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8C — June 27 - July 10, 2014 — Mid-Year Review — 1 -( % 80%28-'
Real Estate Journal
M ID -Y EAR R EVIEW
For Parkside Commons Apartments NorthMarq arranges PLOOLRQUHÀQDQFH
For the acquisition of the Charter Court Meridian Capital Group DUUDQJHVPLQÀQDQFLQJ P HILADELPHIA, PA — Meridian Capital Group, LLC D QD -
year since 2007 and this mo- mentum is continuing in 2014. Vacancy rates have decreased and net absorption has been VWURQJ LQ WKH RIÀFH LQGXVWULDO DQG UHWDLOPDUNHWV /DVW \HDU DQG FRQWLQXLQJ LQWR WKLV \HDU investors continue to be very ac- WLYHLQWKHKRWHOSURSHUW\VHFWRU ZKLFKZDV XS LQGXVWULDO LQFUHDVHGE\RIÀFHXSE\ PXOWLIDPLO\ URVH DQGUHWDLOURVH,QDGGLWLRQ 5(,7VDSSHDUWREHYHU\DFWLYH this year with a projected pace of acquisition and expenditures running about 60%higher than the pace of dispositions. More evidence of the strong commer- FLDODFWLYLW\FDQEHVHHQE\WKH year-to-date rent growth in the 86DSDUWPHQWPDUNHWZKLFK is the best since the economy started to recover from the Great Recession according to $[LRPHWULFV,QF FACTOR #3: RESIDENTIAL HOME PRICE RECOVERY $FFRUGLQJWRWKH&DVH6FKLO - OHU ,QGH[ RI PDMRU FLWLHV home prices nationwide have recovered by about 20% from WKH PDUNHW WURXJK $PRQJ WKH QDWLRQ·V ODUJHVWPHWUR PDUNHWVDOOEXW6W/RXLVDQG Kansas City have experienced year-over-year home price in- FUHDVHVDVRI$SULO7KRVH ZLWK WKHPRVW QRWDEOH DQQXDO LQFUHDVHV LQFOXGH 5LYHUVLGH /DV 9HJDV 6DF - UDPHQWR DQG 2UODQGR (16%). Forecasts show about one-third of the nation expe- riencing home appreciation KLJKHUWKDQWKHQDWLRQDODYHU - age over the next 12 months. 5HQWVRQVLQJOHIDPLO\UHQWDOV CHELSEA, MA — James Murphy PDQDJLQJ GLUHF - tor of NorthMarq Capital ’s %RVWRQ EDVHG UHJLRQDO RIÀFH VHFXUHG WKH PLOOLRQ UHÀQDQFH IRU 3DUNVLGH &RP - PRQV$SDUWPHQWVDXQLW PXOWLIDPLO\ SURSHUW\ ORFDWHG DW6WRFNWRQ6WLQ&KHOVHD 7KHSURSHUW\LVRZQHGE\-RKQ M. Corcoran & Co. and Guard- LDQ /LIH ,QVXUDQFH &RPSDQ\ and managed by Corcoran Management Company, Inc. 7KH WUDQVDFWLRQ ZDV structured with a 7-year term ZLWK\HDUVRILQWHUHVWRQO\ ´:HDUHJUDWHIXOIRUWKHRS - SRUWXQLW\WRZRUNZLWKRQHRI WKH DUHD·V SUHPLHUPXOWLIDP - LO\ GHYHORSPHQW DQG RZQHU - VKLS JURXSVµ VDLG 0XUSK\
WLRQDOFRPPHUFLDOUHDOHVWDWH ÀQDQFHDQGDGYLVRU\ÀUPDU - UDQJHGDPLOOLRQDFTXL - VLWLRQ ÀQDQFLQJ SDFNDJH IRU the purchase of the Charter &RXUW PXOWLIDPLO\ SURSHUW\ ORFDWHG LQ 3KLODGHOSKLD RQ EHKDOI RI Treetop Devel- opment 7KH PLOOLRQ ÀYH\HDUVHQLRUORDQSURYLGHG E\ D UHJLRQDO EDODQFH VKHHW OHQGHUIHDWXUHVDFRPSHWLWLYH À[HGUDWHGDQGPRQWKVRI LQWHUHVWRQO\ SD\PHQWV 7KH PLOOLRQ PH]]DQLQH FRP - ponent features a three-year WHUP D IL[HGUDWH RI DQG LQWHUHVWRQO\ SD\PHQWV IRU WKH IXOO WHUP 0HULGLDQ PDQDJLQJ GLUHFWRU Scott Assouline and managing di- UHFWRU Peter Steier ZKRDUH both based in the company’s 1HZ KDYH DOVR LQFUHDVHG ULVLQJ E\ 2.3% on a year-over-year basis. $OVR WKH ODFN RI QHZ KRPH construction during the Great 5HFHVVLRQKDVOHGWRDVKRUWDJH RI QHZ VLQJOHIDPLO\ KRPHV further pushing uphome prices. 7KH UHFRYHU\ RI UHVLGHQWLDO home prices is another factor causing an increase in 1031 H[FKDQJH DFWLYLW\ +RZHYHU since home buyers are gener- DOO\PRUHVHQVLWLYHWRLQFUHDVHV in the interest rate than CRE LQYHVWRUVULVLQJLQWHUHVWUDWHV LQ WKH IXWXUH FRXOG KDYH D negative impact on demand for VLQJOHIDPLO\KRPHSXUFKDVHV 1031 EXCHANGES 7KH´SHUIHFWVWRUPµUHVXOW - ing from the convergence of WKHVHWKUHHIDFWRUVKDVOHGWR an increase in 1031 exchange activity as investors turn to WKLV SRZHUIXO WD[ VWUDWHJ\ WR preserve investment equity DQGLPSURYHUHWXUQV7KLVLQ - FUHDVHLQDFWLYLW\KDVOHGWRD VLJQLÀFDQWLQFUHDVHLQGHPDQG IRU VHFXUH NQRZOHGJHDEOH DQGVHUYLFHRULHQWHGTXDOLÀHG intermediary services. Pamela Michaels is an attorney and vice presi- dent of Asset Preservation, Inc., a nationwide Qual- ified Intermediary and wholly owned subsidiary of Stewart Title. Michaels is located in Manhattan and can be reached at 866- 317-1031 or at pmichaels@ apiexchange.com . $V D 4XDOLILHG ,QWHUPHGLDU\ DV GHÀQHGLQWKH6HFWLRQUHJXODWLRQV $VVHW3UHVHUYDWLRQ,QFLVQRWDEOHWR SURYLGHOHJDORUWD[DGYLFH$FFRUGLQJO\ \RXVKRXOGUHYLHZWKHGHWDLOVRI\RXU VSHFLÀFWUDQVDFWLRQZLWK\RXURZQOHJDO RUWD[DGYLVRU&RS\ULJKW . ´7KHOHQGHUHDVLO\UHFRJQL]HG WKH TXDOLW\ RI WKLV FODVV ¶$· /((' 6LOYHU &HUWLÀHG DVVHW DORQJ ZLWK WKH VWUHQJWK RI WKHVSRQVRUVKLSDQGZDVDEOH WRSURYLGHDFRPSHWLWLYHORDQ structure that offered the rate DQGÁH[LELOLW\UHTXLUHGWRZLQ WKHGHDOµ Parkside Commons Apartments Charter Court QHJRWLDWHGWKLVÀQDQFLQJ7KH XQLW&KDUWHU&RXUWPXO - WLIDPLO\SURSHUW\LVORFDWHGLQ 3KLODGHOSKLD3$DQGIHDWXUHV WZRVWRU\WRZHUV´,QRUGHU WR PDNH WKLV DFTXLVLWLRQ D VXFFHVV 0HULGLDQ HQOLVWHG D IOH[LEOH DQG UHODWLRQVKLS RULHQWHGOHQGHUZLOOLQJWRDF - commodate the terms of the PH]]DQLQH ILQDQFLQJ ZKLOH OHQGLQJRXWVLGHRILWVSULPDU\ JHRJUDSKLF IRFXVµ VDLG $V - VRXOLQH continued from page 4C The perfect storm: “Three factors... JLL reports higher Newark, Hudson Waterfront 7URSK\FODVV$RIÀFHUHQWV ERWK PDUNHWV VWLOO ERDVW WKH ORZHVW RYHUDOO YDFDQF\ UDWHV LQ1HZ-HUVH\µVDLG Robert Kossar H[HFXWLYHPDQDJLQJ GLUHFWRU DQG KHDG RI -//·V 1HZ -HUVH\ DQG /RQJ ,VODQG RSHUDWLRQV ´&RPELQHG ZLWK WKH VWDWH·V QHZO\ RYHUKDXOHG HFRQRPLFLQFHQWLYHVSURJUDP WKHLQFUHDVHLQDYDLODEOHVSDFH has created opportunities for FRPSDQLHV WR UHORFDWH WKHLU operations into two of the most LPSRUWDQW WUDQVLWFHQWULF PDUNHWVLQ1HZ-HUVH\µ Newark 1HZ -HUVH\·V HFRQRPLF LQ - FHQWLYHVSURJUDPVKDYHSOD\HG D SLYRWDO UROH LQ UHYLWDOL]LQJ GRZQWRZQ 1HZDUN LQ UHFHQW \HDUV,QPLG3DQDVRQLF moved its North American headquarters from Secaucus WR 1HZDUN DIWHU UHFHLYLQJ PRUHWKDQPLOOLRQLQÀ - na QFLDOLQFHQWLYHV3UXGHQWLDO ,QVXUDQFHREWDLQHGPRUHWKDQ PLOOLRQ LQ WD[ FUHGLWV WR UHORFDWH LWV KHDGTXDUWHUV LQWR D QHZ VI RIÀFH EXLOGLQJ RQ %URDG 6W QHDU 0LOLWDU\3DUN:KLOHWKLVDF - WLYLW\FHUWDLQO\EHQHÀWWHGWKH FLW\WKHRYHUDOOYDFDQF\UDWH IRU1HZDUN·VWURSK\DQGFODVV $ EXLOGLQJV LQFUHDVHG VHYHQ percentage points from spring 2013 to 15.0% in response to 3UXGHQWLDOSODFLQJPRVWRILWV FXUUHQW RIÀFH VSDFH DW*DWH - ZD\&HQWHURQWRWKHPDUNHW Hudson Waterfront 7KH +XGVRQ :DWHUIURQW KRXVHV WKH ODUJHVW FRQFHQ - WUDWLRQ RI EDQNLQJILQDQ - FLDO VHUYLFHV ILUPV LQ 1HZ -HUVH\ &RPSHWLWLYH UHQWDO rates combined with a mass WUDQVSRUWDWLRQ V\VWHP OLQN - LQJ GLUHFWO\ WR WKH ÀQDQFLDO PDUNHWVRI/RZHU0DQKDWWDQ have driven this migration. 0DQ\RIWKHVHÀUPVPDLQWDLQ their corporate headquarters LQ 0DQKDWWDQ ZKLOH ORFDW - ing their support operations WR WKH +XGVRQ :DWHUIURQW 0HGLDSKDUPDFHXWLFDOSXE - OLVKLQJDQGWHFKQRORJ\FRPSD - QLHVDUHDOVRLQFUHDVLQJWKHLU IRRWSULQWVLQWKLVVWUDWHJLFDOO\ ORFDWHG PDUNHW $PRQJ WKH ODUJHVWWUDQVDFWLRQVUHFHQWO\ FRPSOHWHGZDV)RUEHV0HGLD·V OHDVH IRU VI DW :DVKLQJWRQ%OYG)RUEHVZDV DZDUGHGPLOOLRQLQHFR - QRPLF LQFHQWLYHV WR UHORFDWH from Manhattan. &RUSRUDWH FRQVROLGDWLRQV and restructurings boosted +XGVRQ:DWHUIURQW YDFDQF\ rates from spring 2013. A VIEORFNDW*ROGPDQ 6DFKV·PLOOLRQVIEXLOGLQJ at 30 Hudson St. is among the ODUJHVW DYDLODELOLWLHV LQ WKDW PDUNHW7KH RYHUDOOYDFDQF\ UDWHIRUWKH:DWHUIURQW·VWUR - SK\ DQG FODVV $ EXLOGLQJV LQFUHDVHGQHDUO\VL[SHUFHQW - age points from spring 2013 WR DSSUR[LPDWHO\ RQH \HDUODWHU
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