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CenterPointe at Bridgewater, a 331,846 s/f, class A office park located in NJ American Real Estate Partners closes on $24.75m acquisition of office park
ISSUE HIGHLIGHTS Volume 27 Issue 8 April 24 - May 14, 2015
RIDGEWATER, NJ — American Real Estate Partners announced the acquisition of CenterPointe at Bridgewater, a four-build- ing, 331,846 s/f, class A office park located in Bridgewater, for $24.75 million. The 20+- acre property and its four brick and glass office buildings —1130, 1140, 1150 and 1160 Rte. 22 East — provide tenants with flexible, highly efficient office space, fitness and food amenities, a conference facility and on-site management in a landscaped campus environ- ment. “CenterPointe at Bridgewa- ter provides American Real Es- tate Partners the opportunity to bring strong management and asset enhancing skills to a very well-located and success- ful office park,” said American Real Estate Partners presi- dent, Brian Katz . “Bridgewa- B
stantial elevator, lobby and common area upgrades. With the campus now 54% leased overall, with two buildings 100% leased, American Real Estate Partners will launch a leasing campaign designed to attract tenants seeking the highest quality office space in the area, with signage opportunities, flexible floor plates, abundant parking, two, tenant-only fitness centers, se- cure access and close proxim- ity to an array of restaurants and retail including Bridgewa- ter Commons Mall, the Village at Bridgewater Commons and the celebrated main street town of Somerville. CenterPointe at Bridge- water is being acquired by a joint venture sponsored by a discretionary fund managed by American Real Estate Part- ners and is the Fund’s fourth investment. n family for several generations, as this developer did,” said Squires. “These buildings have historically high occupancy rates, in an extremely strong rental market. This was a rare opportunity.” Kislakwas engaged to repre- sent the owner on an exclusive basis in order to complete the disposition of family-owned multifamily assets over an extended period of several years. This sale represented a portion of a larger portfolio, consisting of seven Elizabeth apartment buildings. Kislak was granted marketing rights to this portfolio thanks to its longstanding relationship with the family. Jeff Squires joined Kislak in 2007 and specializes in the sale of multifamily and other investment real estate throughout northern New Jersey. He was named a vice president in 2009, becoming one of the youngest salespeople to earn that distinction in Kis- lak’s history. Today, he is one of Kislak’s leading producers. n
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CenterPointe at Bridgewater
ter is one of the best performing office submarkets in New Jer- sey and we intend to enhance the fundamental quality of this project and recent leasing momentum with strategically applied capital improvements
and a top quality leasing and management team.” American Real Estate Part- ners plans to invest $2.7 mil- lion in capital improvements to the office campus, from improved finishes to more sub-
Section C
Largest multifamily sale in Elizabeth, NJ since 2011 Kislak vice president Jeff Squires completes $5.27m multifamily sale in Elizabeth, NJ
For speaking and sponsorship information, please contact: Linda Christman at 781-871-3456 or lchristman@marejournal.com UPCOMING CONFERENCES 2015 SCHEDULE: MAY 5, 2015 NJ OFFICE SUMMIT JUNE 30, 2015 NJ COMMERCIAL RE FORECAST SUMMIT
ELIZABETH, NJ — The Kislak Company Inc. an-
nounced the recent sale of a three- b u i l d i n g mu l t i f am - ily portfolio with 62 units in Elizabeth f o r $ 5 . 2 7 million. Vice
Jeff Squires
First 33 Commerce Center
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Elizabeth, which is a 20-min- ute drive or 30-minute direct train ride to Manhattan, is a desirable area for renters and commuters. This particular portfolio of properties includes two and a half story garden apartments with onsite park- ing that were built in the 1960s. “Owners of garden apart- ments in coveted locations often hold real estate in the
president Jeff Squires rep- resented both parties in the transaction. The sale is the largest mul- tifamily sale in Elizabeth in terms of price since 2011 based on data available from CoStar. The properties are located on Morris Ave. and North Ave., and two of the properties are located across from Kean Uni- versity within close proximity of mass transit.
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Sanford Herrick, Managing Principal and Co-Founder, Case Real Estate Capital Harold Nafash , Senior Director of Acquisitions, Strategic Transactions Federal Realty H. Gabriel, Executive Vice President Capital Markets, Cushman & Wakefield NJ
Marta Person Villa, Vice President, CBRE Richard Burrow, Senior Principal, LANGAN
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Meet Our Speakers & Moderators
Jose R. Cruz, Senior Managing Director, HFF | New Jersey Speaker: 9:00 AM | Critical Capital Markets & Investment Strategies Jose Cruz is a Senior Managing Director in the New Jersey office of HFF with over 21 years of experience in commercial real estate. He specializes in invest- ment sales in New Jersey, New York State and Connecticut. Over the course of his career, Cruz has been involved in over $18.4 billion of office, industrial, retail, multi-housing and land sales. Cruz joined the firm in March 2010. Prior to HFF, he was the Executive Director of Cushman & Wakefield’s New York Area Invest- ment Sales Group where he spent more than 17 years. Cruz began his real estate career as a Real Estate Analyst at PaineWebber, UBS, Inc. Christopher M. Bellapianta, Director of Finance & Acquisitions, Advance Realty Speaker: 9:00 AM | Critical Capital Markets & Investment Strategies In his role as Director of Finance and Acquisitions, Christopher M. Bellapianta is responsible for sourcing, capitalizing, and closing acquisitions along with financ- ing and recapitalizing Advance’s development projects and operating properties. Throughout his commercial real estate career, Chris has been involved in more than $3.5 billion of real estate investments, including the acquisition of both debt and equity, with a focus on mixed-use development projects. Prior to joining Ad- vance, Chris was a Director at Madison Capital, where he was part of a small team that acquired in excess of $350 million of performing and non-performing senior and subordinate debt. Jonathan Schultz, Co-Founder and Managing Principal, Onyx Equities, LLC Speaker: 11:05 AM | The Future of Office Development As Co-Founder, Managing Principal, and Investment Committee officer of Onyx Equities, LLC, Jonathan Schultz oversees the organization’s investor capital rais- ing initiatives, strategic planning, portfolio management, and business develop- ment, as well as formulating overall investment strategy. In addition, Jonathan has shepherded the Receivership Services platform of Onyx Equities, which since its commencement, has fast become the largest of its kind in the tri-state area. Jonathan has been responsible for initiating and closing billions of dollars in leasing and commercial real estate sales and acquisitions during his career to date. Prior to forming Onyx Equities, Jonathan was Founder and President of The Schultz Organization. Adam Altman, Managing Member, KABR Group Speaker: 9:00 AM | Critical Capital Markets & Investment Strategies Adam Altman is one of three founding partners of The KABR Group an owner and operator of Real Estate and opportunistic buyer of real estate debt. Founded in 2008, The KABR Group specializes in acquiring assets from special servicers, financial institutions, global and regional banks. KABR group has current holdings approximating 3,500,000 square feet of office, Three thousand rental units, over 500,000 square feet of retail/ industrial and over 3,000,000 square feet of multi- family and retail construction projects. Altman is also involved with the manage- ment and leasing of the properties post acquisition. Valentina Rozanova, Senior Project Engineer, NJ Clean Energy Speaker: 10:10 AM | The Value of Tenant Improvements in Securing New Leases and Retaining Tenants Valentina Rozanova is a Professional Engineer and Senior Project Engineer with TRC Energy Services, the Commercial and Industrial Market Manager for New Jersey’s Clean Energy Program. She has over 6 years’ experience managing com- mercial, industrial, and multifamily energy efficiency incentive programs. She has overseen New Jersey’s Pay for Performance program since it started in 2008, as well as the Combined Heat and Power and Fuel Cell programs. Her other re- sponsibilities include providing technical support, managing program staff to successfully process applications and payments, as well as making continuous improvements to the programs to better serve the New Jersey marketplace. Len Savino, Principal, Langan Engineers Moderator: 11:05 AM | The Future of Office Development Leonard Savino has more than 25 years of experience in site/civil, geotechni- cal and demolition engineering for office developments for major corporations throughout New Jersey. He has recently supported projects for Panasonic and Biotrial in Newark and provides on-going consulting services for Celgene’s opera- tions in Summit. Savino’s knowledge of the overall project and an understanding of the requirements and regulations for office developments has made his team the go-to consultant for numerous office developers in New Jersey. Jerry L. Barta, Vice President and Director, Leasing and Market- ing, Alfred Sanzari Enterprises Speaker: 10:10 AM | The Value of Tenant Improvements in Securing New Leases and Retaining Tenants Jerry L. Barta, Vice President and Director, Leasing and Marketing, is responsible for overseeing all leasing and marketing activities related to Alfred Sanzari En- terprises’ entire commercial real estate portfolio. Prior to joining the company in 1994, he served as an owner’s representative, associate asset manager and financial analyst at several prominent real estate companies and lending institu- tions throughout the New York metro area. A graduate of Touro College with a Bachelor of Arts in accounting and political science, Jerry earned a Juris Doctor- ate with honors from the Benjamin Cardozo School of Law in New York.
Michael Bergman, Principal and President/CEO, Bergman Real Estate Group Speaker: 9:00 AM | Critical Capital Markets & Investment Strategies Michael joined Bergman Real Estate Group in 1991 and has over 25 of real es- tate investment and leasing experience. Michael is responsible for directing the Company’s acquisitions, overseeing the in-house leasing and marketing activities and managing the investor/client relations with its joint venture partners, lend- ers, and private investors. Bergman Real Estate Group’s office portfolio currently consists of 17 properties comprising 1.75 million square feet in New Jersey and Columbus, Ohio. Michael received a Master of Science degree in Real Estate Development and Investment from New York University, School of Continuing Education in 1993. Edwin Cohen joined Prism in 2003 as a principal partner after a 40-year career as one of the most prominent members of the real estate broker- age community. Cohen has completed hundreds of real estate transactions during his career in the Metropolitan New York/New Jersey/Connecticut area and has been responsible for leasing several million s/f of office space. Mitchell S. Berkey, Co-Chair, Real Estate Group, Chiesa Shahinian & Giantomasi PC Moderator: 9:00 AM | Critical Capital Markets & Investment Strategies Mitchell S. Berkey is Co-Chair of Wolff & Samson’s Real Estate, Development and Land Use Group. Mitch’s three decades of experience has seen him at the point on all aspects of real estate ventures and transactions on a local, regional and national basis, including acquisitions, sales, financing, development, leas- ing, management, loan workouts, and ownership restructuring. His business- oriented approach stems from his experience on both the legal and business ends of real estate. Joseph J. Sarno, Jr., Executive VP, CBRE’s East Brunswick Speaker: 8:00 AM| Market Update: An Evaluation of the OfficeMarket & What Tenants require today Joseph J. Sarno, Jr. joined CBRE’s East Brunswick office in 2011 as an Executive Vice President. He specializes in consulting and transaction services for corpo- rate accounts, office tenant representation, and landlord agency assignments. Mr. Sarno has over 30 years of commercial real estate experience in the Metro New York/New Jersey area, and during that time, has represented property owners as the exclusive leasing agent for more than 10 million square feet of space. Joshua Levering, Senior VP, NAI James E. Hanson Speaker: 8:00 AM| Market Update: An Evaluation of the OfficeMarket & What Tenants require today W. Joshua Levering, SIOR has been a commercial real estate broker and advisor for 30-plus years. Josh has been most active in the Northern New Jersey and tri-state region. Josh joined the NAI James E. Hanson team with the directive of adding depth to the firm’s leasing and investment activities in New Jersey and throughout the NAI international network (NAI Global). Josh oversees the firms Parsippany office, he is consistently been recognized as a top producer and has an outstanding reputation for understanding the many facets of the CRE indus- try. Josh has served as past president for the NJ Chapter of SIOR in 2009 and the Industrial and Office Real Estate Brokers Association (IOREBA) in 2012-2013. Edwin Cohen, Principal, Prism Capital Partners Speaker: 11:05 AM | The Future of Office Development
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ABDM Property Management................................29A American Architectural Window & Door.................1B Arrow Steel..............................................................17B Barley Snyder............................................................8A Bennett Williams.................................................. BC-C Berkadia...................................................................15A Bernardon Haber Holloway Architects..................20A Bohler Engineering. ..................................................7C Capitol Aerials.........................................................10B Case Real Estate Capital........................................23A Castle Lanterra Properties.....................................16A CCC Promotions........................................................3A Crystal Window & Door Systems.............................5B Earth Engineering.....................................................4C Elisa B. Cohen & Associates.....................................4B Environmental Strategies & Applications.............19A Fowler. .....................................................................19B Friedman LLP. ........................................................14A Gebroe-Hammer Associates......................................8B Gerard Construction Corp.. ....................................13C Hollenbach Construction...........................................3B Hutchinson Mechanical Services............................11B Integrated Business Systems. ..................................3B Investors Real Estate..............................................29A IREM...............................................................20-IBC-B Jewel Electric...........................................................10B Kaplin|Stewart.......................................................12A Kay Realty Services.......................................... 29A, 5C Keast & Hood.............................................................3A Levin Management................................................ 8-9C Lindy Communities.................................................13B Lundt Combustion Systems, Inc.............................15B M&T Realty Capital Corp.........................................4A M. Miller & Son.........................................................6B Manko Gold Katcher & Fox....................................14B Marcus & Millichap......................................29A, BC-A Meridian Capital Group............................................9A Michael Cervelli Real Estate..................................11A Mill Creek Residential. ...........................................22A NAI Summit.............................................................29A NAI Mertz................................................................13A New America Power................................................13B NJAA................................................................. 7B, 19B P. Cooper Roofing. ................................................ BC-B Poskanzer Skott Architects.......................................2B Premier Compaction Systems.................................16B Pro-tech Energy Solutions. .....................................12B RD Management.................................................. IC-1C Real Property Capital................................................6A Regal Bank...............................................................10A Rittenhouse Realty Advisors. ...................................7A SaxBST.....................................................................25A Silbert Realty & Management Co...........................14C Stark & Stark............................................................2C SUBWAY....................................................................6C The Azarian Group..................................................15C The Henley Group...................................................27A Transwestern...........................................................17A USGBC.....................................................................18B Warner Real Estate & Auction Co..........................26A Weiss Realty. .............................................................3C Whitesell....................................................................2B MAREJ A dvertisers D irectory To advertise, call 1-800-584-1062
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M id A tlantic R eal E state J ournal Publisher .................................................................Linda Christman Publisher ....................................................................Joe Christman Section Publisher .........................................................Steve Kelley Senior Editor/Graphic Artist ..................................... Karen Vachon Production Assistant ........................................................ Julie King Associate Publisher ................................................. Alissa Aronson Associate Publisher .............................................. Barbara Holyoke Office Manager .........................................................Joanne Gavaza Guest Columnists ................. Michael Oliver, HFF; Glenn Ebersole, Hollenbach Construction 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. Rockand, MA 02370 USPS #22-358 | Vol. 27 Issue 8 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
ARAMUS, NJ —There is an emerging trend in the medical indus- try—independent physicians and practices are consolidat- ing into larger group prac- tices. This direction boasts a win-win for physicians, who benefit from the reduction in overhead, and for patients who appreciate the added convenience. Rather than patients trav- eling to physicians’ offices scattered throughout differ- ent towns or counties, local health care providers are re- alizing that consolidating practices and specialities un- der one large roof can reduce costs and provide a better patient experience. David Hirschman , president of David Hirschman Realty Company , understands the value proposition and has been assisting physicians and landlords in Bergen County, NJ with their mutual objec- tives. In fact, over the past four years, David Hirschman Realty has leased 127,000 s/f of medical space ($27 million value) in Bergen County for practices who choose to co- exist. “There is a golden opportu- nity for local medical profes- sionals, during this challeng- ing economic climate, to pool their resources, share office space and provide a more pro- fessional, full-service, one-stop practice for their patients,” said Hirschman. Full service medical buildings often cater to a wide array of patients’ needs—from office visits and physicals, to imaging, tests, and bloodwork. In addition, the consortium may include specialists such as internists, cardiologists, plastic surgeons, gynecologists, gastrointestinal specialists and more. Hospi- tals are also seeing the value in buying practices, which al- lows them to offer a variety of specialists in one location, and smaller physicians’ practices gain added clout with insur- ance companies because of their hospital affiliation. The real estate business is constantly evolving and be- coming more effective. Smaller medical offices are choosing to merge with larger, more P Consolidation of medical offices: A win-win trend for physicians and patients David Hirschman
efficient practices and some larger medical businesses are looking to expand and acquire interested smaller practices. In addition to saving on leas- ing expenses, physicians are able to streamline services such as insurance, billing and administration, while better accommodating their patients. A prime example is the office building that Forest Healthcare purchased at 277 Forest Ave., Paramus, now an affiliate of Hackensack Uni- versity Medical Center. David Hirschman Realty Company connected the physicians with investors and structured the agreement with the partners of the practice. Hirschman also manages the property and the leasing agreement. Today it is a profitable build- ing for the group. Dr. Morey Menacker, a practicing physi- cian and investor, said: “David Hirschman listened carefully to my needs and found the perfect location, negotiated the lease, and assisted in monitor- ing the construction. After a few years, David and I dis- cussed purchasing the build- ing. The practice had grown and there were six physicians. Physicians, in general, are hesitant to invest their own money, and these physicians were unable to access suf- ficient funds to purchase the building alone. David was able to allay their fears and gather a group of silent inves- tors to join the physicians in the purchase. It is now almost ten years later and all parties are thrilled with the return on investment. David has also provided the management for the building, at a lower price than I could get commercially.” A d d i t i o n a l l y , D a v i d Hirschman Realty Compa- ny arranged an agreement
with Englewood Orthopedic Associates, 401 South Van Brunt St., Englewood, to sell 15,000 s/f of office space to a combination of investors and doctors. Initially, 30% of the space was empty and 70% was leased. The new owners decided to install an elevator large enough to accommodate a stretcher with the goal of leasing the available space. The owner, working closely with David Hirschman Realty, attracted a surgical center, dermatologist, urologist and plastic surgeon, and filled the building. According to Michael Rappaport, a building inves- tor: “We worked together with David Hirschman Realty for the past 14 years on the Engle- wood medical space. David Hirschman Realty managed the building and brought in more than 20 tenants. David’s legal background was instru- mental in getting the leases done. He has patience and helps negotiate legal terms. What is good for the client is good for the landlord and he bridges that gap very well.” “Medical office consolidation is an effective and efficient re- sponse to the financial squeeze many healthcare providers are feeling in today’s mar- ket,” said Hirschman. “It’s important, though, for medi- cal professionals to work with a Realtor who understands their business, objectives and budget so they can find the “right fit” when consolidating. An experienced commercial Realtor should streamline the process by bringing a wealth of contacts, familiar- ity of the marketplace and office space recommendations. Then, the newly consolidated and streamlined office space will certainly benefit the phy- sicians and their patients.” n
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M id A tlantic R eal E state J ournal By the Commerce and Industry Association of NJ NAI Mertz selected as a “Champion of Good Works”
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The CIANJ is a statewide business advocacy organization based in Paramus. The associa- tions asked businesses to tell stories of their good works and more than 85 responses were given. A panel of judges reviewed all the submissions and select- ed 31 champions. The judges included: Cathleen Davey, executive director of the Ra- mapo College Foundation, John Galandak, president of the CIANJ, Jackie Lue Raia, assistant director of the NJ Sharing Network, Cindy Myer, the owner of Ridgewood Moving Service, Jacey Rai- mondo, executive director of the Habitat for Humanity of Bergen County, Judi Stewart, an ambassador with the CIANJ Human Resources Council, and Tom Toronto, president of Bergen County’s United Way. Along with the champion, the CIANJ also honored a family- owned Midland Park men’s clothing store for its “Extraor- dinary Good Works.” Over the past five years, Sal Lauretta for Men organized a fashion show and raised more than $460,000 for Eva’s Village, a social ser- vice agency in Paterson. n
ACKENSACK, NJ — NAI Mertz was recent l y named a
“Champion of Good Works’’ by the Commerce and In- dustry Association of New Jersey (CIANJ) at its recent Chairman’s Reception saluting corporate philanthropy. More than 200 business ex- ecutives attended the gala reception at the Stony Hill Inn in Hackensack. Martin Kafa- fian , chairman of the CIANJ board of directors, presented the trophies to 31 businesses. “For most of these companies their donations, kindness and community outreach are part of their corporate culture -- their mission,” said Kafafian, “The public at large is often unaware of the magnitude and scope of the good works. This reception is our way of shining a spotlight on “Companies that Care.” NAI Mertz was recognized for its extraordinary volunteer efforts with Build Jake’s Place, an organization in memory of “Baby Jake,” who left the world all too soon from a rare cardiac medical condition. The organi- zation helps to design and build specially designed boundless playgrounds that allow children
The source for commercial real estate news in the Mid Atlantic Area. R EAL E STATE J OURNAL
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Jonathan Klear (left) and Martin Kafafian
and adults of all abilities to play and interact together, regard- less of physical limitations. NAI Mertz has participated in many volunteer efforts to raise money for the first Build Jake’s Place playground in Cherry Hill, NJ, as well as the second playground, which is set to be built in Delran, NJ. NAI Mertz participates in many fundrais- ing events for the organization, including a 5K race last fall in which Jonathan Klear , vice president, finished tenth in the race. In addition, NAI Mertz’s Fred Meyer , vice president and director of corporate ser- vices, is a board member of Build Jake’s Playground.
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M id A tlantic R eal E state J ournal Technology workshops, speakers & awards program CORFAC International holds Spring Conference
M Issue: May 29th, 2015 DeaDlIne: May 15th For more information please contact Linda Christman: 781.871.5298 x 203 lchristman@marejournal.com Or contact your account executive DON’T MISS IT! Call 800-584-1062/781-871-5298 for more information Issue: May 30th, 2014 | DeaDlIne: May 16th For more information please contact Elaine Fanning 1-800-584-1062 x 212 | efanning@marejournal.com For more inf rmation please contac Elaine Fan ing 1-800-584-1062 x 2 2 | efanning@marej urnal.com Mid Atlantic R EAL E STATE J OURNAL ’ S A NNUAL S POTLIGHT Industrial & Distributions Centers Mid Atlantic R EAL E STATE J OURNAL ’ S A NNUAL S POTLIGHT dustrial & Distributions Centers InDustrIal anD DIstrIbutIon Centers APPEARING MAY 25 - DEADLINE MAY 18, 2012 PPEARING MAY 25 - DEADLINE MAY 18, 2012 DON’T MISS IT! Call 800-584-1062/781-871 5298 for more information Issue: May 30th, 2014 | DeaDlIne: May
IAMI, FL — COR- FAC Internation- al president Scott
Savacool, CCIM, SIOR , announced that the commer- cial real estate association’s Spring Conference in Miami March 4-7 was a resounding success with solid networking and relationship-building, ex- cellent technology workshops, best practice sessions, guest speakers and an awards pro- gram honoring the top joint transactions from 2014. Keynote speaker Lawrence Yun, Ph.D. , from the Na- tional Association of REAL- TORS , predicted that fixed- h
(L-R) Jeff Graham(past president) presided over the swearing in ceremony of CORFAC’s new 2015 executive officers: Ray Lyons (treasurer), John Homsher (VP), Scott Savacool (president) and Lou Suski (secretary).
rate residential mortgages would rise to about 6% by 2016 and that inflationary pressure is coming from rising apartment rents – 3.5% to 4%
annually, which is ahead of the Fed’s inflation target of 2% to 2.5% for the overall economy. Dr. Yun also forecasted that oil will hover in the $60s a barrel longer than most economists are predicting – for 3-5 years. Technology Highlights: • Patrick Fowler of ESRI and Gary Ralston, CCIM , of the CCIM Institute , pre- sented demonstrations of some of the top technology tools in the industry. Conference spon- sors Buildout , Realcore and RealNex also demonstrated their applications. • Phill Tomlinson , a broker with Commercial Proper- ties Inc. /CORFAC Interna- tional in Tempe, AZ, put on a highly informative talk on how to maximize social media tools in commercial real estate. Best Practices workshops: • Duncan Pat t er son , CCIM , a founder of Patter- son Woods /CORFAC Inter- national in Wilmington, DE, has developed a core expertise helping longtime owners of commercial property unwind their investments and pre- sented “Alternative Disposi- tion Strategies using Chari- table Giving.” • Sandy Shindleman, CCIM, FRICS, SIOR with Shindico/CORFAC Interna- tional in Winnipeg presented on“HowtoSucceed inBusiness.” International Committee update: CORFAC welcomed a new affiliate from France ( BG Carré /CORFAC Inter- national). At the awards function, Mason and Jason Capitani were recognized for their firm’s 50th anniversary ( L. Mason Capitani /CORFAC Interna- tional, based in Troy, MI), as was Mike Boyd , principal and founder of the Houston, TX firm, Boyd Commercial / CORFAC International. Boyd won the Texas Association of REALTORS William C. Jen- nings Award for the Most Out- standing Real Estate Transac- tion in Texas in 2014. n
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Chris Cervelli Michael Cervelli Real Estate
Mark Duszak Rittenhouse Realty Advisors
Stephen Fauer ESA
Jeremy Frey Barley Snyder
David Goldfisher The Henley Group
Jon Leifer CASE Real Estate Capital, LLC
R. Brenner Green Real Property Capital
Michael McCloskey Bernardon Haber Holloway Architects
Matt McDonough Transwestern
Michael Mongelli SaxBST
Russell Tepper Mill Creek Residential
Richard Warner Warner Real Estate & Auction Co., Inc.
David Orbach Regal Bank
Elie Rieder Castle Lanterra Properties
Joshua A. Steinberg Kaplin Stewart
Jeffrey Sloan NAI Mertz
Mortgage R. Brenner Green, Real Property Capital, Inc................................... 6A Multi-Family Sales Mark Duszak, Rittenhouse Realty Advisors...................................... 7A Property Tax Jeremy D. Frey, Barley Snyder......................................................... 8A Multi-Family Lending David Orbach, Regal Bank. ........................................................... 10A Multi-Family Chris Cervelli, Michael Cervelli Real Estate, LLC........................... 11A Real Estate Law Joshua A. Steinberg, Kaplin Stewart.............................................. 12A SNJ Retail Jeffrey Sloan, NAI Mertz . ..........................................................13A Multi-Family Aquisitions Elie Rieder, Castle Lanterra Properties........................................... 16A
Office Market Matt McDonough, Transwestern.................................................... 17A Environmental Stephen E. Fauer, ESA.................................................................. 18A Architecture/Multi-Family Michael S. McCloskey, Bernardon Haber Holloway Architects ......20A Multi-Family Development Russell Tepper, Mill Creek Residential ........................................22A Finance Jon Leifer, Case Real Estate Capital, LLC ..................................23A Taxes & Accounting Michael A. Mongelli, SaxBST .....................................................24A Auction Richard Warner, Warner Real Estate & Auction Company............. 26A CMBS Loans David Goldfisher, The Henley Group, Inc ....................................27A
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6A — April 24 - May 14, 2015 — Spring Preview — M id A tlantic
Real Estate Journal
M ortgage
By R. Brenner Green, Real Property Capital, Inc. The current commercial mortgage market
I
f you ask pretty much any borrower, lender or broker what they
couple of new products over the last three to six months designed to compete directly
the last several years has endured beyondmost every- one’s expectations. This is great news for commercial real estate markets not only on a macro level (just look at the price of almost any REIT stock over the last five years), but for smaller time individual investors and de- velopers as well. However in many respects, things are notably different than they were last time around and it is worth taking a mo- ment to contemplate some of these differences the next time you are in the market
for financing. First and most impor- tantly, even as an experi-
array of options right now for just about any property that demonstrates strong
t h i n k o f the financ- i n g ma r - ke t the s e day s , t he resounding reply is that there is a lot o f capi ta l out there.
“There is a healthy and diverse array of options right now for just about any property that demonstrates strong cash flow, with banks, life companies, CMBS and the GSE’s competing for business.”
R. Brenner Green
with some of the other mar- ket segments to whom they have been losing business. Additionally, a number of balance sheet lenders tied to private equity shops and hedge funds have rolled out alternate permanent loan programs designed to com- pete with CMBS but with more flexible terms on legal structure and prepayment penalty. In the world of commer- cial banking, the effects of increased regulation, primarily in the form of the Dodd-Frank Act, are having far reaching effects and creating unexpected consequences. Lenders from institutions that might con- sider themselves to be direct competitors often look at the same deal and come back with wildly differing quotes, and for reasons that it would have been impossible to pre- dict beforehand. Therefore, it pays to shop around. The overwhelming majority of time, we are finding a deal that exceeds the expectations of the cli- ent based on what we origi- nally said we could do. But it takes turning over more rocks that one might expect in what feels on the surface like an “easy money” envi- ronment. This is very much unlike how things were before the recession, when lenders tended to quote right on top of one another and it felt a little bit like a popularity contest. So if you are not getting the answer you are looking for from your lender or broker, turn over more rocks until you do, and it will be worth it in the end. R. Brenner Green is a 15 year veteran in com- mercial real estate fi- nance and president of Real Property Capital, Inc., a full service com- mercial mortgage bank- ing firm based in the Philadelphia suburbs. n
enced mortgage banker it is becoming difficult to predict which lender will win the bid on the most routine fi- nancing assignments. There is a healthy and diverse
cash flow, with banks, life companies, CMBS and the GSE’s competing for busi- ness. Notably with respect to the GSE’s, Fannie and Freddie have rolled out a
All sectors of the capital markets are now firing on all cylinders and the historic low rate environment that we have experienced over
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Real Estate Journal — Spring Preview — April 24 - May 14, 2015 — 7A
M id A tlantic
M ulti -F amily S ales By Mark Duszak, Rittenhouse Realty Advisors 2015 Multi-Family prices will outshine 2014 prices
L
sell their spacious suburban homes in order to downsize and eliminate the need for home up- keep and maintenance. These empty-nesters are willing to pay high premiums for higher quality product in desirable locations. Additionally, 55 plus communities are offering these renters high-end finishes and luxury amenities. Construction in major metro- politan areas continues to move at full speed. Philadelphia developers are hard at work to keep up with the demand for high-quality rental units. Current renters are paying
2015 bull market. Sellers will be able to exit with high prices and buyers will be able to ex- ecute with low interest rates. Rittenhouse Realty Advisers can offer strategic advice on developing a plan that fits your Multi-Family goals. Rittenhouse Realty Advisors is a Philadelphia, PA based real estate advisory firm with an extensive focus in the broker- age of multi-family communi- ties throughout the Northeast region of the United States. Mark Duszak is a director at Rittenhouse Realty Advi- sors. n
ast year, Rittenhouse Realty Advisors pre- dicted 2014 Multi-Fam-
i l y p r i c e s w o u l d i n - crease from 2 0 1 3 . W e believe this t r e n d w i l l continue in 2015. The Tri- State region experienced
Bloomsburg Portfolio
Mark Duszak
strong sales velocity last year. The high demand for Multi- Family product resulted in record per-unit pricing for the region in 2014. In 2014, Rittenhouse Realty Advisors sold north of 2,100 apartment units representing more than $137 million in con- sideration. Examples of garden- style apartment sales include: Lancaster Court – 320 Units in Wilmington, DE, Washington Crossing Apartments – 108 Units in Allentown, PA and Linden Court Apartments – 80 units in Northeast Philadel- phia. Examples of student housing sales include: The Bloomsburg Portfolio – 147 units in Bloomsburg, PA and The Metropolitan at Overbrook – 222 beds master leased to St. Joseph’s University in Phila- delphia. Record breaking price per unit sales were seen in the Center City, Suburban Phila- delphia, Lehigh County, New Jersey and Delaware markets. Why do Multi-Family prices continue to shine? It is evident that the profile of the typical renter has changed considerably in the last few years. “Millennials,” who expe- rienced living through the hous- ing crisis, do not prioritize home ownership like the generations before them. A report released by the Joint Center for Hous- ing Studies entitled "America's Rental Housing: Evolving Mar- kets and Needs," states that the share of U.S. households turning to the rental market to meet their housing needs rose over the last decade, bringing the total number of renters to 43 million by early last 2013. Additionally, an astonishing 50% of renters pay more than 30% of their income for hous- ing. With more than 30% of their income going toward rent, it will be very challenging for these serial renters to save for a down payment toward home ownership. “Baby Boomers” are continu- ing to gain a larger presence in the rental pool as many
as much as $3/sf to live in the city of Philadelphia, where they can have walking access to restaurants, night life and entertainment.
Multi-Family owners, in- vestors and developers will continue to prosper in 2015 and both sellers and buyers will be able to capitalize on the
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Corey Lonberger, Managing Partner corey@rittenhouserealty.com
Mark Duszak, Director mark@rittenhouserealty.com
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RCA Sources Financing for the Full Range of Commercial Real Estate Asset Types: Retail, Office, Industrial, Healthcare, Hospitality, Multi-Family, Development, Special Purpose, Senior Apartments, Student Apartments, Mixed-Use & More!
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For information visit www.RittenhouseRealty.com or call (215) 454-2852
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8A — April 24 - May 14, 2015 — Spring Preview — M id A tlantic
Real Estate Journal
P roperty T ax By Jeremy D. Frey, Barley Snyder Property tax assessments: Should you appeal?
W hile a recovery is underway for the commercial real es-
expense through tax appeals. In Pennsylvania, property owners can appeal their taxes every year, often at little to no net cost, and perhaps signifi- cantly reduce their tax burden. In Pennsylvania, a prop- erty’s tax assessment forms the basis for all of the real estate taxes. The assessment is established by the County once every few years and remains fixed as property values move up and down. If the assessment is too high, the taxes are too high as well. The assessment will remain the same until the property is
changed (improvements are added or removed), the County undergoes a County wide reas- sessment, or an appeal is filed so if the taxes are too high, it can add up quick. County wide reassessments do not occur often. If you lower your as- sessment, you will lower your real estate taxes until the next County wide reassessment occurs which could be many years. Reducing your assess- ment can make your project more competitive in the mar- ketplace if your competition is assessed above market value. The amount of costs involved
in the appeal are often far less than the total savings you will receive if the appeal is success- ful. In most cases, the only costs are an appraisal of the property and legal fees. So how do you challenge your tax assessment? The process is started by filing an appeal to the County Board of Assessment Appeals. The Board will review the assess- ment and determine if it is too high. For a successful appeal, you will typically need a recent appraisal of the property. If the Board’s decision is not satisfactory, an appeal can be
filed with the Court of Com- mon Pleas. Keep in mind that any re- duction in the assessment will most likely result in tax savings not just in the year in question but in future years as well. While in general you can- not receive a refund for past taxes paid if your assessment is too high, your assessment will be reduced for future years which will save you money. To determine how much savings you could receive, determine your local millage rates and multiply those by the differ- ence between the current as- sessment and what you believe the assessment should be and you can determine the savings for one year. For example, if the combined millage rates in your municipality (School, County and Municipal millage rates) are 25 mills (or 2.5%), you would save $250 for every $10,000 that you reduce your assessment. If you believe your assess- ment is too high you should touch base with an attor- ney who can help lower your assessment and lower your taxes. Jeremy D. Frey is a part- ner at Barley Snyder. He focuses his practice in the areas of planning, negotia- tion and execution of busi- ness and real estate trans- actions, real estate develop- ment, land use and zoning matters, real estate assess- ment appeals, business and real estate financing, and business planning. 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 Publisher/CEO Linda Christman lchristman@marejournal.com Section Publishers Alissa Aronson araonson@marejournal.com Spring Preview
tate market, everyone is still looking for ways to cut expenses. Real estate t axe s r ep - resent one of the most s i gni f i cant
expenses of commercial real estate and while many own- ers and developers consider them a fixed expense, there is often opportunity to lower that Jeremy Frey
We know Real Estate Our dedicated real estate attorneys provide comprehensive legal services to assist clients in every stage of the real estate transaction. We regularly represent developers, businesses, public entities and individuals. Listed as a 2015 Harrisburg Tier 1 firm in five practice areas, and Tier 2 firm in two practice areas.
• Negotiation • Due diligence • Permits & Approvals • Title insurance • Entity formation • Settlement • Tax assessment appeals
Barbara Holyoke bholyoke@marejournal.com Section Editor Julie King editor@marejournal.com
Lancaster York Reading Hanover Malvern Hunt Valley www.barley.com @barleysnyder
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