6C — March 16 - 29, 2018 — Pennsylvania — M id A tlantic

Real Estate Journal


P ennsylvania By Daniel M. Palmier, UC Funds Micro-units can lead to macro-returns for investors


illennials and white collar executives are flocking to ma-

workers looking for affordable housing in major downtown markets and commercial real estate investors have taken notice. These efficiency apartments, generally under 400 s/f, are a wise investment for develop- ers, investors, and tenants. As any city-dweller can tell you, the high cost of living in urban markets plays a role in the decision-making process for prospective tenants and developers. It is extremely expensive to acquire land in major cities, and construction costs continue to skyrocket.

These factors, along with ongo- ing redevelopment and the rise in demand, has led to lower yields on investments. De- velopers are now renovating two-bedroom apartments into three-bedroom apartments to increase their returns. Rents for tenants in these small spaces are within the means of young executives willing to choose an ideal location over square footage. This trend isn’t likely to slow down, as the scarcity of developable sites di- minish and construction costs remain high. Rents in urban areas will only increase, along

with interest frommillennials. All arrows point to consistency for this type of asset. Meanwhile, micro-units are growing beyond gateway cit- ies. The concept is seeing an upswing in secondary markets like Kansas City, Pittsburgh, and Houston. There is less institutional capital available in these downtown areas and more competitive loan to val- ue. This allows investors, wary of gateway cities, to establish a presence in emerging asset classes, and diversify their experience. Micro-units are an impor-

tant find for investors explor- ing new asset capabilities and identifying growing markets. The value of such apartments within the commercial real es- tate sector lies in their ability to meet the needs of millenni- als looking for housing they can afford, in often unafford- able areas. Daniel M. Palmier is President and CEO of UC Funds, a provider of debt and equity capital solu- tions. n Markward Group handles 10,882 s/f sale in Allentown A l l e n t o w n , P A — Markward Group an- nounced the recent sale of a fully occupied 10,882 s/f single story industrial/warehouse building at 913 E. Highland St. in Allentown for $650,000. ChipMiers and Ann Kline of Markward Group repre- sented the seller A-Town Inc. and the buyer, Chau Huynh, who occupies the building. n Durkin of Roddy renews lease and expansion in Bristol Philadelphia, PA — Roddy Inc. represented J.B. Investments in the sale of 9100 State Rd., Philadelphia, as well as the leasing of a 14,400 s/f portion of a 46,750 s/f retail building located at 8700 Frank- ford Ave., Philadelphia, PA. Sean Durkin of Roddy Inc., who handled the sale on behalf of J.B. Investments, advised that Nancy W. Gaffney, rep- resented by Jamie Weiner of Delphi Property Group, LLC , purchased the 48,441 s/f one-story building at 9100 State Rd. which will be occu- pied by Harry W. Gaffney & Company, Inc., an independent distributor of specialty raw materials and packaging for manufacturers and industrial accounts across the Mid-Atlan- tic region. Durkin also advised Billows Electric, an entity related to J.B. Investments. They are re- locating and will occupy the fa- cility located at 8700 Frankford Ave. Billows Electric, who have been in business since 1950 and today have over 250 employees with 19 locations throughout the Tri-State Region, serve a full spectrum of residential and commercial electrical needs, switch gear and lighting. n

j o r c i t i e s , which come with a high price tag. So, how can peo- ple in mid- range income brackets af- ford to live in primary

Daniel M. Palmier

gateway cities such as New York City, San Francisco, and Philadelphia? Micro-units are making the unattainable more feasible for entry-level

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