Tag Archives: commercial real estate


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.”

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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.

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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.”

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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.

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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.

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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.

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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.

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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.

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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

A Quarter of Houston CRE Properties Suffer Flood Damage

As the flood waters continue to recede in Texas and Louisiana, officials caution the storm waters continue to pose threats to life and property. However, the region is shifting into recovery mode and beginning to take a full measure of the unprecedented destruction brought by Hurricane Harvey.

An assessment of the potential impact of the epic storm on the Houston commercial real estate market indicates 27 percent of the market’s gross leasable area, representing approximately $55 billion in property value, was likely affected by flooding.

This report is being offered through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm, based on information collected and studies conducted by the by the CoStar commercial real estate information company.

Included in the estimated is 175 million square feet of commercial real estate market space located within the Houston metro’s 100-year flood zone that appears to have been inundated by the epic floodwaters, including some 72,000 apartment units and 20 million square feet of office space.

Harvey, which first made landfall at Rockport, TX, as a Category 4 hurricane early August 26 and then stalled over the Texas coast, broke all records to become the wettest tropical cyclone in the contiguous United States. Weather experts have estimated that through the middle of last week, the storms had dumped an estimated 20 to 25 trillion gallons of water on Texas and Louisiana.

The greater Houston commercial real estate market ranks as the sixth-largest metro area in the U.S. by total CRE space at 1.6 billion square feet. According to CoStar data as presented Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm, $16 billion of the $55 billion in property at risk is comprised of apartment buildings within the 100-year flood zone.

The densely populated Southwest Houston submarket segment of the overall Houston commercial real estate market, home to more than 66,000 apartment units, is likely to be the district most affected by flooding. Nearly 30 percent of the submarket’s apartment units are estimated to be impacted, with the Braeburn, Greater Fondren and Sharpstown neighborhoods having the largest number of units within the 100-year flood zone.

For more information about Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm specializing in Philly office space, Philly retail space, and Philly industrial space, 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, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings, Philly office space, Philly retail space, Philly industrial space, 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 Philadelphia commercial real estate listings and services – including Philly office space, Philly retail space, and Philly industrial space – 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.

WCRE Expands Philly Team with Joe Nassib

Wolf Commercial Real Estate (WCRE) is pleased to announce the hiring of Joe Nassib as the firm’s newest sales associate. Nassib is a former commercial construction project management specialist who will be a valuable partner to clients seeking expertise in development and understanding the potential of a space. Nassib will work closely with WCRE’s team of sales professionals to generate new business relationships and create opportunities for clients in Philadelphia and its suburbs.

For four years Nassib was a defensive back and special teams player for the Syracuse University Orange football team. He began as a walk-on, and through his perseverance, earned a scholarship and appeared in more than 40 games. He will bring this same type of tenacity and commitment to his clients at WCRE.

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“We believe Joe has a lot of potential as a sales associate, combining what he knows about commercial development with his can-do competitive spirit,” said Jason Wolf, founder and managing principal of WCRE. “I’m thrilled to welcome him to our company.”

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 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

Tenant Improvements and Betterments

Tenant Improvements and BettermentsLet’s explore how Tenant Improvements and Betterments impact insurance. Suppose that a landlord leases a storefront to a retailer that makes improvements to the facility by adding features to help sell its products. During the lease, a fire breaks out and damages the building, including the features added by the retailer to improve the space. When the insurance claims are made, the following questions arise:

• Who did the improvements belong to?
• Who is responsible for paying the damages?

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Defining Tenant Improvements and Betterments

While legal definitions vary, improvements and betterments are anything that a tenant attaches to the landlord’s real estate that becomes a permanent part of that real estate. Under most leases, such improvements become the property of the landlord and tenants are responsible for repairing or replacing the improvements in the event of loss. However, property policies can be customized to determine whether tenants’ improvements and betterments are covered under the building category or under the contents category.

A Landlord’s View of Tenant Improvements

When a tenant makes substantial improvements and betterments to a building, it adds to the building’s value. In order to realize this added value, the landlord needs to clearly establish who is responsible for damages to that property to avoid insurance complications. In doing so, the landlord typically has to make one of the following decisions:

1. Increase the limits of the property insurance policy to account for this extra value.

2. Add a clause to the rental contract stating that the tenant is responsible for damages to improvements and betterments.

In the absence of one of the aforementioned decisions, the landlord may face penalties in the event that he or she has to make an insurance claim. For example, if a tenant makes $100,000 worth of improvements and betterments to a property that was initially worth $500,000, and a fire destroys the entire building, the insurance adjuster will value the property at $600,000 when processing the claim. But, since most landlords’ property policies consider improvements and betterments as covered property, the landlord may be charged an underinsured penalty if the building’s policy hasn’t been increased to reflect the amount of the improvements
and betterments.

A landlord who does not wish to insure for the values of the improvements and betterments should specifically exclude them.

A Tenant’s View of Tenant Improvements

If the lease requires the landlord to repair or replace tenants’ improvements and betterments that become damaged, the tenant does not need to insure them. In contrast, if the lease does not require the landlord to repair or replace tenants’ improvements and betterments, tenants need to make sure they are covered under their own property policy.

 

Tenant Improvements – Considerations When Entering a Lease

When entering into a new lease or renewal, it is critical for both landlords and tenants to carefully review the terms of the lease to ensure that it adequately delegates the responsibility for insuring tenant improvements and betterments. It is also important to make sure that each party’s insurance policy is adequate enough to properly protect the scope of the tenant improvements agreed upon in the lease. When reviewing the lease, both the landlords and tenants should discuss the following questions:

• Who owns the improvements?
• Who is responsible to replace the improvements if damaged?
• Which insurance policy covers the improvements—the landlord’s or the tenant’s?
• Is the policy adequate?

Insuring Tenant Improvements and Betterments

Tenant Improvements and betterments are not difficult to insure, as a building’s insurance forms automatically cover them. However, many landlords expect their tenants to insure any improvements and betterments that are
made, and some landlords refuse to increase the value of their building policies to reflect the new value of such changes. Therefore, it is important to understand the insurance ramifications of tenants’ improvements and betterments. Hardenbergh Insurance Group can help you identify your exposures and make appropriate recommendations.

For more information on Tenant Improvements and Betterments

Brian Blaston, Partner
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955
email: brianb@hig.net
www.hig.net

Philadelphia Industrial Vacancy Increases to 5.9 Percent

The Philadelphia industrial market ended the second quarter of 2017 with a vacancy rate of 5.9 percent.

The vacancy rate in the region’s commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – was up over the previous quarter, with net absorption totaling positive 1,782,519 square feet in the second quarter. That compares to positive 9,931,174 square feet in the first quarter 2017. Vacant sublease space increased in the quarter, ending the quarter at 1,193,014 square feet.

The flex building segment of the Philadelphia commercial real estate market recorded net absorption of positive 428,315 square feet while the warehouse building market recorded net absorption of positive 1,354,204 square feet in the second quarter 2017.

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

Tenants moving into large Philadelphia commercial real estate properties in 2017 include: Uline moving into 1,070,000 square feet at Liberty Business Center III – Building 1, Mattel moving into 1,002,000 square feet at 575 Old Forge Road, and PepsiCo moving into 502,754 square feet at 545 Oak Hill Road.

Rental rates among Philadelphia commercial real estate listings ended the second quarter at $4.84, a decrease over the previous quarter.

Fourteen buildings totaling 5,075,807 square feet were delivered to the commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – in the quarter, with 15,226,755 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. national industrial vacancy rate, which decreased to 5.1 percent from the previous quarter, with net absorption positive 71.76 million square feet in the second quarter. Average rental rates connected to Philadelphia commercial real estate listings increased to $6.22, and 537 industrial buildings delivered this quarter totaling more than 64.4 million square feet, with almost 272.4 million square feet still under construction.

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) or Lee Fein (lee.fein@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.

Business Risk Exposure from Drones

Business Risk Exposure from DronesLet’s explore the business risk exposure from drones (UAS). While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time now, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

Unmanned aerial drones (UAS) are a new type of aircraft that has broad commercial and personal uses. UAS can be used to market and inspect buildings and construction sites, deliver materials or fly around as simple, recreational products.

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Risk Exposure from Drones #1 – REGULATION

The FAA currently considers UAS to be in the same category as manned aircraft, and the agency has released some very comprehensive rules on the commercial use of drones. UAS that are used only for recreation are still considered aircraft, and most of them must be registered with the FAA. Because the FAA currently considers UAS to be in the same category as manned aircraft, any attempt to damage or destroy one can result in federal penalties—up to 20 years in prison and $25,000 in fines.

Risk Exposure from Drones #2 – PHYSICAL LOSS: BEYOND THE AIRCRAFT

With UAS, it’s often the loss of the payload—not the aircraft itself—that can be the most costly. One of the most widespread applications to date has been in unmanned aerial photography. Businesses in real estate, agriculture, filmmaking and insurance all have interests in surveying and photographing land, and the cameras used to do so can get expensive. Because of the increasing affordability of drones, the payload often has a higher intrinsic value than the aircraft itself. Additionally, cameras and other payloads are usually slung below the aircraft, meaning that in the event of a hard or emergency landing, damage to the payload is almost certain.

Risk Exposure from Drones #3 – CASUALTY AND LIABILITY

As with conventional aircraft, a UAS crash could mean a hefty casualty claim. While the crash rate is actually relatively low with conventional aircraft, UAS are not subject to the tight maintenance requirements or the stringent operator regulations that make conventional commercial aircraft crashes so rare. Businesses should make sure they are adequately covered in the event of property damage or injury to a third party.

Risk Exposure from Drones #4 – BROAD USE

Another benefit that could become a potential liability is the flexibility of the technology. The same UAS that photographs a parcel of land could be used to survey a hazardous chemical spill. This kind of flexibility offers a broad number of business opportunities, but each new opportunity brings its own exposures. Businesses will have to think through how they plan on using their UAS in order to make sure that their FAA authorization
and their insurance cover each arena of commercial use.

Risk Exposure from Drones #5 – LIABILITY FOR PRIVACY

Privacy represents one of the largest exposures with regard to drones. A highly maneuverable technology that gives remotely operated cameras access to virtually any location is bound to result in claims of privacy breach. What’s unclear, however, is how both the legal system and insurers plan to address these new exposures.
Currently, carriers exclude all privacy-related claims, but the increased exposure means that there’s a potential market for such protection. However, without some kind of precedent, it’s unclear how, if at all, the insurance industry will respond. 

Risk Exposure from Drones #6 – CYBER LIABILITY

As with all new technology, UAS create new opportunities and risks for businesses. Perhaps the greatest potential liability comes from the cyber risks posed by UAS. As technology advances, UAS will be able to remotely hack into computer systems and steal data.

FOR MORE INFORMATION:

David Leff
Account Executive
The Barclay Group

Phone: 856-829-1594, x1216

Email: dleff@barclayinsurance.com