4-22-22

ISSUE HIGHLIGHTS Volume 34, Issue 4 April 22 - May 19, 2022

EWARK, NJ — One- Wall Communities announced the $30 N Multifamily rental properties totaling 191 units located in Newark, NJ Onewall Communities sells workforce housing portfolio totaling $30 Million

SPOTLIGHTS

million sale of a 191-unit port - folio of two multifamily rental properties in Newark, NJ. The properties, located at 103 Chancellor Ave. and 25 Van Velsor Pl. in the Weequahic neighborhood of Newark, were acquired by OneWall from 2017 to 2018. These market-rate apartments are conveniently lo - cated between I-78 and Rte. 22, minutes from the burgeoning business district downtown and in proximity to transit options and employment opportunities. OneWall repositioned and upgraded the properties with common area improvements, physical plant upgrades and in-unit renovations. The assets are largely com - prised of one- and two-bedroom apartments with rents well below competing properties in the market, offering a unique opportunity to implement a value-add capital improvement

SPRING PREVIEW

3-12A

FINANCIAL DIGEST

13-16A

103 Chancellor Avenue

25 Van Velsor Place

kets in regions with abundant employment opportunities,” said Nate Kline, a OneWall partner and chief investment officer. “Shifting demographic trends have created significant opportunities for attractive real estate investment returns throughout the East Coast.” CBRE Institutional Prop- erties represented OneWall Communities in both the New - ark and East Orange transac - tions, while also helping secure a buyer in both cases. MAREJ roster of tenants. The buyer recognized the highly sought-after property’s potential as an exceptional investment opportunity. Im - pressed by the combination of the property’s flexible spaces, proximity to New York City, and stability offered by the current tenant roster, the buyer saw the property as an ideal acquisition in the boom - ing industrial market. “This deal further under - scores our team’s ability to represent the interests of sell - ers by showcasing properties’ full value to enable our clients to take advantage of the high demand for versatile and centrally-located industrial spaces across the state,” said Somple. “We look forward to continue leveraging our local relationships and exceptional market expertise to help our clients find value for their properties in the increasingly competitive northern New Jersey market.” MAREJ

program. In total, 103 Chancel - lor Ave. is six stories with 108 units, while 25 Van Velsor Pl. is five stories with 83 units. OneWall owns and operates properties throughout the East Coast. The sale of 103 Chancel - lor Ave. and 25 Van Velsor Pl. comes on the heels of OneWall’s $97 million acquisition of a 459-unit garden-style apart - ment complex in Temple Hills, MD, in February, and a $53 million sale of a 301-unit hous - ing portfolio in East Orange in

January. OneWall also recently ac - quired Oak Grove Apartments & Townhomes, a 17-acre, 259-apartment, 88-townhome rental property and Hopkins Point, a 39-acre, 524-unit rent - al property – both in Middle River, MD. “OneWall correctly identified long-term growth trends in the Newark market when we ac - quired these assets, and we are excited to continue our invest - ment focus in suburban mar -

11B Admits Three New Partners

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Somple of NAI James E. Hanson negotiates sale of 132,135 s/f industrial/flex complex in Clifton, NJ

CLIFTON, NJ — NAI James E. Hanson an- nounced it has negotiated the sale of a 132,135 s/f in- dustrial/flex complex at 65-75 and 125-127 Kingsland Ave. in Clifton, N.J. NAI James E Hanson’s Andrew Somple, SIOR , represented the seller, 1913 Realty Associates LLC.

Directory ROP (Front Section) ........................................... Section A Spring Preview........................................................ 3-12A Financial Digest..................................................... 13-15A Retail Development Reimagined. .......................... 17-19A CRE Organization’s Events Calendar ............................ 20A DelMarVa................................................................... 21A Billboards & Business Card Directory.......................... 23A New Jersey.............................................................. 1-12B Pennsylvania........................................................13-BC-B Owners, Developers & Managers....................... Section C www.marej.com

Kingsland Ave.

The plaza on Kingsland Ave. boasts 57,000 s/f and 68,000 s/f industrial /flex buildings situated on 6.23 acres of land. Conveniently located at the intersection of Routes 3 and 21, this prop - erty’s central location allows for near-immediate access to New York City as well as a plethora of the region’s major transportation arteries, in -

cluding the NJ Turnpike and the Garden State Parkway. In addition, the buildings fea - ture mezzanine office space with a total of 19 tailgates and four drive-ins, as well as expansive on-site parking with over 200 spaces. Further highlighting its excellent investment value, the nearly fully leased complex is also home to an impressive existing

Inside Cover A — April 22 - May 19, 2022 — M id A tlantic Real Estate Journal

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2A —April 22 - May 19, 2022 — M id A tlantic Real Estate Journal

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M id A tlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Publisher ........................................................Joe Christman Conference Producer ............................... Jordaan Van Oort Editor/Graphic Artist ......................................Karen Vachon Contributing Columnist .................................... Phil Kelley Jr. Mid Atlantic R eal E state J ournal ~ Published Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 117 HMS Halsted Dr., Hingham, MA 02043 USPS #22-358 | Vol. 34, Issue 4 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 www.marej.com

Phil Kelley Jr.

Why In-Person Interaction Remains Critical In The Age Of Remote Work

ot long after the CO- VID- 19 pandemi c forced a shift to re-

mote work, the internet secu- rity research firm Twingate conducted a national survey to find out what workers missed most about going to the office. Heading the list: “Social connections,” followed closely by “human contact in general.” Those answers aren’t sur - prising to Phil Kelley Jr., author of Presence and Prof- itability: Understanding the Value of Authentic Commu- nications in the Age of Hyper- Connectivity . “Interactions with other people are essential to human beings and those interactions significantly affect our state of mind,” said Kelley, who is also president and CEO of Salem One, a company that special- izes in direct marketing, pack- aging, printing and logistics. “We were built to interact, to socialize, to gather and sort ourselves into social groups.”

Kelley understands the need and advantages of flexible remote-work schedules. He just worries that if remote work isn’t handled correctly – and if trends continue such as hot-desking policies where no one is assigned a permanent workspace at the office – the big loser will be corporate culture. And when culture suffers, so does the entire enterprise. “It’s well established that a great organizational culture – one where people feel engaged, connected, purposeful – helps achieve financial success,” Kel - ley said. “This is because the attitudes of the people in an

continued on page 16A “Unfortunately, building and maintaining good internal relationships gets more diffi - cult when those relationships are mediated by technology via email, texts, phone calls or video calls,” Kelley said. While some communication organization ultimately reach and affect customers. To put it simply, satisfied employees tend to foster satisfied customers.” Developing A True Connection That’s why it’s important to promote the development of authentic connections and good relationships within a company, he said.

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.

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Contact: NEIL A. STEIN • nstein@kaplaw.com 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-941-2469 • kaplaw.com Other Offices: • Cherry Hill, NJ 856-675-1550 • Philadelphia, PA 215-567-3120 Kaplin Stewart A t t o r ne y s a t Law

M id A tlantic Real Estate Journal —April 22 - May 19, 2022 — 3A

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Mid Atlantic R eal E state J ournal ’ s S pring P review

Carlo Batts, MAI Rittenhouse Appraisals

Jamie Cutler M&T Insurance Agency, Inc.

Tom Delark M&T Insurance Agency, Inc.

Shannon Christie PECO

Jonathan Glick Sheldon Gross Realty

Shannon Kaplan, PE AKF Group

Todd C. Monahan WCRE l CORFAC International

Neil Andrew Stein, Esq. Kaplin, Stewart, Meloff, Reiter & Stein

Michael Mullin IBSRE, Inc.

Inside: Shannon Kaplan, PE, AKF........................................................................................................... 4A Exchange Solutions. .................................................................................................................. 5A Todd C. Monahan, WCRE l CORFAC International.................................................................... 6A Michael Mullin, IBSRE, Inc.......................................................................................................... 7A Carlo Batts, MAI, Rittenhouse Appraisals................................................................................... 8A Neil Andrew Stein, Esq., Kaplin, Stewart, Meloff, Reiter & Stein.................................................. 9A Shannon Christie, PECO.......................................................................................................... 10A Jamie Cutler and Tom Delark, M&T Insurance Agency, Inc.................................................... 11A Jonathan Glick, Sheldon Gross Realty..................................................................................... 12A

4A —April 22 - May 19, 2022 — Spring Preview — M id A tlantic Real Estate Journal

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C onsulting E ngineer

By Shannon Kaplan, PE, AKF Group The Pandemic’s Influence on the Energy and Carbon Conversation

was down. The shift to sup - porting some staff in offices while others are remote has resulted inmore energy being used overall and an increased need to focus on energy ef- ficiency and sustainability. Several major cities on the east coast have approved leg- islation around energy and carbon including New York City (Local Law 97), Boston (BERDO 2.0), andWashington, A.C. (Omnibus). Other major cities, such as Philadelphia (Building Energy Performance Program), are pushing require- ments for building tuning and

s the world sorts out how to move forward with continued un-

around fresh air quantities and filtration are still fluctu - ating. Over the next year, as people become more comfort- able living with COVID-19, it will be interesting to see how many of these changes remain and which disappear as we readjust to life and once again mingle with others. During the start of the pandemic as people tran- sitioned to working from home, energy use in many commercial buildings did not drop as expected—computers and other equipment were still plugged in, HVAC was

still running, and lights got turned on for the few people still coming into the office. Meanwhile, higher energy usage resulted at the homes of individuals working re- motely. As companies started returning to the office, focus quickly turned to ensuring healthy indoor environments and a demand for additional outdoor air. However, this came at an energy cost. Con - ditioning more fresh air led to increased energy usage for HVAC systems, even though fewer people were in offices and occupant density

a section of the MARE Journal Phone: 781-740-2900 www.marej.com S ection P ublishers Linda Christman lchristman@marejournal.com Lea Christman lea@marejournal.com S ection E ditor Karen Vachon editor@marejournal.com Fall Preview The current war in Europe has also highlighted how frag- ile the world energy market is and how interconnected it has become. For the first time in a long while, energy and fuel prices have rapidly increased. This spike further drives the urgency of focusing on how to achieve our needs with less en- ergy. In the coming year, con - versations around renewable energy, building electrifica- tion, and decarbonization will likely become more common. COVID-19 is expected to reach endemic status this year and we will continue sorting out what life looks like in the wake of all the rapid change the pandemic brought. It will be interesting to see which focuses and changes remain, and which disappear. Will the corporate workforce stay hybrid now that we have proved technology allows its success? Will restaurants and other service industries rebound? Will demand for lab and research space remain high? Each of these questions has potential to increase our energy demand if we do not find a way to rethink where we are using energy and where it is no longer needed. As we establish new norms in 2022, expect those conversations to continue to be at the forefront. Shannon Kaplan, PE is a partner and sustainability champion at AKF . MAREJ energy auditing. In addition to regional regulations and requirements, corporations are also stepping up their focus on energy and carbon reductions. These goals are pushing the market to explore new technol- ogies and rethink strategies to create comfortable spaces that support our heavy technology needs, while doing so with a lower impact to our planet.

c e r t a i n t y r e g a r d i n g COV I D - 1 9 and radically altered cor- porate work- p l ac e s , we are still see- ing dramatic shifts in the

Shannon Kaplan

market. In the corporate world, our thoughts on who needs to be in the office, how much distance we keep between people, and our expectations

Creating flexible spaces that inspire people as they live, learn, work, heal, and explore akfgroup.com

M id A tlantic Real Estate Journal — Financial Digest — Spring Preview — April 22 - May 19, 2022 — 5A 1031 E xchange

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6A —April 22 - May 19, 2022 — Spring Preview — M id A tlantic Real Estate Journal

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P ennsylvania B roker

By Todd C. Monahan, Executive VP&Managing Director of WCRE / CORFAC International Center City Philadelphia and the return to office

s the Covid Pandemic begins to subside, many questions about how

is designed, perhaps providing fewer dedicated offices and workstations? Or instead, will employers create more open, collaborative dynamic spaces, knowing most of the heads down quiet work will be per- formed at home or elsewhere? How do HR departments create policies and solutions allow- ing them to recruit and retain talent in one of the most com- petitive job markets in recent memory, without alienating or disenfranchising long term employees? Lastly, will dense urban office markets like Cen - ter City Philadelphia rebound to pre-pandemic levels, or will

a reduction in demand create unhealthy markets with declin- ing rents and over leveraged properties unable to compete? Currently the Center City Philadelphia market is showing resilience and strong signs of life, despite the fact that daily headcounts in major downtown office towers remain below an average of 30%. Tenants continue to pay their rent ob- ligations and Landlords have yet to feel a major impact on their assets. Rents have held firm, although Tenant Improve - ment Allowances and free rent concessions have increased 10-15%. The Philadelphia CBD

is currently 15% vacant. Any- thing below a 10% vacancy rate becomes a Landlord’s market, where Tenants (Employers) have little leverage. 10-12% is a more balanced market. So at 15%, conditions have softened slightly but not to any alarming point. There is activity, demand for new space and leases are get- ting signed. In fact, over 1M s/f of office requirements are in the market seeking solutions. There are several significant subleases on the market with lease expira - tions beyond 5 years, but that is often the case in markets with less certainty. There are also many small and short term sub-

leases on the market where it is unclear whether the Tenant will let the lease expire turning that space into additional vacancy, or will they retain the space if the sublease exercise proves unsuccessful, so they still have an office for employees to return to several days a week. As major employers such as Comcast, Independence Blue Cross and others, begin bringing people back to the office, many of these questions will get an- swered over time. But bringing people back has not proven easy, as Covid variants emerge and employees show a reluctance to return to long days of commut- ing, riding mass transit, paying to park, etc. Some employers are offering incentives to bring employees back, offering to pay for their monthly SEPTA pass, free in-house catered lunches, gym memberships and the like. Clearly employers want people to return at least several days per week, critical to maintain culture, collaborate, innovate and train young talent. Many people have predicted the demise of cities throughout history. From the fall of Ancient Rome, the Cholera Epidemic in London, the horrible condi- tions of NYC in the 1970’s, and after 9-1-1, many naysayers said people will leave cities in droves. We are hearing the same negative prognostications now, that cities are in trouble. But cities exist for a reason. Human beings are social ani- mals, we yearn for face to face interactions, spontaneous meetings and engaging with focus. New uses also emerge. Philadelphia was once full of factories which no longer exist. We adapt and reuse. That is occurring now as an explosion in demand for lab and life science space has emerged. The Gene & Cell therapy re - search emanating from CHOP and Penn has spurred incredible demand for lab space. Several office buildings have already converted some space to meet this demand, such as Brandy - wine’s Blabs at Cira and the Cutis on Washington Square. Make no mistake, Center City Philadelphia will come back, adapting and responding to changes in employee living pat- terns and new and exciting uses for office space. Todd C. Monahan is Executive VP & Manag- ing Director of WCRE/ CORFAC International in Philadelphia PA. MAREJ

we work and from where remain unan- swered. Will total demand for space de- cline and if so to what degree? How do employers

Todd C. Monahan

retain valuable employees, pro- vide the flexibility employees are demanding, while main- taining productivity? As em- ployees return to work, will em- ployers change the way space

We see deals from your perspective.

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M id A tlantic Real Estate Journal — Financial Digest — Spring Preview — April 22 - May 19, 2022 — 7A

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By Michael Mullin, IBSRE, Inc. It’s time to wake up to the reality of cyber security in 2022 T echnology S olutions

A cross the world, hack- ers are targeting and exploi t ing secur i ty

cyber-attacks. If you think it’s too expensive to have your own IT team watching over your cyber needs, think again. Hir - ing an MSP is one of the best and most cost-effective ways to ensure that your network and information are protected. MSPs can be incredibly beneficial to any business. They’re designed to recognize and fix weak points in your IT infrastructure. MSPs work proactively to ensure that your business is fully protected in the cyberworld. They offer around-the-clock monitoring, data backup and recovery, firewall and network protec -

tion, real-time threat preven- tion and so much more. MSPs provide you with a dedicated team of IT professionals who are available to assist with any IT needs. If you have not looked into hiring an MSP for your business, you need to consider it. If you’re interested in hiring anMSP or want more informa- tion about the benefits, reach out to us and we will assist with any concerns or questions you may have. Create A Cyber-Secure Culture Many cyber-attacks stem from employee error or mis-

understanding. You need to make sure that all of your employees are aware of the risks associated with cyber- attacks. When you first hire an employee, train them on cyber security. In addition to this, your current employees should go through a reminder course at least once a year. You’ll need to inform your employees about the dangers of phishing e-mails and texts, downloading malware, social media scams and password protection. If you have em - ployees working remotely, you should ensure that their devices have security mea-

sures built into them. If your employees are informed about the risks, they will be more observant so they can spot any potential threats. Your entire team needs to buy into the cyber-secure culture if you want your training to be effective. In today’s day and age, you can never be too careful when it comes to your cyber secu- rity. You need to be proac - tive and put into effect all of the security measures you possibly can. The year 2021 saw cyber-attacks reach new heights, and it’s likely that continued on page 12A

weaknesses and holding data hostage. In May 2021, the Colonial Pipeline was hit by a cy- b e r - a t t a c k that disrupt- ed fuel sup-

Michael Mullin

plies along the East Coast for several days. The company – and the FBI – paid hack - ers $4.4 million in Bitcoin to regain control of the system. Colonial Pipeline was not the only corporation that paid hackers an exorbitant amount of money. The NBA, Kia Motors and JBS Foods have also been victimized by cyber-attacks where hackers demanded millions of dollars. CD Projekt RED, a Polish video game developer, was also a victim of a cyber-attack, but since they had backups in place, they never had to pay the demanded ransom. While these are all big orga- nizations, that does not mean that small businesses are safe. These stories made the news because companies paid mil- lions of dollars to regain con- trol of their data. When a small or mid-size business (SMB) gets attacked, they can’t pay millions of dollars to recover stolen information. Instead, these hackers will usually go after customer and employee information as well as finan - cial records and statements. When a hacker attacks an SMB, it often ends in the business closing their doors for good. The year 2021 set a record for cyber-attacks, and 2022 is shaping out to be no different. If you’re a business owner, you need to wake up to the reality of cyberthreats and cyber secu- rity before it’s too late. Here are a couple of the best cyber security practices you should put into place im- mediately. Hire A Managed Cyber security awareness has grown over the past five years, but there are still plenty of SMB owners who think there is no need for cyber security measures or that they’re too expensive. The simple truth is that every business can be a victim of Services Provider For Your IT Needs

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8A —April 22 - May 19, 2022 — Spring Preview — M id A tlantic Real Estate Journal

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A ppraisal

By Carlo Batts, MAI of Rittenhouse Appraisals Measuring up Philadelphia and the growth to come

ap rates are at historic lows, major out-of-town REITS are investing, and devel - opment con- tinues at a feverish pace in Philadel- p h i a . Th e forces in play are creating s igni f i cant shifts in the city’s commercial real estate makeup and geography. Unprecedented development activity in the University City neighborhood means the area C Carlo Batts

is a driving force in Philadel- phia’s economy and recovery. The University City District reports over 1.4 million s/f of new development or signifi - cant renovations with a value of approximately $400 million was in process in 2021, with an additional 11 million s/f on the development launch pad. Life sciences is the key in- dustry in the University City expansion with related office, research, and manufactur- ing facilities. But while these new building uses bring jobs and people, they are also dis- rupting and often removing

other businesses that round out neighborhood ameni- ties. A case in point is the 13-story lab that will replace the current home of Abner’s Cheesesteaks and other eat- eries at 38th and Chestnut. This leaves University City without a dedicated steak shop - distressing to say the least (wink). The investment in Univer - sity City has ripple effects into other real estate sectors. Multifamily investment is now moving into secondary and tertiary neighborhoods, with the 52nd and 63rd Street

corridors as prime targets. These transit-oriented neigh - borhoods are perfect for mul- tifamily development to house the talent that is needed in the research labs and manu- facturing facilities as well as supportive services. This housing demand is anticipated to continue increasing, and while the market is currently under expansion, expect more. With apartment cap rates at an all-time low, and even with possible increases resulting from rising interest rates and inflation, developers and lend - ers still consider multifamily a

strong investment in the core areas of the region. While it seems that Univer- sity City receives the majority of discussion related to Phila- delphia’s changing real estate market, there is significant activity along the North Broad corridor. Netrality Data Cen - ters’ acquisition and invest - ment in 401 N. Broad Street has provided a property for life science users north of Center City. The corridor also in - cludes a variety of mixed-used projects and nearly 800 more residential units are currently under construction with more planned. The Philadelphia Po - lice department opened its new home on North Broad Street and while only a proposal at this point, the Pennsylvania Ballet is considering a new building in this part of the city. The area’s makeup is changing considerably as developers continue to explore new uses for properties and see the pro- jected high ROI from feasibil- ity and market studies. Development in Philadel- phia is at a point where we are seeing core centers reemerge and link together, driving real estate market value changes in all parts of the city. This progress is also creating new service gaps for these freshly configured areas which need to be considered in terms of valuations, risks, and re- turns. One current shortage is of lodging facilities for the North Broad Street corridor, Northern Liberties and Uni- versity City areas based on the projected influx of businesses and people. Outside investors and major REITs are robustly entering the market betting on the continued growth of the city. These new players, plus pres - sures in life science develop- ment, the continued need for housing, and a city connected more than ever are moving small investors and business owners into other neighbor- hoods of Philadelphia, such as Germantown, Mt. Airy, East/ West Oak Lane, and Over- brook. While there is some uncertainty on the part of investors due to fear of a war- time economy emerging along with rising interest rates and inflation, shortages, demands, and projected positive returns look to overcome these doubts. Carlo L. Batts, MAI is principal of Rittenhouse Appraisals. MAREJ

Commercial Real Estate Serving the Greater Delaware Valley Appraisers

M id A tlantic Real Estate Journal — Financial Digest — Spring Preview — April 22 - May 19, 2022 — 9A A ttorney

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By Neil Andrew Stein, Esquire, Kaplin, Stewart, Meloff, Reiter & Stein Is your property tax exempt? Don’t bet on it

ennsylvania may be at the forefront of a national trend that has

to an exemption remains with the property owner. If you must defend a chal- lenge in court, do not assume that the initial grant of an exemption by the county board will hold much weight. When it comes to the burden of proof, a court may be far more exact- ing. An organization loses if it is unable to meet just one element of the HUP Test. Problems often arise due to a sale. If the property becomes a revenue source from the payment of rent, or if a ten- ant receives the benefits of the owner’s charity, the exemption may be lost.

Charitable organizations should keep the following prin- ciples in mind when structuring lease arrangements: (1) the ten- ant should share in the owner/ charity’s mission and use the property in furtherance of that mission; (2) the overall leasing arrangement should not be profitable, i.e., rent that is at or below market rates; (3) the owner/charity should be respon - sible for building maintenance and improvements; and (4) the owner/charity should continue to occupy a portion of the leased property and should maintain its right to continued posses- sion and control. Exempt status

generally cannot be granted on the basis that the tenant, rather than the owner, is an institution of purely public charity. Nonprofit entities must un - derstand the importance of the HUP Test and required burden of proof. A property owner must have well-drafted documents and present strong testimony to push back against increased scrutiny from local taxing jurisdictions. Neil Andrew Stein, Es- quire is a principal of Kap- lin, Stewart, Meloff, Reiter & Stein and a member of the Land Use, Zoning & Devel- opment Department. MAREJ

exemption because that por- tion of the property was leased to other nonprofits. On appeal, the Commonwealth Court re- manded the case to the trial court to determine whether each of the five prongs of the HUP Test had been satisfied. So once granted, is a tax exemption ever safe from challenge? The answer is no. Local taxing authorities have very little, if anything, to lose by challenging an exemption. The property owner must also understand that even though the challenge was initiated by the taxing authority, the burden of proving entitlement

s e en l o c a l governments r emo v e o r modi fy the f a v o r a b l e property tax t r e a tme n t for nonprof- its, particu- larly hospi-

Neil Stein

tals and universities. Munici - palities and school districts are always on the hunt for additional tax revenue, and successfully challenging an ex- emption is one way to achieve that goal. Exemption law is rooted in the Pennsylvania Consti- tution, which permits the exemption of “institutions of purely public charity,” Pa. Const. Art. VIII, §2(a)(v). However, there is no stat- ute defining a “purely public charity.” Hospital Utilization Project v. Commonwealth first laid out the Pennsylvania Supreme Court’s vision of a clear standard, requiring that an exempt entity must: 1) advance a charitable purpose; 2) gratuitously provide a sub- stantial portion of its services; 3) benefit a substantial and indefinite class of persons who are legitimate subjects of char- ity; 4) relieve the government of some of its burden; and 5) operate free from private profit motive (“HUP Test”). In 1997, the passage of the “Institutions of Purely Public Charity Act” (“ Charity Act ”), resulted in the adoption of the HUP Test and the creation of additional eligibility tests. While the Charity Act was intended to reduce confusion, the courts interpreted the Charity Act as adding a second layer of criteria, i.e., an orga - nization must satisfy the HUP Test and the Charity Act test. A tough nut to crack. Litigation ensued. In one case, a court revoked the tax exemption of a Jewish summer camp on the grounds that it did not relieve the govern- ment of some of its burden. In another case, a court consid- ered the exemption claim of a wholly-owned subsidiary of a Section 501(c)(3) charitable trust. The Trust’s sole pur - pose was to own, operate and maintain a historic property. The Chester County Board of Assessment denied a full exemption but granted a 72%

10A —April 22 - May 19, 2022 — Spring Preview — M id A tlantic Real Estate Journal

www.marej.com

S mart E nergy

By Shannon Christie, PECO A return to the office calls for upgrades

usinesses across the region are preparing to bring employees back

workplace have also changed because of the pandemic. They want healthier, safer and more sustainable workspaces and want their employers to adopt environmentally conscious busi- ness practices. By incorporating energy ef- ficiency into return-to-office plans, commercial property developers and managers can help address these new expec- tations while improving the overall energy performance and comfort of their buildings, which in turn can reduce oper- ating costs and the buildings’ carbon footprint.

energy assessment and use the results to implement energy efficiency upgrades. Consider installing an Energy Manage- ment System (EMS), which can yield savings of 20%–30% for lighting systems and 15% for heating, ventilation and air conditioning (HVAC) sys - tems. 1 Optimizing lighting and HVAC systems for new spaces. The new work arrangements are driving the need for an increased number of collabora- tive spaces, particularly spac- es that accommodate teams of both on-site and off-site

employees. Businesses will also need larger collaborative spaces for larger teams. En - sure a productive, comfortable, safe and visually appealing environment for employees by upgrading to LED lighting and high efficiency HVAC equip - ment. Installing lighting and HVAC controls can enhance these benefits, while offering greater control over your en- ergy use in these spaces and the potential to reduce energy consumption up to 50%. 2 Upgrading air filtration systems. Improvements or upgrades to the HVAC sys - tem to more frequently and efficiently replace the air in a facility ensure employee com- fort. Plus, the installation of HEPA filters (high-efficiency particulate absorbing filters) and the use of portable air cleaners can decrease the transmission of viruses and other airborne contaminants when implemented alongside other CDC recommended best practices. PECO Incentives to Offset Investments PECO Ways to Save of- fers incentives for dozens of qualifying equipment, helping to make energy efficiency up - grades simple and affordable. Incentives are available for interior and exterior lighting, HVAC, refrigeration and other equipment and systems. Infor - mation on the PECO Ways to Save Program can be found at www.peco.com/business. While the PECO Ways to Save Programhelps financially, energy efficiency upgrades can help property managers and building owners demonstrate their leadership in sustainabil- ity and more easily. This could translate to property man- agers more easily attracting sustainability-focused tenants. Employers with sustainability goals are often able to recruit and retain environmentally minded workers, which is key at a time when it is harder to attract employees. In other words, a few build- ing upgrades could be a win- win-win for all stakeholders— not bad for something inspired by a pandemic. ShannonChristie is a senior energy efficiency program manager at PECO. MAREJ 1 https://www.sciencedirect.com/sci - ence/article/pii/S1364032115013349 2 https://www.designlights.org/ lighting-controls/reports-tools-re - sources/nlcenergy-savings-report/

Facility Improvements Many commercial develop- ers, property managers and individual businesses are already taking steps to ad- dress these new expectations and improve energy efficiency. These include: Benchmarking the proper- ties. Analyzing your building’s energy use will give you all the data you need to identify ways to optimize your energy use and improve energy efficiency. You can benchmark your prop- erties’ energy usage through the ENERGY STAR Portfolio Manager Tool or conduct an

to the office, some on a hybrid basis, others, full- t ime. As a result, com- panies are a s s e s s i n g the changes they need to

Shannon Christie

make to their spaces to accom- modate the new office reality and ensure that the environ- ment is flexible. Employee expectations for the

Something this big can’t be ignored. It’s time to please your tenants and get future-ready. Make your property more energy efficient today.

Start saving money and energy at PECO.com/Business

M id A tlantic Real Estate Journal — Financial Digest — Spring Preview — April 22 - May 19, 2022 — 11A

www.marej.com

C ommercial B usiness I nsurance By Jamie Cutler and Tom Delark M&T Insurance Agency, Inc.’s Spring 2022 Market Brief

he insurance market brief series fromM&T In - surance Agency is aimed

According to CIAB, respondents are reporting increased claims activity in virtually all lines of coverage. In particular, two specific lines saw a significant rise in claims activity: Commercial Property & Commercial Auto Graphic from Council for Insurance Agents and Brokers (CIAB), 3Q 2021 Commercial Property/Casualty Market Index. Insurance Products are NOT Deposits; NOT FDIC Insured; NOT insured by nor an obligation of Any Federal Government Agency; NOT Guaranteed or Underwritten by the Bank; Not a Condition to the Provision or Terms of any Banking Service or Activity; and May Go Down in Value. ©2022 M&T Bank and its affiliates and subsidiaries. All rights reserved. AMP-1849 220414-2

at supporting you and your business by p r o v i d i n g perspect ive o n i n s u r - a n c e ma r - ke t t r end s in terms of Property, Ca- sualty, and Specialty In- surance lines. 2021 was an interest- ing year for the market. Some key in- sights in our latest market brief include:

79%

77%

60%

51%

37%

36%

35%

32%

31%

29%

23%

Jamie Cutler

Cyber

Commercial Property

Commercial Auto Employment Practices

Umbrella

Workers' Compensation

Q3 2021

Q2 2021

Tom Delark

“On behalf of all of us at M&T Insurance Agency, I invite you to ex- plore our Spring 2022 Market Brief. We always take an entrepreneur- ially-minded view of the risk to our clients via these insights. We look forward to walking through this report together and what it means for your business” - Tom Delark Jamie Cutler leads M&T Insurance Agency’s Real Es- tate & Construction Prac- tice Group for M&T Insur- ance Agency. TomDelark is headof Insur- ance Placement and Regional Market Leader for M&T In- surance Agency. MAREJ Respondents agreed that the prevalence of cyberattacks, spe- cifically ransomware, phishing, and social engineering attacks, was one of the primary drivers of Cyber premium increases. Staying abreast of these threats remains challenging. Did you know we offer a com- plimentary cyber risk assess- ment? Schedule yours today at mtia.com Premiums increased for the 16th consecutive quarter in Q3 2021, with respondents re - porting an average premium increase across all account sizes of 8.9%. Cyber once again had a record increase in Q3 2021, the highest premium increase out of all other lines. Respondents said premi - ums for that line increased by an average of 27.6%. Respondent s i nc reased claims activity in virtually all lines of coverage. In particu - lar, Commercial Property and Commercial Auto lines saw significant increases.

Experience, trust and guidance.

M&T Insurance Agency, Inc. offers more than just insurance. Our consultative approach is what sets us apart. You’ll work with an experienced team that has deep industry and product knowledge to help you build a completebenefits and property & casualty insurance solution. Backed by M&T Bank’s more than 165 years of experience with businesses, we will provide customized, proactive guidance. Contact Tom Delark at 212-350-2522 or email tdelark@mtb.com or Jamie Cutler at 212-350-2019 or email jcutler@mtb.com to discuss what’s important to you.

mtia.com

P R O P E R T Y A N D C A S U A L T Y | E M P L O Y E E B E N E F I T S | S U R E T Y B O N D S

Insurance Products are NOT Deposits; NOT FDIC Insured; NOT insured by nor an obligation of Any Federal Government Agency; NOT Guaranteed or Underwritten by the Bank; Not a Condition to the Provision or Terms of any Banking Service or Activity; and May Go Down in Value.

Insurance products are offered by M&T Insurance Agency, Inc., not by M&T Bank. Insurance policies are obligations of the insurers that issue the policies. M&T Insurance Agency, Inc. is a subsidiary of M&T Bank. ©2022 M&T Bank Corporation and its subsidiaries. All Rights Reserved. AMP-2117 220412

12A —April 22 - May 19, 2022 — Spring Preview — M id A tlantic Real Estate Journal

www.marej.com

N ew J ersey B roker By Jonathan Glick, Sheldon Gross Realty

Challenges facing the purchase or lease of an industrial property

property, the cha l l enges you ’ l l face this spring will be quite similar. And, you might as well plan on these vari- ous hurdles W

hether you’re look- ing to purchase or lease an industrial

ability. For several years, the media and everyone else has been discussing how difficult it is to find residential property. It’s a nationwide issue, the problem related to industrial properties is actually rather similar. It’s basically the clas- sic demand situation – more individuals and companies want warehouse space and manufactured buildings than are available, so when a pro- spective buyer or tenant finds something that meets their needs, they have to pay a premium. The same, by the way, holds true for vacant land

massive structures of the type that address the needs of small and midsize businesses. There just aren’t enough … and it remains the case that very few are under construction. This said, if your plan is to engage in one or more in- dustrial real estate transac- tions – despite the challenges we’ve mentioned – I have some specific advice both for those who have a property to sell or lease and those seeking to buy or rent. For landlords or sellers, en- suring that a deal is secure is always a priority. In the short-

to mid-term, this will be even more true. Every potential tenant or buyer must be thor- oughly, vigorously screened to confirm they’re capable of withstanding the types of financial stormy days we’ll almost certainly experience in coming months. If there’s any doubt, it’s probably advisable to reconsider the entire trans- action. After all, in the current market, there should be no shortage of those interested in your industrial property. For prospective buyers or tenants, it’s crucial to ac- curately assess the types of improvements or structural alterations that may be neces- sary on a property of interest. No matter how much a given location may seem ideally suited to the various needs at hand, you need ironclad confirmation that a landlord or seller will be able to de- liver what has been agreed to. Supply chain issues won’t be going away any time soon, so there needs to be appropriate concern related to delivery of construction materials, con- tractor availability, and even securing of necessary permits. Without peering too far into the future, my prediction is that industrial real estate rental rates and sale prices will continue rising for some time to come. The challenge for everyone involved in this sec- tor, whether on a full- or part- time basis, will be determining at what point these values will begin to level out. For three years now, industrial sales and leasing volumes have climbed to unprecedented lev- els, and I expect this trend to continue for the remainder of 2022, through 2023, and even into 2024. Jonathan Glick is execu- tive vice president of Shel- don Gross Realty. MAREJ continued from page 7A It’s time to wake up to the reality . . . these numbers will continue to rise even higher this year. Take preventive action and don’t let your business add to the cyber-attack statistics. If you’re unsure of where to be- gin when it comes to buffing up your cyber security practices, give us a call, and we will be glad to help. Michael Mullin is presi- dent of IBSRE, Inc. MAREJ

that can be utilized for outdoor storage. It’s a difficult environment, and there currently is no solution or resolution on the horizon. Of note, the reason the sup- ply of suitable properties is so tight is frustratingly simple – there just hasn’t been an appropriate level of construc- tion for quite some time. Of course, we’ve all seen massive, 200,000 s/f or even more ex- pansive distribution facilities being built – but what we’re talking about, and where the real need lies, are far less

Jonathan Glick

continuing on through the summer and beyond … be- cause they will. To begin with, there’s a significant issue with avail -

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The information contained herein has been obtained from sources considered reliable, but no guarantee of its accuracy is made by this company. Subject to errors, omissions or withdrawal without prior notice.

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