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Represents the largest apartment sale in New Jersey in 2018 HFF’s Cruz, O’Hearn, Oliver & Simonelli represent seller in $146Msale
ISSUE HIGHLIGHTS Volume 30, Issue 10 May 25 - June 7, 2018 SPO TLIGHTS Industrial & Distribution Centers
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apartment buildings, each with one story of covered parking at ground level. A large portion of units have been renovated since 2014. Community ameni- ties include an updated fitness center, newly renovated court- yard with lounge and grill- ing areas, clubhouse, private storage lockers and a Zipcar pickup/drop off station. The HFF investment adviso- ry team representing the seller included senior managing di- rector Jose Cruz , managing director Kevin O’Hearn and senior directors Michael Oli- ver and Stephen Simonelli . “Capital continues to be at- tracted to multifamily assets in markets with high barriers to entry and significant future rental growth,” said Cruz. “The Hudson Waterfront market re- mains a target for REITs, pen- sion fund advisors and private buyers alike.” Fridays. It is part of the New Haven trade area, 235,000 s/f , and was purchased in partnership with an institu- tional real estate fund and Silver Peak Real Estate Partners . “As major open-air centers with proven anchor tenants in strong locations, these centers are perfectly aligned with our established criteria for acquisitions,” said Tom Wilder , a Wilder principal. “Our goal is to build on each centers’ success to enhance the shopper experience while continuing to add value for the ventures.” “With these acquisitions we are expanding our presence in Connecticut and are pleased to reestablish ourselves in Pennsylvania,” said Shelley Anderson , director of new business development. Our operating platform and long- standing tenant relationships allow us to stay competitive and creative in the retail investment arena. Qualities that are highly valued by our institutional partners.”
oboken, NJ — Holliday Fenoglio Fowler, L.P. (HFF)
announces the sale of The Rivington, a 240-unit, luxury apartment community in Hobo- ken. This transaction repre- sents the largest apartment sale in New Jersey in 2018. The HFF team marketed the property on behalf of insti- tutional investors advised by J.P. Morgan Asset Manage- ment . Equity Residential purchased the property free and clear of existing debt. The Rivington is situated at 1130 Grand St. in the heart of the dynamic northwest section of Hoboken, which offers com- muters access into Manhattan via the Hoboken PATH Station, 14th St. Ferry Terminal and the NJ Transit bus line. Ad- ditionally, the property has a WalkScore of 94 and is within blocks of multiple retail ameni-
Jose Cruz
Kevin O’Hearn Michael Oliver Stephen Simonelli
GP-FM Show Section C
The Rivington
ties along Washington St. as well as the 5.4-acre Northwest Park. Completed in 1999, The
Rivington features 240 two- bedroom, market-rate units housed within four six-story
9-20B
Wilder gains acquisitionmomentumwith two newassets totaling over 800,000 s/f in PA&CT
MAREJ Events May 30, 2018 PA Multifamily Conference
Mechanicsburg, PA andHamden, CT — Wild- er , the national retail real
June 7, 2018 NJ Land Development Conference For speaking and sponsorship information, please contact: Lea at 781-740-2900 or [email protected]
estate leas- ing, manage- ment , and development firm, in part- nership with an institu- tional real estate fund, continues to
Tom Wilder
Silver Spring Square
Directory
add to its portfolio by acquir- ing two more market domi- nating centers; over 800,000 s/f of space. Silver Spring Square in Mechanicsburg, PA is home to the only Wegman’s in the Harrisburg trade area. The powerhouse center is shadow anchored by the third ranking Target in its 13-store district, and Kohl’s, which is ranked first in its 14-store district. At nearly 570,000 s/f the center is well-positioned in one of the fastest growing communities in Central Pennsylvania.
The CBRE teamof BradNa- thanson , executive vice presi- dent, and John Colussi , sales associate, negotiated on behalf of the seller, DDR Corp. , and identified the buyer. Silver Spring Square fol- lowed shortly after the ac- quisition of The Marketplace at Hamden, CT. The center features one of the highest volume Stop & Shop locations in the New England and New York markets, T.J. Maxx, Staples, Old Navy, along with popular specialty shops Petco, Pier One Imports, and TGI
Shopping Centers.............................................5-17A Business Card/Billboard Directory.......................19A Owners, Developers & Managers............... Section B Industrial & Distribution Centers................ Section C
Upcoming Spotlights Northern New Jersey Northern PA Creative Financing www.marejournal.com
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COLLABORATIVE CULTURE RELATIONSHIP FOCUSED DEFINED EXPERTISE
Applebee’s Lynchburg, VA $2,000,000
Walgreens Deep River, CT $5,230,000
Oxford Commons Tallahasee, FL $3,845,000
Wendy’s St. Joseph, MI $1,760,039
Pizza Hut Newport, TN $ $784,000
KFC Rossford, OH $2,600,000
CVS Hyannis, MA $13,950,000
AutoZone Zebulon, NC $1,545,000
CVS Coconut Creek, FL $5,125,000
Closed $4,000,000,000 in Recent Transactions
Transactions 1,000+ in 36 States
Ranked #1 Industry Leading Team
David Zacharia, DZ Net Lease Realty LLC, MI Broker of Record, License 6505381227 | Ethan Cole, CT Broker of Record, License REB.0791749, FL Broker of Record, License BK3382287
www. Ho r v a t hT r emb l a y . com Main: 781-776-4000 | Fax: 781-823-0245 | [email protected]
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M id A tlantic 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 Office Manager, Social Media and Public Relations Coordinator ..............Marisol Chase Contributing Columnists: ............................................. Lisa Cassidy, ecoImagine; Jon Leifer, Case Real Estate Capital, LLC; Chris Mavros, Case Real Estate Capital, LLC; Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly Periodicals postage paid at Hingham, 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 10 Subscription rates: $99 - one year, $148 - 3 years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 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
M id A tlantic Real Estate Journal
Insights on Trends in Capital Markets
C ompe t i t i on among commercial real es- tate lenders shows no sign of abating as borrowers continue to turn to private lenders for an influx of turn- around capital, according to Chris Mavros and Jon Leifer of Case Real Estate Capital, LLC (Case). How will recent tax reforms and rising inter- est rates affect the market? And what asset classes are garnering the most interest in this stage of the cycle? Q. On the lending side, there remains a steady stream of available capital. What is your prediction on demand in 2018 and how will lenders react? Mavros: Demand from bor- rowers will remain steady in 2018, which will only serve to further increase competition among lenders as new loan capital sources enter the mar- ket. The average lender will likely feel pushed to stretch on rate, leverage and structure to win deals this year. Leifer: The influx of new players is particularly notable in the bridge lending space. Overall, it is an excellent time for borrowers to receive multiple quotes, but they must keep in mind that lenders with a strong history of execution provide the best opportunity for quality financing. Q. What asset classes are garnering themost interest in themetro NewYork area and Florida in this stage of the cycle? Leifer: Industrial and mul- tifamily have the strongest fundamentals in the metro New York area and Florida markets. At eight-plus years into the economic recovery, new household formation con- tinues to create opportunities for redevelopers in the mul- tifamily sector. At Case, we have a healthy appetite for funding the repositioning of both industrial and multifam- ily assets. Q. How is the unrelenting force of e-commerce affect- ing the retail sector? Leifer: There’s no question that e-commerce, particularly Amazon, is remaking the sec- tor, and retail properties con- tinue to be adapted for new
uses. Urgent care and food hall facilities are springing up like weeds in former storefronts. We’ll continue to see improve- ments in multitenant property performance as we “right size” retail supply. Q. What are your predic- tions on land lending this year? Mavros: Case is actively lending on land development deals, even where there re- mains a level of uncertainty. We are targeting acquisition loans on entitled land and de- velopment ready deals. Overall, with regard to loans for unentitled land, lenders will hesitate to underwrite them given the multitude of risks inherent in early- to mid- stage projects. Borrowers will be pressured to pay significant fees and interest rates if they do not have entitled land. Q. What shifts in invest- ing will result from rising interest rates? Mavros: These rate-in- crease trends undoubtedly affect cap rates and real es- tate values. By extension, if underwriting loan payoffs in future refinancing becomes difficult as asset values de- cline, the dollar amounts lend- ers are willing to extend will be affected as well. Investors, especially institutional ones, will likely focus on debt rather than equity to avoid taking last-dollar risks. Q. How will recent tax reforms under the current administration affect CRE finance? Mavros: The real impact of the tax bill will be seen next year - 2019 - and from the commercial real estate per- spective, the reforms are very favorable. Any perks, though, will be offset by increasing interest rates. Corporate tax cuts and pass- through deductions are a sig- nificant boon to partnerships,
LLCs and S corporations that will not be taxed at the entity level. On a personal tax level, the elimination of the state income and property tax de- ductions will clearly have a negative effect, particularly in New York and New Jersey. Q. How is the aging Baby Boomer generation creat- ing opportunities in the market? Leifer: We are seeing in- creased opportunities in the medical office and assisted liv- ing property sectors, although the market has five to seven more years before the peak retirement years of the Baby Boomer generation. Self-storage is garnering a lot of interest as well, and new supply in this sector is trend- ing up and down the southern coasts of Florida, where de- velopers are building housing of every stripe. Baby Boom- ers are trading out of larger homes, generating demand for storage. Questions are arising about overbuilding in that sec- tor, though. Q. What are the major concerns in this stage of the cycle? How is Case ad- dressing them? Leifer: My main concern is that sponsors and their lend- ers maintain discipline in their underwriting. This is not a time to ignore the importance of mitigating risk. While there are good deals out there for strong sponsors with solid operational capabilities, if a deal seems too good to be true, it probably is. On a separate note, pricing expectations on the limited number of nonper- forming loans out there seem to be getting more realistic. At Case, we have the dis- cretionary capital that allows us to deliver on our promises, which distinguishes us in the market. We remain interested in senior secured financings continued on page 14A
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M id A tlantic R eal E state J ournal
By Richard Gacek, Gacek Design Group Design is Transforming
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experiences that are authentic and specific to your target au- dience will capture attention and will resonate. The latest research on lifestyle prefer- ences shows the importance of providing social spaces that are flexible, can be used for live- work, and also appeal to the lifestyle of Renters of Choice to build a sense of community. SMART TECHNOLOGY: In the housing industry, tech- nology is no longer just an appliance, it has become a major part of the design. Smart technology enriches the experi- ence and research tells us that
continued on page 18A PERSONALIZATION: As residents use common spaces more often to live, work, and play, they have transformed free or reliable WiFi ranks as the highest preferred feature. Other tech on the radar is as follows: smart thermostats, keyless front entry, high tech door locks, built-in USB charg- ing ports, in-unit motion-de- tection cameras, and motion sensor lighting. Advanced digital capabilities such as online leasing forms, as well as credit card processing are also on the rise.
acek Design Group is laser focused on the transformation we see
spaces, Renters by Choice even have designers looking at apartment layouts differently. With Boomers at a downsizing life stage, they need room to en- tertain, accommodate guests, work at home, and pursue their hobbies. Millennials like what’s new and cool, and will give up apartment space if it means access to hot neighborhoods and conveniences. Adaptable living is the new norm where the apartment’s “physical com- ponents” meet the needs of many different households. Imagine an apartment where flexible spaces are created by
opening and closing walls – Or using lightweight panels that can snap in and out of place to expand or minimize walls. How about an exterior window that is flexible enough to open and transform to a balcony? SOCIAL CONNECTIVITY: The digital age has connected us in so many amazing ways, although has provided less opportunities for in-person interaction. With information at overload capacity, it has become more and more difficult to engage and retain the atten- tion of your target audience. Because of this, spaces and
i n De s i gn , particularly as it relates to our clients in the hous- ing industry. The shifts in demographic trends have positively im-
Richard Gacek
pacted multifamily housing with Millennials continuing to play a prominent role in renting. And as Baby Boomers enter the rental market, it can be challenging to determine the right housing/amenities that resonate with the lifestyles of both target markets. How do you accomplish this? There are many white papers, research, and point of views on how to appeal to this group that we call Renters by Choice . They do have a number of characteris- tics in common. The one thing we know for sure is that this new target market has forced many developers to think out- side the box, and to concentrate on making a connection with their audience in differing ways. Design is transforming and here are trends that we believe are worth exploring: WELLNESS: Consumers today are focused on health and wellbeing. This growing trend has impacted, for example, the amount of square footage allotted to fitness spaces. We see transformation from the typical treadmill/weight lifting center to a wellness experience that highlights the mind, body, and spirit. However, wellness is no longer a place just for the fitness zone. Build environ- ments are now valued by how they support overall health. The WELL Building Stan- dard is gaining popularity by measuring the performance of building features that impact health and wellbeing through air, water, nourishment, light, fitness, comfort, and mind. It is third-party certified by the Green Business Certification Incorporation (GBCI), which administers the LEED cer- tification programs. Healthy homes improve sleep, support healthy eating, improve air quality, and optimize our cog- nitive and emotional health. With improved studies, more >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84
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