5-20-22

ISSUE HIGHLIGHTS Volume 34, Issue 5 May 20 - June 16, 2022

Sands and Ryan represent The Halle Companies Avison Young brokers $200M sale of retail buildings in Kingstowne, VA

than 60 diverse retail and din- ing options, the center already possesses strong fundamentals. We look forward to bringing an elevated experience to the local community and further expanding our presence in the area as part of our long-term regional strategy.” The portfolio is ideally lo- cated in Kingstowne near the Transportation Security Administration’s new head - quarters (under 2 miles), the National Geospatial Intelli- gence Agency (3 miles), Fort Belvoir (4 miles), Amazon’s HQ2 (7 miles) and Washing- ton, DC (10 miles). Kingstowne is an extraor- dinarily popular community that continues to grow and thrive. After new multifam- ily buildings are constructed in the Kingstowne Towne Center, the local economy will be bolstered by another influx of young, affluent residents. MAREJ

ASHINGTON, DC — Avison Young’s Capital Markets

SPOTLIGHTS

Group has brokered the sale of a premier portfolio of retail buildings in Kingstowne in Northern Virginia. Federal Realty purchased the portfolio from The Halle Companies for $200 million. The portfolio features 410,398 s/f of best-in-class retail space anchored by two top-ranked grocery stores, Safeway and Giant. It includes a significant portion of Kingstowne Towne Center, a dynamic, live-work- play power center in Virginia. The deal will close in two parts, with the first half closing this week and the second half expected to close in July. Rep- resenting the seller is an Avison Young Capital Markets team led by Dean Sands and Chip Ryan , principals in the firm’s U.S. Capital Markets Group. “This portfolio represented an exceptional opportunity to

OFFICE AND INDUSTRIAL PROPERTIES

7-13A

CENTRAL NEW JERSEY

Kingstowne Towne Center

5-8B

acquire a generational asset that makes up the critical mass of Kingstowne Towne Center,” Dean said. “We are proud to work with The Halle Companies and Federal Real- ty on this extraordinary deal.” The portfolio offers 410,398 s/f of retail featuring 61 diverse tenants, including Safeway and Giant. The institutionally owned and maintained build- ings are 97 percent leased.

“Kingstowne Towne Center, with its attractive demograph- ics and significant barriers to entry, is reflective of our North - ern Virginia growth strategy, and further demonstrates our corporate commitment to seiz- ing value-enhancing opportuni- ties,” said Deirdre Johnson , senior vice president, asset management for Federal Re- alty. “Offering a convenient and walkable format, and more

UPCOMING CONFERENCES June 16th, 2022 6th Annual PA Healthcare Medical Properties Conference Courtyard Philadelphia City Ave Hotel June 21st, 2022 6th Annual New Jersey Capital Markets Sheraton Edison Hotel June 27th, 2022 Reduce Your Real Estate Taxes Zoom Webinar For speaking & sponsorship info., please contact: Lea at 781-740-2900 or lea@marejournal.com

RRA/GREA sells three development sites totaling $47+ Million in Philadelphia, PA

Builders and Developers , a New Jersey developer. 225- 229 N 13th St. is located in a Qualified Opportunity Zone and has plans for 81 apartment units in the heart of Chinatown. The Grays Ferry site will soon be home to 1,200 self-storage units. Total project develop- ment costs for all three sites is $150 million. “Our team was able to secure buyers from California, New York, and North Jersey from networking at different confer- ences around the country. These developments will bring over $150 million of new develop- ment into the Philadelphia mar- ket,” said Ken Wellar , manag- ing partner at RRA/GREA. These transactions high- light the benefits available to commercial real estate inves- tors through RRA/GREA. The company’s model is based on having local knowledge of mar- kets around the country, with a global reach of investors and developers. MAREJ

PHILADELPHIA, PA –— Rittenhouse Realty Advi- sors , a member of GREA , is pleased to announce the sale of three development sites in Philadelphia: 650 Fairmount Avenue in the Northern Lib- erties neighborhood, 225-229 North 13th St. in Chinatown, and adjacent parcels in the

Directory ROP (Front Section) ........................................... Section A Retail Development Reimagined...............................3-5A Office And Industrial Properties Spotlight . .............. 7-13A DelMarVa.............................................................. 15-17A Billboards & Business Card Directory..........................19A CRE Organization’s Events Calendar ............................ 20A New Jersey..............................................................1-10B Pennsylvania........................................................11-BC-B Owners, Developers & Managers....................... Section C www.marej.com

Grays Ferry neighborhood lo- cated at 3114 Grays Ferry Ave., 3115-3119 Wharton St., 1216- 24, 30-34, 1235, 1238, 1248, 1251 S. Patton St. and 1207-51 and 1228 S. Napa St.. The total consideration of the transac- tions was over $47 million. All three sites will be devel- oped by developers that are new to the Philadelphia region. 650 Fairmount, located in the heart

of one of the hottest neighbor- hoods in the city for real estate development, has plans for 297 apartments, 107 townhomes, plus 21,000 s/f of commercial space. This four-year project started with the formation of a joint venture/partnership steered by RRA/GREA, followed by the planning and zoning approval process, and then a subsequent sale to Accurate

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M id A tlantic R eal E state J ournal Publisher, Conference Producer ..............Linda Christman AVP, Conference Producer ...........................Lea Christman Publisher ........................................................Joe Christman Conference Producer ...............................Jordaan Van Oort Editor/Graphic Artist ......................................Karen Vachon Contributing Columnist .....................David L. Church, CCIM Mid Atlantic R eal E state J ournal ~ Published Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 117 HMS Halsted Dr., Hingham, MA 02043 USPS #22-358 | Vol. 34, Issue 5 Subscription rates: 1 year $99.00, 2 years $148.50, 3 years $247.50 & $4.00 single issue - plus postage REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 www.marej.com

David L. Church, CCIM

Impact of Rising Interest Rates on NNN Values and Leveraged Returns nflation is raging at lev - els not seen in 40 years and interest rates for long term mortgages secured by income-producing proper - ties are following the curve. Investors have flocked to triple-net lease deals with credit tenants for the past five or ten years because they offer predictable income streams, long-term occupancies, and es - sentially no management. The reward for sellers has been ex - ceptionally low capitalization rates in the 4.00-4.25% range. I analyzed what I believe is a run-of-the-mill NNN deal and determined what the IRR and Equity Multiple were to an investor with a 10-year hold, the Base Case. The Base Case assumed a NNN tenant with a first-year rent of $250,000, underwrit - ten vacancy and management fees of 1.0% each, a 4.25% going-in cap rate with a ter - minal cap rate of 5%, a per - manent loan with a minimum I

DSCR of 1.25x, a mortgage rate of 3.75% Actual 360, and a total acquisition cost of $5,888,300*. The equity required was $2,729,300. The resultant Leveraged IRR and Leveraged Equity Multiples were 5.96% and 1.71x, respec - tively. If a seller demanded the same price for the property while the interest rate on permanent debt increased to 5.25%, returns to the investor are reduced substantially, the Static Price Case. The 1.25x DSC requirement reduced the permanent loan from $3,159,000 to $2,706,000, a reduction of $453,000. At

continued on page 18A If an equity investor de - manded the same IRR and Equity Multiple from the investment with the higher interest rate on permanent debt, the price of the property must decline, the Static Re - turn Case. To maintain the re - turns, the price of the property must decline by $661,000 from $5,765,000 to $5,104,000. This translates to an increase in the the same time, the equity requirement increased by $446,100 from $2,729,300 to $3,175,400. The increase in equity drove the IRR and Eq - uity Multiples down to 4.72% and 1.54x, respectively.

Firmly Rooted in the Law and in the Community We are well grounded in every facet of real estate law, from acquisition to construction. We are committed to serving the needs of our clients and our communities.

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Contact: NEIL A. STEIN • nstein@kaplaw.com 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-941-2469 • kaplaw.com Other Offices: • Cherry Hill, NJ 856-675-1550 • Philadelphia, PA 215-567-3120 Kaplin Stewart Attorneys at Law

R etail D evelopment R eimagined

M id A tlantic Real Estate Journal — Retail Development Reimagined —May 20 - June 16, 2022 — 3A

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Lombardi, Loccisano and Nadler orchestrate transactions Horvath & Tremblay sells four retail properties in New Jersey for $24,957,150

EW JERSEY — Horvath & Trem- blay has completed

the sale of four retail proper - ties in New Jersey for a total of $24,957,150. Michael Lombardi of Horvath & Tremblay has successfully completed the sale of a Wawa in Edison. Horvath & Tremblay repre - sented the seller to complete the transaction at a sale price of $7,575,000. Wawa is located at 580 US Rte. 1. The property consists of a 4,736 s/f building and a gas station and convenience store on 1.99 acres of land. Wawa has a new 20 year, corporately backed, ground lease (Abso - lute NNN) with six, 5-Year Options. The lease features 10% rent increases every five years beginning in year 11 of the lease and continuing throughout both the primary term and the option periods. Charles Loccisano and Lombardi of Horvath & Trem - blay have completed the sale of the Instone Distribution Center in Millstone. Horvath & Tremblay represented the seller and procured the buyer to complete the transaction SAVANNAH, GA — First National Realty Partners, LLC (FNRP) announced the addition of McAlpin Square in Savannah to its expanding grocery-anchored shopping center portfolio. The 170,000 s/f asset marks the Red Bank, NJ-based firm’s fourth prop - erty in the State of Georgia. McAlpin Square is an - chored by a 43,600 s/f Kroger, one of the original tenants at the center, which opened in 1980. Kroger operates a branded onsite fuel center, reinforcing its commitment to the property and driving increased traffic to benefit its co-tenants. McAlpin Square’s national retailers include Big Lots, Goodwill, US Postal Service, Family Dollar, Rain -

Michael Lombardi

Charles Loccisano

Matt Nadler

at a sale price of $6,222,150. The Instone Distribution Center is located at 4 Wren Haven Dr. The property is improved with a 44,000 s/f building (4,000 s/f office and 40,000 s/f warehouse) on 5.26-acre parcel in the Red Valley Industrial Park. The property is 100% leased to Instone, the largest whole - sale stone distributor of thin veneer masonry products in the United States, has 6+ years remaining on their Double Net Lease with one, 5-year renewal option. The lease features annual rent in - creases throughout the base term and renewal option. Additionally, the Property has a long-term lease with Lamar for a Billboard on the property, providing ad -

ditional passive income. The property is well located in the burgeoning four-property Red Valley Industrial Park. Situated just off of Trenton Lakewood Rd. (NJ Rte. 526). Matt Nadler of Horvath & Tremblay has completed the sale of the Middletown Plaza in Middletown. Horvath & Tremblay represented the seller and procured the buyer to complete the transaction at a sale price of $9,750,000. The Middletown Plaza is located at 1287 Rte. 35. The prop - erty was constructed in 2021 and consists of an 11,505 s/f retail plaza leased to Mavis Discount Tire, Sissy’s Nails & Spa, Dunkin’, and Lascara, and a 10,000 s/f single tenant building leased to The Learn - ing Experience. The property

open-air retail centers in primary and key secondary markets. FNRP’s additional Georgia properties, all lo - cated in the Atlanta Metro market, include City Center Crossing in Sandy Springs, Crossroads South in Jones - boro and Crowes Crossing in Stone Mountain. “McAlpin Square provides a perfect opportunity for FNRP to expand our Georgia portfolio while establishing a presence in one of the southeast’s lead - ing coastal markets,” said An - nibale. “This market-dominant shopping center has retained its anchor tenants for an aver - age of 21 years, and the prop - erty’s unrivaled location has great synergy in an expand - ing marketplace.” Annibale enjoys excellent visibility and frontage and is situated on 2.88 acres of land. The Learn - ing Experience, Mavis, and Dunkin’ have attractive rent increases every five years throughout their base terms and at the start of each re - newal option. Sissy’s Nails & Spa and Lascara have annual rent increases throughout their base term and renewal options. All of the tenants have Double-Net leases. The property is strategically lo - cated along NJ Rte. 35, the primary commercial corri - dor traversing Middletown, NJ. The Property enjoys outstanding visibility and frontage and benefits from excellent traffic counts. The Property is 0.4-miles from the area’s two primary grocery

added that the center’s 5,600 s/f of available space provides significant upside potential by way of increased occupancy and cash flow. Located at 1900 East Vic - tory Dr., McAlpin Square sits at the intersection of East Victory Blvd. and Tru - man Pkwy., just three miles southeast of downtown Sa - vannah. The densely popu - lated retail corridor boasts daily traffic counts exceed - ing 59,000 vehicles, and the center serves a growing population of more than 132,000 within a five-mile radius of the property. David Rivers of Palo- mar represented the sell - er in the McAlpin Square transaction. MAREJ stores, 1.4 miles from the area’s elementary and high schools, and 1-mile from the Middletown Train Station. Lombardi has completed the sale of 7-Eleven in Clark, NJ. Horvath & Tremblay represented the seller and procured the buyer to com - plete the transaction at a sale price of $1,410,000. 7-Eleven is located at 10 Westfield Ave. 7-Eleven has been at this lo - cation since 2012 (10 Years) and recently extended their lease, demonstrating their commitment to the site and the market. 7-Eleven has 5+ years of term remaining on their lease with two addition - al 5-year renewal options. The lease features a 10% rent increase at the start of each renewal option. MAREJ

New Jersey’s First National Realty Partners acquires grocery-anchored shopping center in Savannah, GA

McAlpin Square

bow, Rent-A-Center, Subway, Domino’s and GameStop. According to FNRP’s Matt Annibale , senior director

of acquisitions, the McAlpin Square acquisition aligns with FNRP’s strategic nationwide expansion targeting premier

4A —May 20 - June 16, 2022 — Retail Development Reimagined — M id A tlantic Real Estate Journal

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R etail D evelopment R eimagined

Deptford, New Jersey power center sells to Wharton Realty Group JLL Capital Markets closes sale of Deptford Landing in Southern New Jersey

EPTFORD, NJ AND READING, PA — JLL Capi-

tal Markets has complet- ed the sale of two retail properties in NJ and PA totaling 878,191 s/f. Deptford Landing, a

Jose Cruz

fully leased, 517,096 s/f retail power center in the South NJ community of Deptford has sold to Wharton Realty Group . JLL marketed the property

Exeter Commons

Deptford Landing

including the one of the world’s largest retailers as anchor ten- ants along with DSW, Michaels, Five Below, PetSmart, Ray-

mour’s Furniture, The Mat- tress Factory, Hand & Stone, Carter’s, Five Guys, Great Clips, Chipotle and National Vision.

Positioned on 67.33 acres at 2000 Clements Bridge Rd. 12 miles from downtown Phila- delphia, Deptford Landing is along NJ-42, one of the most traveled roadways in the area, and visible to more than 107,000 vehicles per day. The property has easy connectivity to I-76 and 295 and serves a trade area that includes 82,467 residents within a three-mile radius. The JLL Capital Markets team representing the seller was led by Jose Cruz, Chris Munley, Steve Simonelli, J.B. Bruno, Jim Galbally, Colin Behr and Austin Pierce . “Deptford Landing was well received by the investment community, with multiple offers coming from both private and in- stitutional investors,” Cruz said. In a separate transaction, JLL Capital Markets has closed the sale of Exeter Commons, a 361,095 s/f, dominant, grocery- anchored shopping center an- chored by a high-performing Giant Food and Lowe’s Home Improvement in Reading, PA. JLL represented the undis- closed seller. Wharton Realty Group acquired the asset. The JLL Retail Capital Mar- kets team representing the sell- er was led by senior managing directors Christopher Munley and James Galbally and senior director Colin Behr. “Market-dominant, grocery- anchored centers of scale such as Exeter Commons rarely become available to market,” Munley said. “With demand for assets of this nature never being greater, we fully antici- pate trades of like-kind prod- uct to price to a premium for the foreseeable future.” “It was a pleasure to work with Wharton Realty on their most recent acquisi- tion,” Galbally said. “Exeter Commons is a great addi- tion to their existing grocery- anchored shopping center portfolio in the Philadelphia market.” MAREJ

on behalf of the seller. Deptford Landing’s high- performing tenant lineup is dominated by national tenants,

Relocation Opportunities Wanted

PENNSYLVANIA COUNTIES OF INTEREST INCLUDE: Bradford, Bucks, Carbon, Columbia, Lackawanna, Lehigh, Luzerne, Lycoming, Monroe, Northampton, Pike, Schuylkill, Sullivan, Susquehanna, Tioga, Wayne, Wyoming TYPES OF LOCATIONS WANTED: End Cap, In-Line, Drive-Thru, Free Standing

PLEASE CONTACT: Abbie Muto muto_a@sdepa.com | Cheryl Green green_c@sdepa.com (610) 366-8120 • www.sdepa.com

M id A tlantic Real Estate Journal — Retail Development Reimagined —May 20 - June 16, 2022 — 5A M id A tlAntic Real Estate Journal — Retail Development Reimagined — March 19 - April 15, 2021 — 33A

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R etail D evelopment R eimagined eimagineD 700,000 s/f of transactions & new agency assignments among 2020 Levin Mgmt. ushers in 2021 with a look back on progress Boot Barn expects to open this fall at Union Lake Crossing Metro Commercial represents Irgang Group in 14,354 s/f lease

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OUTHERN NEW JER- SEY — Irgang Group has signed Boot Barn ORTH PLAIN - FIELD, NJ — Amid the challenges of 2020, commercial real estate services firm Levin Manage- ment Corporation (LMC) achieved tangible progress – a promising sign for the industry moving into a new year. Over the past 12 months the North Plainfield based organization secured nearly 700,000 s/f of new leases and renewals, added new leasing and management assign- ments, solidified its staff with new hires/promotions, and garnered several industry recognitions. to a lease for a 14,354 s/f store at Union Lake Crossing, a 393,000 s/f power center serving the greater Mill - ville-Vine - land market in southern NJ. Boot Barn expects to open this fall at Union Lake Crossing in Millville. The 14,353 s/f loca - tion will be among two initial stores that the 303-unit chain is opening in NJ later this year. Boot Barn will join a store lineup at Union Lake Crossing that’s led by Target, Shop- Rite, Kohl’s, Ross, Staples and PetSmart. The Union Lake Crossing store will be among two initial locations that Boot Barn is opening in New Jersey lat - er this year, as the 303-unit chain pushes northward along the East Coast from existing locations in Delaware and Pennsylvania. The other New Jersey store will be in Cherry Hill. Currently operating in 38 states, Boot Barn ranks as the nation’s leading lifestyle retailer of western and work- related footwear, apparel and Highlights of LMC’s retail leasing activity included an anchor lease with off-price retailer Burlington Stores at Mill Creek at Harmon Meadow (Secaucus), a 24,000 s/f lease with Aqui Market at Twin City Shopping Center (Bayonne) and a 20,000 s/f lease with Planet Fitness at Mayfair Shopping Cen- ter (Commack, NY). LMC’s transactional activity also brought a host of renewals as well as new retailers and service providers to the region, punctuated by nearly one dozen leases with restaurant tenants – several of which have already launched opera- tions. Other openings involved Joseph Dougherty N S

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Burlington Stores at Mill Creek at Harmon Meadow

high-profile anchors like Lidl (North Brunswick) and Burl- ington Stores (Raritan). Non-retail leasing highlights within LMC’s diversified port - folio included a 135,000 s/f renewal by Hall’s Warehouse Corp. at Rutgers Industrial Center (Piscataway). “Despite the economic un- certainty and business-related disruptions facing our indus- try since March, there has been progress – with certain key dynamics coming into sharpened focus,” said LMC’s Matthew Harding , chief ex- ecutive officer. “For example, positive landlord/tenant rela- tions have always been impor- tant. During 2020, as tenants worked to navigate an incred- ibly difficult environment, we approached everything on a very granular basis, review- ing the distinctive needs and nature of each business. Like - wise, we have done the same with our landlord clients and their individual properties to Boot Barn’s Union Lake Crossing store is expected to de - but this fall, occupying a space between Party City and Xfinity. The chain will join a mix led by shadow anchor Target, along with Shop-Rite, Kohl’s, Ross Dress For Less, Staples, and PetSmart. Other notable ten - ants include Famous Footwear, Party City, Five Below, Buffalo Wild Wings, Moe’s Southwest Grill, and Sonic. Over 95% of the property’s occupied space is held by national tenants. “Our exclusive leasing agent, Metro Commercial Real Estate, has been working diligently to introduce new tenants that will make Union Lake Crossing an even more dynamic destination for residents and daytime work - ers in our region,” said Irgang Group CEO Mark Irgang . “With their unique offering, Boot Barn fit that bill perfectly. accessories for men, women and children.

help them best respond to ten- ant requests and operational needs. “This customized approach has always been central for our team; however, this year has intensified the practice to a new level that we will sustain moving forward,” Harding added. “This is an ad- vantage we can provide over some of our larger, nationally focused peers.” LMC also continued to ex - pand its leasing and manage- ment portfolio, which today totals 110 properties total- ing nearly 15.5 million s/f. The firm was appointed leas - ing and managing agent for Springfield Avenue Market - place, a 112,000 s/f supermar- ket-anchored property at 204- 234 Springfield Ave. in New - ark. In Bergen County, LMC was named managing agent for Marketplace at Edgewater, a 73,000 s/f shopping center located at 725 River Rd. in Edgewater. MAREJ Meanwhile, Dougherty noted that Famous Footwear, an original tenant at Union Lake Crossing, just renewed the lease for its 6,983 s/f store. Irgang Group was repre - sented by Metro Commercial on the lease, while Boot Barn was represented by CBRE. MAREJ Having witnessed their special brand of merchandising at Pop - lin Place, a center we recently purchased in North Carolina, we are thrilled to have them as the first new tenant since our acquisition of Union Lake.” Joseph Dougherty , ex - ecutive vp and principal with Metro Commercial, added: “As brick-and-mortar retailing continues to come back from the effects of the Pandemic, we’ve had strong interest from a num - ber of national, regional and local tenants for Union Lake’s remaining vacancies and expect to announce more signed leases as the year progresses.”

Union Lake Crossing

Mid Atlantic Real Estate Journal

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M id A tlantic R eal E state J ournal

Publication designed for 1031 Exchange and DST investment strategies and education Kay Properties publishes new issue of the “1031 DST Digest”

T ORRANCE, CA — Kay Properties & In- vestments , a national leader in Delaware Statutory Trust equity placements and in educating DST investors na - tionwide, announced it recently published its exclusive 1031 DST Digest magazine, a publi - cation designed exclusively for 1031 Exchange and Delaware Statutory Trust investment strategies and education. According to Dwight Kay , founder/CEO of Kay Proper - ties and editor of the maga - zine, the 1031 DST Digest was designed to help educate investors on the DST 1031

makes Delaware Statutory Trust 1031 investments so pop - ular, how to build a defensive DST real estate portfolio, and how DSTs help investors re - place debt in a 1031 Exchange. The magazine is offered free of charge as part of our commit - ment to providing educational resources to 1031 exchange DST investors nationwide. Re - quest your complimentary copy today and in addition to a print version delivered to your door - step, you’ll also receive instant access to an electronic version of the magazine.” said Kay. People can receive a copy of the limited-edi -

tion periodical by going to www.1031dstdigest.com. “The intent of the 1031 DST Digest magazine is to help educate existing and potential clients about DST 1031 proper - ties, the potential benefits and risks of DST investments and whether they might be a right fit for investors considering a 1031 exchange,” said Kay. Specifically, the Kay Prop - erties “1031 DST Digest” will cover topics like : How 1031 Exchanges into Delaware Statutory Trust In - vestments Can Unlock More Quality Time for Investors Why Now Might be a Good

Time to Sell the Income Prop - erty you Love What Real Estate and DST Investment Opportunities Should be Considered after the Pandemic recedes? View the newest issue of the 1031 DST Digest now. About Kay Properties and www.kpi1031.com Kay Properties is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the mar - ketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor com - panies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST sec - ondary market. Kay Proper - ties team members collectively have over 150 years of real estate experience, are licensed in all 50 states, and have par - ticipated in over $30 Billion of DST 1031 investments. This material does not consti - tute an offer to sell nor a solici - tation of an offer to buy any se - curity. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum pay - ing special attention to the risk section prior investing. IRC Sec - tion 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal profes - sional for details regarding your situation. There are material risks associated with invest - ing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operat - ing commercial and multifam - ily properties, financing risks, potential adverse tax conse - quences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guar - antee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. Nothing contained on this website constitutes tax, legal, insurance or investment ad - vice, nor does it constitute a solicitation or an offer to buy or sell any security or other fi - nancial instrument. Securities offered through FNEX Capital, member FINRA, SIPC. MAREJ

Exchange marketplace, while also answering specific ques - tions his firm’s team of expert representatives hear from investors daily. “Inside this accessible maga - zine, readers will find out what

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M id A tlantic Real Estate Journal —May 20 - June 16, 2022 — 7A

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Mid Atlantic R eal E state J ournal ’ s O ffice & I ndustrial D istribution C enters

Featuring:

Michael Schipper, SIOR The Blau & Berg Co.

David Simon NAI DiLeo-Bram & Co.

Sean Kelly Wolf Commercial Real Estate

Jonathan Klear NAI Mertz

Inside: Shannon Kaplan, PE, AKF...........................................................................................................4A Exchange Solutions...................................................................................................................5A Todd C. Monahan, WCRE l CORFAC International....................................................................6A Michael Mullin, IBSRE, Inc..........................................................................................................7A Carlo Batts, MAI, Rittenhouse Appraisals...................................................................................8A Neil Andrew Stein, Esq., Kaplin, Stewart, Meloff, Reiter & Stein..................................................9A Shannon Christie, PECO..........................................................................................................10A Jamie Cutler and Tom Delark, M&T Insurance Agency, Inc....................................................11A Jonathan Glick, Sheldon Gross Realty.....................................................................................12A Inside Sean Kelly, Wolf Commercial Real Estate..................................................................................................................8A Sorce Companies..........................................................................................................................................................9A David Simon, COO of NAI DiLeo-Bram & Co............................................................................................................10C NAI Mertz......................................................................................................................................................................11C Elberon Development Company................................................................................................................................12C Michael Schipper, SIOR, The Blau & Berg Co..........................................................................................................13C CCIM PA/NJ/DE Chapter.............................................................................................................................................14C

8A —May 20 - June 16, 2022 — Office & Industrial Distribution Centers — M id A tlantic Real Estate Journal

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O ffice & I ndustrial D istribution C enters By Sean Kelly, Wolf Commercial Real Estate (WCRE) A Snapshot of An Unprecedented Industrial Market in Southern New Jersey

avigating the New Jer - sey industrial mar - ket since the COVID

demand priced in to current rents proposed to tenants, building purchases and land purchases for new develop - ment. Never in this market’s history have we experienced the current conditions; vacan - cies below 1%, rents increasing 5-15% month-over-month, and record high sales prices for ex - isting buildings and land. There are now new compli - cations on the horizon that are affecting forecasting and underwriting, offering little protection to manage risk. Construction costs have been on the rise driven by booming

tems, racking infrastructure, concrete, steel and other build - ing materials, have lead times varying between 6-18 months. This challenge costs time, as materials necessary to move a project forward aren’t readily available when needed. Before the pandemic, developers could predict with precision when materials would be delivered to a site. Labor availability is another real issue compounding the problem. Further General Con - tractors (GC’s) and construction professionals choose projects that offer scale, in order to

maximize their time and profit margins. This condition has created challenges for develop - ers hiring and selecting GC’s as they no longer have leverage. GC’s are routinely bidding high, so that if they win a project, they are padding their profits. Yet another variable that may add additional stress to the sup - ply chain and demand for con - struction materials are projects funded by the recently passed infrastructure bill. States are anxious to begin shovel ready projects, including road and bridge repair. Mass transit agencies such as Amtrak and Septa are also getting much needed funding to improve their infrastructure and ser - vice. How this impacts prices of steel, concrete and other materials is not yet known but it will put upward pressure on labor availability. Additionally, ecommerce and last mile distribution is driving end user demand, which has resulted in a flood of institu - tional capital into the sector, which is bullish on new devel - opment and leased facilities. Identifying development sites has become increasingly chal - lenging, forcing developers to think outside the box. This includes knocking down office buildings and similar underuti - lized buildings on larger sites well suited for warehouse and industrial development. Never before has highest and best use analysis manifested itself into warehouse and industrial conversions. Many of these sites however, require zoning chang - es, which is yet another difficult variable affecting this segment of the market. Many township and communities are resistant to further development due to truck traffic and strains on their ability to provide utilities and services. We are seeing this exact scenario occur in the Lehigh Valley where a portion of the community and elected officials want to prevent addi - tional warehouse distribution development. Favorably-zoned land how - ever is sometimes found in well-located, in-fill townships with obsolete or vacant office. Given the reduced demand for old and obsolete office product has made demolishing office space feasible, offering benefits to townships recep - tive to the new development, such as improving the tax base and the creation of new continued on page 11A

demand for warehouse space as a result of dramatic increases in ecommerce. Further, labor and materials costs are rising and unpredictable, two of the biggest variables affecting de - velopment costs, making the final cost and delivery dates of these projects virtually impos - sible to predict. Supply chain constraints have also made material costs and lead times unpredictable, the biggest vari - ables for delivering a func - tional, end product for users on time for occupancy. Many components of these facilities, including ESFR Sprinkler sys -

Pandemic in 2020 has cre - ated an ultra- competitive and fierce landscape for users and in - vestors alike. Bu i l d i n g owners hold

Sean Kelly

all of the cards and the sprint to obtain functional, well-located warehouse space is becoming more and more challenging. We are seeing this extraordinary

We see deals from your perspective.

Our global network of 75 commercial real estate offices is the clear choice.

M id A tlantic Real Estate Journal — Office & Industrial Distribution Centers — May 20 - June 16, 2022 — 9A

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O ffice & I ndustrial D istribution C enters

48,000 SF WAREHOUSE SPACE FOR LEASE

(DIVISIBLE) 35,000 SF / 13,000 SF

1005 WHITEHEAD ROAD EXT., EWING, NEW JERSEY

PROPERTY FEATURES CORNER UNIT

24' CLEAR

AMPLE PARKING

7 DOCKS / 2 DRIVE-INS

FOREIGN TRADE ZONE

201-488-4000 mike@sorce.com MIKE COVIELLO

609-883-7900 eeebaron@aol.com ERIC BARON

SORCE COMPANIES | www.sorce.com Our properties can be viewed on CoStar & LoopNet

10A —May 20 - June 16, 2022 — Office & Industrial Distribution Centers — M id A tlantic Real Estate Journal

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O ffice & I ndustrial D istribution C enters By David Simon, COO of NAI DiLeo-Bram & Co. New Jersey office occupancy rates are anticipated to increase throughout 2022

increase throughout 2022. INDUSTRIAL The industrial market soared during the past two years as e-commerce rapidly expanded. Despite many consumers across the U.S. returning to in- person shopping, e-commerce continues to grow because of the convenience it offers. As a result, demand for indus- trial space in New Jersey is outpacing the limited sup- ply currently available. The consistent need for industrial properties in this market has led to record low vacancy rates and record high rental rates. With multiple companies vying for the same properties, Landlords are in an enviable position and are experiencing unique leverage. It is expected that rates will continue to increase throughout the year. The unwavering demand has supported new construction in this market and pricing for new buildings has reached an all-time high. In fact, many of the new buildings have been pre-leased while still in the construction phase. The de- mand for space in this area has dramatically increased compe- tition on both the user/occu- pier side as well as the owner/ investor side of the business. Given current market trends, the remainder of 2022 looks to be another solid year for the New Jersey industrial sector. David Simon is COO at NAI DiLeo-Bram & Co. MAREJ NAI DiLeo-Bram inks 16,000 s/f ind. sublease in Union, NJ UNION, NJ — NAI DiLeo- Bram & Co. announced that the team of Richard Goski , VP, and Catherine Goski , associate VP completed a sub- lease for 805 Lehigh Ave., a 16,000 s/f industrial building in Union. The Goski’s represented the master tenant. The new subtenant, Rbud, Inc., was rep - resented by Robert Clayton of Keller Williams City Life JC Realty . Rbud, Inc. was looking for a property with a 1/2 acre fenced-in lot for parking and in close proximity to the ports, which made 805 Lehigh Ave. an ideal location. Additional features of the property that appealed to Rbud included upgraded office space and covered loading docks. MAREJ

pacted the overall absorption of office space and has been a factor in the way companies have opted to utilize existing space and determine future office space needs. Demand for office space in the first quarter of this year showed improvement over the same time last year. There is a desire by many to spend some time with colleagues and clients, in person. The challenge is determining the proper balance that works best for everyone and enables companies to generate desired results for clients while pro -

office requirements. However, sublease space is not always the right solution for a variety of reasons. In this environment where recruiting and retaining top talent is competitive and critical, companies want their office space to properly reflect their own unique brand and culture. Some sublease spaces, which may be financially ap - pealing, might not be able to effectively convey some of the intangible qualities that a company wants to project. Without any unforeseen events, overall office occu- pancy rates are anticipated to

viding the right environment for employees. Companies are placing an emphasis on employee wellness and are focused on building systems and practices such as indoor air quality and more stringent daily cleaning procedures. As a result, this has benefited owners of class A properties and others who have upgraded their properties to comply with these types of tenant requests and concerns. The abundance of available class A sublease space in the market presents some excel - lent options for tenants with

FFICE There appears to be a contrast in vari-

ous office policies that companies have imple- mented due to the pan- demic. Some companies are currently operating ful-

David Simon

ly remotely; some are requir- ing all of their employees to be in the office full time while others are adopting a hybrid structure. This shift has im-

Celebrating 85Years of offering dependable real estate solutions based on knowledge, experience and vision For more information, please visit: naidb.com

DiLeo-Bram & Co .

Commercial Real Estate Services, Worldwide. Since 1937.

M id A tlantic Real Estate Journal — Office & Industrial Distribution Centers — May 20 - June 16, 2022 — 11A

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O ffice & I ndustrial D istribution C enters Jonathan Klear leads team representing seller & buyer NAI Mertz inks sale of 140,000 s/f industrial building in Delanco, New Jersey by two new loading docks.

ELANCO AND MARLTON, NJ — NAI Mertz an-

• Westrock, one of the larg - est corrugated packaging com - panies in the United States, leased a 15,000 s/f flex unit. WestRock is a publicly traded business on the New York Stock Exchange and boasts over $18B in annual revenue. • Schmid Dewland Associ - ates leased a 5,000 s/f unit. This unit will soon become Schmid’s headquarters and will feature roughly 50/50 office/warehouse footprint with the warehouse portion hosting a demo kitchen for its customers. MAREJ

n o u n c e d the team of Jonathan Klear , senior vice presi- dent, Roy Ka r d on , SIOR , vice president; Jeff Licht,

Jonathan Klear

jobs. Reducing the inventory of obsolete commodity type office product, which is fairly prevalent in South Jersey. We are truly in unchartered waters with little relief in sight. Many experts contend these market conditions are unsustainable, but how long these market conditions can continue is extremely difficult to predict. Sean Kelly is vice presi - dent of Wolf Commercial Real Estate (WCRE). MAREJ continued from page 8A A snapshot of an unprecedented industrial market . . . SIOR , senior vice president; Jared Licht, senior associate; and Fred Meyer , EVP corpo - rate services, completed the sale of a 140,000+/- s/f indus- trial building located at 740 Coopertown Rd. in Delanco to buyer Faropoint. The team represented both the seller and buyer in this transaction including the long- term leaseback to the tenant- in-place, Stylex Seating. In a separate transaction, Velocity Venture Partners announced three long-term flex-industrial leases totaling 40,000 s/f at Velocity Business Park in Marlton. NAI Mertz’s team of Jona - than Klear, Andrew John - son & Jason Simkins acted as the sole broker in the sale of this business park to Veloc - ity Venture Partners in the fourth quarter of 2021 and was retained to continue serving as the eleasing broker. The three leases recently completed include: • Lauda-Brinkmann, a mul - tinational temperature control technology firm based out of Germany, leased a 20,000 s/f unit leased for 15 years. The flex unit will be redesigned as a 50/50 split between warehouse and office space. The warehouse portion of the unit will be served

740 Coopertown Rd.

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NAI Mertz is seeking experienced real estate professionals looking to advance their careers. As an established leader in Greater Philadelphia / Southern New Jersey with a reach that spans the globe, NAI Mertz has the team and tools in place for you to thrive across all commercial property types and sectors. If you’re ready for your career to be bound only by your drive, contact Bobbi Jean Formosa, COO to request an exploratory virtual meeting: bobbijean.formosa@naimertz.com. READY TO TAKE YOUR CAREER GLOBAL?

+1 800 520 7139 naimertz.com

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