- DC
N 38 buildings totaling 3.6 million s/f occupy prime infill market Cushman & Wakefield arranges Long Island industrial portfolio interest sale
ISSUE HIGHLIGHTS Volume 30, Issue 5 March 16 - 29, 2018 2018 Regional Conference of MBAs
Long Island boasts a popu- lation of 5,632 persons per square mile and average household income of $124,770. “Within this context, many of these buildings are ideally situated for conversion based on their locational attributes,” Palmese said. “For example, those proximate to train sta- tions could be adapted for retail or multifamily, and others could be repurposed for in-demand medical uses. Several of the properties have excess land for dedicated park- ing, which could be subdivided and sold as hotel or retail pad sites.” The East Rutherford, NJ, investment sales group spe- cializes exclusively in office, industrial, multifamily, land and retail property trades throughout New Jersey, New York, and Fairfield County, Conn. The teamhas completed $27 billion worth of transac- tions since 2000, closing over $2.2 billion in sales in 2017. n development projects inMarket East include Fashion District Philadelphia located directly below the property, as well as East Market and the Lits Brothers Building. Scheduled to open in the fourth quarter of 2018, Fash- ion District Philadelphia (for- merly The Gallery) will be the largest retail development in downtown Philadelphia, encompassing 840,000 s/f of shopping, food and entertain- ment destinations including an eight-screen AMC Theatre, Century 21, and the largest H&M in Philadelphia. The property also provides direct access to SEPTA’s Jefferson Station, and is within walking distance to Reading Terminal Market and the Pennsylvania Convention Center. Confirmed East Market retail tenants include an Iron Hill Brewery & Restaurant, City Fitness, Columbia Sports- wear, T.J. Maxx/Home Goods, and Federal Donuts. n
ASSAU AND SUF- FOLK COUNTIES, NY — Commercial real estate services firm Cush- man & Wakefield provided advisory services in the recent sale of a 50% interest in a 3.6 million s/f, 38-building indus- trial portfolio in Nassau and Suffolk Counties. A team of investment sales specialists based in East Rutherford, NJ, and Queens, NY, represented the ownership – a joint venture of FBE and Cammeby’s – in the $135 million transaction. Located throughout Nassau and Suffolk Counties, the port- folio is close to 90% occupied by tenants including Summit Plastics, Sam Ash, Ultimate Precision Metal, Luminance and Newsday, among many others. It includes a mix of industrial, office and R&D properties with varying lev- els of office finish, and clear heights ranging from 14 to 28 feet. The structures were developed between 1955 and
5-8A
Lee & Associates Md brokers sale of 135,000 s/f whse.
Long Island industrial portfolio
2000; many of the properties feature substantial renova- tions and upgrades, and con- tinued innovation is planned by the portfolio’s newmanager – Milvado Property Group – which features a dynamic, experienced team that is at the forefront of commercial real estate in the region. “This is a distinctive portfo- lio in a densely populated, af-
fluent market,” said Cushman & Wakefield’s Gary Gabriel , who headed the assignment with Andrew Merin, David Bernhaut, Kyle Schmidt, BrianWhitmer and Stephen Palmese . “The buildings all are well-located for last-mile and e-commerce distribution capabilities throughout Long Island and the five boroughs of NYC,” added Schmidt.
Section D
20A
MAREJ Events March 29, 2018 New Jersey Industrial Real Estate and Development Conference
Thor Equities acquires first property in Philadelphia, Pennsylvania for $41.8 million
April 26, 2018 New Jersey Office Conference
Philadelphia, PA — Thor Equities has closed on the acquisition of a three-story office condominium at 907 Market St. in Philadelphia for $41.8 million. The 214,000 s/f property is fully leased to Health Partners Plans, a not-for-profit health maintenance organization
For speaking and sponsorship information, please contact: Lea at 781-740-2900 or lea.christman@marejournal.com
Directory
Upcoming Spotlights Best of 2017 Multifamily featuring POA Expo CCIM PA/NJ/DE Organization.....................................IC-A Financial. ................................................................ 3-27A 1031 Exchange...................................................... 11-15A DelMarVa.............................................................. 19-22A New Jersey.........................................................Section B Northern NJ............................................................ 7-14B Pennsylvania......................................................Section C Central PA............................................................... 7-14C
907 Market St. in Philadelphia
serving more than 280,000 members in Southeastern Pennsylvania. “907 Market Street is a high quality asset located in the heart of Market East, the
fastest growing neighborhood in Philadelphia’s burgeoning City Center district,” said Joseph Sitt , CEO of Thor Equities. Retail, residential and office
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Real Estate Journal M id A t Antic
Questions? Contact PA/NJ/DE CCIM Chapter Director Jennifer Shockley at 717-614-4271 or email Jennifer@panjdeccim.com
2018 PA/NJ/DECCIMCHAPTER OFFICERS Jeffrey Hoffman, CCIM President JPH Realty Advisors PhilipEarley, CCIM Vice President Lieberman Earley & Company Charles Swope, Jr., CCIM Secretary Swope Lees Commercial RE Eric Gorman, CCIM Treasurer & Immediate Past President Cushman & Wakefield 2018 PA/NJ/DECCIMCHAPTER DIRECTORS John Birkeland, CCIM Chair, Central PA ROCK Commercial Realty Gregg Broujos Chair, Pittsburgh Region Colliers International David Church, CCIM Chair, New Jersey DL Commercial Real Estate Michele Countis, CCIM Jackson Cross Partners Jonathan Epstein, CCIM Berger-Epstein Associates, Inc. Cindy Feinberg, CCIM Chair, Lehigh Valley Feinberg Real Estate Advisors Craig Fernsler, CCIM Chair, Delaware NAI Emory Hill Jeff Kurtz, CCIM High Associates, Ltd. Laura Martin, CCIM, CPM, WBE Latus Commercial Realty Melissa Meyer, CCIM Brandywine Realty Trust Tom Skeans, CCIM SVN KW Commercial, Blue Bell Neil Kilian, CCIM, SIOR
Instructor: Ben Wilson Thursday, March 22, 2018 9:00 a.m. – 3:00 p.m. East Stroudsburg University Lehigh Valley Center Site To Do Business (STDB) Training
Instructor: Bill Overman, CCIM June 25-28, 2018 CI 101: Financial Analysis for Commercial Investment Real Estate 1427 West Liberty Ave., Pittsburgh, PA CI 101 will provide you with a foundation of practical financial analysis skills you need to succeed in the remaining curriculum and in the field. CI 101 introduces the CCIM Cash Flow Model, a tool for ensuring your investment decisions are based on wise finance fundamentals. The course also teaches key financial concepts in order to compare different types of commercial real estate investments. Cost : Member: $1,145 | Realtor ® : $1,390 Non-member: $1,650 Register at www.ccim.com Realtors ® Association of Metropolitan Pittsburgh
60 West Broad St., Bethlehem, PA, 18018 The Site To Do Business (STDB) is a veteran market leader in commercial real estate demographics. Using STDB provides commercial real estate professionals the reliable and singular source for real estate analytical tools such as demographic data, business information, thematic mapping, lifestyle data, and high quality aerial imagery. Cost : $50 for members & $75 for non-members Register at www.panjdeccim.com/events
6-hours PA continuing education!
DEALMAKERS Cindy McDonnell Feinberg, CCIM and Gregg M. Feinberg, Esq. of Feinberg Real Estate Advisors, LLC represented the seller, 3801 Paxton Equities, LLC on its $8,425,000.00 sale of the property located at 3801 Paxton Street, a 62,000 square-foot office building located in Swatara Township, Dauphin County, Pennsylvania. The property is located in TecPort, the former AMP, Inc. headquarters. The redeveloped 100 acre office park includes hotels, restaurants, car dealerships, office buildings and provides convenient access to businesses in central PA. FREA was the sole real estate broker involved in the transaction. The buyer, Rosser LLC is an Arlington, Virginia based investor. The property closed within three months of initiating the marketing of the property.
Kathy Sweeney-Pogwist Brandywine Realty Trust Matthew Wolf, CCIM High Associates, Ltd.
The PA/NJ/DE CCIM Chapter Proudly Acknowledges and Thanks the Following Sponsors:
Real Estate Journal — March 16 - 29, 2018 — 1A
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Mid Atlantic Real Estate Journal
Mid Atlantic R eal E state J ournal Publisher, Conference Producer ......................................Linda Christman AVP, Conference Producer . .................................................Lea Christman Associate Publisher ................................................................Steve Kelley Associate Publisher .................................................................. Kim Brunet Associate Publisher ............................................................ Miriam Buttrick Senior Editor/Graphic Artist ................................................ Karen Vachon Contributing Columnists ............... Carlo L. Batts, Rittenhouse Appraisals; Brian Clark, Esq., Buchanan Ingersoll & Rooney PC; David Goldfisher, The Henley Group, Inc.; Skelly Holmbeck, Advanced Geoservices Corp.; Darren Lizzack, msre, NAI Hanson; Randy Horning, msre; Daniel M. Palmier, UC Funds; Donald Smith, Jr., PhD, RIDC Mid Atlantic R eal E state J ournal — Published Semi-Monthly Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, 350 Lincoln St., Suite 1105 Hingham, MA 02043 USPS #22-358 | Vol. 30, Issue 5 Subscription rates: $99 - one year, $148 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion 781-740-2900 | Fax: 781-740-2929 www.marejournal.com The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
Recently Closed Loans
Blockchain, The Domino Effect: One State Down, 49 To Go P Natalia Karayaneva ropy, Inc. , a Palo Alto California-based block chain startup — is pleased to announce the launch of a pilot project in collaboration with the City Clerk’s Office of South Burlington, VT to utilize blockchain technology to re- cord real estate conveyance documents. As a recognized leader in the creation of blockchain- friendly legislation, Vermont is focused on attracting inno- vative technology companies such as Propy, the leading global blockchain real estate platform. “The Propy pilot will show- case the savings of block- chain distributed technology furthering Vermont’s and the City of South Burling- ton’s goal to achieve more cost-effective government. In parallel to making land record management systems signifi- cantly more efficient, Propy’s additional safeguards ensure additional data integrity,” said Natalia Karayaneva , CEO of Propy. “The announcement of a
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pilot project to utilize block- chain technology in real estate transactions is emblematic of Vermont’s long history of in- novating business, insurance, and financial technology. We are fortunate to have a cut- ting edge statutory frame- work that enables the use of blockchain technology, and we will continue to work with the legislature to ensure Vermont remains at the forefront of these innovations,” said Ver- mont Agency of Commerce and Community Development Secretary Michael Schirling, “The City of South Burling- ton is always interested in taking advantage of technol- ogy that enhances its deliv- ery of services to residents. We are ready to learn from this Propy pilot,” said Donna Kinville, City Clerk, South Burlington, VT,
Propy provides a real-world platform for the State of Ver- mont to continue studying and developing public policy for the continued creation, sup- port, and growth of a sustain- able and diversified economy around the Fintech sector. This joint public-private pilot program demonstrates that technology companies have the full support and active participation of Vermont’s state and local governments. The South Burlington-Pro- py pilot includes the Burl- ington based legal team of Gravel & Shea , a group of attorneys focused on the legal aspects of commercial development using blockchain technology. Also included is Purcell International, a con- sulting firm specializing in technology, startups, and gov- ernment/community liaison. n
ORDER TODAY Call Lea Christman 781-740-2900 for details
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M id A tlantic F inancial D igest Led by managing directors Will Baker and Brendan Coleman Walker & Dunlop closes $707 million credit facility for student housing portfolio
Real Estate Journal — March 16 - 29, 2018 — 3A
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ethesda, MD — Walker & Dunlop, Inc. funded a $707 mil- lion credit facility for the ac- quisition of 23 student housing properties for Scion Student Communities LLC, a joint ven- ture among The Scion Group LLC (Scion), General Invest- ment Corporation of Singapore (GIC) and Canada Pension Plan Investment Board (“CPPIB”). Walker & Dunlop has financed four large acquisition pools for Scion since 2016, totaling over $2 billion in debt. Walker & Dunlop’s team, led by managing directors Will Baker and Brendan Cole- man , structured a Fannie Mae Credit Facility with a mix of fixed and floating rate loans with staggered maturities. “Once again, Walker &Dunlop’s tireless commitment, creativity, and market knowledge resulted B PHILADELPHIA, PA — Hol- liday Fenoglio Fowler, L.P. (HFF) announced the $160 mil- lion sale and financing of 1600 Market St., a class A, 39-story office tower totaling 825,968 s/f in Philadelphia’s CBD. The HFF team represented the seller, Equity Common- wealth, and procured the buy- er, an affiliate of American Real Estate Partners (AREP). Addi- tionally, HFF worked on behalf of AREP and its institutional joint venture partner to secure a three-year, floating-rate loan for the acquisition. The HFF investment advi- sory team representing the seller included senior man- aging director Doug Rodio and managing director Brett Segal . In other news, HFF an- nounced $115.4 million in construction financing and pre- ferred equity for Scout on the Circle, a 551,000 s/f, mixed-use residential and retail develop- ment in Fairfax, VA. The HFF team worked on behalf of the developer, Combined Properties, In-
Cottages of Tempe
Sterling Burbank LSU
in superior execution for a large and fairly complex transaction,” said Avi Lewittes , chief invest- ment officer of The Scion Group LLC. “Especially important to us is Walker & Dunlop’s con- sistent ability to synthesize its broad resources and expertise in a fully coordinated and seam- less manner to deliver compre- hensive financing solutions.”
Chairman and chief executive officer of Walker &Dunlop, Wil- ly Walker, said, “It is an honor to be the selected financing partner, once again, for Scion as they continue building one of the premier Student Hous- ing companies in the United States.” Walker added, “Our team, in conjunction with Fan- nie Mae, did an exceptional job
structuring and executing on this complex financing.” “We appreciate the opportu- nity to partner with both Scion and Walker & Dunlop to close another structured Credit Fa- cility transaction,” said Jeffrey Ketron , vice president of mul- tifamily lender relationships, Fannie Mae. “Scion’s strategy
of providing multiple student housing options presents stu- dents at all income levels with safe, affordable housing. Walk- er & Dunlop was Fannie Mae’s largest partner in 2017, and it is clear that they worked tire- lessly to find the right execu- tion for this large and complex transaction.” n
Holliday Fenoglio Fowler, L.P. announces $160M sale and financing of 1600 Market in Philadelphia’s CBD
Carras, Walter Coker, Brian Crivella, JohnOwendoff and Jordan Lex. HFF announced the $11.2 million acquisition financing for Silver Star Commerce Center, an eight-building light indus- trial center totaling 254,915 s/f in Orlando, FL. The HFF teamworked on be- half of the borrower, Denholtz Associates , to place a three- year, floating-rate loan with Rialto Capital Management (Rialto). Proceeds will be used to purchase the property and make capital improvements, including a new façade, exte- rior painting, new tailboard and dock levelers, constructing truck wells and replacing the tenant entrance doors. Situated on 19.50 acres at 3600-3820 Silver Star Rd., Sil- ver Star Commerce Center is in the Northwest Orange County Industrial submarket. The HFF debt placement team included managing di- rector Michael Klein , direc- tor Preston Reid and senior managing director Michael Weinberg . n
1600 Market St.
Scout on the Circle
corporated, to arrange a $100 million, floating-rate construction loan and $15.4 million in preferred equity. Scout on the Circle will be a premier mixed-use community with three individual build- ings: a 54,000 s/f, single-story grocery store on the eastern corner of the property with prominent signage and front- age on Fairfax Blvd./Rte. 50 and Blake Lane/Rte. 655 along with two five-story luxury apartment buildings above
Silver Star Commerce Center
ground-floor retail podiums encompassing a total of 400 apartments and 29,000 s/f of
retail. The HFF team representing the developer included Susan
4A — March 16 - 29, 2018 — Financial Digest — M id A tlantic
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F inancial D igest
Progress Capital negotiates $86.25M construction loan
ating agencies have fore- cast their predictions for 2018 CMBS origina- By David Goldfisher, The Henley Group, Inc. 2018 Commercial mortgage- backedsecurities:TrendingNow R business pales in comparison to the wall of maturities from 2015 – 2017. CMBS Lenders have significant capital to lend but may lack the deal flow. locations to fulfillment cen- ters in response to consumers demand for improved on-line selections and increased speed of delivery.
NEW YORK, NY — Brad Domenico and Kathy An- derson of Progress Capital negotiated an $86.25 million construction loan for YYY 62nd Street LLC, a joint venture be- tween Joy Construction and Maddd Equities , to construct and fit out a new seven-story office building at 330 East 62nd St. in Manhattan. The 90,000 s/f office building is slated for a community facility. The build- ing is currently under construc- tion and is a through block site acquired from the Archdiocese of New York between First and Second Ave. “We are very pleased to have worked with Natixis and Prog- ress Capital on this financing. With our diverse development platform of multifamily, hospi- tality, workforce housing and community facility projects, it is crucial we have lenders and advisors who are able to provide creative and value add capitalizations to help us execute on our business plans,” mentioned Eli Weiss, Man- aging Member of YYY 62nd Street LLC. The loan is a 24 month interest-only construction loan with two 1-year exten- sions floating over LIBOR. Loan terms include limited recourse that burns off once the building is occupied. The loan represents a 90% loan to project cost ratio with a flex- ible prepayment option which was a major consideration in choosing a lending partner. Domenico and Anderson ne- gotiated terms of the loan with FALLS CHURCH, VA — Private equity firm Kiddar Capital has acquired 575 Hern- don Pkwy., the landing site for the platform of the WMATA Herndon Silver Line station. The 4.8-acre property is im- proved by a 135,102 s/f office building primarily occupied by Booz Allen Hamilton. The acquisition by Kiddar’s Real Estate Group was financed by Eagle Bank and brokered by C olliers Int’l . “This site is at the center of a vibrant community with local leaders committed to bringing new jobs and investment to their jurisdiction. Herndon’s leadership and larger commu- nity understand that good in- frastructure drives development and economic growth,” said Kid- dar Capital founder and CEO Todd Hitt . “We look to invest on new infrastructure whenever possible, and are thrilled about
tion volumes. The general c o n s e n s u s b y S & P , Fitch, DBRS, Morningstar, Moody’s and Kroll is that 2018 CMBS loan origina-
Roughly 200 of Sam’s Club stores share a parking lot with Walmart, cannibalizing one another’s businesses. Addi- tionally, Sam’s Club struggles to keep financial pace with and match future growth expectations of its chief rival Costco Wholesale. Costco has roughly the same number of stores but with almost twice the revenues. Costco was much quicker adapting its e-commerce plat- form to the demand of its customer base. Costco rolled out two new on-line delivery related offerings and created on-line marketing campaigns geared to its dues paying members. Convenience is the key driv- er for future sales. Retailers who flourish must accelerate its omni-channel sales ap- proach and create distinct in-store experiences that drive both e-commerce and in-store purchases. Real estate has just as much value in serving the online customers as it does the ones - in store. David Goldfisher is co- founder and principal at The Henley Group, Inc. n
The CMBS default rate has dropped over the prior eight consecutive months and is now at 4.51%. With all property types performing well and over 95% of CMBS loans current, the sector that seems to be the most dynamic is the retail market. Volatility in the retail sector will continue to be strongly in- fluenced by a stores executive management team’s vision and execution of marrying and branding its e-commerce sales and marketing platform with its bricks and mortar real estate locations. Last mile delivery locations (locations between distribution centers and customers) are in higher demand as Amazon Prime, Target and Walmart compete to drastically reduce customer delivery times. Walmart recently shuttered 63 of its 660 Sam’s Club loca- tions. According to Sam’s Club CEO John Furner,” Sam’s Club needs a strong fleet of stores fit for the future and we must exit clubs that cannot be successful under our new strategy.” Sam’s Club plans to convert 12 of the 63 closed
Jared Zimmel , of Natixis. Doug Heitner, Isaac Stern and Abe Seaman-Baldaro of Kaskowitz Benson and Torres LLP represented the borrower while Ralph Arpajian, Daniel Lisk and Jeremy Chubak of Haynes Boone LLP represented Natixis throughout the clos- ing process. In a other news, a valued client approached Domenico to refinance the existing debt on their mixed-use asset lo- cated at 115-02 Jamaica Ave. in the Richmond Hill section of Queens. The mixed-use property is a 38,000 s/f fully occupied 3-story brick retail/ office building. Each tenant is currently subject to a lease agreement with 10+ years remaining on initial terms. Domenico negotiated a $7 million non- recourse permanent mortgage loan representing a 60% loan to property value with 1 year of interest-only at 4.25%. The loan is subject to a 7 year term with a 5 year extension option, a fixed rate of 4.25%, 30 year amortization and a 5-5-4-4-3- 1-1 Prepayment Schedule. n 330 East 62nd St. rendering
David Goldfisher
tion volume will flatten to dip relative to the roughly $86 bil- lion securitized in 2017. The agencies generally agree that a significant tailwind propelling CMBS volume into 2018 is the continued strength of the single-asset/single-bor- rower (SASB) market and the current favorable low interest rate environment. Although experts at the February 2018 MBA conference in San Diego predicted that the 10-year Treasury rate will rise from 2.4% at the end of 2017 to 3.7% in 2020, interest rates will remain relatively low on a historic basis and not create a drag on the commercial real estate financing market. The major headwind con- straining 2018 CMBS loan growth is the significant decline in loan maturities going from $80 billion in 2017 to $24 billion in 2018. The 2018 refinancing Philadelphia, PA — For more than 20 years, 1499 S. Christopher Columbus Blvd. in south Philadelphia sat empty. Now, plans to develop this long-vacant property are finally moving forward. Nationwide private lending firm Silver Arch Capital Partners an- nounced the closing of a $15 million land loan for two of the site’s six parcels. The borrower used the loan proceeds to pur- chase the waterfront property, known as 1401 and 1401 R-S Christopher Columbus Blvd. A mixed-use development is planned for the 22.39-acre waterfront area. The proposed site plan includes the con- struction of up to 235 luxury townhomes along the scenic Delaware River, boat slips for owner’s watercraft, outdoor recreational activity and a riverfront cafe. “South Philadelphia is becom- ing a vibrant area where people want to live, work and shop,” said Jeffrey Wolfer , CEO of
Silver Arch Capital Partners announces $15 million loan closing for the acquisition of Former Foxwoods Property
Eagle Bank finances Kiddar Capital acquisition of 575 Herndon Parkway
Development on 22.39 acres in South Philla. along the Delaware River Silver Arch Capital Partners. “Putting this vacant lot to good use will add tremendous value to this growing area of the city.” The property, a 30.39 acre parcel at 1499 S. Christo- pher Columbus Blvd., was purchased by Philadelphia developer Bart Blatstein in 1993, and was later acquired by Bally’s Entertainment. Bally’s eventually traded the property to Foxwoods Resort and Casino, which partnered with several Philadelphia- area investors to finance the construction and operation of a casino on the site. In the face of fierce opposi- tion from the city, Foxwoods abandoned the project and in 2014 Blatstein acquired the property once more. Blatstein divided the 30.39-acre property into multiple parcels, two of which were developed with an Aldi’s grocery store and a Wawa convenience store. According to Wolfer, a new mixed-use development is an exciting new prospect for south Philadelphia, which has under- gone significant revitalization in recent years. n
this opportunity to steward the ownership of a metro-centric site in the town of Herndon.” Herndon includes a down- town Historic District listed on the National Register of Historic Places with shops, restaurants, and plans for a new arts center. Hitt noted that Kiddar Capital is looking forward to contributing to the local economy and commu- nity through ownership of the metro site. n 575 Herndon Parkway
S hopping C enters M ortgage B ankers A ssociation 2018 R egi nal C onference www.marejournal.com M id A tlantic Real Estate Journal — Financial Digest — March 16 - 29, 2018 — 5A
Monday, March 26, 2018 10:30 a.m. - 11:45 a.m. State of the Retail Market
Monday, March 26, 2018 9:00 a.m. - 9:15 a.m. Welcome/Introductions
A review & analysis of the current State of the retail market in light of the vast number of store closings by many major retailers, and the overall effect of the internet into the traditional businesses of all retailers.
E. Robert Levy, Esq. Conference Chairman; Executive Director, MBA-NJ, NJAMB and PAMB
Charles H. Kauffman, Jr., CMB President, C.H. Kauffman & Associates, Inc., Comm’l. Planning Committee
9:15 a.m. - 10:30 a.m. State of the Commercial Market
Lawrence J. Longua Chairman of the Industry Outreach Committee of Fordham Real Estate Institute at Lincoln, Baruch College, NYC
Shari D. Linnick Vice President - Client Service Trepp, LLC
Speaker: James W. Hughes, Ph.D. University Profes- sor; Dean Emeritus, Edward J. Bloustein School of Planning and Public Policy; Senior Faculty Fellow, John J. Heldrich Center for Workforce Develop- ment; Senior Research Scientist, Center for Ad- vanced Infrastructure and Transportation (CAIT), Rutgers School of Engineering
Agenda continued on page 6A
6A — March 16 - 29, 2018 — 2018 Regional Conference of MBAs — Financial Digest — M id A tlantic
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2018 R egional C onference of MBA s Monday, March 26, 2018 12:30 p.m. - 1:30 p.m. Lunch with Speaker Tuesday, March 27, 2018 9:30 a.m. - 11:30 a.m. Traditional Lenders Panel
The lenders are back with money to lend. Hear their insights and perspectives on how transactions are getting structured today, current lending programs available and their forecasts for 2018. The bankers will be in the house on Tuesday morning, will you?
Ryan Severino, CFA Chief Economist, JLL 1:45 p.m. - 3:00 p.m. Alternative CRE Financing Who’s Lending & How They’re Doing It
Moderator: Ronald M. Shapiro Assistant Professor of Professional Practice, Finance & Economic Departments, Rutgers Business School – Newark and New Brunswick, Rutgers the State University of New Jersey Panelists/Speakers:
Pioneers and industry leaders in alternative and non-bank CRE financing share their insights on the current structures of senior debt, mezzanine loans and preferred equity. Learn where lenders are investing their capital and what types of Sponsors attract their attention. On which asset types will alternative lenders lend? What are the critical decisions in their underwriting process? In a lively discussion, panelists will discuss real-time opportunities and challenges, impact of the tax law changes and offer their outlook for 2018 and beyond.
Jack Coll Senior VP Emigrant Mortgage Co., Inc.
Vincent G. Forma VP, Comm’l. Loan Officer Sussex Bank
Colleen Foy VP, Senior Relationship Manager M&T Bank
Moderator: Richard T. Carr Managing Director, Petrich International Panelists/Speakers:
Stephen Gregory VP, CRE Republic Bank
Ellen McHenry Senior Director of Financial Programs UCEDC
John J. Pagano VP, Commercial Lending Officer CRE Oritani Bank
Adam Luysterborghs Managing Partner Avant Capital Partners
Michael Schneider Chief Operating Officer Aristone Capital
Peter Rand Senior VP & Sr. Banker KeyBank Real Estate Capital
Ken Wood NE Regional Dir. Money360
Michael K. Staton VP, Mortgage Officer The Community Preservation Corp.
Gregory J. Nuber VP & Relationship Manager Popular Community Bank
Michael Zmachinski Vice President, Senior Commercial Lending Officer Millington SavingsBank 11:30 a.m. - 2:00 p.m. Exhibit Hall with Lunch 7:00 p.m. - 9:00 p.m.
Jeff Seidler Managing Director Emerald Creek Capital
Jonathan M. Shapiro Director of Originations Maxim Capital Group
Opening Networking Cocktail Reception in the Exhibit Hall
6:00 p.m. - 8:00 p.m. Second Commercial Networking Cocktail Reception
Real Estate Journal — Financial Digest — 2018 Regional Conference of MBAs — March 16 - 29, 2018 — 7A
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M id A tlantic
2018 R egional C onference of MBA s
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• Westchester/Rockland • Orange & Putnam NJ/PA/CT Market • New Jersey* • Eastern PA including Phila- delphia • Fairfield County, CT * (Other counties may be considered) New England Market • Eastern Massachusetts in- cluding Boston Florida • Southeast Florida including Miami • Southwest Florida including Tampa * EFC’s Small Business Admin- istration (SBA) lending area
Emigrant maintains offices in New York (Manhattan, Long Island andWestchester), New Jersey, Massachusetts, and Florida. Our Commercial Mortgage Specialist along with our in-house team of underwriters, appraisers and closers, facilitate prompt deci- sion making and processing of all loan applications. If you would like to learn more about how Emigrant can help you with your clients, please reach out to Jack Coll, senior vice president at Emi- grant Mortgage Co., Inc. Coll is in his 24th year with
Emigrant Mortgage Company. Jack has had management responsibility for many geo- graphical regions with Emi- grant throughout his career. At present, Coll has regional responsibility for the New Jer- sey and Philadelphia Regions. Emigrant Mortgage Company offers a Small Balance Com- mercial Lending Program to the wholesale mortgage mar- ketplace. With loan sizes up to 5MM, Emigrant specializes in commercial loans for Mixed Use and Multifamily prop- erties. Financing for Retail Strip properties, Small Office
buildings, and certain “Stand Alone Building” property types is also offered within the lend- ing program. As a portfolio lender, and with features such as no personal debt-to-income ratio, large cash outs, Cross- collateralizations, and deal structuring, Emigrant brings a unique underwriting ap- proach to the commercial lend- ing space. Coll and Emigrant’s other lending representatives will be happy to discuss these loan programs in more detail at the 2018 Regional Confer- ence of the Mortgage Bankers Association. n
F u n d i n g Corporation (“EFC”), of- f e r s p o r t - folio (bank- owned) small b a l a n c e commercial / mixed use products for
Jack Coll
first mortgage financing for most types of commercial real estate, including: multifamily apartment houses, mixed-use buildings, retail strips and of- fice properties. As a subsidiary of Emigrant Bank, a 168-year- old New York savings institu- tion, EFC is able to draw upon the vast resources of its parent to make sure borrowers get the funds they need in a timely fashion. Emigrant’s commercial port- folio guidelines include pur- chase, rate/term refinancing and cash-out transactions, full documentation loan programs and amortization Periods up to 30 Years. EFC’s full suite of programs and products provide financing options for traditional borrowers, as well as foreign nationals, resident aliens and borrowers with low or no credit scores. EFC, through Emigrant Bank, is a participating Small Busi- ness Administration (“SBA”) Lender offering SBA Advan- tage Loans 7(a) and SBA Grow Loans (504). Emigrant’s Commercial Lending Area includes: NY Market * • 5 boroughs • Nassau/Suffolk
A SUBSIDIARY OF EMIGRANT BANK
Commercial Mortgages
Eligible Properties Include:
Guideline Highlights:
No Minimum Credit Score Requirement Loan Amounts up to $5 Million Various amortization periods available
Financial Digest
Foreign Nationals & Non-Resident Aliens eligible Multi-State Cross Collateralized Loans allowed Cross Collateral Loans with Residential Properties permitted
a section of the Mid Atlantic Real Estate Journal Phone: 781-740-2900 Fax: 781-740-2929 www.marejournal.com
Jack Coll, Senior Vice President NMLS#13478 / 914.785.1245 CollJ@Emigrant.com
Call Today
Emigrant Bank is a Participating SBA Lender offering SBA Advantage Loans 7(a)and SBA Grow Loans (504).
S ection P ublisher Miriam Buttrick mbuttrick@marejournal.com
Copyright © 2018 Emigrant Mortgage Company, Incorporated - NMLS#1577 (Emigrant). All rights reserved. Emigrant is a subsidiary of Emigrant Bank, Member FDIC. Emigrant is an Equal Opportunity Lender and an Equal Opportunity Employer. The information, products and services contained in this advertisement are believed to be correct but may include inaccuracies, typographical errors and/or omissions. Emigrant does not guarantee the accuracy of the data contained herein. All loans are subject to submission of a complete application, underwriting review and credit and property approval by Emigrant. Not all products and/or programs are available in all states and/or localities and/or for all loan amounts. Other restrictions and limitations may apply. Emigrant’s commercial mortgage programs/products are offered through Emigrant Funding Corporation - NMLS#1597 (EFC) a Subsidiary of Emigrant Bank. EFC’s loan programs are limited to loans that do not meet the definition of residential under applicable state laws. New York Mortgage Banker License*, New York State Department of Financial Services, One State Street, New York, NY 10004, 212.709.3500. New Jersey Licensed by the N.J. Department of Banking and Insurance, Residential Mortgage Lender License #9401304, with a principal address at 7 Westchester Plaza, Elmsford, NY 10523, 914.785.1100 and Residential Mortgage Lender Branch License #296765, with a principal address at 350 West Passaic Street, Rochelle Park, NJ 07662. Pennsylvania Partially Exempt Mortgage Company Registration #31288, Pennsylvania Department of Banking and Securities, 17 North Second, Harrisburg, PA 17101, 717.787.2665. Emigrant is also registered or licensed with the Banking Departments or Divisions in CT, MA, and FL. *Mortgage Banker activities authorized pending issuance. /// 03/01/18.
S ection E ditor Karen Vachon kjoy@marejournal.com
8A — March 16 - 29, 2018 — Financial Digest — M id A tlantic
Real Estate Journal
www.marejournal.com
F inancial D igest
$50MM of financing on Bridgeport Avenue in last 12 months Cronheim secures $22.5 million for Shelton, CT retail center
airfield Coun- ty, CT — Cronheim Mortgage secured per- manent financing totaling $22.5 million for The Center at Split Rock, a neighborhood retail property located in Shel- ton, Fairfield County. The 10 year loan was structured with a fixed-rate of 4.12%, and am- ortizes over a 30 year period. The Subject encompasses 91,197 s/f comprised of several freestanding and multi-tenant buildings on various levels of an upward-sloping, 11.72 acre parcel of land. The property was constructed in 2007 and F
is 99% leased to over 20 ten- ants including Walgreens, Outback Steakhouse, Orange Theory Fitness, and Mattress Firm, as well as a mix of local tenants including a spa, frozen yogurt shop, tanning salon, and multiple restaurants. The Subject's local area is defined as the Bridgeport Avenue commercial corridor that extends to the south from Exit 11 of Route 8 to the north commencing near the downtown area along the Housatonic River. This corridor is the most heavily trafficked in the town and
comprises the majority of retail inventory serving the local area. The loan was originated and placed by Dev Morris, Allison Villamagna , and Andrew Stewart. In Ocean City, MD, Cron- heim Hotel Capital (CHC) and GEM Equity Markets (GEM) arranged a first mort- gage construction loan of $20,800,000 for the 133-key Cambria Resorts & Confer- ence Center Hotel to be built on North First Street in Ocean City, Maryland. The iconic project was financed for the joint venture group of Ocean City based Pinnacle Hospitality Solutions and The Wankawala Organiza- tion of Philadelphia. The financing was provided by a consortium of Maryland based credit unions. The loan provided 65% of total costs and is at a rate of Prime plus 175 basis points with a floor of 5.75%. The initial term is 24 months interest only with extension options. The loan has the option to convert to a 5/25 perm loan at 350 basis points over the Constant Maturity Treasury Rate upon comple- tion and certain occupancy and debt service coverage covenants. Choice Hotels Interna- tional, Inc. (Choice Hotels), owner of the Cambria Brand, granted a 30-year franchise to the owners of this location. Choice Hotels is headquar- tered in Maryland and was committed to developing this location as they have no other property of this caliber in Ocean City, Maryland. Mihir Wankawala com- mented: “CHC did an amaz- ing job. They were truly part of our team and went above and beyond anything one might expect of a mortgage broker. This was not an easy deal and if it were not for them, I can honestly say this project would not have gotten financed.” Cronheim Hotel Capital and its affiliate, Cronheim Mortgage Corp, provide debt and equity for a wide array of commercial real estate. The principals of CHC have six decades of combined ex- perience in commercial real estate capital markets and have completed over $8 Bil- lion of capital transactions. n
The Center at Split Rock
A smart
alternative to conventional financing
Rates from 7% Loans up to $50 million
Funding in 1 - 2 weeks No prepayment penalty
www.emeraldcreekcapital.com
1 (800) 313-2616
Real Estate Journal — March 16 - 29, 2018 — 9A
www.marejournal.com
M id A tlantic
10A — March 16 - 29, 2018 — Financial Digest — M id A tlantic
Real Estate Journal
www.marejournal.com
F inancial D igest By John Licari, Singer Financial Corp.
“Hard” Money Lending Myths
F
or some, the phrase “hard money lender” connotes visions of lend-
business borrowers to whom big commercial banks won’t lend. Whether it’s because you’re being told that your bank won’t lend to you due to the nature of your business, or because your business hit a rough patch, a business loan through a hard money lender is worth exploring. While there are differences between loans from hard mon- ey lenders—or private lenders as we prefer to call ourselves-- and traditional banks, many of those differences may make it easier to secure the capital your business needs. Hard money lenders make loans based on
the value of real estate owned by the borrower. The Lending decisions are generally based on the quality of a borrower’s real estate and whether the lender can secure a first po- sition mortgage against the property and not the borrower’s credit score. Credit-worthiness is considered when setting the interest rate for the loan. This key difference may qualify many commercial borrowers for a loan in circumstances where traditional commercial banks won’t lend. Hard money lenders also use lower loan-to value ratios (LTV) in offering loans. While
traditional banks may offer a loan with 80% LTV, many hard money lenders will typi- cally offer loans with an LTV in the 30% to 50% range. The hard money lender may also appraise the value of your prop- erty more conservatively than a bank. How does this translate? Let’s use a possible scenario at Singer Financial Corp. as an example. We will typically loan up to 40% of the value of the property. If you have a prop- erty valued at $1,000,000.00, Singer Financial may offer to lend you $400,000.00, while a commercial bank may offer to lend you $800,000.00 if you
otherwise qualify with them based on your credit score, type of business, and are issue-free . While interest rates charged by hard money lenders are higher than traditional banks, the rates are based on the higher cost of capital. Commer- cial banks borrow their money from the Federal Reserve at the “discount” rate (2.0% as of the date of this article). Hard money lenders do not get cheap money through the Federal Reserve. Most hard money lenders get their money from private investors to whom they pay higher rates of inter- est. This is primarily why rates charged by private lenders are higher than banks. Despite the stereotypes, in- terest rates charged by most hard money lenders are a lot less expensive than you may think. For example, we offer loans with rates as low as 11% to 15% at Singer Financial Corp. Today’s hard money lend- ers offer a valuable service to many businesses who have real assets, but for a variety of other reasons can’t get the money they need from the big banks. Singer Financial Corp. is a private commercial lender with over 25 years of lending experience. If you are looking for capital for your business, and having trouble securing it from a traditional bank, give us a call. We may be able to offer a solution. John Licari is the assis- tant to Paul Singer of Sing- er Financial Corp. located in Philadelphia, PA. n Denholtz Associates secures $9.2million r e f i nanc e wi t h Provident Bank Bridgewater, NJ — Denholtz Associates has secured a 5-year, $9.2 mil- lion refinancing from Provi- dent Bank on its 11 build- ing, 264,163 s/f flex-indus- trial property on Chimney Rock Rd. and Kearney St. in Bridgewater and Bound Brook, NJ. Paul Barrood , CRE relationship manager III for Provident Bank , secured the financing for Denholtz. n Bridgewater Industrial Park
ers who prey on the finan- cially weak, impose op - p r e s s i v e l oan t erms and charge o b s c e n e l y high interest rates. These
John Licari
connotations and stereotypes can’t be further from the truth. The reality is that most hard money lenders are profession- al, experienced lenders who can offer financial solutions for
M id A tlantic 1031 E xchange Fast-Tracked Legislation, Took Effect January 1 Under Tax Reform, A new landscape for Section 1031
Real Estate Journal — Financial Digest — 1031 Exchange — March 16 - 29, 2018 — 11A
www.marejournal.com
P
Unfortunately, the repeal of personal property exchanges does leave some assets ineli- gible for deferral under Section 1031 or for immediate expens- ing. These assets include: • Franchise agreements • Distribution rights • Liquor licenses • Artwork, collectibles and antiques The Role of Qualified Intermediary The legislation also preserved the role of the qualified inter- mediary (QI). The QI plays an important role during the exchange process by helping guide the taxpayer and their advisors through the exchange process. In additional to pre- paring the pertinent exchange documentation and safeguard- ing the exchange proceeds, QI’s also keep the taxpayer aware of the time deadlines and the
identification rules, coordinate with the closing agents and help ensure he transaction is completed pursuant to Trea- sury requirements. The QI also communicates with the taxpayer’s legal and tax advi- sors regarding these important requirements. Members of the Federation of Exchange Ac- commodators (FEA; www.1031. org), the national trade associa- tion for exchange practitioners, have access to the latest tax court decisions, private letter rulings (PLRs) and other rel- evant legal and tax guidance. Thank You The leadership and members of the FEA are grateful to all who supported the effort to pre- serve 1031 like-kind exchanges. Teresa Person, CES ® is president of Federation of Exchange Accommoda- tors. n
resident Trump signed the Republican tax re- form bill into law on
changes for real estate are preserved. • 1031 exchanges of all per- sonal property assets are eliminated. • The role of the Qualified Intermediary is preserved. Impact on Section 1031 1031 exchanges for real prop- erty have been preserved which includes all real property used for business or held for invest- ment purposes Section 3303 of the bill, how- ever, repeals exchanges for all personal property, including but not limited to machinery, equipment, vehicles and air- craft. New and used assets acquired and placed in service after September 27, 2017, and before January 1, 2023 will be eligible for 100% immediate expensing. After the first five years, this immediate expens- ing will begin to phase out.
December 22, 2017. After years of wor- rying about the future of Section 1031 like-kind ex- changes, the rea l es tat e industry was
Teresa Person
offers new tools for taxpayers and businesses. The legislation retains Section 1031 like-kind exchanges for real property assets and the vital role of the qualified intermediary (QI), but eliminates exchanges of all personal property. The law took effect on Janu- ary 1, 2018. The following summarizes the impact of tax reform on 1031 like-kind ex- changes: • Section 1031 like-kind ex-
fortunate Section 1031 survived but it came with significant modifications. 1031 exchanges provide many economic benefits that help create jobs and con- tribute meaningfully towards economic growth. The Tax Cuts and Jobs Act is the first major overhaul of the U.S. tax code since 1986. The controversial new law reduces tax rates, redefines tax rules and accounting methods, and
Edward Fernandez 1031 CrowdFunding, LLC
Alan Fruitman www.1031tax.com
Diane Schaefer EXCHANGE SOLUTIONS
Eric Nelson Woloshin Investment Management
Inside:
Eric Nelson, Woloshin Investment Management..................................................................................................... 12A Edward Fernandez, 1031 CrowdFunding, LLC......................................................................................................... 14A EXCHANGE SOLUTIONS............................................................................................................................................ 15A Stonecrest Partners.................................................................................................................................................... 16A Alan Fruitman, www.1031tax.com............................................................................................................................. 17A
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