Tag Archives: commercial real estate


New Jersey Marijuana Reform Presents Commercial Real Estate Opportunities

New Jersey Marijuana Reform

New Jersey Marijuana Reform

Let’s look at New Jersey Marijuana Reform and Commercial Real Estate. Governor Phil Murphy campaigned on a pledge to fully legalize marijuana in New Jersey. On January 23, 2018 he signed an Executive Order directing a complete review of New Jersey’s existing medical marijuana program within 60 days, which sets the stage for legalizing recreational marijuana. Presently, only medical marijuana is legal under a New Jersey law enacted in January 2010. Likely marijuana reform presents unique real estate investment opportunities and will probably increase the demand for commercial and industrial real estate. However, there are significant risks that must be carefully considered before making any investment decisions, including criminal and civil liability (including property seizure) if federal laws are enforced, and a limited number of potential lenders and buyers.

Download Printable Article (PDF) >>>

Opportunities Associated with New Jersey Marijuana Reform

New Jersey Marijuana Reform presents a unique opportunity to be capitalized upon by risk tolerant investors willing to invest in real estate and benefit from the cannabis trend. Vacancy rates may decline based on the experience in other states following marijuana legalization and expansion, where cannabis suitable commercial real estate became hot commodities.

For example, in four states with legalized recreational cannabis (i.e. California, Colorado, Oregon and Washington), industrial real estate prices surged. In some Denver neighborhoods, the average asking lease price for warehouse space reportedly jumped by more than 50 percent from 2010 to 2015. Industrial space has been in high demand due to both marijuana growers and manufacturers seeking industrial warehouses to cultivate and process their product. Commercial real estate prices have also experienced double digit annual increases in some markets.

Risks Associated with New Jersey Marijuana Reform

The federal government does not recognize a legitimate medical use of cannabis and can impose criminal or civil liability under the Controlled Substances Act. Marijuana is currently classified as a Schedule I drug, which puts it
under the same category as heroin, cocaine, peyote, meth and fentanyl. It is currently illegal under federal law
to lease or rent real estate for the purpose of manufacturing or distributing any controlled substance. However,
the Department of Justice can direct the enforcement of these laws differently between administrations, as the
Obama Administration issued guidance discouraging the enforcement of federal marijuana laws in states where it had been legalized. United States Attorney General Jeff Sessions has long been strongly opposed to the legalization of marijuana and there is a fear of federal enforcement among owners, developers and lenders as long as the federal and state positions remain at odds. It is tough to make long term real estate investments without clarity predicated on the assumption that the federal government will not enforce its own laws.

Banks traditionally answer to federal regulators and risk losing their licenses by dealing with marijuana businesses. Federal banking laws also prevent banks from lending to or accepting deposits from illegal businesses. The federal government is also allowed to seize property. Thus, obtaining financing from traditional sources and collecting rents is difficult. Borrowing costs will therefore likely be higher than a typical real estate transaction, and tenants may be limited to properties that are owned free and clear of traditional financing.

Therefore, many companies that get into the marijuana business try to buy and control their own real estate. If the state approves expansion, it will probably issue licenses allowing business to legally sell recreational marijuana in designated places, and businesses must find a local jurisdiction that will allow them to operate.

Towns will need to change their zoning ordinances to allow for such uses.

What Does This Means for Commercial Real Estate Investors?

Higher risks will likely translate into higher rents for commercial and industrial landlords based on anecdotal evidence seen in California, Colorado, Oregon, Washington and other states that have permissible marijuana laws. Developers, landlords and investors with a suitable risk tolerance should closely follow the state’s progress in introducing and passing legislation to accomplish Governor Murphy’s goals and evaluate potential opportunities and risks. They should also monitor subsequent municipal efforts to accommodate such uses by amending their zoning ordinances, and work to identify potential opportunities in suitable locations.

The contents of this article are for informational purposes only and none of these materials offered are, nor should be construed as, investment advice, legal advice or a legal opinion based on any specific facts or circumstances.

kenneth-morgan

 

Commercial Real Estate Tax Deduction Restrictions

commercial real estate tax deduction restrictions.Let’s take a quick look at some 2018 tax law changes affecting commercial real estate tax deduction restrictions. Below please find some insight into recent tax changes affecting commercial real estate tax deductions.

Download Printable PDF >>>

Here are some items that come to mind:

(1) The Tax Cuts and Jobs Act enables investment real estate owners to still defer capital gains taxes using section 1031 like-kind exchanges. There were no new restrictions on 1031 exchanges of real property made in the law. However, the new law repeals 1031 exchanges for all other types of property that are not real property. This means like-kind exchanges of personal property will no longer be allowed after 2017 for collectibles, franchise rights, heavy equipment and machinery, collectibles, rental vehicles, trucks, etc. The rules apply to real property not generally held for resale (such as lots held by a developer).

(2) The capital gain tax rates stayed the same so a real estate owner selling an investment property can potentially owe up to four different taxes: (1) Deprecation recapture at 25% (2) federal capital gain taxed at either 20% or 15% depending on taxable income (3) 3.8% net investment income tax (“NIIT”) when applicable and (4) the applicable state and local tax rate.

(3) The tax law creates a new tax deduction of 20% for pass-through businesses. This gets tricky but here goes. For tax years 2018-2025, an individual generally may deduct 20% of qualified business income from a partnership, S corporation, or sole proprietorship. The 20% deduction is not allowed in computing Adjusted Gross Income (AGI), but is allowed as a deduction reducing taxable income. 

Restrictions on Tax Deductions

(1) Mostly, the deduction cannot exceed 50% of your share of the W-2 wages paid by the business. The limitation
can be computed as 25% of your share of the W-2 wages paid by the business, plus 2.5% of the unadjusted basis
(the original purchase price) of property used in the production of income.

(2) The W-2 limitations do not apply if you earn less than $157,500 (if single; $315,000 if married filing jointly).

(3) Certain personal service businesses are not eligible for the deduction, unless their taxable income is less than
$157,500 for singles and $315,000 if married. A “specified service trade or business” means any trade or business involving the performance of services in the fields of health, law, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners, or which involves the performance of services that consist of investing and investment management trading, or dealing in securities, partnership interests, or commodities. (It appears President Trump liked real estate people but did not like professionals like lawyers, doctors, accountants and other consultants).

(4) The exception to the W-2 limit and the general disallowance of the deduction to personal service businesses is phased out over a range of $50,000 of income for single taxpayers and $100,000 for married taxpayers filing
jointly. By the time income for a single taxpayer reaches $207,500 or $415,000 for a married-filing-jointly
taxpayer, the W-2 limitation will apply in full (i.e. personal service professionals get no deduction).

(5) The new tax law increased the maximum amount a taxpayer may expense under Section. 179 to $1,000,000 and increased the phaseout threshold to $2,500,000. Interestingly, the new law also expanded the definition of Section. 179 properties to include certain depreciable tangible personal property used predominantly to furnish lodging. It also expanded the definition of qualified real property eligible for Section 179 expensing to include the following improvements to nonresidential real property: roofs; heating, ventilation, and air-conditioning property; fire protection and alarm systems; and security systems

(6) State and local taxes paid regarding carrying on a trade or business, or in an activity related to the production of income, continue to remain deductible. A rental property owner can deduct property taxes associated with a business asset, such as any rental properties. Don’t confuse such with the itemized deduction for your personal residence or vacation home which is now limited.

(7) While the prior law generally allows a deduction for business interest expenses, the new tax act limits that deduction to the business interest income plus 30% of adjusted taxable income. However, taxpayers (other than tax shelters) with average annual gross receipts for the prior three years of $25 million or less are exempt from this limitation. Real estate businesses can elect out of the business interest deduction limitation, but at the cost of longer depreciation recovery periods—30 years for residential real property and 40 years for nonresidential real property. If a real estate business does not elect out of the interest deduction limitation, then residential and nonresidential real property depreciation recovery periods are maintained at 27.5 years and 39 years, respectively.

Phew-there you have taste of what we’re going or at least as we see general changes directly or even indirectly
affecting real estate peeps. As you can see, the new law will bring a lot of changes (both good and bad) to individual and business taxpayers. On the plus side, this means more planning opportunities for many although looking for answers can be problematic as we all try to navigate through uncertain territory. These comments only touch the surface of one of the biggest tax overhauls in the nation’s history. Stay tuned and do stay close to your tax attorney and accountant.….

 

WCRE 2017 FOURTH QUARTER REPORT

SOUTHERN NEW JERSEY & PHILLY CRE MARKETS FINISH A STRONG 2017 WITH STRONG FUNDAMENTALS BUT MIXED RESULTS

January 8, 2018 – Marlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the Southern New Jersey market is in largely good shape, despite a seasonal drop in leasing activity.

 

“Aside from an expected leasing slow-down in the fourth quarter, 2017 was a strong year for our market,” said Jason Wolf, founder and managing principal of WCRE. “All the elements for success are in place, including a labor market that is heating up, record gains in the financial markets, and continued deal and prospecting activity and enthusiasm.”

There were approximately 210,525 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was about half the total compared with the previous quarter. While leasing slowed considerably, the sales market stayed active, with more than 1.88 million square feet on the market or under agreement and an additional 205,364 square feet trading hands.

New leasing activity accounted for approximately 25.7 percent of all deals. Overall, net absorption for the quarter was in the range of approximately 65,250 square feet.

Download The Report (PDF) >>>

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 10.1 percent, which is an uptick of a third of a point from the previous quarter.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.50/sf NNN or $20.00-$24.50/sf gross for the deals completed during the quarter. These averages have stayed within this range for most of this year.
  • Vacancy in Camden County improved throughout the year, standing at 11.7 percent for the quarter, up a bit from the third quarter, but down from 13.3 percent at the beginning of the year.
  • Burlington County vacancy was at 8.5 percent, a slight increase in a year that saw marked improvement overall.

 

WCRE has expanded into southeastern Pennsylvania, and the firm’s quarterly reports now include a section on transactions, rates, and news from Philadelphia and the suburbs. Highlights from the first quarter in Pennsylvania include:

  • Philadelphia’s office market saw increasing vacancy in the Central Business District during 2017, as several large tenants emphasized efficiency and returned large blocks to the market. Still, we see increasing employment and new construction, both of which bode well for continued strength.
  • The Philadelphia retail sector continues to struggle. It has been affected by the same challenges facing retail businesses everywhere. Namely, the shift to online retailing. Still, there were some positive signs amid the announced store closings and bankruptcies. Community shopping centers remain an area of strength in the market, with vacancy rates nearly half the national average.
  • The Philadelphia industrial market continues its hot streak, and the outlook is positive. Vacancy rates for flex and industrial properties in Philadelphia are well below the regional and national averages, and this is expected to continue. Industrial vacancy in Philadelphia is currently at 7 percent, and net absorption was in the range of 1.7 million square feet.

WCRE also reports on the Southern New Jersey and Philadelphia retail market, noting that holiday spending reached the highest levels since 2011, with both online and brick-and-mortar retailers reaping gains. Overall holiday retail sales posted gains of 4.9 percent over last year, with online retailers gaining 18.1 percent. Other highlights from the retail section of the report include:

  • Retail vacancy in Camden County stood at 8.5 percent, with average rents in the range of $12.75/sf NNN.
  • Retail vacancy in Burlington County stood at 9.9 percent, with average rents in the range of $13.83/sf NNN.
  • Retail vacancy in Gloucester County stood at 7.2 percent, with average rents in the range of $14.64/sf NNN.

The full report is available upon request.

 

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

WCRE’S Chris Henderson Promoted to Principal & Shareholder

January 8, 2018 – Marlton, NJ – Wolf Commercial Real Estate (WCRE) proudly announces the promotion of Chris Henderson to Principal and Shareholder of the firm effective January 1, 2018. Chris Henderson joined the firm in 2014, and was previously promoted to vice president at the end of 2016. He has been recognized for his tremendous leadership skills, collaborative approach, entrepreneurial spirit, and a boundless work ethic that has served him well within the company and the community.

“Chris’s new role within the company is well deserved, and I am proud to welcome him to the WCRE partnership,” said Jason Wolf, Managing Principal of WCRE. “Our firm’s growth and success relies on the strength and development of our team, our clients, and our communities. Chris has helped to define the integrity, quality, teamwork, and focus that are the essence of the WCRE brand.”

Download Printable PDF >>>

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long-term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.moorestownofficespace.com, www.moorestownmedicalspace.com, www.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

The Tax Reform Bill and Commercial Real Estate

The Tax Reform Bill and Commercial Real Estate

Let’s look at how the recent tax reform bill impacts commercial real estate. The Tax Cuts and Jobs Bill was signed into law on 22 December 2017. The tax reform bill is one of the most substantive changes to the tax laws passed in over 30 years. With the current administration’s background in commercial real estate and understanding of the challenges in the industry, it’s no surprise that certain provisions would be included that might help propel real estate development and commercial real estate transactions. Here’s a quick summary of a few of the critical pieces that affect the commercial real estate business. This isn’t a full compendium or review of the bill and it’s not tax advice but it will help guide you in developing some strategies to take advantage of these laws with your CPA in 2018.

Download Printable Article (PDF) >>>

Tax Reform Bill Lowers Taxes on Pass Through Corporations

Pass-through businesses—partnerships, S-corporations, and limited liability companies—are corporate entities that allow business income to “pass-through” to the owner, thereby paying a personal income rate, as opposed to a business rate. For most this is a tax cut from 40% down to 25%. So, let’s say you have a rental income entity organized as an LLC, this new regulation could be significant tax savings to you. Also, be sure to ask your accountant about the “Corker Kickback” which further amplifies this benefit through a 20% deduction subject to income thresholds.

Tax Reform Bill Offers Tax Deductions for Property Developers:

New provisions allow developers to deduct interest expenses for a variety of real estate activities, including construction, management, and property development. This should help developers free up some necessary cash to keep projects moving.

Tax Reform Bill’s Impact on 1031 Exchanges

Like-kind exchanges enable owners of property to sell at a large capital gain but defer any tax as long as they use the proceeds to buy some other property. In essence, owners of commercial real estate can keep flipping the properties until they die without ever paying any capital gains tax. (And if the estate tax is abolished, the gains might go untaxed forever.)

Tax Reform Bill’s Impact on Carried-Interest

There was lots of talk that the “carried interest” loophole would be closed for hedge fund managers. Carried interest essentially allows for taxation at lower capital gains rates rather than ordinary income rates for assets held at least one year. The new reform changes the hold period to three years but this won’t affect most hedge funds as the average hold on assets is three years.

In the real estate context, the change doesn’t make much difference to investors who have a long-term hold strategy. However, for real estate investors who operate on a fix-and-flip strategy this could affect you directly.

CONCLUSIONS:

There are more aspects in this tax reform bill that are favorable to real estate investors and you should be consulting your CPA as soon as possible to start planning for 2018 if you haven’t already. While every action has an equal and opposite reaction, most experts agree that these new regulations should spur additional investment in the commercial real estate sector from development through purchase of real estate for rental income purposes.

For more information, contact:

Marc Snyderman, Esquire
President
923 Haddonfield Road, Suite 300
Cherry Hill, NJ 08002

phone: 856.324.8267

web: www.snydermanlawgroup.com


Antonella Colella, Esquire
150 Monument Road, Suite 207
Bala Cynwyd, PA 19004

phone: 856.324.8268

web: www.snydermanlawgroup.com

Performing Pre-Construction Due Diligence

Let’s explore why performing pre-construction due diligence prior to the acquisition of a site or proceeding towards construction is critical.

We’ve heard it all before:

  • “Do your homework.”
  • “Measure twice….cut once.”
  • “A little bit of knowledge is a dangerous thing.”
  • “Hindsight is 20/20”
  • “Snooze, you lose.”

Download Printable Article>>>

My father didn’t author any of those lines, but he said them so often I thought he might have. And quite frequently, I can still hear his voice in my head giving me such sage counseling. But it was more than fatherly advice; it was sound advice that helped prepare me for the world of design and construction; as he would say: “Always be prepared.” He never used the term “due diligence;” but I knew what he meant.

Now that I’m all grown up, his words seem even more to the point. Performing pre-construction due diligence prior to the acquisition of a site or proceeding towards construction is critical. You need to protect your interests and investments of time and money, and the best way to accomplish that is to assess potential risks in every
development venture.

It may sound like a simple task, but it is a complex process to identify and analyze the risks and arrive at sound and level-headed solutions to obstacles that may arise. After that, you’ll need to address and mitigate each through the planning and construction processes. If the obstacles appear too great, or reveal other issues that verge on being unsurmountable, it may be a good time to rethink and retool the project.

Pre-Construction Due diligence must be done for every project, no matter how big or small…be it single family home or multifamily housing, commercial, office or retail, educational or worship, healthcare or hospitality, industrial or government. So, before you take that leap and make the decision to proceed with a site and/or building project, take the time and effort to perform the investigation and assess if it (and its context) are suitable for a particular project, and if it is in balance with the other various risks involved.

Thorough pre-construction due diligence is critical to your project…from the selection of the site, to the designer and builder, delivery method and materials, to compliance, financial assessments and budget. Nothing can place you on a better course than proper pre-construction due diligence. It’s just as my dad said: “measure twice, cut once.”

Paul Stridick, AIA is Director of Design/Build at The Bannett Group. He is an award-winning architect that also has extensive government experience. Prior to joining TBG, Paul was the Director of Community Development for Cherry Hill Township, NJ, a 26-square mile suburban community in the Philadelphia metropolitan area. Before that, he was the Director of the Division of Housing and Community Resources for New Jersey’s Dept. of Community Affairs. His last article “IS THERE AN EASIER WAY TO GET SOMETHING BUILT?” was published on WCRE’s blog in August 2017.

The Bannett Group is a South Jersey firm that was founded in 1970. Since then, we’ve become one of the fastest growing design and construction firms in the region, with a portfolio of work that spans the country. The Bannett Group always views our design & construction services as a set of tools available to complete each job. We’ll pick the best tool or delivery method for each job…general contracting, construction management or even a fully integrated Design-Build package. Whatever the tool, we get the job done. With our steadfast history and fine-tuned in-house talent, we’re able to complete each project on time…on budget…every time.

Analysts: Closing of Weakest Stores to Benefit Shopping Center Performance

The national retail vacancy rate ticked up 10 basis points for the second consecutive quarter to reach 5.2% in the third quarter of 2017 as retail leasing and net absorption slowed despite continuing improvement in the broader economy and growing consumer spending power, according to CoStar analysts.

The slower leasing performance in the third quarter for the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – reflects the ongoing store closures announced by several major retailers. In total, retailers have announced a record 101 million square feet of store closings this year, on top of 83 million square feet of store space that went dark in 2016.

However, despite signs of decelerating leasing demand for the national and Philadelphia commercial real estate markets, some analysts speculate that record levels of store closures will eventually have a ‘healing effect’ on the market as the weakest shopping centers shut down or are repurposed.

This report on U.S. and Philadelphia commercial properties is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Analysts argue that recent weakening of fundamentals does not necessarily justify the doomsday scenario suggested by gloomy headlines warning of a “retail apocalypse” or “Armageddon,” and the focus on the ongoing purge among national and Philadelphia commercial real estate properties masks the best-performing centers, many of which are adding stores and maintaining occupancy.

“Store closures have become a headline risk, and I think it is impacting the capital markets and pricing of retail property. But for shopping center owners and investors, these closures may be a necessary means to healing the market,” observed CoStar director of U.S. retail research Suzanne Mulvee in presenting the latest quarterly data during CoStar’s State of the Retail Market Q3 2017 Review and Outlook.

“Consumer spending (at the closed stores) needs to go somewhere, usually to another physical retailer, so we look at this trend as somewhat positive for the overall market,” Mulvee said. Surviving stores in the right locations “will ultimately come through this period even stronger than before,” added CoStar managing consultant Ryan McCullough.

One major issue contributing to concerns on Wall Street about U.S. and Philadelphia commercial real estate listings is the staggering amount of debt held by retail chains, incurred in part during the wave of leveraged buyouts by private-equity firms in recent years. For example, giant shoe retailer Payless Inc., which filed for Chapter 11 bankruptcy in April, incurred more than $700 million in new debt, including buyout borrowings, after being acquired in 2012 by Golden Gate Capital and Blum Capital Partners.

“If retailers can’t refinance the debt at reasonable rates, they will be forced into bankruptcy, and that gives them cover to break leases,” said Mulvee. “Capital is still positive on high-quality retail, but it is becoming even more bearish on weaker retail.”

The best-performing malls and shopping centers populating the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – will continue to attract tenants and retain value. Average and lower-performing properties will continue lose value and eventually close or be repurposed, according to the report.

U.S. retailers dealing with national and Philadelphia commercial real estate listings expect to open nearly 4,100 more stores than they will close in 2017, a conveniently overlooked fact in many news headlines focused chiefly on the number of store closings, according to “Decluttering the Retail Landscape,” a recent report by TH Real Estate. Competition from online sales is pushing weaker retailers out of business faster than ever before, but the report posits that should ultimately result in a financially healthier and more adaptable set of retailers and shopping centers that provide more appealing experiences and a compelling product mix for shoppers.

“When we subtract those non-competitive malls with vacancies of 40% or higher, we see a far different picture,” said CoStar’s McCullough. “It’s the troubled properties that lose a key tenant and set into motion an exodus of defections,” skewing the retail vacancy picture, he added.

For more information about Philly office space, Philly retail space and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.

Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space, Philly retail space or Philly industrial space with the Philadelphia commercial properties that best meets their needs.

As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space, Philly retail space or Philly industrial space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

Proposed Modifications to Philadelphia Mixed Income Housing Bill

Philadelphia Mixed Income Housing BillThere have been some proposed modifications to the Philadelphia Mixed Income Housing Bill. On June 22, 2017, City Councilmember Maria Quiñones-Sanchez introduced a bill proposing to provide for new affordable housing requirements in Philadelphia in the commercial real estate context. The bill, as originally drafted, would amend the Housing Code to require residential developers to include affordable housing units in their new and redeveloped residential projects. In return, developers would be rewarded with height and floor-area ratio bonuses. Since its initial introduction in June, the bill has been recently modified by its sponsor as part of the Planning Commission review process, resulting in certain substantive changes to its original form. A November 27 public hearing revealed dissension against the bill from neighborhood groups, housing advocates and developers, resulting in Councilmember Quiñones-Sánchez putting a hold on the bill. Further amendments to rectify the differing viewpoints are to be expected, and another hearing as well as a vote has been scheduled for December 5, 2017.

Download Printable Article (PDF) >>>

Background of the proposed modifications to the Philadelphia Mixed Income Housing Bill

Legislating affordable housing requirements in the commercial/residential real estate context is not a new trend in major cities nationwide. San Francisco and New York City, for example, have long had robust mixed income housing programs. Given Philadelphia’s high poverty rate, city officials view this bill as a way to provide increased affordable housing to its residents while still recognizing and meeting the needs of private developers.

Philadelphia Mixed Income Housing Bill NO. 170678

The bill directs private developers of new residential projects or substantially rehabilitated projects containing more than 10 units to set aside 10 percent of the units for affordable housing. The amended bill specifies, however, that its affordable housing requirements do not apply to student or subsidized housing. Under the original bill, the affordable units would have been available to prospective renters whose incomes were between 30 percent and 50 percent of the area median income (AMI) and to purchasers between 50 percent and 80 percent of the AMI, depending on the location of the units. Now, under the amended bill, the units would be available to prospective “low income” renters at or below 50 percent of the AMI and “moderate income” renters at or below 60 percent of the AMI. The amended bill would also make the units available to prospective “low income” purchasers at or below 70 percent of the AMI and “moderate income” purchasers at or below 80 percent of the AMI.

Originally, the bill applied to the entire city; as amended, however, the bill would only affect high-density zoning districts of RM-4, RMX-3, CMX-3, CMX-4 and CMX-5. These modifications result in both the affordable housing requirements and the incentives offered being inapplicable in zoning districts other than those listed above. The bill defines an affordable unit as one whose cost—whether rental or purchase—is 30 percent or less of the applicable maximum qualifying income level. These units were initially proposed to them should they opt to build affordable units. The amended bill grants substantial height and floor-area bonuses to developers who incorporate the affordable housing proposals, although the specifics of these bonuses may change in the next version of the bill. These developers will have enhanced development opportunities as a result of their assistance in providing homes to a wide range of Philadelphians.

The bill, if passed into law, would go into effect on July 1, 2018. Should it pass, the bill will not apply to construction pursuant to valid zoning permit applications that were filed prior to the effective date. Currently, a Rules Committee public meeting and the vote on the bill have been set for Tuesday, December 5, 2017.

Want More Information about the proposed modifications to the Philadelphia Mixed Income Housing Bill?

This Alert has been authored by Aaron R. Feinblatt, an associate in Duane Morris’ Real Estate Practice Group. If you have any questions about this Alert or otherwise, please contact Brad A. Molotsky at 856-874-4243.

brad-molosky

 

WCRE Helps Feed Neighbors With Annual Thanksgiving Food Drive

In its Fourth Year, WCRE’s Thanksgiving Food Drive Brings A Community Together

Wolf Commercial Real Estate (WCRE) wrapped up its fourth annual Thanksgiving Food Drive today by delivering 130 bags of food and $1,200 in supermarket gift cards to the Jewish Family and Children’s Service food pantry.

As in previous years, the firm spent the past several weeks collecting food and grocery store gift cards from friends, clients, and colleagues throughout the region. More than thirty area businesses contributed to the effort.

“Over the course of just a few years, WCRE has become an integral charitable partner in our efforts,” said Marla Meyers, MSW, executive director of Samost Jewish Family and Children’s Services of Southern New Jersey. “We thank Jason Wolf and the entire WCRE team for their generosity and leadership today and throughout the year.”

Download Printable PDF>>>

The food drive is part of WCRE’s Community Commitment program, which also includes donating a portion of the proceeds from every transaction to one of several local charities. In September the firm hosted its second annual celebrity charity hockey game, in which local business leaders played alongside several former Philadelphia Flyers. That event raised more than $65,000 that was shared among several local charities.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

# # #

How to Encourage Office Creativity

Encourage Office CreativityLet’s look at ways to encourage office creativity. Most people think that working hard is the most effective way of working. However, that is not always the case. A great way to accomplish everything on your to-do list is to do smart work instead of hard work. To encourage office creativity and welcome various thoughts from different channels at the work place, there needs to be a collaborative working environment. Here is a list of activities that will help you achieve maximum levels of creativity within your office.

Download Printable PDF>>>

1. Arrange for some games that encourage a team-building attitude to encourage office creativity

You should plan a small game for your employees and schedule it once every few weeks. Introduce such games that are to be played between teams. This will help you to educate your staff about the importance and benefits of team work.

2. Entertain employee suggestions to encourage office creativity

You should dedicate an area where employees can come and share their creative thoughts or suggestions. You can hang a notice board in a corner so that the employees may write their thoughts on paper and pin it on the notice board or you can place a suggestion box where employees can raise their concerns without revealing their identity. Make sure that you value their suggestions and reward them for creative ideas.

A notice board is preferable, as the content on the board can be seen by other employees as well and it provides a platform to interact. Employees can pin up suggestions as well as any challenges they are facing while accomplishing any given task. This way they will get input from others to get problems solved. This improves collaboration and teamwork.

If you have a huge office with thousands of employees, you can replace notice boards with digital
collaborative platforms.

3. Encourage brainstorming to encourage office creativity

Brainstorming sessions are the best way to get the creative ideas flowing. Try to make every employee a part of the brainstorming sessions where everyone should be given freedom to express their thoughts.

4. Treat all your employees equally to encourage office creativity

A workplace is full of people with different backgrounds and thoughts. Everyone must be treated equally, and there should not be any bias to any particular group of employees. Plan a few informal get-togethers’ where all the employees gather and spend few hours together irrespective of their designation in the workplace. It is an awesome sight to see the director talking to a trainee and getting to know about him/her; an accounts person talking to a technical person and sharing thoughts; and many more such interactions. This is the sign of a great work culture within an organization.

Creativity is directly linked to the flow of ideas. The better the flow of ideas, the more creative your team will be. Creative resources are the assets of an organization and the creative atmosphere results in the best quality output. Give it a try today and let us know how successful your working environment
is.

 

Josh Smargiassi: Principal
Boomerang, Inc.
6950 Sherman Lane
Pennsauken, NJ 08110
P 856.582.0100
F 856.582.0104
www.boomerangofficefurniture.com

WCRE Third Quarter Report: Fundamentals Remain Strong

SOUTHERN NEW JERSEY & PHILLY CRE MARKETS PERFORMING STEADILY

October 6, 2017 – Marlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the Southern New Jersey market is in good shape, but remains in somewhat of a holding pattern.

“For most of 2017 we have seen an overall positive tone and conditions that usually indicate a period of strength,” said Jason Wolf, founder and managing principal of WCRE. “The national economy has been adding jobs, the financial markets are on a hot streak, and our market continues to attract outside investors – yet increased activity and enthusiasm are tempered by trouble in the retail sector and uncertainty related to current events.”

There were approximately 421,113 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents an increase of approximately 6.6 percent compared with the previous quarter, and a 15 percent increase over the same period last year. While leasing showed moderate gains, the sales market was quite active during the third quarter, with more than 1.76 million square feet worth more than $105 million of completed sales transactions trading hands.

New leasing activity accounted for approximately 43.3 percent of all deals. Overall, net absorption for the quarter was in the range of approximately 91,600 square feet.

Download The Report (PDF) >>>

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 9.75 percent, which is a solid improvement over the previous quarter.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.50/sf NNN or $20.00-$24.50/sf gross for the deals completed during the quarter. These averages have stayed within this range for most of this year.
  • Vacancy in Camden County maintained its dramatic improvement, standing at 10.8 percent for the quarter, down from 13.3 percent at the beginning of the year.

WCRE has expanded into southeastern Pennsylvania, and the firm’s quarterly reports now include a section on transactions, rates, and news from Philadelphia and the suburbs. Highlights from the first quarter in Pennsylvania include:

  • The Philadelphia industrial market continues its hot streak, and the outlook is positive. Vacancy rates for flex and industrial properties in Philadelphia are well below the regional and national averages, and this is expected to continue.
  • Philadelphia’s office market continues to gain strength across the board, with far lower vacancy rates than regional and national averages for both Class A and Class B properties in the Central Business District and the suburbs. We see increasing employment and new construction, both of which bode well for continued strength.
  • The Philadelphia retail sector is the one area that is not performing well. It has been affected by the same challenges facing retail businesses everywhere. Namely, the massive shift to online retailing and away from brick-and-mortar. Still, there were some positive signs amid the announced store closings and bankruptcies. Community shopping centers remain an area of strength in the market, with vacancy rates nearly half the national average.

WCRE also reports on the Southern New Jersey and Philadelphia retail market, noting slight declines in consumer confidence and related metrics as the third quarter wound down. Overall retail sales were 3.2 percent higher this year compared to 2016, and were likely impacted by the major hurricanes affecting Texas and Florida in late August and early September. Highlights from the retail section of the report include:

  • Retail vacancy in Camden County stood at 9.5 percent, with average rents in the range of $12.47/sf NNN.
  • Retail vacancy in Burlington County stood at 10.7 percent, with average rents in the range of $13.38/sf NNN.
  • Retail vacancy in Gloucester County stood at 7.9 percent, with average rents in the range of $14.10/sf NNN.

The full report is available upon request.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long-term growth and success.

Learn more about WCRE online on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

# # #

5 Self-Defense Tips for Realtors

Self-Defense Tips for RealtorsLet’s look at some self-defense tips for realtors. As in any job, but especially in real estate, agents have the possibility of being confronted with the threat of physical attack Unfortunately, the majority of employees are typically armed with little to no self-defense awareness. In fact, in a recent survey conducted by the National Association of Realtors, 40% of the respondents reported that they had experienced a situation that made them fear for their personal safety or safety of their personal information while on the job. Below, we’ve outlined 5 self-defense tips for realtors that can help all real estate agents protect themselves while on the job.

Download Printable PDF Article >>>

1. Unlock the doors and perform any safety checks prior to your prospect’s arrival. Make sure all exits are unlocked and clear of obstacles.

2. Never walk into a property first. You already have the door unlocked and open. Step aside and allow your prospective buyer to go in first. If you walk in first, it’s easy for your would-be assailant to lock the door behind him and proceed with the attack.

3. Maintain a personal comfort zone. There is no reason for a person to be within 3 feet of you at any time without permission. If attacked, stand your ground. You are far less likely to survive an attack if the perpetrator moves you from one location to another. Don’t let an attacker force you into a car, as this will decrease the chances of emergency responders finding you with enough time to save your life.

4. Breathe. This is often the first thing people forget to do in an assault. The easiest way to prevent this is to start yelling. Yell at the attacker to stop. Yell at them to go away. Or simply yell “NO!” Target sensitive areas. There are several areas of the human body that are very sensitive to attack. Pinch together all five fingertips of one hand and go straight for the eyes. If the attacker is behind you, jab your elbow into the face, throat or pit of the stomach.

5. Take a self-defense class. You can never be too prepared in an attack. Learn the most effective ways to fend off an attacker from a trained professional. At the end of the day, the most important point is that you make it out alive.

If you are interested in learning more about these and other self-defense tips for realtors, please contact:


Mike Andrus

Personal Security Expert
Guard Llama
MAndrus@guardllama.com
(215) 370 -1650
www.guardlama.com