8-16-13

R EAL E STATE J OURNAL the most comprehensive source for commercial real estate news

ISSUE HIGHLIGHTS Volume 25 Issue 13 August 16 - 29, 2013

For Bordentown, NJ luxury apartment complex Mark Scott’s Commercial Mortgage Capital secures $23m construction loan

Contributing Columnist

ORDENTOWN, NJ — Mark Sco t t ’ s Commercial Mort-

buildings will be equipped with an elevator and there will be 16 under-building garages and 40 free-standing garages. The complex will also boast an outdoor resort style swimming pool, state-of-the-art fitness center and an exclusive club- house. Construction has com- menced, with an anticipated completion date of 12 to 18 months. Rivergate is part of the Bordentown Waterfront Com- munity Development, which will include a mix of residen- tial and commercial uses on approximately 100 acres. On the residential side, there the community will feature a total of 358 apartment homes, 118

skyline make it a perfect place to live, work and play,” said Emanuel Stern , president and chief operating officer for Hartz Mountain. While Hartz Mountain’s strategy for increasing its residential asset class focuses on newly constructed develop- ments in fast-growing urban areas on the East Coast it is Hartz’ goal to continue to survey the national markets for other quality residential acquisitions like the Alto. Stern continues, “AltoApart- ments offered Hartz an excit- ing opportunity that we could not pass up along withmaking it a meaningful acquisition in a market that is both flourish- ing and still nowhere near its full potential.” “Hartz Mountain is known for their portfolio of well-locat- ed, luxury rental communities in metropolitan areas,” said JimAtkins , managing direc- tor of Harbor Properties . “They have developed over 1,500 residential units of their own and will be great stew- ards of Alto Apartments.” Jeff Dunne of CBRE’s New York Institutional Group rep- resented Hartz Mountain had loft homes, 120 manor town- houses and 52 townhouses. There will also be 31,400 s/f of commercial property and additional restaurant and of- fice uses. When completed, the community is projected to be the location of at least 75 em- ployees and 648 households. The Bordentown Waterfront Community also has plans to reconstruct the Light Rail System, which includes a station at the entrance to the community. The site is surrounded by the Delaware River and Crys- tal Lake, easily accessible pub- lic transportation and a major highway network. Bordentown boasts a lively downtown of

the following comments on the acquisition: “Alto Apartments represents Hartz Mountain’s first major apartment acqui- sition on the West Coast. The Seattle market is an exciting investment opportunity for Hartz andAlto’s high-rise con- struction and transit-oriented location should provide for long-term rental growth.” The property was construct- ed in 2012 and enjoys modern, Class A apartment finishes. The rich amenity package at the property includes a glass- enclosed penthouse lounge, Viking BBQ grilling stations, community room, common area wi-fi, bike storage, state- of-the-art fitness center, two on-site Zipcars and other mod- ern urban-centric amenities. Hartz Mountain was repre- sented in the purchase by Jef- frey Dunne and Christopher Leonard of CBRE’s NewYork Institutional Group. James Gunning and Donna Fal- zarano of CBRE’s Debt & Eq- uity Finance team secured the debt for Hartz Mountain. Jon Hallgrimson, Frank Bosl and Eli Hanacek of CBRE’s Seattle office represented the seller. ■ boutiques, restaurants, cafes and galleries. Other retail op- tions are located on US 130, including three regional malls located within a 20-minute drive of the development site. “With interest rates likely to escalate, borrowers remain eager to lock in loans at today’s low rates,” said Mark Scott . “Now is the time for borrowers to take a hard look at what makes the most sense for their bottom line and to recast, un- wind, extend or rebind their loans into new 10- to 15-year term loans. Several large lend- ers have not hit their targets and are still aggressive, while others have hit their goals and are raising spreads.” ■

gage Capi- tal (CMC) announc ed that i t re - cently closed a three-year, $23 million l o a n c o n - s t r u c t i o n l oan f o r a

J. Glenn Ebersole, Jr.

Mark Scott

four-building luxury apart- ment complex located in Bor- dentown. The property, which has been named Rivergate, will feature four-story apartment buildings containing 159 lux- ury units. Three of the four

Multifamily Financing Spotlight

Gunning and Falzarano of CBRE’s Debt & Equity Finance team secures debt Hartz Mountain Industries expands national residential portfolio with West Coast acquisition

SEATTLE, WA —Secaucus, NJ-based Hartz Mountain Industries , which began acquiring and constructing a national portfolio of luxury apartments in 2010 that has reached close to 3,000 units, has expanded to the West Coast by purchasing Alto Apartments, a 184-unit resi- dential tower in the popular Belltown section of Seattle. The Alto is located within close proximity to popular destinations and employers by foot or public transporta- tion. Alto’s thriving urban

11-21A

5-12C

Alto Apartments

Directory

neighborhood boasts popular restaurants, boutiques, and nightclubs. Hartz Mountain caters to a musical clientele at its Tribeca Grand and Soho GrandHotels inNewYork City and appreciates the building’s name Alto in honor of the site, which was once the home of the Musician’s Association of Seattle formed in 1889. “Everything about the Alto Apartments says attention to detail and the outstanding views of the Olympic Moun- tains, Puget Sound, the Space Needle and the downtown

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2A — August 16 - 29, 2013 — Mid Atlantic Real Estate Journal MAREJ A DVERTISERS D IRECTORY ALT Realty ...................................................... 13C Asset Preservation ............................................ 3A B.R. Kreider & Son ........................................... 7C Barley Snyder.................................................... 8C Barton Partners ............................................ FC-C Bayshore Recycling ........................................... 8B Beacon Commercial RE .................................... 4C Bennett Williams ............................................ 14C Bergman RE Group........................................... 6B Bernardon Haber and Holloway ...................... 6A Billboard Directory ............................................27 Brasler Properties ............................................. 1C Business Card Directory................................. 25A Bussel Realty Corp......................................... IC-B Commercial Mortgage Capital ....................... 19A Cooper Horowitz.............................................. 21A Deerwood Capital............................................ 20A Earth Engineering ............................................ 6C Energyworks ..................................................... 4C Fortna Auction .................................................. 4A G William Group ............................................... 7B Gebroe-Hammer Associates............................ 11B Gerber/Somma Associates ................................ 1B Goal Point Realty ........................................... IC-C GREP ............................................................... 14C Harvey Hanna & Associates........................... 10A Heller Industrial Parks .................................. 10B Healthcare Facilities Solutions ........................ 1A Hinerfeld Commercial RE .......................... IBC-C Investors RE Agency ......................................... 3C Investors RE...................................................... 3A Jewel Electric Supply Co. ................................. 5A Kaplin Stewart .................................................. 2A Kearney Federal.............................................. 12A Keast & Hood Co. ............................................ 15C KW Comm’l.- The James Balliet Comm’l. Grp.6C Landcore Engineering Consultants ............... 13C Liberty Environmental ..................................... 2C LMS Commercial RE ........................................ 8C M. Miller & Son................................................. 5A Madison Capital ............................................... `8A McMahon ......................................................... 11C Mericle Commercial RE Services .................BC-C Meridian .......................................................... 15A NAI Summit .................................................... 12C Nave Newell ...................................................... 7C NorthMarq....................................................... 17A PA Housing ...................................................... 13A PennCap Properties .........................9C IBC-BC-A Poskanzer Skott Architects .............................. 3B Productive Painting .......................................... 2B Provident Bank .............................................. IC-A Real Property Capital ..................................... 18A Regal Bank .................................................16A,3B ROCK................................................................. 2C SEBCO Laundry Systems ................................ 2B Security Resources ............................................ 9B Sheldon Gross Realty........................................ 4B Sorce Companies ...........................................BC-B Target building Construction ......................... 11C The Green Group ............................................ 14A The Kislak Company ........................................ 4B Thompson Mangement ..................................... 2B Warfel Construction .......................................... 9C Wolf Commercial Real Estate......................... 10B

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Mid Atlantic Real Estate Journal

Mid Atlantic R eal e state J ouRnal Publisher ............................................................................ Linda Christman Publisher ............................................................................... Joe Christman Section Publisher ................................................................ Elaine Fanning Section Publisher .................................................................... Steve Kelley Associate Publisher .......................................................Janine Hennessey Senior Editor/Graphic Artist .................................................Karen Vachon Office Manager ................................................................... Joanne Gavaza Guest Columnists ........................................... J. Glenn Ebersole, Jr., P.E.; ..........................................................Scott Saunders and Pamela Michaels 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. 25 Issue 13 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

By J. Glenn Ebersole, Jr., P.E. The Importance & Power of Project Mgmt. in Today’s Business Environment

hy is project man- agement important and what awesome

power exists with project man- agement in today’s business environment? The first reasons that come to my mind about why project management is im- portant (based upon more than 35 years of my personal project management experience) are: tighter budgets; diminish- ing resources; more and more time constraints; increasing regulations and documentation requirements and competition to improve the ways we do busi- ness. The awesome power of project management makes it possible to focus on priorities, track and measure perfor- mance, overcome challenges and problems, become flexible enough to adapt to change and achieve higher performance and a higher probability of suc- cess in each project. What do we mean by project management? Project man- agement is a discipline and a process. It is a set of tools

and techniques that define a project’s goals, plan all work to reach the goal, lead the project and support teams, monitor progress and optimize the use of resources (time, people, money, etc.) in order to reach and exceed the customer’s ex- pectations from that project. What is special about project managers? Project manag- ers need to be very skilled in the management of commu- nications, human resources, procurement, quality, time, cost, documentation, systems integration, etc. Project management is very important in today’s busi-

ness environment when one considers the consequences of the absence of good project management or when project management is poorly applied to projects. Here are some of the that can be experi- enced with the lack of or poor project management: missed deadlines; cost overruns; poor workmanship; conflicts among team members; redoing work to correct errors; unclear direc- tions for the project; continu- ous changes in project scope; forgotten key tasks; lack of securing project approvals & permits; poor morale of team;

continued on page A

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M id A tlantic R eal E state J ournal By Scott Saunders and Pamela Michaels 1031 Exchanges and vacation homes

Investors Real Estate Agency

Investors Real Estate Agency 322 Ambrust Rd. • 2nd Floor Youngwood, PA 15697 P: 724-925-0215 F: 724-925-0216 mallison5@aol.com Mark D. Allison, Broker of Record/Owner

ccording to the National Association of Realtors, the vacation home mar-

property if: (1) the relinquished property is owned by the property owner

use period”); and (2) within each of the two 12-month periods which make up the qualifying use period (whether for the relinquished property or the replacement property): (a) the property owner rents the property to another person or persons at a fair rental for 14 or more days; and (b) the property owner’s personal use of the dwelling unit does not exceed the greater of: 14 days, or 10% of the num- ber of days the dwelling is rented out. Under Rev. Proc. 2008-16, continued on page 24A

ket is heat- ing up again a n d ma n y real estate professionals are reporting strong sales in many va- cation home h o t s p o t s .

for at least 24 mon t h s immediately prior to the exchange, or the replace- ment prop- erty is owned for at least 24 months im-

Scott Saunders Pamela Michaels

Real estate in resort or vaca- tion destinations can produce diverse and significant tax consequences. These tax con- sequences can be particularly critical at the time a property is sold, since many vacation destinations have appreciated significantly and property own- ers may be facing significant capital gain tax consequences upon disposition. The use of a tax deferred exchange under IRC Section 1031 can be par- ticularly important in disposing of such property. Tax Treatment At Disposition: Qualifying For A 1031 Exchange Internal Revenue Code Sec- tion 1031 may be available for vacation property owners seek- ing to defer capital gain taxes on the sale of a vacation-type property. The main issue, in most cases, is whether the prop- erties sought to be exchanged are held “for the productive use in a trade or business or for investment,” or whether they are held exclusively for the per- sonal use of the taxpayer. The starting point in addressing this issue is Revenue Procedure 2008-16. Rev. Proc. 2008-16 creates a “safe harbor” for exchanges of vacation property; in other words, if the specified owner- ship and use requirements of Rev. Proc. 2008-16 are met, the property will qualify under Section 1031. Under Rev. Proc. 2008-16, a “dwelling unit” is defined as any real property improved with a house, apart- ment, condominium, or similar improvement that provides basic living accommodations, which include a sleeping space, bathroom and cooking facilities (e.g., a residential property). The safe harbors for the re- linquished property and for the replacement property are substantially the same. The IRS will not challenge whether a relinquished dwelling unit, or a replacement dwelling unit, qualifies as Section 1031

mediately after the exchange (the 24-month period, whether for the relinquished property or the replacement property, is referred to as the “qualifying

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A — August 16 - 29, 2013 — Mid Atlantic Real Estate Journal

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P lace your B usiness C ard in our A uction D irectory T oday ! C ompanies S pecializing in C ommercial /I ndustrial R eal E state C an P romote T heir C ompany and its S ervices in our T wice monthly D irectory P lease F ill O ut C oupon B elow A nd F ax I t T o 781-871-5299 or E mail lchristman @ marejournal . com

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M id A tlantic R eal E state J ournal To PA Virtual Charter School in King Of Prussia Industrial Investments leases 10,880 s/f of flex space K ING OF PRUSSIA, PA — Industrial Investments, Inc.

Markets we serve: Commercial Industrial Residential

Electrical Contractors State, Municipal & Government Hospital & Institutions Property Management & Hospitality Products we offer: Wire, Pipe, Fittings & Wiring Devices Switchgear, Panelboards, Motor Controls & Motors Lighting & replacement Lamps LED Retrofits, Fixtures and other Energy Efficient Products Sub-Metering Equipment Meters, Tools & Ladders Safety Devices & Equipment Fire Alarms, Smoke Detectors & Burglar Alarms Generators Services we offer: On time Deliveries to meet customer requirements 24/7 Emergency Response Inventory Management Project quotes Lighting & Energy Audits Customer Training

recently signed a new multi- year lease for 10,880 s/f of flex space at its 450 S. Hen- derson Rd. property with the Pennsylvania Virtual Char- ter School (“PA Virtual”). PAVirtual is a public char- ter school based in Norris- town, Pennsylvania that pro- vides personalized education for more than 3,400 students from diverse ethnic, racial and socio-economic back- grounds, and from a variety of geographic regions across the Commonwealth. They specialize in creating dynam- ic partnerships between the school and the home, using a rich, research-based cur- riculum and the innovative use of technology to meet the educational needs of their students. The company has been in business since 2001. PA Virtual will use its new King of Prussia facility for storage and assembly of computer components and systems and for associated office purposes. Robert Bown , project duplication of effort; etc. Be- cause of these potential conse- quences, project management is critical to a project’s success. Effective project management will help to: meet or exceed customer expectations; maxi- mize the use of your resources (time, people, money, space, etc.); bring the project to a successful conclusion on time, within budget and within the quality standards; document what was done for any need of future reference; and build confidence in your team for future projects. We may ask ourselves “How vital and important is project management?” Here is a fa- mous quote I have chosen as one response to that question: “Of all the things I’ve done, the most vital is coordinating the talents of those who work for us and pointing them towards a certain goal.” Walt Disney Glenn Ebersole is strate- gic vice president, business development/marketing and a member of the Stra- tegic Leadership Team at Hollenbach Construction, Inc. in Boyertown, PA. n continued from page 2A By J. Glenn Ebersole, Jr., P.E.

455 Third Street Jersey City, NJ 07302 Ph: 201-653-1613 Fx: 201-653-5470 Bob Kilroy

bkilroy@Jewelelectric.com www.jewelelectric.com

Markets we serve:

450 S. Henderson Rd.

manager and principal of Industrial Investments, Inc.,

represented the property’s owner in this transaction. n

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A — August 16 - 29, 2013 — Mid Atlantic Real Estate Journal

www.marejournal.com M id A tlantic R eal E state J ournal Construction career began with Carpenters Local 1006 River Drive Construction promotes Boysen to VP

EDITORIAL DEADLINES ARE 14 DAYS PRIOR TO PUBLICATION DATE Aug. 30 Deadline: Aug. 20 Commercial RE Law

Sept. 13 Deadline: Aug. 30 Spotlight Spotlight Sept. 27 Deadline: Sept. 13

LMWOOD PARK, NJ — River Drive Con- struction , one of New Jersey’s leading full-service E

Drive Construction, he has been responsible for securing many of our major projects,” said Joseph Langan , president of River Drive Construction. “He’s also played an integral role in recruiting talent for the company. Marshal’s hard work and ability to build fruitful relationships has allowed us to weather the recession and emerge as a stronger company. He’s a huge asset to the firm and we look forward to many more successful years with Marshal on board.” Boysen, who has notched more than $120 million in sales

since joining the company, has been in marketing construc- tion services for more than 15 years. At River Drive, he has originated business from some of New Jersey’s most reputable developers and commercial property owners. “I’m honored to be a part of company of River Drive’s caliber,” said Boysen. “River Drive has a strong reputation for quality and customer sat- isfaction. With my experience in the construction industry and River Drive’s track record, which speaks for itself, I’ve been able to successfully close deals with some of New Jersey’s leading retail, industrial and pharmaceutical companies.” Boysen began his construc- tion career as a journeyman carpenter with Carpenters Local 1006 inMilltown, which, he said, provided him with the skills needed to understand the construction process, including schedules and budgets. He is active in the local chapters of the Industrial and Office Real Estate Bro- kers Association (IOREBA) ; CoreNet Global, an asso- ciation for corporate real es- tate and related professionals; the International Facility Management Association (IFMA) ; and the Commercial Real Estate Development As- sociation (NAIOP) . n Wohl sen Cons t . picks Schlouch for The Hi l l School Faculty Housing BLANDON,PA — Schlouch Incorporated has been named by Wohlsen Construction to prepare a 5.27-acre site for East Faculty Housing at The Hill School in Pottstown, Mont- gomery County. Schlouch is providing clear- ing, grubbing, survey, stakeout, demolition, sediment/erosion control, blasting, rock removal, earthwork, sanitary and storm sewers, water line installation, roads, building pad, concrete, curbs and paving. J e r e m y K e e n e r i s Schlouch’s site coordinator and Michael Laudermilch is project manager/estimator. Work will be completed in this month. Schlouch Incorporated spe- cializes in site design and site construction throughout Eastern Pennsylvania and surrounding states. n

Appraisal

construction c omp a n i e s a nn o un c e d that it has p r o m o t e d M a r s h a l Boysen t o v i c e pr e s i - dent. Boysen, who was pre-

Fall Preview

Mid Atlantic R EAL E STATE J OURNAL Phone: 800-584-1062 x203 lchristman@marejournal.com www.marejournal.com

Marshal Boysen

viously director of business de- velopment, joined the company in 2007. “Since Marshal joined River

Mid Atlantic Real Estate Journal — August 16 - 29, 2013 — A

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Melnick & Merkert, SIOR coordinate Baltimore disposition totaling $2.365m on behalf of the seller Cushman & Wakefield sells 101,596 s/f Rivers Business Commons in Columbia, Maryland

olumbia, MD — Cushman & Wake- field of Maryland,

Inc. has arranged the sale of Rivers Business Commons, located at 8945-8975 Guilford Rd. in Columbia, to Fernau LeBlanc Investment Part- ners. Cushman &Wakefield’s capital markets team of Cris- topher Abramson, Brian Kruger, Nicholas Signor and Jonathon Chalkley coordinated the disposition of Rivers Business Commons on behalf of the seller, an affili- ate of Greenfield Partners. Rivers Business Commons is a 101,596 s/f, four-build- ing office portfolio of single and two-story assets. The portfolio features class A office space in a landscaped campus in the heart of the Baltimore-Washington Cor- ridor, equidistant to both Washington D.C. and Balti- more. “This transaction rewards the seller for the lease-up realized since their purchase and the institutional mainte- nance of a quality asset,” said Abramson. “The buyer has WASHINGTON, DC — Marcus & Millichap Real Estate Investment Servic- es , one of the nation’s largest real estate investment ser- vices firms, has announced the sale of 740 6th Street, NW, a 12,130 s/f mixed-use property located in Washington, DC, according to Bryn Merrey , regional manager of the firm’s Washington, D.C. office. Stacey Milam and Peggy Brooks Smith , investment specialists in Marcus & Mil- lichap’s Washington, D.C. of- fice, had the listing to market the property on behalf of the seller, a family partnership whose original ownership dates back to the early 1900’s. The buyer was secured and represented by Brooks Smith and Milam. 740 6th Street NW in Wash- ington, D.C., has nine rental units comprised of restaurants

Rivers Business Commons

2811 Lord Baltimore Drive Photo courtesy of CoStar

acquired a very well located property with excellent ten- ancy and great term.” The property’s new own- ership, Fernau LeBlanc Investment Partners , is a Washington, D.C.-based real estate owner and operator, focused on achieving attrac- tive risk-adjusted returns by investing in industrial prop- erties and flex/single-story office buildings. Cushman &Wakefield sold

2811 Lord Baltimore Dr. in Woodlawn to Concrete Pro- tection and Restoration for $2.365 million. The buyer plans to occupy a portion of the building. Matt Melnick and Hayes Merkert, SIOR with Cushman & Wakefield coordinated the disposition on behalf of the seller, Tra- son-NewYork, LLC, a private investor. Bob Oare and Andrew McIlvaine with Cassidy Turley represented

the buyer. 2811 Lord Baltimore Dr. is a three-story, 22,785 s/f office building located on 2.6 acres within the Rutherford Busi- ness Center, a hub for federal government headquarters, government contractors and business services including the Social Security Admin- istration and the Center for Medicare and Medicaid Ser- vices. The property is strate- gically located in one of three

Baltimore County Enterprise Zones at the intersection of Lord Baltimore Dr. and Windsor Boulevard offering convenient access to I-695, I-95, I-70, I-795, and I-83. The new owner-occupier, Concrete Protection & Res- toration, Inc., supplies the commercial, industrial and public markets with compre- hensive concrete repair and protection and a wide variety of construction services. n

Marcus & Millichap Washington, DC office brokers two sales

740 6th Street, NW

on the first and part of the sec- ond floors and office tenants on the balance of the second and upper floors. The property is located on the same block as the Verizon Center with en- trances to 2 Metro stops. In a separate transaction,

Marcus&Millichapannounced the sale of 1639 WisconsinAve NW, a 2,400 s/f retail property located in Washington, DC, according to Josh Feldman , senior associate in the firm’s Washington, D.C. office. The asset sold for $1.2 million.

Feldman, an investment specialist in Marcus & Mil- lichap’s Washington, D.C. of- fice, had the listing to market the property on behalf of the seller, a private investor. The buyer, a private inves- tor, was secured and repre-

sented by Feldman. 1639 Wisconsin Avenue NW in Washington, DC was for- merly operating as the Bookh- ill Bistro. The new owner has recently signed a lease with a local restaurateur who should be opening shortly. n

8A — August 16 - 29, 2013 — Mid Atlantic Real Estate Journal

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d el M AR V A

Feature Your Project ~ Developments ~ ~ Construction ~ ~ Renovations ~ in the Mid Atlantic Real Estate Journal

state-of -the-art holiday Décor project with parker 3D madison capital finances Blink! A light Extravaganza

Wings mills, mD — madison capital , a leading provider of

fit. Madison Capital provided a significant portion of the financing for the décor, lights and sound system that went into creating the fabulous holiday show for the Faneuil Hall Marketplace Merchants’ Association,” said nancy pis- torio , executive vice president, Madison Capital. Madison Capital has a his- tory of successfully serving the holiday décor needs of shopping centers and retail destinations. Madison Capital is committed to this niche industry through 14 years of continuous mem- bership in icsc . To view their holiday décor video, please click visit their website. n

equipment and commercial vehicle financing solutions, provided the financing for a state-of -the-art Holiday Dé- cor project with Parker 3D. The project, Blink! A Light and Sound Extravaganza, is a six week “must-see” light and sound event that trans- forms every inch of Boston’s historic Faneuil Hall Mar- ketplace. This magical and unforgettable light showcase uses over 350,000 LED lights to illuminate Boston’s skyline. Blink! runs during the summer through Labor Day and for the oWings mills, mD . — greenberg gibbons announced that construc- tion is moving forward on a new 23,190 s/f building at Annapolis Towne Centre on the property between West St. and Whole Foods. The building, which is already 100% leased, will in- clude three new restaurants and two retailers. Construction on the new building began in August,

holidays starting November 23. As a financing partner, Madi- son Capital collaborated with Parker 3D, the Maxi Award- winning technology driven holiday design team, to make this spectacular project a real- ity. “Parker 3D creates amaz- ing technology based event programs and Madison Capital specializes in financing holiday décor; therefore, it was a great

greenberg gibbons begins construction on 23,190 s/f bldg.

Lot 17 rendering

and the first tenants are ex- pected to open in fall 2014. An additional 112 new park- ing spaces will be created,

adding to the numerous covered and valet parking options that already exist at the center. n

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10A — August 16 - 29, 2013 — Mid Atlantic Real Estate Journal

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F inancial D igest F eaturing M ultifamily F inancing

Mid Atlantic Real Estate Journal — August 16 - 29, 2013 — 11A For mixed-use, multifamily & co-op Meridian Capital negotiates $72.6m

www.marejournal.com

reenwich, CT — The Richman Group Affordable Hous- G Includes portfolio of properties located in 18 states Richmancloses taxcredit funds totaling $291 million in equity

New York, NY — Merid- ian Capital Group, LLC an- nounced the following transac- tions: Meridian negotiated a mort- gage in the amount of $32 million on two multifamily buildings to- taling 153 units located on West 106th St. The loan features a rate of 3.00% and a 15-year term. Michael Kesselman negotiated this transaction. Mortgages totaling $18.9 mil- lion were placed by Meridian on six multifamily buildings total- ing 134 units located on 15th St., Seventh Ave., Eighth Ave., 11th St., First St. and Church Ave. in Brooklyn. The loans feature a rate of 3.00% and a 10-year term. Morris Diamant and Joe Klein negotiated this transaction. Meridian negotiated a mort- gage in the amount of $8 million on five multifamily buildings totaling 66 units located on Bar-

boroughs of NYC. The properties acquired by Funds 89 and 95 will provide high-quality affordable housing for family, senior and special needs tenants and will add over 3,000 units to Richman’s current portfolio which exceeds 105,000 units. According to StephenDaley, executive vice president of Richman, “Fund 89 was a na- tionally diversified fund while Fund 95’s targeted acquisitions were limited to New York City. Richman’s lengthy experience in the affordable housing indus- try and its acquisitions capabil- ity throughout the U.S. and its territories allows it to custom tailor funds which match the differing needs of institutional investors seeking to invest in affordable housing tax credit properties.” In addition to being a spon- sor of affordable housing tax

credit funds, Richman is also a leading developer of afford- able, market-rate and luxury rental housing, an asset and property manager and, more recently, a mortgage lender. Richman and its affiliates have developed more than 19,000 residential units, provide asset management services to nearly 100 public, private and institu- tional investment funds which own approximately 120,000 housing units, and have capital under management approach- ing $10 billion. RICHMAC Funding LLC, an affiliate of Richman, is a mortgage lender with a deep bench of talent and resources to underwrite and place loans for market rate and affordable multifamily proper- ties and healthcare facilities. RICHMAC Funding LLC is an approved FHAMAP and LEAN lender and a designated Fannie Mae Affordable lender. n

clay Ave. in Flushing. The loan features a rate of 3.00% and a 10-year term. Joe Taub negoti- ated this transaction. A mortgage of $5.5 million was placed by Meridian on two mixed-use buildings totaling 21 units and 2,370 s/f of retail space located on Mott St. The loan features a rate of 3.13% and a 12- year term. Diamant and Klein negotiated this transaction. Meridian negotiated a mort- gage in the amount of $4.725 million on two multifamily build- ings totaling 29 units located on 67th Rd. in Flushing. The loan features a rate of 3.00% and a 10-year term. Taub negotiated this transaction. A mortgage of $3,500,000 was placed by Meridian on a 74-unit, 13-story cooperative building located on West 23rd St. in NY. The loan features a rate of 3.38% and a 10-year term. Ami Levin negoti- ated this transaction. n

ing Corpo- rat ion an- nounc ed i t closed a $166 million fund, U.S.A. Insti- tutional Tax Credit Fund LXXXIX L.P. Fund 89 will include a di-

Stephen Daley

versified portfolio of properties located in 18 states. Investors in Fund 89 included 11 insti- tutional investors comprised of insurance companies and banks. Richman also closed a $125 million fund, U.S.A. Insti- tutional Tax Credit Fund XCV, L.P. Fund 95 had four bank- ing institutions as investors and will specifically target for acquisition affordable housing tax credit projects in the five PITTSBURGH, PA — HFF announced today that it has arranged a $53.7 million con- struction loan for a to-be-built, two-building class A office campus totaling 336,000 s/f in Southpointe Office Park located 15-miles southwest of downtown Pittsburgh, Penn- sylvania. HFF worked on behalf of the borrower, Quattro Invest- ment Group , to secure the three-year construction loan through Wesbanco Bank with First Commonwealth Bank and First National Bank as participants. Due for completion in October 2014, the project will consist of an 186,000 s/f, LEED certi- fied, five-story building that is a build-to-suit for the world headquarters of Ansys plus a 150,000 s/f speculative office building. The properties are situated on a 21 acre site within Southpointe Office/Industrial Park, an 830-acre mixed-use development about 15 miles southwest of the Pittsburgh central business district and

HFF arranges $53.7 million construction loan for two- building office campus in suburban Pittsburgh, PA

Ansys Corporate Campus rendering

dent of Burns & Scalo Real Estate Services . Scalo states that, “this is an incredible development in a very tight office market. Based

12 miles southeast of the Pitts- burgh International Airport in Southpointe. The HFF team representing Quattro Investment Group was

led by senior managing director Mark Popovich and manag- ing director Matt Kafka . The managing partner of Quattro is Jim Scal o, presi-

on the activity in the market, we anticipate that the specu- lative office building will be leased before construction is completed.” n

12A — August 16 - 29, 2013 — Mid Atlantic Real Estate Journal

www.marejournal.com

M ULTIFAMILY F INANCING

Offering services and flexibility that the giant banks do not Kearny Federal Savings Bank yields community growth

earny Federal Sav- ings Bank’s reputa- tion among seasoned

nity engagement because it creates strong institutions, housing, jobs and other ben- efits that make communities prosper,” said John Mazur, chairman of the Board of Di- rectors of Kearny MHC, Ke- arny Financial Corporation and Kearny Federal Savings Bank since January 2004. “We truly believe in giving back to the communities which made us so successful today.” Under Mazur’s tenure on the Board, the bank has gone from four to forty-one branches in nine New Jer-

sey counties. Much of the growth has been achieved through the bank’s four bank acquisitions over the past fifteen years, the most re- cent being Central Jersey Bank in 2010. Kearny has expanded its market share through aggressive market- ing, maintaining its matured existing customer base while addressing the needs of a new generation of customers who look for service in non- traditional banking channels and through the expansion of services into commercial financing and C&I lending.

Traditionally, Kearny’s lending activity primarily consisted of the origination of one-to-four family residential mortgage loans. Strategic emphasis has since shifted toward more aggressive loan portfolio growth with higher transactional dollar volume, while maintaining high asset quality and good credit risk. Kearny Federal Savings Bank, which employs ap- proximately 500 people, has a staff of thirty people in the commercial lending depart- ment alone. The company’s business plan continues to call for increased origination of commercial mortgages, primarily secured by multi- family apartment buildings, but also mixed-use properties and nonresidential mortgage loans. At the helm of new busi- ness development is Vincent Micco, second vice president and director of sales at Ke- arny Federal Savings Bank. Micco started in residential mortgages in 2005 and has been promoted to the highest sales position in the bank, all while raising his family and serving as an Army Reserv- ist, with two tours in Iraq. Customers note his person- ality and commitment are why they do business with Kearny. Micco credits the team culture that is focused on new business develop- ment for growing the bank’s loan portfolio. “My goal is to lead by ex- ample, constantly prospect- ing for new business re- lationships for the bank, while providing outstanding customer service. I manage an outstanding, very capable team of commercial and residential loan officers and SBA Business Development Officers, who are constantly hunting for new business in order to grow our portfolio safely,” said Micco, or Vince, as all of his clients and most of the Meadowlands Regional Chamber know him. Knowing the Customer Kearny Federal Savings Bank attributes much of its success to the relationships it has with clients. Vince Micco and his team are known for learning about their clients’ businesses so they can bet- ter understand how to help them reach their objectives. In return, their clients get to continued on page 24A

prospecting, outstanding cus- tomer service and the ability to attract loans that meet and exceed high underwrit- ing standards. For almost 130 years, the federally chartered stock sav- ings bank has grown steadily with conservative lending and deposit principles and a commitment to exception- al service and creating op- portunities. Since the bank joined the NASDAQ Stock Exchange in 2005, it boasts assets of $2.9 billion. “Commercial financing is an extension of our commu-

commercial real estate i n v e s t o r s and brokers throughout the Mead- owlands and greater New Jersey mar- ket remains

Vincent Micco

favorable, as evidenced by its remarkable growth in recent years. An anchor in the com- munity, the bank attributes its progress to aggressive

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The Local Source for Commercial Financing skearnyfederalsavings.com 41 Offices In New Jersey

Mid Atlantic Real Estate Journal — August 16 - 29, 2013 — 13A

www.marejournal.com

M ultifaMily f inancing Expanding affordable housing options across Pennsylvania

For more than 40 years – since 1972 – the Pennsylvania Housing Finance Agency has been helping Pennsylvanians address their housing needs. In addition to affordable rental housing and competitive mortgage products to help homebuyers, the agency has been a leader in offering housing counseling and foreclosure prevention assistance.

Your housing resource. PHFA.org

Tom Corbett, Governor • Brian A. Hudson, Sr., Executive Director & CEO

14A — August 16 - 29, 2013 — Mid Atlantic Real Estate Journal

www.marejournal.com

M ultifamily F inancing

By Timothy Torres & Ralph Anderson, The Green Group How can an individual better position themselves to obtain financing while saving tax dollars?

btaining financing in the current economy remains a difficult

tax returns often uncovers ag- gressive stances when reporting expenses, but few understand the possible consequences lurking in the near future. People do not enjoy paying income tax, however this short sighted plan leaves many high and dry when they are speaking with lenders. Let’s pose a very basic ex- ample to illustrate how “saving” a dollar today can negatively Ralph Anderson

impact you tomorrow: A tax- payer owns a multi-family unit that provides $45,000 in rental income per year with operat- ing expenses of $20,000. Due to faulty construction the roof needs to be replaced amount- ing to $30,000. What is the taxpayer’s profit or loss? Did you answer a $5,000 loss? If so, the Internal Revenue Service disagree. In this example, the taxpayer should be reporting a profit. In general, major repairs such as a replacement roof are considered capitalized expenses and are not to be expensed entirely in the year the cash

outlay was made, rather, the cost must be depreciated over a time as specified by the IRS. Why would this matter to a lender? The lender will view this rental property as having negative cash flow in year one when it should be reporting positive cash flow. Lenders will simply refuse to lend money to a taxpayer reporting losses, especially when trying to ob- tain financing for multi-unit properties. Using the above example, the taxpayer incor- rectly expensed the cost of the roof entirely in year one. The taxpayer effectively eliminated

the chance of obtaining any financing should they wish to purchase new properties. What steps can you take to- day to save income tax dollars, help maintain your good stand- ing with the IRS, and grow your chances of obtaining new financing? First, always con- sult a tax professional before making any of these decisions. Second, capitalize expenses when necessary. Third, con- duct a cost segregation report. The cost segregation report is designed to recover the cost of capitalized expenses quicker by allocating portions of the expenses to lower useful lives. Simply put, it saves income tax dollars sooner than later. In general, residential and com- mercial properties are depre- ciated using the straight-line method over 27.5 years and 39 years, respectively. However, when these properties are pur- chased the entire cost of the building is usually lumped in the 27.5 or 39 year depreciation method. Here is an example of the power of this report and why it should always be uti- lized: A taxpayer purchases a $450,000 residential property and allocates $412,500 to the 27.5 year pool, and treats the remaining portion of $37,500 as land, which is non depreciable. Currently, the taxpayer will receive a $15,000 depreciation deduction every year for the next 27.5 years. However, after the cost segregation report the taxpayer is informed that of the $450,000 property: $225,000 is 27.5 year property, $200,000 is 15 year property, and $25,000 is land. By utilizing the cost segregation report the taxpayer has correctly shifted $12,500 and $200,000 to a 27.5 and 15 year class. The cost savings have increased from a $15,000 a year deduction to approxi- mately $21,000. In addition to the tax savings the lenders will look favorably on the correct allocations of asset lives. In conclusion, reach out to a professional CPA advisor who specializes in real estate before you contact a bank for financ- ing. It could be the difference between being approved or declined. Timothy Torres is an ac- countant at The Green Group specializing in Real Estate. Ralph Anderson, CPA is a managing partner at The Green Group. n

task, but how can an indi- vidual bet- ter position themselves t o o b t a i n f i n a n c i n g while saving tax dollars? As CPA’s

Timothy Torres

we are often engaged in the loan process after a new cli- ent is denied a loan, instead of consulting with one first. Our initial review of the new client’s

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