder’s presentation fo- cused on such properties as 222 Saratoga in Baltimore; Watergate Pointe in Annapo- lis, MD; Stonegate Apart- ments and Villas Tech Ridge in Austin, TX; Harbor Pointe in Bayonne, NJ; Heights at Skyland in Tuscaloosa, AL.; River Park in Raritan, NJ; and Trantor Place in Staten Island, NY. For each, he pro- vided an overview, insight on the investment opportunity, the business plan and initial performance. And for Trantor Place (a fully realized deal), he recounted exit returns. “I invited him to share the practical perspective of eq- uity investors and how they access the capital markets,” said Korologos, who also serves as managing direc- tor of Situs , a diversified real estate organization. “He was very generous with his time—what was initially to be a one-hour presentation continued for more than two hours. “One of the highlights of the discussion was his candor in sharing not only his ‘wins,’ but also telling the students ‘what I did wrong and how I learned from it,” said Korolo- gos. “For the students, that really optimizes the learning experience. It’s all about in- tegrity and reputation, and those are the kinds of things students in a program like this need to hear.” n
FOR SALE
JUST LISTED
JUST LISTED
APPLE LOFTS - Development Site University City - Philadelphia, PA Approved for 112 Units | $2,000,000
RITTENHOUSE PORTFOLIO Rittenhouse Square - Philadelphia, PA 36 Units| $4,700,000
FOR SALE
FOR SALE
UNIVERSITY CITY PORTFOLIO Student Housing - Philadelphia, PA 48 Bedrooms | $4,650,000
CHRISTIAN STREET PORTFOLIO Graduate Hospital - Philadelphia, PA 19 Units | $3,020,000
VISIT US AT THE 27th ANNUAL NJAA CONFERENCE AND EXPO - BOOTH 626!
University City Apartments Washington Square Mixed-Use Rittenhouse Square Apartments
Philadelphia, PA Philadelphia, PA Philadelphia, PA Wilkes-Barre, PA Philadelphia, PA Allentown, PA
25 Units 8 Units
$4,800,000 $3,650,000 $2,850,000 $2,650,000 $2,000,000 $1,706,400 $1,225,000
12 Apartments
Philadelphia, PA 3 Floor Office Building
Art Museum Redevelopment Opportunity Wilkes University Student Housing
45 Bedrooms
South Street Commercial Condos
2 Commercial Units
Allentown Apartments
19 Apartments
Ca l l ( 215 ) 454 - 2852 for a FREE Proper t y Va l uat i on ! Additional Information and Listings Available on Our Website: www.rittenhouserealty.com
Corey Lonberger, Managing Partner corey@rittenhouserealty.com
Mark Duszak, Director mark@rittenhouserealty.com
KenWellar, Managing Partner ken@rittenhouserealty.com
For information visit www.RittenhouseRealty.com or call (215) 454-2852
F inancial D igest
Real Estate Journal — May 13 - 26, 2016 — 5A
www.marejournal.com
M id A tlantic
Walker & Dunlop closes $53m loan for office bldgs.
448 units managed by Applied Housing Management NorthMarq arranges $81.9m refinance for four properties
OBOKEN, NJ — Gary Cohen , senior vice president/senior director of NorthMarq Capi- tal ’s New Jersey-based region- al office, arranged the $81.9 million refinancing of four affordable housing properties in Hoboken. The properties consist of a combined 448 units and are managed by Applied Housing Management . The transaction was structured with a 10-year term and 30- year amortization schedule. NorthMarq arranged financ- ing for the borrower through its seller-servicer relationship with Freddie Mac . “The four properties are sub- ject to long-term regulatory agreements where 40 percent of the apartments must be rented to Section 8 tenants,” H
embark upon this strategy in the Tenleytown submarket. Located in Bethesda, Mary- land, Dan Martin , senior vice president, and Chris Hew , vice president, led the Walker & Dunlop team that structured the deal. Hew said, “The Tenleytown proj- ect was an exciting opportu- nity to provide liquidity for a truly neighborhood-changing project. Walker & Dunlop’s vast network in the real es- tate capital markets allowed us to find the perfect execu- tion for our client’s needs.” Financing procured by Walker & Dunlop included $24,962,542 and $18,645,900 floating rate construction loans, with 4- year terms, for the two office-to-multifamily conversion projects. A sec- ond lender was engaged for the operating office build- ing which secured a max- leverage $9.75 million float- ing rate permanent loan. The permanent loan was designed to be coterminous with the two construction loans. n for the management of a staff of commercial property ap- praisers as well as business development, client services, and appraisal review. Robert Delisio will be senior valuation specialist for the Pittsburgh office. He has over 10 years of appraisal experience including prepa- ration of appraisal reports, appraisal review, supply and demand analysis, financial and site feasibility, and over- all market examination. n
WASHINGTON, DC — Walker & Dunlop, Inc. an- nounced it closed a $53,358,442 loan for three class-C office buildings in Tenleytown, a his- toric neighborhood in North- west, Washington, DC. This transaction was unique due to the complex financing Walker & Dunlop provided and the distinct conversion of two office buildings into class-A multifamily proper- ties, with the third building continuing to function as an office property. Known for its strong single family residen- tial market, Tenleytown has limited multifamily proper- ties, and developers have recently been identifying of- fice sites for conversions into residential units. As DC’s population continues to grow at a rate of 1,100 new resi- dents per month (U.S. Census Bureau), property owners are swiftly becoming aware of the changing highest-and-best- use of their properties. The borrower, Urban Investment Partners , is one of the first firms to acquire a property and PITTSBURGH, PA — Colliers International Valuation & Advisory Ser- vices announced the launch of their Pittsburgh office and has brought on two commer- cial real estate veterans to lead it. N. Todd Albert is the new managing director for the Pittsburgh office, which pro- vides valuation and advisory services in Western-to-Cen- tral Pennsylvania and West Virginia. Albert is responsible
said Cohen. “Freddie Mac provided a competitive deal where the borrower was able
to reduce the interest rate on the loans and pull out a sig- nificant amount of equity.” n
JLL secures $42.5m in financing for River Park at Raritan in NJ
The Thornton
River Park at Raritan
Colliers Int’l Valuation & Advisory Services launches Pittsburgh office
vious successful transactions, we are pleased to continue and expand our relationship with their entire team.” River Park at Raritan is located 60 miles from New York City and 50 miles from Philadelphia, directly off route 206 and provides easy access to Interstates 287 and 78 as well as surrounding retail centers. Community amenities include a heated pool, state-of-the-art fitness center, club room with bil- liards, bar, flat screen TV and a fireplace, as well as tennis and basketball courts. n
RARITAN, NJ — Taking advantage of low vacancy rates and a premium suburban location, Castle Lanterra Properties announced it has secured $42.5 million in financing for the acquisition and rehabilitation of River Park at Raritan, a 224-unit multifamily asset located in Somerset County. JLL se- cured the loan through Freddie Mac. The securitized loan will be serviced by JLL through its Freddie Mac Program Plus Seller/Servicer program. Sen i o r v i c e p r e s i den t Jonathan Schwartz , man-
aging director Aaron Appel and vice president Adam Schwartz led the JLL team on the deal. “Somerset County’s ex- tremely low multifamily va- cancy rate combined with River Park at Raritan’s tre- mendous value-add potential drew significant interest from lenders looking to get into a prestigious market,” said Jon- athan Schwartz. “This financ- ing provides Castle Lanterra Properties with a high-quality asset with upside rents primed to produce a steady yield. Hav- ing worked with CLP on pre-
6A — May 13 - 26, 2016 — Financial Digest — M id A tlantic
Real Estate Journal
www.marejournal.com
F inancial D igest
By Fred Clapp, Cost Segregation Services, Inc. What’s your BRA size?
ments, Reno- vations, and A d a p t i o n s (BRA), size matters if an- nual repair costs exceed thirty percent of an effected building sys- W
the IRS as electrical, security, fire and safety, HVAC, gas distribution, elevators, plumb- ing, and other, if the annual M&R costs associated with one of those building systems exceed 30%, the costs have to be depreciated (capitalized) over the straight line life of the building. Me a n i n g : Y o u s p e n d $187,000 for a new chiller and the value of your HVAC system is $525,000. The M&R ratio test is 35%. Instead of $187,000 expense against current in- come, you have to capitalize that cost at $4,794 annually the next 39 years. This ratio
hen the IRS looks at CRE through the tax world of Better-
of the 2014 Tangible Property Regulations (new Regs). Every commercial building owner in America needs to pay atten- tion to their annual budgets because, as of January 1, 2014, Uncle Sam has determined what dollar amounts have to be capitalized and defined what dollar amounts can be expensed. The new Regs require an annual 30% ratio test be ap- plied with all M&R costs to determine what costs qualify. Additionally, those M&R costs have to associate with the value of a designated (nine) building system. Identified by
test must be applied annually to every building system. What happens if an audit finds that item as an expense? The IRS will disallow it either way and your return gets whacked. With 2015 taxes just ending, many tax professionals have realized their CRE clients may not be in compliance with the new Regs. Consequently, if your CPA has suggested an extension, chances are good your return may fall into this category. Don’t press your luck about M&R compliance because the IRS looks at BRA (RABI) size.
Instead, ask the following: Have I established a value for the nine building systems in my building? Do I have a written spending policy that meets the safe harbors for de minimus expenses under the new Regs? Did I property “cost-out” the disposal of that pile of building materials hauled off in a dumpster? According to the AICPA, one of the biggest challenges fac- ing CPAs is the valuation of designated building systems. If your tax advisor needs to know the value of an existing plumbing system that came with a building you purchased four years ago, can you provide an audit-proof document sup- porting the cost basis of just that system? Most tax advi- sors are not capable of valuing building assets and need help. The only IRS audit proof “Certain Method “ that an- swers these questions is an en- gineering based cost segrega- tion study (CS). It may finally be time to put CS at the top of your “to-do” list. When you bring a CS specialist into the mix, they incorporate the IRS approved 15 year “look-back” to even identify past costs that, under the new Regs, were capitalized but now may qualify as an expense. CS pro- vides audit proof documenta- tion your CPA needs help you comply with the newRegs. Tell the IRS to try that on for size! Fred Clapp is Cost Seg- regation Services, Inc.’s re- gional director. In 2015 he managed projects totaling $85M generating $14M in savings for CRE owners. n a section of the MARE Journal P.O. Box 26, Accord, MA 02018 781-871-5298 • 800-584-1062 fax 781-871-5299 www.marejournal.com Section Publisher Barbara Holyoke bholyoke@marejournal.com Section Editor Julie King jking@marejournal.com Financial Digest
Fred Clapp
tems. Include an “I” for Im- provements, change the order, and you’ve got the official RABI rules for Maintenance and Repair (M&R), which is one important compliance element
Time Out! Off Setting Penalties
Ratio Test Violation Capitalized Assets Should be Expensed Existing Building Systems Out of Value OfÞcials Will Review the PlayÉ.
The Call: Team had a CSSI Cost Segregation Study
▶︎ Find Money in your BuildingÕs Walls & Generate Cash Flow ▶︎ Are Experts for Valuing Building Systems & Units of Property ▶︎ Create Savings from Material that went into a Dumpster ▶︎ Provide IRS Approved Documentation & Ensure Maximum Tax BeneÞt The Play: Get a No-Cost Analysis of your Building(s) Fred W. Clapp, Regional Director 703.298.0705 fred@bamprojects.com www.costsegserve.com Put time back on the clock and win if youÕre working with CSSI. As the NationÕs premier Þrm delivering cost segregation we:
Real Estate Journal — Financial Digest — May 13 - 26, 2016 — 7A
www.marejournal.com
M id A tlantic
F inancial D igest
410 Commerce Blvd. was constructed by Russo Development CBRE’S NJ Capital Markets Debt & Structured Finance Team arranges a $20m refinancing
C ARLSTADT, NJ — CBRE Group Inc. an- nounced that its New Jersey Capital Markets Debt & Structured Finance team has arranged a $20 million refinancing on behalf of Russo Development . The financing was secured by 410 Com- merce Blvd. in Carlstadt, New Jersey, a 280,600 s/f office/ warehouse/data center fully leased to Coach Inc., Digital Realty Trust and SunGard Availability Services. After marketing and a com- petitive bid process, the CBRE team of James Gunning , Donna Falzarano and Ste- phen Joseph placed the seven-year non-recourse loan with a regional bank at a com- petitive interest rate. Columbus joinsThe Rockefeller Group MORRISTOWN, NJ —The Rockefeller Group announced that real estate industry pro- Based in The Rockefeller Group’s Morristown office, Co- lumbus leads the development and formulation of financial strategies for the company’s New Jersey and Pennsylvania operations, including asset performance, lease projections and project evaluations. Co- lumbus is specifically focused on a number of major indus- trial projects in the region, including Rockefeller Group’s 1.3-million s/f development Cranbury Station Park. “Having Mikki on board has already been enormously beneficial to our New Jersey and Pennsylvania operations — specifically in terms of in- dustrial development strategy — as we continue to rapidly expand our footprint in the re- gion,” said ClarkMachemer , senior vice president and re- gional development officer for The Rockefeller Group’s New Jersey/Pennsylvania office. Prior to joining The Rocke- feller Group, Columbus worked for the Greater Jamaica Devel- opment Corporation (Queens, New York) as the company’s director of real estate and eco- nomic development. n Mikki Columbus f e s s i o n a l Mikki Co- lumbus has j o i ned t he company as senior man- ager of de- v e l o pme n t and financial analysis.
Constructed by Russo Devel- opment, 410 Commerce Blvd. boasts high-quality features and amenities that facilitate corporate appeal, including brick exterior elevation and ample parking space. The building is located within the Russo Business Campus, one of the premier “high-tech” industrial parks in northern New Jersey. The park consists of approximately 2 million s/f of class A space which is cur- rently near-full occupancy. Tenants in the park include JP Morgan Chase, Coach, Donna Karan NY, Pantone, and Sun- Gard Availability Services. n
8A — May 13 - 26, 2016 — Financial Digest — M id A tlantic
Real Estate Journal
www.marejournal.com
F inancial D igest
Gragg Cardona Partners purchases 68-unit affordable apartment community Love Funding secures $8.71 million loan for acquisition/rehabilitation of Arnold Gardens S
for up to 40 years for the new construction or substantial rehabilitation of multifamily rental or cooperative housing for moderate-income families, the elderly and the handi- capped. In this case, the property needed significant repairs that might have deterred a potential buyer. Built in 1971, Arnold Gardens required re- placement of all electrical sys- tems, hot water heaters, older windows and sliding glass doors, among other improve- ments. Love Funding was able to combine the non-recourse FHA financing with an award
of 4% low-income housing tax credits to help the buyer, Gragg Cardona Partners LLC , acquire the property and address the nearly $4 million in repair and improvement costs. Boston Capital agreed to purchase the tax credits. The transaction helps pre- serve 55 units of affordable housing at the property that are subject to a project-based Section 8 HAP contract and which will be extended for another 20 years. The remain- ing 13 units will be restricted to households earning 60 per- cent or less of the area median income. n EDA approves loan to fuel startup TRENTON, NJ — Fur- thering the State’s commit- ment to support biotechnology companies throughout their lifecycle, the New Jersey Economic Development Authority (EDA) approved Admera Health for a $1 mil- lion loan through the Edison Innovation VC Growth Fund. Located in South Plainfield, Admera Health is an advanced molecular diagnostics company focused on personalized medi- cine and non-invasive cancer testing. Admera Health plans to maintain its current staff of 51 and create an additional 30 new jobs over the next two years. “We are grateful to the EDA for the loan approved today,” Admera Health president and CEOGuanghui Hu, PhD, said. “We plan to use the funding as working capital as we con- tinue to grow and expand our customer base.” Created in 2011 to enhance support of early-stage busi- nesses that have attracted funds through venture capital (VC) investors, the Edison In- novation VCGrowth Fund helps companies directly finance uses such as hiring key staff, product marketing, and sales. Up to $1 million in subordinated convert- ible debt financing is available for venture capital-supported technology companies with min- imum commercial revenues of $500,000 in the prior 12 months. To be eligible for the Edison Innovation VC Growth Fund, companies must: be a devel- oper/owner of protected pro- prietary technology, employ 75% of its employees in New Jersey or commit to growing 10 high-paying jobs over two years; and occupy physical commercial office space. n
UITLAND, MD — Love Funding , one of the na- tion’s leading providers of FHA multifamily, affordable and healthcare financing, an- nounced the closing of an $8.71 million loan for the acquisition and substantial rehabilitation of Arnold Gardens, a 68-unit affordable apartment commu- nity in Suitland, MD. Senior director Holly Bray of Love Funding’s Washington DC office secured the financing through the U.S. Depart- ment of Housing andUrban Development ’s 221(d)(4) loan insurance program. The program insures financing
Arnold Gardens
Spotlight on : Creative Financing
June 10th publication Editorial Requirements Include: Half page ad with 550 word article Deadline: May 27th, 2016 Contact: Barbara Holyoke Mid Atlantic Real Estate Journal Tel: 781-871-5298 x202 E-Mail to: BHolyoke@marejournal.com
Real Estate Journal — Financial Digest — May 13 - 26, 2016 — 9A
www.marejournal.com
M id A tlantic
F inancial D igest $335,000,000
850 THIRD AVENUE NEW YORK, NEW YORK An existing 21 story Class A office building containing approximately 600,000 square feet The undersigned arranged the above financing.
David Horowitz Richard T. Horowitz
622 Third Avenue New York, NY 10017 (212) 986-8400 Fax: (212) 983-0512 www.cooper-horowitz.com
Real Estate Financing
10A — May 13 - 26, 2016 — Financial Digest — M id A tlantic
Real Estate Journal
www.marejournal.com
F inancial D igest
orningstar Credit Ratings, LLC af- firmed its ‘MOR CS1’ Morningstar also revises its special servicer ranking forecast for Berkadia to Negative Morningstar Credit Ratings affirms ‘MOR CS1’ & ‘MOR CS2’ for Berkadia Commercial Mortgage M named special servicer on 18 CMBS transactions consisting of 957 loans with a UPB of ap- proximately $1.3 billion.
the servicer’s strong manage- ment team and professional depth, excellent technology platform, effective leveraging and oversight of its seasoned and growing operations in In- dia, investor reporting exper- tise and stringent subservicer monitoring procedures for commercial mortgage-backed securities (CMBS) transac- tions, extensive internal audit program, diligent portfolio management practices, and emphasis on training. As a special servicer, Berka- dia has adequate staffing re- sources, controlled and proac- tive loan-recovery procedures,
effective technology, and gen- erally favorable asset-resolu- tion results albeit for a modest level of activity predominantly consisting of smaller-balance loans. Morningstar’s nega- tive forecast for the ranking reflects Berkadia’s modest operational scale for special servicing combined with its reduced volume of active and resolved assets during the past few years. As of Dec. 31, 2015, Berka- dia’s primary- and master- servicing portfolio consisted of 19,736 loans with an ag- gregate unpaid principal bal- ance (UPB) of approximately
$219.8 billion. These figures exclude 3,512 loans with a UPB of $7.1 billion repre- senting construction loans, some loans located outside the United States, and loans with less than full servicing duties. Berkadia was the primary and/or master servicer on 285 CMBS transactions and 92 Freddie Mac securitizations. CMBS loans, including the 92 Freddie Mac securitiza- tions, comprised approximate- ly 23 percent by UPB and 27 percent by loan count of the total primary- and master- servicing portfolio. As of Dec. 31, 2015, Berkadia was the
commercial mortgage primary and master servicer rankings and its ‘MOR CS2’ commer- cial mortgage special servicer ranking for Berkadia Com- mercial Mortgage LLC (Berkadia) . Morningstar also revised its special servicer ranking forecast for Berkadia to Negative from Stable and maintained its Stable forecast for the primary and master servicer rankings. Mo rn i ng s t a r a f f i rmed Berkadia’s primary and mas- ter servicer rankings based on
Berkadia’s active special- servicing portfolio had a total UPB of approximately $52.8 million and contained 28 loans with a UPB of approximately $51.9 million and three real es- tate owned properties with an aggregate balance of $860,000. The CMBS component of the active special-servicing port- folio had a total UPB of ap- proximately $8.9 million and contained 22 assets including three REO properties. Morningstar rankings , forecasts, and assessments contained in this rankings announcement are not assess- ments of the creditworthiness of an obligor or a security and thus are not credit ratings sub- ject to NRSRO regulations. n Appraisal Institute calls on Congress to address Appraisal Regulation CHICAGO, IL — The Ap- praisal Institute joined the American Bankers Associa- tion , the National Associa- tion of Home Builders , the National Association of Realtors and The Appraisal Foundation in calling on Congress to hold a hearing this year on the future of appraisal regulation. The groups noted that the federal regulatory structure for real estate appraisal es- sentially has been untouched since enactment of the Fi- nancial Institutions Reform, Recovery and Enforcement Act of 1989 and that the most re- cent Congressional committee hearing devoted to appraisal oversight was four years ago. The organizations wrote to the chair and ranking mem- bers of the Senate Banking, Housing and Urban Affairs Committee and the House Financial Services Commit- tee, in addition to leaders of the relevant subcommittees. Read the Senate letter and the House letter. The groups asked Congress to focus on topics including the current appraisal regulatory framework, appraisal informa- tion systems, the impact of the recent regulatory reforms on the appraisal profession, and the availability of qualified ap- praisers, particularly in rural areas. n
Reliability is important.
When you’re facing a complicated multifamily financing situation, it’s crucial to have a dependable lender on your side. M&T Realty Capital Corporation has the experience and expertise to understand your business, and our relationship-focused approach ensures the terms we recommend are right for you. These are just some of the reasons 75% of our business comes from repeat borrowers. Get started at learnmore.mandtrcc.com or call 1-800-737-2344.
Equal Housing Lender. Based on internal customer data. All loans and all terms referenced herein are subject to receipt of a complete application, credit approval and other conditions. ©2016 M&T Realty Capital Corporation. Member FDIC.
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88Made with FlippingBook HTML5