8C — April 22 - May 19, 2022 — Owners, Developers & Managers — M id A tlantic Real Estate Journal
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O wners , D evelopers & M anagers
Firm acquires Rockville & Westminster facilities Tryko Partners expands MD assisted living portfolio
MDEnergy Advisors provides $2.5M CPACE loan to 40Ten
BALTIMORE, MD — MD Energy Advisors has sourced a $2.5 million commercial property-assessed clean ener- gy (CPACE) loan for 28 Walk- er Development Group to reduce their weighted average cost of capital for 40TEN, the first commercial office building in downtown Baltimore City to be constructed entirely using heavy wood timber materials. Located within 28 Walker’s mixed-use Collective at Can- ton, the five-story, building at 4010 Boston St. will contain 125,000 s/f of class A office space upon its delivery at the end of this year. The CPACE loan is in ad- dition to the $28 million con- struction loan sourced by ColumbiaNational Real Estate Finance, a commer- cial mortgage banking firm. CPACE is a financing mech - anism that is typically used to finance energy and water- related improvements of a real estate project. New construc- tion and gut rehabs are strong candidates for the product as an additional factor that wouldn’t be present if the gain is recognized in full during the year of sale. Additional Tax on Large Installment Sales On the topic of interest income, for larger real estate sale transactions, the concepts found under IRC Section 453A may come into play. In gen- eral, Section 453A requires the calculation of interest income on transactions that exceed $150,000 in sales price and have a remaining installment balance of $5 million. This is in addition to the interest calculated on the agreement itself (mentioned above), as it is recalculated each year on the remaining deferred tax liability. Creditor Risk In an installment sale agree- ment, the seller essentially becomes a de facto creditor of the buyer. As such, it is pos- sible for the buyer to default on the repayment terms of the agreement. While the seller would be able to take back the real property, there may be a gain to recognize upon repos- session. Furthermore, the calculation of the gain itself differs for real vs. personal property as personal property receives a step-up in basis to its fair market value at the continued from page 4C
QUEENS, NY — Crystal Window & Door Systems has completed installation of a large new almost 1 MW solar electricity generation system on the rooftop of its headquarters and main pro- duction facility in Queens, NY. The system includes over 2,300 solar panels and is ex- pected to generate nearly one million kW-h annually, offset- ting about 35% of the manu- facturer’s overall electricity needs. The Crystal system is one of the larger systems in Queens and NYC. According to the USEPA, replacing one million kW-h annually with solar energy eliminates over 1.5 million pounds of carbon dioxide per year from the atmosphere. That is the approximate equivalent of eliminating the greenhouse gas emissions from over ¾million pounds of coal burned per year or annu- ally removing 154 passenger vehicles from the road or by replacing 26,860 incandescent lamps with LEDs. Crystal partnered on a 25- year Power Purchase Agree- ment (PPA) with Amergy So- lar , a NY-NJ regional provid- er of solar energy generation “We know this market area well and are pleased to grow our investment footprint in a region where we have an established presence – one that offers ex- ceptional demographics and top- notch hospital networks,” said Tryko’s Uri Kahanow , director of acquisitions. “The facilities fit well with our strategic growth in key Mid-Atlantic locations and across the full continuum of care.” Developed in 1998, Brighton Gardens of Tuckerman Lane is a 140-bed assisted living and skilled nursing commu- nity – with the two components renamed The Terraces at Tuck- erman Lane and Tuckerman OCKVILLE/WEST- MINSTER, MD — Tryko Partners has expanded its Maryland skilled nursing/assisted living real estate portfolio with the acqui- sition of Brighton Gardens of Tuckerman Lane in Rockville and Sunrise of Carroll in West- minster. Both properties are being rebranded and renamed, with significant capital improve - ment programs set to begin imminently. R
and CPACE will reduce the weighted average cost of capi- tal for building owners when compared to preferred equity and or mezzanine financing. CPACE is fixed rate, long term, non-dilutive and non- recourse with rates routinely under 6% on a 20 to 25-year term and amortization. “28 Walker Development is in- novative in their approach to real estate development and financing. By understanding their needs, we successfully lowered their weighted aver- age cost of capital, as well as reduced operating expens- es and the carbon footprint through financing a more efficient building envelope for the project,” said Jason Schwartzberg, president of MD Energy Advisors. MAREJ 40TEN rendering Election to Opt Out of Installment Sale Treatment Given the factors listed above, it is important to note that a seller can elect out of installment sale tax treat- ment even if the terms of the transaction call for cash pay- ments over time. Therefore, should the seller anticipate an unfavorable tax position by de- laying the recognition of gain, the taxpayer is well within his or her right to pay the tax up front while receiving cash per the terms of the agreement. TaxReportingRequirements of an Installment Sale time it is repossessed. Should a real estate trans- action result in installment sale treatment, the resulting gain will be reported on Form 6252. This form also calculates the gross profit percentage in the initial year of sale. That percentage is then multiplied by the principal portion of cash received in future years to determine the amount of deferred gain to be recognized annually. Any interest income is separately reported, either on Schedule B of Form 1040 or via Schedule K-1 if the transaction took place via a passthrough entity. Andrew Murray, CPA is a Real Estate Services Group team member at Withum. MAREJ
Brighton Gardens of Tuckerman Lane
Rehabilitation & Healthcare Center, respectively. According to Kahanow, an immediate, multi-million-dollar modern- ization of the property at 5550 Tuckerman Lane is planned, including the introduction of a secure memory care unit. “The five-story structure has good bones and impressive curb appeal,” Kahanow noted. “The planned renovation will posi- tion Tuckerman to maintain a market-leading position well into the future.” Located at 45 Washington Rd. in Westminster, Sunrise of
Carroll – renamed The Terraces at Westminster – is a 62-bed assisted living and memory care community. Developed in 1999, the two-story structure was originally a historic man- sion. The facility, which sits in a residential and commercial blended neighborhood, is just a few hundred feet from both the Westminster Senior Center and Carroll Hospital. “Our investment will solidify The Terraces at Westminster’s position as a destination of choice in the region,” Kahanow added. MAREJ
Sell now, pay later: Capital Gains Tax Deferral via . . .
Crystal Windows reduces carbon footprint
Crystal Window & Door Systems recently completed installation of a new 2,320-panel solar electricity generation system on the roof of its headquarters and main production facility in Queens, NY.
systems for commercial and residential properties. With a PPA, the solar system pro- vider owns and maintains the solar generation equipment installed on the customer’s premises while the customer simply purchases the electric- ity generated at a significant discount over rates from the local utility. PPA’s are gener- ally transferrable upon resale to new building owners, thus enhancing a property’s value. Crystal’s solar energy gen- eration system was several months in design and con- struction. To determine the appropriate scale of the sys- tem, Crystal’s energy usage
patterns, available roof space, and roof structure were re- viewed. Then the interface between Crystal’s existing electric system within the building and Con Edison’s electricity distribution sys- tem was upgraded, the roof surface was renovated, per- mits for the installation were secured, and required inspec- tions completed. A custom racking and bedding system was de- signed and fabricated for Crystal’s solar panels. The entire system is comprised of 2,320 solar panels, associ- ated racks, and 18 electrical power inverters. MAREJ
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