R EAL E STATE J OURNAL the most comprehensive source for commercial real estate news
ISSUE HIGHLIGHTS Volume 24 Issue 15 August 17 - 30, 2012 RIVERWALK: NJ Project of the Month
A S B R O U C K HEIGHTS, NJ — Jai- me Weiss, president of 338 unit Skyline & Boulevard apt. complexes in Hasbrouck Heights, NJ Weiss Realty orchestrates $57.5 million multi-family sale to Kushner Cos. H
“Our close relationship with the Klein family and our local Bergen County area market knowledge played an impor- tant role in the completion of this deal” commented Jaime Weiss. “This is the highest price on record we are aware of for a garden apartment complex in Bergen County and speaks volumes for the property owners, Hekemian & Company and Herbert Klein, recognized leaders in apart- ment rental property owner- ship and management. “Multi-family vacancies are in the low single-digit range and rent growth is rising providing a perfect selling opportunity for our client and we were able to work out a suc- cessful deal with Kushner.” ■
Moonachie basedWeiss Realty has announced the completion of a major sales transaction with the of the 338 unit Sky- line and Boulevard apart- ment complexes in Hasbrouck Heights to the NewYork based Kushner Companies for $57.5 million. Weiss Realty represented owners Skyline and Boulevard Associates in the investment transaction, one of the larg- est real estate transactions in Bergen County in recent history. Jaime and Matthew Weiss brokered this transac- tion on behalf of the selling entitles Herbert Klein and Hekemian & Company.
7-10B
Mericle Comm’l. leases 198,400 s/f in CenterPoint
Boulevard Apartments, Hasbrouck Heights, NJ
115,394 s/f former Railway Express Building in Washington, DC Shister of Cassidy Turley represents Potomac Development Corporation in $30.5 million sale
2C
WASHINGTON, DC —Cas- sidy Turley, a real estate services provider in the U.S., announced today that it ar- ranged the sale of 900 2nd Street, NE, formerly known as the Railway Express Building, in Washington, DC. Jayne Shister of Cassidy Turley rep- resented the seller, Potomac Development Corporation. 900 2nd Street, a 115,394 s/f, 4-story office building, is
Mid Atlantic Real Estate Journal — Pennsylvania —August 17 - 30, 2012 — C
5-12C
mpany Name: Liberty Property Trust peofFirm&OverviewofCompany: LibertyProperty ust is a $6.9 billion (as of 3/31/2012) real estate vestment trust which owns over 79.3 million s/f of ce in 21 markets throughout the United States and d in 1972 and headquartered outside Philadelphia nearly 40 years of experience in development, ingof commercial realestatewith themission rough extraordinary work environments. Liberty’s ndustrial properties offer exceptional locations, menities, cost efficient operations and state-of- mpany’s over 2,000 tenants. Liberty continuously tfolio through expert management, marketing, and gover10.4million s/f of LEED® spacecompleted over 10.9 million s/f in 77 Energy Star certified elop green office space, ndustrial a d warehouse ildings and even clean our properties in an envi- berty Property Trust has been awarded the 2011 ear; NAREIT’s 2011 Small Cap–Gold Leader in the rd of Excellence; NAIOP’s 2008 Developer of the 2008 Sustainability Leadership Award for Design 07GreenDevelopmentAward;U.S.GreenBuilding adership in LEED® Award; and was also awarded l Estate’s Customer Service Award for Excellence eople’s lives through extraordinary work environments. A ffices throughout the U.S. and U.K. 50 employees ered: As one of the nation’s largest real estate Trust offers in-depth local knowledge in multiple lopmentexpertiseanda focusoncustomerservice dustry, all backed by the financial strength of a . Liberty is also the nation’s leading commercial cegreenbuildings.Weprovide realestatesolutions ustomers’ bottom line by focusing on our core , leasing, acquisition and property management.
Company Name: Mericle Commercial Real Estate Services TypeofFirm&OverviewofCompany: Founded in 1985 by Robert K. Mericle, Mericle
Directory Commercial Real Estate Services is a full-service commercial real estate developer and brokerage firm. Mericle has developed close to 16.5 million s/f of bulk industrial, flex, and office space in 15 NortheasternPennsylvaniabusinessparksand lists30Fortune1000 companies among its many tenants and clients. MissionStatement: : Usingamasterbuildermodel,Mericlewilldevelop a variety of speculative, quality, affordable, commercial buildings and prepare pad ready sites throughout Northeastern Pennsylvania and will recruit tenants to these properties, thus creating job opportunities for the residents of Northeastern Pennsylvania. Headquarters: Corporate Center at East Mountain, 100 Baltimore Drive, Wilkes-Barre, PA, 18702 Additional locations: A satellite brokerage office in Williamsport, PA No. of employees: Approximately 200 employees Services and or Products offered: Mericle specializes in the construction of speculative bulk industrial, flex, and office space. Mericle is a vertically integrated, “master builder” that self performs all phases of its projects from acquiring sites, to designing the infrastructure and buildings, to obtaining permits and approvals, to constructing the buildings, to maintaining the buildings after they are completed. What isyourVisionandStrategy in thenextyear: Mericlewillcontinue to build industrial, flex, and office buildings on speculation and will prepare sites for new construction. Whatprojectsareyou involved incurrently: Mericle ispreparingmor than 90 “Ready to Go Sites” in 10 business parks in Northeastern Pennsylvania. For its Ready to Go Sites, Mericle clears and grades the sites, obtains all permits and approvals including all subdivision, land development, and subdivision approvals, installs utilities, and places compacted stone sub-base in the building and pavement areas. Mericle then constructs speculative industrial, office, and flex buildings on its Ready to Go sites. Mericle currently has three spec buildings under construction in on these sites. Upcoming Spotlight Commercial Real Estate Law — August 31 st Auction Directory ......................... 4-5A Financial..................................... 7-18A DelMarVa ................................... 19-24A Calendar of Events......................... 29A TriState Organization ................ 30-31A New Jersey ............................ Section B Pennsylvania ......................... Section C
900 2nd Street
located at the intersection of the NoMa submarket and the H Street Corridor. Originally designed by Daniel Burnham
and constructed in 1908, the asset underwent a full reno- vation in 1989. 900 2nd St. is proximate to the Senate Office
building, the U.S. Capitol and Union Station. Its largest ten- ant is Amtrak, which occupies 30% of the building. ■
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Mid Atlantic Real Estate Journal — August 17 - 30, 2012 — A
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2A — August 17 - 30, 2012 — Mid Atlantic Real Estate Journal MAREJ a dVErtisErs d irEctorY Alen Security..................................................................... 9B Auction Directory .............................................................. 4A B.R. Kreider & Son, Inc. ................................................. 10C Barry Isett &Assoc., Inc.................................................. 15C Bayshore ............................................................................ 8B Bergman Real Estate Group ............................................ 6B BL Companies ................................................................... 6C Brahney Paving................................................................. 5B Brasler Properties............................................................. 1C Bruce Coin Consulting.................................................... 11A Business Card Directory................................................. 25A Bussel Realty Corp............................................................ 1B CBC Bennett Williams............................................. 27A, 7C Cenova Snow & Ice Solutions........................................IC-C Cerullo Fire Protection ..................................................... 7B Charles Friel Inc. ............................................................ 11C Chartwell Group ............................................................... 4A Columbia Bank................................................................ 15A Commercial Mortgage Capital ....................................... 12A ConnellFoley...................................................................... 6A Cooper-Horowitz ............................................................. 17A D2CAArchitects LLC...................................................... 13C Deerwood Real Estate Capital ....................................... 12A Earth Engineering Inc. ..................................................... 7C Eastern Union Commercial ............................................ 10A Fitzpatrick Lentz & Bubba............................................. 15C Floorcom ............................................................................ 8B GA Keen Realty................................................................. 3A Greater Reading Economic Partnership.......................... 4C Griffin Land..................................................................... 12C Harvey Hanna & Associates...................................... 21,24A Hawley Realty, Inc. ......................................................... 11C Heller Industrial Parks .................................................. 13B High Associates LTD......................................................... 3C Hinerfeld Commercial Real Estate ....................27A, IBC-C J&J Tile ........................................................................... 10B Jenkintown Building Services, Inc .................................. 5C JMOTA Construction ...................................................... 10B Kaplin | Stewart............................................................... 2A Keast & Hood Co............................................................. 13C KW Comm’l. – The James Balliet Comm’l. Group .......... 6C Landcore Engieering Consultants, P.C. ........................... 2C Liberty Environmental, Inc.............................................. 2C Liberty Property Trust...................................................... 9C LMS Comm’l. Real Estate ................................................ 8C M. Miller & Son................................................................. 3A Marcus & Millichap Taylor Zang ..................................... 2C McMahon Transportation Engineers & Planners ......... 12C Meli Corp. .......................................................................... 9B Mericle Comm’l. Real Estate ........................................BC-C Meridian Capital Group .............................................. 3,16A MGKF LLP........................................................................ 2C NAI Keystone Commercial & Industrial .....................FC-C NJ Paving .......................................................................... 3B NorthMarq.................................................................. 9A, 4C PennCap Properties .......................................................... 8C Penns Northeast ............................................................... 3C Poskanzer Skott Architects .............................................. 5B ProExpos...................................................................... IBC-A Regal Bank ....................................................................BC-A Riker Danzig ............................................................... 1A,2B River Drive Construction...............................................8-9B Salon Interiors .................................................................. 8B SAMPAUL ......................................................................... 7B SEBCO Laundry Systems ................................................ 2B Sheldon Gross Realty........................................................ 2B Sponzilli ........................................................................... 10B Subway ............................................................................ 27A The Berger Organization.................................................. 1B The Kislak Co.................................................................... 3B Thesing ............................................................................ 27A Tighe & Cottrell, P.A....................................................... 23A Tranzon Auction ................................................................ 5A TriState Realtors Commercial Alliance ......................... 31A Warfel Construction ........................................................ 10C Warner Real Estate & Auction Co.................................... 5A WCRE ................................................................................ 2B
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Mid Atlantic r eal e state J oUrNal Publisher ............................................................................Linda Christman Co-Publisher .........................................................................Joe Christman Section Publisher ..............................................................Michael Campisi Section Publisher ................................................................Elaine Fanning Senior Editor/Graphic Artist ................................................ Karen Vachon Production Assistant ........................................................ Rachel Rugman Office Manager ...................................................................Joanne Gavaza Editorial Consultant ............................................................. Ben Summers Guest Columnist ....................................................Gregg I. Adelman, Esq. Mid Atlantic r eal e state J oUrNal ~ Published Semi-Monthly P.O. Box 26 Accord, MA 02018 (Mail) 312 Market Street, Rockland, MA 02370 (Overnight) Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, P.O. Box 26, Accord, MA 02018 USPS #22-358 | Vol. 24 Issue 15 Subscription rates: $99 - one year, $198 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
By Gregg I. Adelman, Esq. Right to Convert and Withdraw Real Estate Extended Under Permit Extension Act
K
aplinStewart continues to be at the forefront of obtaining time exten-
sions of development related approvals under Pennsylva- nia’s Permit Extension Act. On July 19, 2012, in a case of first impression, Judge Ste- phen P. Linebaugh, the Presi- dent Judge of the York County Court of Common Pleas, dis- missed a quiet title action in Logan Greens Community Association, Inc. v. Church Re- serve, LLC (York CCP Case No. 2011-SU-794-93) wherein the Logan Greens Commu- nityAssociation sought to force developer-declarant Church Reserve, LLC (“Church Re- serve”) to turn over real estate that Church Reserve had not withdrawn from the planned community within the initial seven (7) years provided for under the declaration. In defense, Church Reserve asserted that the time to with- draw real estate from the planned community was ex- tended until January 30, 2015 under the Permit Extension
Act (Act 46 of 2010). Church Reserve’s withdrawal period under the declaration had ex- pired on July 30, 2010. Church Reserve argued that the Permit Extension Act tolled the run- ning of the withdrawal period as of December 31, 2008 and that the withdrawal period did not run again until July 2, 2013 after the Extension Period un- der the Permit Extension Act expired. In its Opinion, the Court agreed that Church Reserve’s withdrawal period had been ex- tended until January 30, 2015 by holding that the Permit Ex- tension Act applied and tolled the running of the withdrawal period. To support its decision,
the Court adopted the holding from In re: Appeal of Keystone Custom Homes, Inc. and Fox Clearing, LLC (Lancaster CCP Case No. CI-10-03933, October 22, 2010), which was another Permit ExtensionAct case that Kaplin Stewart successfully litigated. The net effect of Judge Line- baugh’s decision in Logan Greens is that a developer- declarant now has additional time in which to convert or withdraw real estate. In ad- dition, with the recent enact- ment of Act 87 of 2012 further extending the Extension Period under the Permit Extension Act until July 1, 2016, the time continued on page 3A
Contact: GREGG I. ADELMAN 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-260-6000 • www.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 Real estate law from the ground up. Experience Counts. Count On Us.
To advertise, call 1-800-584-1062
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Mid Atlantic Real Estate Journal — August 17 - 30, 2012 — 3A
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M id A tlAntic R eAl e stAte J ouRnAl Centralize prospect leasing pipeline & communications Whitestone REIT adoptsYardi CRM as its management sys. S ANTA BARBARA, CA — Whitestone REIT has selected Yardi CRM as
They wrote the policy.
We make sure they write the check.
with our existing Yardi opera- tional database, and is acces- sible to our Whitestone associ- ates via the Internet to better service our tenants,” said Theodore Zeck, vice president of technology and security for Whitestone REIT. Yardi CRM is built in as part of the Yardi Voyager platform, and it inter- faces with Microsoft Outlook. Making the customer relation- ship system part of Yardi Voy- ager gives Whitestone REIT a single view of customers and contacts in a common global database. The system provides real-time tracking of leads, qualified prospective clients and their requirements and other information such as rent
roll and vacancy openings. Then Yardi Voyager automati- cally converts the prospect record to a tenant record when a lease is executed, without reentry of data. Emails can automatically upload to Yardi Voyager, saving additional time by eliminating multiple logins and data entry and offering a clear view of the pipeline. “Yardi CRM will help Whit- estone REIT achieve its pri- mary business objective of increasing shareholder value by delivering greater efficiency and streamlining business practices,” said Terri Dowen, senior vice president of sales for Yardi. n and Chris Hile handled the dis- position assignment on behalf of Dress Barn. VP Joel Friedman of Team Resources SBWE represented Raymour & Flanigan. n & Real Estate Development Department, represented Church Reserve, LLC in the Quiet Title Action. n
i ts end- to - end customer relationship management system. W h i t e s - t one REIT r e c e n t l y u n d e r t o o k a bus iness
M. MILLER & SON Public Adjusters Since 1960
1211 Liberty Ave., Hillside, NJ 07205 � Tel: 908-355-4800 adjuster@mmillerson.com � www.mmillerson.com
Terri Dowen
initiative to transfer the pro- cess of tracking its leasing prospects pipeline to Yardi Voyager, Whitestone REIT’s property management and ac- counting system since 2006. “We wanted an easily navi- gable system that integrates
Jones Lang LaSalle team brokers sale of 900,000 s/f distribution center in Suffern, NY Barn.
Recent Financings Arranged By Meridian Capital Group
SUFFERN, NY — Jones Lang LaSalle secured a buyer for the sale of the Tri-State Logistics Center, a 900,000 s/f. Raymour & Flanigan pur- chased the property fromDress
Jones Lang LaSalle manag- ing director Robert Kossar, SIOR, managing director Da- vid Knee, vice chairman Robert Martin, VPs Blake Chroman years. Gregg I. Adelman, Es- quire, a principal of Kaplin Stewart’s Land Use, Zoning
continued from page 2A Right to convert and withdraw real estate extended . . .
period to convert or withdraw real estate remains tolled for approximately four (4) more
Hunters Glen 1,124 Units $49,000,000 Delran, NJ
Steward’s Crossing 241 Units $27,200,000 Princeton, NJ
OFFER DEADLINE: OCTOBER 5, 2012 6 Waterfront Industrial Properties * Florida * New Jersey * Maryland Act Now! BANKRUPTCY SALE Subject to Bankruptcy Court Approval
Millville, NJ 234,013 Sq. Ft. on 19.20 Acres
Salisbury, MD 10 & 20 Acres of Industrial Land
West Creek Village 306 Units $16,000,000 Elkton, MD
Woods at Narraticon 150 Units $16,950,000 Deptford, NJ
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Excellent Boat Manufacturing Real Estate Opportunities with Major Redevelopment Potential! GA Keen Realty Advisors P: 646-381-9222 www.greatamerican.com/keen
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A — August 17 - 30, 2012 — Mid Atlantic Real Estate Journal www.marejournal.com M id A tlantic R eal E state J ournal A uctions N e w J e r s e y • P e n n s y lva n i a • D e l awa r e • M a r y l a n d • W a s h i n g t o n D . C . • V i r g i n i a Auctioneers Directory NJ-PA-DE-NY-MD-VA N ew J ersey PA-MD-VA-W.VA
Richard G. Warner, President NJ & PA Licensed Real Estate Broker Warner Real Estate & Auction Co., Inc. 109 East Grant Street, Suite B Woodstown, NJ 08098 Ph: (856) 769-4111 ext 710 Website: www.WarnerRealtors.com
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866.4 BIDDERS
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©2008 Sheldon Good & Co. Auctions NE, LLC
AUCTIONS NE, LLC
5th_floor • CLIENTS • S-CLIENT • Sheldon Good • 18000 Jobs 18448 Sheldon Good_New York • 18448 SG-3x2_MAREJ Mid Atlantic Real Estate Journal / business card 3 x 2 (28 lines) • Proof 1 • 5/1/08 • Debbie “LIVE” REAL ESTATE AUCTION / SEPT 26 224 Acres • Bordering I-81 • Exit 291,
Toms Brook, VA Shenandoah Valley
725 Mount Olive Rd. (Hwy 651), Toms Brook, VA 22660
Bank Workout Requires Immediate Sale Reserve Prices Start $10,000 per Acre – Total Reserve $2,540,000 Recently Valued Beyond $40,000 per Acre GENERAL INDUSTRY/COMMERCIAL • RAIL ACCESS
LOCATION: Prominent Highway Frontage, Immediate Interchange I-81, Access to I-70, I-66 & I-270. Only 10 miles to the nearest Inland Virginia Port, 45 minutes to Dulles International Airport and strategically positioned outside the 50 mile blast zone of Washington D.C. (Server Location Requirement). DEVELOPMENT OPPORTUNITY: Coast-to-Coast Crossroads, DataCenter, LogisticsPark, Warehousing, Distribution with Redundant Power Sources. Contiguous Parcels to be Offered in Parts and Whole . State/Local Incentives Available. All mineral rights transfer. All properties transfer free and clear. ZONING: M-2 Industrial / B-2 Commercial/Public Utilities Tour Dates: Aug 29 & Sept 12, 1:00 - 3:00 PM Cashier’s Check Required to Bid / Title Insurance Issued / Closing in 35 to 45 Days
For Brochure & Terms of Sale call 877-430-9558 Chartwell Group, LLC · Gordon Greene VAAL #3716 / Jason Dolph,VA Broker #0225192495 • www.chartwellauctions.com
Mid Atlantic Real Estate Journal — August 17 - 30, 2012 — A M id A tlantic R eal E state J ournal A uctions
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MIXED-USE INCOME PROPERTY AVULK0UK\Z[YPHS3PNO[0TWHJ[030 2 Homes & Multiple Barns on 6.26± Acres Selling in the Entirety REAL ESTATE AUCTION S ELLER R ETIRING AND R ELOCATING 3VJH[LK^P[OPUTPU\[LZVM51;\YUWPRL9V\[L 0
BANK OWNED Former Retreat Center on 10± AC
MAIN HOME Z[VY`*VSVUPHS ILKYVVTZ ,H[PURP[JOLU^KPUPUNHYLH Auction On-Site, Saturday, September 8 at 12:00 PM 43 & 45 Brick Yard Road, Cranbury, NJ 08512 SECOND HOME 9HUJO:[`SL/VTL ILKYVVTZIH[OZ JHYKL[HJOLKNHYHNL Mutiple Barns )HYU^P[O _Z[HSSZZLWH YH[L[HJRYVVTZ)HYU^P[OZ[HSSZ VɉJLZ(\J[PVUYPUN
+++ PROPERTY INSPECTIONS +++ 6XQGD\$XJXVW 30
856-769-4111 www. Wa r n e r Re a l t o r s . c om
AL82912B
Mid Atlantic Real Estate Journal, 1/4 page, Aug. 17
COURT ORDERED Former Bed & Breakfast A Beautiful Property in the Poconos - Sells at $550,000 or Above!
August 29 at 3:00pm ET Canadensis, PA | Route 447 PREVIEWS: Friday, August 17 & 24, from 10:00 AM - 12:00 PM ET s -ULTIPLE (OUSES #ABINS s :ONED 4 s 3EVERAL 5NITS HAVE 2ECENT 5PGRADES s 5SE AS A 2ESORT OR 9OUR 0ERSONAL 0RIVATE 'ETAWAY
PREVIEWS: August 17 & 24 1:00 PM – 3:00 PM s /N ¢ !CRES WITH A 0OND s 'UEST 2OOMS "AR !REA Dining Area and Kitchen s 3ALE )NCLUDES 2IGHTS TO THE Existing Liquor License
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August 29 at 1:00pm ET Henryville, PA | 314 Cherry Lane Road
Tranzon Alderfer, AY-000115-L | Sale Subject to Terms & Conditions | Broker Participation Offered | 10% Buyer’s Premium
Tranzon Alderfer, AY-000115-L | Sale Subject to Terms & Conditions | Broker Participation Offered
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Mid Atlantic Real Estate Journal, 1/4 page, Aug. 17
Mid-Atlantic Real Estate Journal, 1/2 page, Aug. 17
6A — August 17 - 30, 2012 — Mid Atlantic Real Estate Journal
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M id A tlAntic R eAl e stAte J ouRnAl Friedman Realty Group launches renovations Brian Court Associates, LP purchases Brian Court Apts. R IDLEY PARK, PA — Brian Court Asso- ciates, LP, an affiliate
For Lease - Mayfield, PA
entrance doors, beautiful birch kitchen cabinets with custom countertops, new ap- pliances and dishwashers; upgraded bathroom fixtures and vanities. “We’re very excited to add this property to our local portfolio,” said Friedman, who, with his father, Brian Friedman, owns and manages 11 other apart- ment properties within Dela- ware County, Pennsylvania. “There’s a lot of potential for Brian Court, and I’m certain that we will transform this place into another Friedman Realty Group gem.” In 1963, David Goldstein, a local developer, built these apartments and managed them until his death in the early 2000’s. Upon David’s death, ownership and man- agement responsibility ul-
timately fell to two sons. Given their respective medi- cal professions, neither of the children had the time nor the expertise to operate Brian Court at its full po- tential. Having grown up in and around Brian Court, the Goldstein brothers were ini- tially reluctant to say goodbye to the property their father constructed and to the years of memories they had at the apartments. However, all things must come to an end, said Fried- man. As for the Goldstein brothers, they embrace these changes as they turn the property over to another Brian; that is, Brian Fried- man, president of Friedman Realty Group and guiding owner of Brian Court Associ- ates, LP. n
95,000 sf office building/educational/research/ conference facility on 18 acres. Easily accessible to Interstates 81, 380, 84 and 476 from US Rt. 6. Many offices, laboratories, a 250 seat lecture hall. Paved parking for 260.
of Friedman Realty Group, Inc., recently purchased the Brian Court Apartments, located at 17 West Chester Pike, Ridley Park. According to David Friedman, a general partner of Brian Court Asso- ciates, LP and vice president of Friedman Realty Group, the intention is to extensively renovate Brian Court and transform it into the premier rental community within Ridley Park. Friedman Re- alty Group will immediately commence renovations, which are expected to take approxi- mately one year to complete. The planned renovations include a custom landscape design, brand new parking lot paving and striping, new
www.hinerfeldcommercial.com
BRISTOL, PA — Roddy representing Joe JD sold their masonry facility of 23,000 s/f located at 125 Phyllis Dr. to Zampell 125 Phyllis Drive LP for $1.425 million. Robert Olender of Roddy advised Zampell. n Roddy sells 23,000 s/f for $1.2m in Bristol, PA 125 Phyllis Dr.
Publication Date: August 31, 2012 Deadline: August 22, 2012
We are inviting a select group of Legal Professionals to write an expert article on counseling and legal services available to the commercial real estate industry. These experts should have a thorough understanding of the business aspects of the commercial real estate industry as well as the law, and have the ability to inform our 25,000 readers on policies and procedures, contracts and lease agreements, building, and title insurance as well as environmental concerns. Target the corporate real estate executives, building owners and commercial real estate developers who are actively involved in the industry.
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Contact Linda Christman or your account rep Mid Atlantic Real Estate Journal Tel: 781-871-5298 800-584-1062 Fax: 781-871-5299
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F inancial D igest F eaturing M ultifamily F inancing
Mid Atlantic Real Estate Journal — August 17 - 30, 2012 — A
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DC office executes $50 million refinancing HFFarranges$41.15mon behalf of JG Petrucci
Office, retail, mixed-use, mulitfamily & co-op properties Meridian Capital Group negotiates $76.7m in financing
N EW YORK , NY – Meridian Capital Group, LLC, a lead-
Meridian on two multifamily buildings composed of 640 units located on 41st Avenue
$8,600,000 was placed by Meridian on a 43,000 s/f re- tail building on Fulton Street in Brooklyn, NY. The loan features a rate of 3.75% and a five-year term. Rael Gervis negotiated this transaction. Meridian negotiated a new mortgage in the amount of $7,700,000 on a 27,000 s/f office building on Broadway in New York, NY. The loan features a rate of 3.76% and a five-year term. Michael Kesselman negotiated this transaction. A n e w m o r t g a g e o f $1,850,000 was placed by Meridian on a 6,000 s/f mixed- use building on Atlantic Av- enue in Brooklyn, NY. The loan features a rate of 3.63% and a 10-year term. Simon Rosenfeld negotiated this transaction. n
ing national commercial real estate fi- nanceandad- visory firm, announced the follow- ing transac- tions: Me r i d i an
in Flushing, NY. The s e l o an s f e a - ture rates of 3 . 50% and f i v e - y e a r terms. Carol Shelby and Dani Sabe- san negoti-
Middlesex Logistic Center in Edison, New Jersey
Carol Shelby
Michael Kesselman
negotiated a new package of mortgages totaling $5,350,000 on three co-op buildings com- posed of 128 units located on Brighton 3rd Street and East 18th Street in Brooklyn, NY. These loans feature rates of 3.25% and 10-year terms. Morris Diamant negotiated these transactions. Two newmortgages totaling $41,200,000 were placed by BRAINERD, MN — Deer- wood Real Estate Capital, a mortgage brokerage and advisory firm, closed on an $8.5 million loan for a 240,000 s/f shopping mall located in Brainerd. The borrower acquired the property while it was 60% occupied and increased occupancy to 95%, raising the value of the prop- erty. Therefore, Deerwood was able to close a non-recourse, 10-year, fixed-rate loan that provided the borrower with
ated these transactions. Meridian negotiated a new mortgage in the amount of $12,000,000 on 11 multifam- ily buildings totaling 109 units located on Dover Chase Boulevard in Toms River, NJ. The loan features a rate of 3.88% and a seven-year term. Avi Weinstock negotiated this transaction. A n e w m o r t g a g e o f
Bayfair Center, an 813,307 s/f retail center in San Leandro, CA
EDISON, NJ — HFF has arranged $41.15 million in construction financing and joint venture equity for the development of Middlesex Lo- gistic Center, a 570,100 s/f dis- tribution center in Edison. HFF worked on behalf of the sponsor, JG Petrucci Co., Inc., to structure joint ven- ture equity from institution- al investors advised by J.P. Morgan Asset Management. In addition, on behalf of the partnership, HFF secured the construction loan through M&T Bank. Middlesex Logistic Center will be a 570,100 s/f state-of- the-art LEED certified ware- house and distribution center located adjacent to Raritan Center and Heller Industrial Park near Exit 10 of the New
Jersey Turnpike. The HFF team represent- ing the borrower was led by senior managing director Jon Mikula and managing direc- tor Michael Nachamkin. WASHINGTON, DC—HFF has secured a $50 million re- financing for Bayfair Center, an 813,307 s/f retail center in San Leandro, CA. HFF worked on behalf of Madison Marquette Retail Enhancement Fund to secure the five-year, adjustable-rate loan through Guggenheim Commercial Real Estate Fi- nance. The HFF team representing Madison Marquette Retail Enhancement Fund was led by managing director Mark Remington and senior manag- ing director Bruce Ganong. n
Deerwood arranges over $16.5 million in financing for two shopping centers
a significant return of equity. The loan was negotiated by Rafi Frankel, Abe Katz, and Mark Silbersher. Deerwood also secured an $8.12 million loan for a 200,000 s/f grocery-anchored shopping center in Western Pennsylvania. The 30-year- old center includes a local gro- cery store, as well as several national and local tenants. The borrower needed a non- recourse loan of 75% of his purchase price; Deerwood suc- Given Deerwood’s activity in the market, the borrower knew that he could count on Deerwood to get the most competitive deal. The firm was successful in closing the loan quickly and efficiently, with a very smooth process. David Rosenberg, Meyer Perl- man and Adam Schenkman negotiated the terms of the loan. n ALSO INSIDE: E dward D. B rown , N orth M arq . .....................................................................................................................................................................8-9A cessfully closed the loan and fixed the rate for 10 years in the mid 4’s.
M arc T ropp , E astern U nion C ommercial .......................................................................................................................................................10A
B ruce C oin , B ruce C oin C onsulting , I nc ....................................................................................................................................................... 11A
M ark S cott , C ommercial M ortgage C apital .................................................................................................................................................12A
S ales & L eases . .................................................................................................................................................................................................18A
A — August 17 - 30, 2012 — Mid Atlantic Real Estate Journal
www.marejournal.com
M ultifamily F inancing
By Edward D. Brown, NorthMarq Multifamily owners enjoy low rates and an abundance of capital
T
he historic low trea- sury rates that have been in place over the
agencies (provided implied not direct credit enhancement from the US government) who fund apartment loans primarily on terms from 5 to 10 years (can go to 30 years) with amortiza- tions typically between 25 and 30 years. Loan proceeds under these programs can approach 80% for acquisition loans or no cash out refinances and 75% for cash out refinances. Pric- ing is established via spreads over the benchmark 5, 7 and 10 year treasuries and recent 10 year quotes have ranged as low as 3.62% for full leverage structures. Each program typi- cally locks rate near the date of closing but there are options for early rate lock after significant underwriting requirements have been met. Agency loans are originated, underwritten and serviced through correspondent entities (FNMADelegated Underwriter Servicer “DUS” or Freddie Mac Approved Seller Servicer) which may be affiliated with banks, life companies, invest- ment banks or commercial mortgage bankers. These enti- ties execute all facets of the loan process with close adher- ence to program guidelines and obtain final approval of the loan terms from the agency. The agencies also have programs for specialty rental real estate including Student Housing, Affordable Housing, Senior Housing and Manufactured Home Communities (Fannie Mae only). In general they offer supe- rior rates, high leverage levels, supplemental funding options and interest only periods under certain underwriting scenarios. There is significant specula- tion regarding the future of these two agencies tied into the overall political discussions surrounding federal supported financing agencies. However for the present they remain the overwhelming preferred source of apartment financing and that should continue over the near term. The third government agency source providing capital to the multifamily market is the Federal Housing Administra- tion (FHA). Unlike Fannie and Freddie, FHA is a true government agency funded and operated by the US Govern- ment. It provides permanent financing for market rate and affordable housing through a series of different programs and also provides construc-
tion/ permanent loans for the development of apartment communities. FHA also has historic low rate structures and can provide more leverage (83% refinance and up to 90% of construction costs) than Fannie and Freddie but its process is longer and involves significant upfront expenses including market studies and a variety of underwriting exhibits prior to approval. If the Borrower has the time and inclination to follow the process the resulting loans can be extremely attrac- tive in terms of leverage, term and pricing. Life Insurance Companies The Life Insurance Compa- nies have traditionally pro- vided a meaningful portion of the financing for multifamily rental communities and the as- set class is at the top of the list for these investors. Many Life Companies withdrew from the market or significantly lowered funding targets for all com- mercial real estate during the recent economic downturn as they struggled with above aver- age delinquencies and default- ing loans in their portfolios. However they have re-emerged in the last two years to resume funding with a strong appetite. The Life Companies are most competitive on a rate basis for longer term executions (15 to 25 years) and can structure long term fully amortizing, fixed rate loans with competitive rates for conservative Borrow- ers in today’s market. Their rate structures tend to reward lower leverage Borrowers and they capture a significant share of this level of funding. The Life Companies also compete effectively because of the relative surety of execution that their process can deliver. As portfolio Lenders they offer more flexibility in negotiation of key loan terms, no funded reserves for replacements, a variety of prepayment options and strong servicing relation- ships either directly or through their local mortgage banking correspondents. They try and focus their apartment fund- ing in primary markets with proven, experienced sponsor- ship and often develop multiple transaction relationships with those key sponsors. Many Life Companies are represented in local markets by mortgage banking firms who serves as their exclusive correspondents providing origination, under- writing and servicing for their
loans. Some of these investors tend to be most aggressive in the early part of the year as they seek to fill funding quotas through competitive pricing. Most always reserve some of their best pricing for well lo- cated, quality apartment loans because of their history of low loan loss and delinquencies. Commercial Banks Historically commercial banks provided the bulk of the loan dollars necessary to fund construction of new apartment communities and short term “mini permanent” loans after stabilization of the newly con- structed units. However the recent economic downturn left many of the active construc- tion Lenders with significant delinquency and default issues for new construction (primar- ily single family residential and land development) and virtually stopped all construc- tion funding for a period while markets slowly recovered and loans were worked out. This created a shift in focus for the banks to the relative safety of income in place lending and like their fellow Lenders, apart- ment communities became the investment of choice. At first banks tended to be most competitive for shorter term fixed rate transactions (5 years) but as treasury rates continued to plummet we have seen banks now assume a highly competitive position for fixed rate term financing of apartments up to 10 years. They share some of the same competitive advantages as the life companies with flex- ibility of terms and negoti- ated conditions but also add the ability of the Borrower to interact directly with the indi- viduals approving their loan. As treasuries have reached historic lows many of the life companies have enacted rate floors to protect against overly weighting the total return of their loan portfolios at historic low rates. The banks however have not employed floors and simply assign an underwritten credit risk spread over libor plus an interest rate swap for the corresponding fixed rate term. The all in costs for these executions in today’s market can compete effectively below many life company quotes and sometimes fairly close to the Agencies. The Banks have traditionally required some level of personal
recourse to the Borrower but will waive that requirement for strong, moderate leverage (70 to 75% LTV) apartment loans thus removing one of the major competitive advantages of the Agencies and Life Insur- ance Companies. As a result they are winning more of the competitive multifamily loan business than ever and as long as treasury rates stay low this trend should continue. This loan activity is consistent for many large national and re- gional commercial banks all the way down to down to local savings institutions, credit unions and community banks. A level of conservative apart- ment construction financing has also returned as a result of the demand created by years of relative inactivity in virtu- ally all markets and the bank lenders view this product as an opportunity to secure future permanent financing for stabi- lized apartments. Mortgage Loan Conduits In the years from 2000 through early 2007 mortgage loan conduits became a major source of funding for all types of commercial real estate includ- ing multifamily communities. They tended to offer superior leverage and competitive pric- ing for a variety of properties and were more aggressive in evaluating loan and asset risk factors. As a result of this market stance the conduits ex- perienced significantly higher levels of loan delinquencies and defaults than their competing sources during the economic downturn. This effectively shut down the securitized com- mercial mortgage market for an extended period of time and the remnants of that seg- ment of the industry did not re-emerge until 2010. They resumed activity with a much more conservative approach and limited market appetite for the underlying bonds that fuel their funding. As the economy has slowly improved and mar- kets stabilized the conduit community has regained some market viability and has been quoting and closing business for a couple of years. However the shadow of the older over- leveraged product that is being worked out continues to create higher risk spreads in the mar- ket than their competitors. The conduits are also perceived to be subject to significant volatil- ity in spreads and funding from continued on page 9A
last couple of years have t r a n s l a t e d to a parallel contraction of nominal in- terest rates for commer- cial real es- tate mortgag-
Edward D. Brown
es. Nowhere is this low rate environment more evident than in the various segments of the apartment finance market. In addition to the low base trea- sury rates which establish the pricing for these loans (rates are typically established via a risk spread over benchmark term treasuries) there is also a flight by mortgage investors to the perceived safety of apart- ments as an asset class. The current strength of the overall apartment market is a result of the continued erosion of single family housing values since 2007/2008 and an increase in the pool of prospective renters. Negative perceptions of rental vs. homeownership have disap- peared as mobility and afford- ability now drive a larger por- tion of the residential market and that trend points toward healthy increases in apartment rentals in most markets. The Northeast has partici- pated in this rebound in apart- ment occupancy, rents per unit and sales price per unit that has created this overheated market for both investment and financ- ing for quality multifamily rental communities. There are multiple viable capital sources that offer attractive options for apartment owners seeking financing for their properties. Below is an overview of the major capital sources for apart- ments and a brief discussion of the competitive advantages and factors involved in evaluating each potential source: Agency Financing The largest source of mul- tifamily funding in the US is provided by the combination of the multifamily divisions of the Federal National Mortgage Association- FNMA (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation- FHLMC (“Freddie Mac”).In 2011 these two agencies pro- vided $44.7 billion or 64% of all apartment mortgages written in the US and they are ahead of that pace in 2012. Fannie and Freddie are quasi-governmental
Mid Atlantic Real Estate Journal — August 17 - 30, 2012 — 9A
www.marejournal.com
M ultiFAMily F inAncing
Firm arranges three multi-family trades netting a combined $.+ million in days Gebroe-Hammer Associates hosts East Orange Multi-family Investment Roundtable
E
AST ORANGE, NJ — Gebroe-Hammer Associ- ates hosted the East Or-
ing Committee and as a mem- ber of the Housing, Licensing and Inspection; Finance; and Public Safety Committees. The session focused on how multi-family investors and landlords are contributing to- ward the City of East Orange’s urban revitalization and the important role of apartment buildings in future renewal initiatives. The Investment Roundtable was organized by Gebroe-Hammer executive VP David Oropeza, East Orange market specialist, as well as Isaac Frankel, who owns and manages approximately 30 buildings throughout Essex
County, including East Orange, and Ken Uranowitz, the firm’s managing director. In other multifamily news, three recent multi-family trans- actions that netted a combined $5.8+ million have paved the way for a stellar summer for Gebroe-Hammer Associates and the apartment-rental in- vestment sector as a whole. The firm recently arranged the trades, involving a total of 116 units, in NJ’s Union and Hudson counties and Delaware County, PA. Gebroe-Hammer was the broker in each trans- action, all within an eight day period. n
outside global market influ- ences and thus less certain in ability to execute on their loan applications. This has particu- larly impacted their competi- tiveness for acquisition loans since the sponsors are sensitive to potential loss of deposits in the event of a negative market event. All of these factors have relegated the conduits to quot- ing and funding transactions which fall outside the strike zone of their competitors. This was the original position of the conduits in their infancy in the late 90’s and it remains to be seen how they will recapture more market share, particu- larly for desirable apartment assets. In addition to the four major categories listed above there are a number of specialized lenders who provide funding for apartment properties including Lenders who focus on bridge or interim lending, acquisi- tion lenders who accommodate value addition through moder- ate to substantial rehab, and mezzanine and preferred equity sources who fund the upper levels of the capital stack. What is consistent through- out any discussion of current apartment financing is that the overwhelming competitive landscape that has created a boon for existing apartment owners and an overheated market for investors trying to acquire apartment assets for their portfolios. The historic low rates have contributed to this scenario but regardless of rates some level of favor for apartment loans is expected to continue as traditional hom- eownership levels are projected to be lower over at least the near term and apartment com- munities should continue to outperform other commercial real estate assets. Edward D. Brown is a senior VP and managing director for NorthMarq’s Philadelphia Office. n continued from page A By Brown . . . ange Multi-Family Investment Roundtable, an informational exchange between some of the city’s most prominent apart- ment-building owners and East Orange Councilman Ted Green, who represents the ThirdWard. He serves as Chairman of the Business Development & Zon-
Shown from left: Ken Uranowitz, Councilman Ted Green, David Oro- peza and Isaac Frankel
Better Solutions Better Relationships deliver
RECENT DE AL S
$7,100,000 Southgate Apartments STUDENT HOUSING | NEWARK, DE LENDER: FREDDIE MAC
$4,500,000 Creek Village Apartments 180 UNITS | LEVITTOWN, PA LENDER: LIFE COMPANY
$22,300,000 Bethlehem Fields 216 UNITS | BETHLEHEM, PA LENDER: REGIONAL BANK
Capital Markets
northmarq.com
Philadelphia Office 215.496.3000 33 offices coast-to-coast
JOSEPH SWEENEY | EDWARD BROWN PHILIP DEETER | MICHAEL AYLMER
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