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WCRE 2018 FIRST QUARTER REPORT

SOUTHERN NEW JERSEY & PHILLY CRE MARKETS SEE MODERATE GAINS AMID TAX REFORM OPTIMISM AND FINANCIAL MARKET SHAKINESS

April 10, 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, with moderate gains in leasing activity and strong fundamentals. The firm believes the market may be poised to take off as benefits of the new tax law begin to reverberate in personal and corporate checkbooks.

Download Printable Report (PDF)

“Our market appears to have picked up steam, with a healthy pace of business growth and continuing new investment,” said Jason Wolf, founder and managing principal of WCRE. “Despite corrections ending a long winning streak in the financial markets, the benefits of the new tax law should shore up commercial real estate, especially industrial and office demand.”

There were approximately 272,550 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was a gain of 23 percent over the previous quarter. Leasing picked up, and the sales market stayed active, with about 1.63 million square feet on the market or under agreement and an additional 320,691 square feet trading hands. The sales figure is a 36 percent increase over the previous quarter.

New leasing activity accounted for approximately 77.2% percent of all deals. Overall, net absorption for the quarter was in the range of approximately 105,250 square feet. Both of these figures represent large increases over the fourth quarter.

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 11.2 percent, which is more than a full point higher than the previous quarter. This may be attributed to large blocks of space returning to the market.
  • 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 steadily last year, but jumped nearly a point to 12.5 percent for the quarter.
    Burlington County vacancy was at 9.9 percent, which was also higher than the fourth quarter.

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 a decrease in vacancy in the Central Business District during 2017 and Q1 2018, as demand for office space continues to be strong. Still, we see increasing employment and new construction, both of which bode well for continued strength.
  • Comcast’s second office tower, the Comcast Innovation and Technology Center, is a 59-story (1,121 feet), LEED Platinum certified skyscraper developed by Liberty Property Trust. The development, positioned in the heart of the CBD, will also include a Four Seasons Hotel. The project is estimated to cost $1.2 billion, is expected to be the tallest building in the United States outside of New York and Chicago, and will be the largest private development project in the history of Pennsylvania. Net of the hotel, the property is planned for 1,336,682 SF of office space. Comcast has signed a 20-year lease for 98% of the building, with the remainder available for lease. However, Comcast may fill the remaining space themselves.
  • The project is estimated to cost $1.2 billion, is expected to be the tallest building in the United States outside of New York and Chicago and will be the largest private development project in the history of Pennsylvania. Net of the hotel, the property is planned for 1,336,682 SF of office space. Comcast has signed a 20-year lease for 98% of the building, with the remaining available for lease. However, like with the Comcast Center original headquarters, they potentially may fill the remaining space themselves.
  • At 2400 Market Street, the new Aramark Headquarters is utilizing the former Philadelphia Market Design Center and will comprise the entirety of floors 5-9 on a long-term lease. Thus, the expansion (new inventory) is effectively 100% pre-leased. Estimated delivery is early 2018.
  • The Philadelphia Planning Commission has approved zoning changes to an area west of 30th Street Station, where Brandywine Realty Trust and Drexel University plan their Schuylkill Yards redevelopment project, a 14-acre district of labs, offices, residences and shopping. There is not a definitive timeline for the project. According to Brandywine, the master plan will comprise a total buildout of 2.8 million square feet of office, 1.6 million SF of residential, 247,000 SF hotel, 1 million SF of lab, and 132,000 SF of retail space. This reflects the bulk of proposed inventory in the Center City submarket.
  • Developer Oliver Tyrone Pulver Corp. is proposing a 38-story office tower on a long-empty lot east of City Hall at 1301 Market Street. It will comprise 841,750 SF upon completion if developed once a lead tenant is secured. The tower would tentatively open in 2020.
  • Demand for multi-family product is demonstrating significant growth, with nearly 2,800 units recently completed, 1,250 units under construction, and 3,200 units proposed in the PA suburbs. Within the Center City market, there are 2,200 units under construction with an additional 6,300 units proposed. Market participants are questioning whether these units will continue to be absorbed. Many high-end apartment complexes are facing concessions and compression in rental rates.
  • Quarter-over-quarter, industrial vacancy in Southeastern Pennsylvania was flat at 6.8%. The market’s largest yearly occupancy gains were recorded in Bucks County, where positive absorption totaled 709,530 square feet, and Delaware County, where 233,633 square feet was absorbed. The year’s largest moves were Almo and Amazon occupying 300,000 and 104,000 square feet of warehouse space along Cabot Boulevard in Bucks County in the second quarter.
  • Philadelphia County recorded 169,134 square feet in negative yearly absorption. The increased demand for warehouse and distribution space from e-commerce firms has focused on larger scale properties and newer buildings, both of which are in low supply. E-commerce and logistics warehouses may require anywhere between a few hundred thousand square feet to over 1 million square feet, but the tightness of Philadelphia’s industrial market means that many companies are starting to look outside the city to fulfill their space needs.

WCRE also reports on the Southern New Jersey and Philadelphia retail market.

The first quarter saw a continuation of the unfortunate trend of legacy brands such as Toys R Us and Sears closing stores and/or filing for bankruptcy protection. However, there was good development news in the region, with several healthcare, entertainment, and retail projects receiving approval. Other highlights from the retail section of the report include:

  • Retail vacancy in Camden County stood at 8.4 percent, with average rents in the range of $13.75/sf NNN.
  • Retail vacancy in Burlington County stood at 10.4 percent, with average rents in the range of $14.24/sf NNN.
  • Retail vacancy in Gloucester County stood at 7.0 percent, with average rents in the range of $14.83/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.

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WCRE Rapidly Expands Exclusive Agency Relationships In PA & NJ

New Assignments Bring Additional 113,000 Square Feet Under Firm’s Control

March 1, 2018 – Marlton, NJ – Wolf Commercial Real Estate (WCRE) is pleased to announce that it has been appointed exclusive agent for 13 new projects in the Southern New Jersey and Philadelphia region.

WCRE continues to raise the bar with an aggressive marketing and branding strategy and has increased its South Jersey and Philly presence. WCRE will assume marketing, leasing and sale responsibilities for an additional 13 properties totaling approximately 113,000 SF.

The team at WCRE now oversees over 175 properties throughout the PA/NJ market encompassing over 4.2M square feet of office, retail, industrial, healthcare and investment real estate.  

“We see endless possibility in the properties our clients have entrusted to WCRE, and we are excited to connect new prospects with these assets.” said WCRE managing principal Jason Wolf.

The New Projects awarded to WCRE during the first two months of 2018 are as follows:

  • 1140 White Horse Road, Voorhees, NJ (25,000 SF Retail Building)
  • 1030 Auburn Road, Woolwich, NJ (4.2 Acres)
  • 601 Route 130 North, West Collingswood, NJ (2,113 SF Commercial Building on .35 Acres)
  • 605 Route 130 North, West Collingswood, NJ (1,200 SF Commercial Building on .27 Acres)
  • 513 Centennial Drive, Voorhees, NJ (6,700 SF Office Building on 1.31 Acres)
  • 1504 Blackwood Clementon Road, Blackwood, NJ (3,000 SF Office Building on .34 acres)
  • 297 Easton Road, Horsham, PA (.62 Acres)
  • 146 East Evesham Road, Cherry Hill, NJ (.92 Acres)
  • 133-136 Route 73, Voorhees, NJ (25,000 SF Medical Office on 2.85 acres)
  • 816 North Black Horse Pike, Gloucester Township, NJ (1.39 Acres)
  • 162 West Cohawkin Road, East Greenwich, NJ (25,000 SF Retail Property on 2.5 Acres)
  • 55-59 High Street, Mount Holly, NJ (13,000 SF Office Building on .12 acres)
  • 735 Bethlehem Pike, Montgomeryville, PA (3,234 SF Retail Building on .39 acres)
  • 700 W Browning Road, Collingswood, NJ (8,250 SF Retail Building)

A marketing brochure for each of these properties is available upon request.

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.

WCRE FACILITATES INVESTMENT SALE OF MAJOR INDUSTRIAL/FLEX BUILDING IN EASTON, PENNSYLVANIA

FOR IMMEDIATE RELEASE

Contact: Andrew Becker

Phone: 856.449.5220

Email: andrew.becker@wolfcre.com

 

50-hilton-image

 

WCRE FACILITATES INVESTMENT SALE OF MAJOR INDUSTRIAL/FLEX BUILDING IN EASTON, PENNSYLVANIA

December 9, 2016 – King Of Prussia, PA – WCRE is proud to have exclusively represented 50 Hilton Street, L.P.  in its recent acquisition of 50 Hilton Street in Easton, Pennsylvania. The subject property is a fully leased 119,500 square foot multi-tenanted industrial/flex building situated on approximately 5.24 acres.

This well located property is within a half mile of the Morgan Hill Interchange of I-78 providing for convenient access to New York, Philadelphia, and Harrisburg.

Lee Fein, senior vice president at WCRE, exclusively represented the buyer in this investment transaction.

“We are please to have matched our client with this terrific opportunity to purchase a fully leased building with high quality tenants in an ideal location,” said Fein.

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 http://lehighvalleyindustrial.com, 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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Pennsylvania’s New Medical Marijuana Law – Implications for Commercial Real Estate

This article explores the Implications of Pennsylvania’s medical marijuana for commercial real estate.

pennsylvania-medical-marijuanaOn April 17th, Pennsylvania joined 23 other states and the District of Columbia that have legalized some form of medicinal or recreational use of marijuana. Under the new law, specially-licensed physicians will be able to prescribe medical marijuana to patients who have qualifying medical conditions. Of significance to the commercial real estate industry, the product must be be grown, manufactured, and dispensed through highly regulated physical locations within Pennsylvania. The law raises many new and unique issues for those who plan to own or use property related to the marijuana industry.

Pennsylvania’s legalization permits use for medicinal purposes only. The patient must be under the ongoing care of a physician, and prescribing physicians must obtain a special license after completing a course. Patients and/or caregivers will also need an identification card from the state. Unlike some states where prescriptions are issued to walk-in patients on-site, in Pennsylvania the dispensary must be in a different office from the prescribing physician.

medical-marijuanaThe law divides industry participants into two categories: 1) grower/processors; and 2) dispensaries.   There will be up to 25 grower/processor licenses, and up to 50 dispensary licenses. Each dispensary licensee may operate up to three (3) dispensing locations, for a potential total of 150 dispensary sites throughout the state. There will be a thorough licensing process with significant financial qualifications and fees for application. The licensing and regulatory process will be overseen by the Pennsylvania Department of Health, which is expected to issue its initial regulations in November, 2016.

One major difference between Pennsylvania and many states is that leaf or bud marijuana will be prohibited, as will smoking or retail sales of edibles. The only types of medical marijuana initially permitted will be pills, oils, gels, creams, ointments, tinctures, liquid, and non-whole plant forms for administration through vaporization. Access to dry leaf marijuana will not be considered until at least May, 2018.

From a facilities perspective, the law requires that all growing and manufacturing activities take place at an indoor facility. On the retail end, dispensaries may not be located within 1,000 feet of a school or day care. Each type of use is also subject to local zoning requirements, and the land use classification of marijuana facilities is one which may generate confusion at the municipal level. Dispensaries also face the hurdle of community acceptance, although the prohibition on dry leaf sales and smoking could make that process somewhat easier.

The manufacture and sale of medical marijuana presents additional legal and practical issues for tenants and landlords. Much of that complication arises from the fact that the legality of the industry is treated differently under state and federal law. Because marijuana is still illegal under federal law, financial transactions cannot be processed through credit cards or the banking system. As a result, the medical marijuana industry is largely a cash business and security concerns are paramount in storing and transporting what are often huge sums of cash. Physical space must account for these concerns, as well as the security of the product itself. Also, landlords can likely expect to be paid in cash or money order.

Existing contractual provisions and insurance considerations are also a concern. In a multi-tenant property, having a marijuana-related use may violate conditions in other leases. Commercial loans generally prohibit a marijuana use, so a large majority of commercial space may be unavailable to the industry. When there is a marijuana-related use, insurance costs will generally be higher. Finally, while federal prosecutions of state-authorized marijuana businesses are extremely rare, forfeiture laws still place landlords at technical risk. Not surprisingly, industry rents per square foot are significantly higher than market rate – in some cases up to two or three times higher.

One final unknown is the likely demand for medical marijuana space. Medical marijuana has been legal in New Jersey since 2010, but distribution is still limited to five dispensing locations statewide. By contrast, more than one-third of all industrial space in Denver (where recreational use is also permitted) was occupied by marijuana industry growers between 2009 and 2014.

State legalization of marijuana is a trend that is likely to continue for the foreseeable future, and even the growing call for changes to federal law will not eliminate the need to exercise additional care. Anyone entering the industry needs to be aware of the many hurdles, costs, and opportunities presented to owners and tenants of real estate used for medical marijuana manufacture and distribution.

For more information about Philly or New Jersey office space, Philly or South Jersey retail space or other Philadelphia and Southern New Jersey commercial properties, please call 215-799-6900 or 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) Leor Hemo (leor.hemo@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate brokerage firm with expertise in Philly office space and Philly retail space.

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

As experts in Philadelphia and New Jersey commercial real estate listings and services, the team at our Philadelphia and South Jersey commercial real estate brokerage firm provides ongoing detailed information about Philadelphia and New Jersey commercial properties to our clients and prospects to help them achieve their real estate goals.

If you are looking for Philly or New Jersey office space or Philly or South Jersey retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia and Southern New Jersey 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.

For More Information Contact:

transfer-taxes Anthony V. Mannino, Esq.

P: 215 799 6900

D: 215 799 6140

F: 856 283 3950

M: 215 470 6084
anthony.mannino@wolfcre.com

 

 

 

 

Realty Transfer Taxes: Understand the Costs and Plan Ahead

Transfer taxes are increasingly a major consideration when closing a real estate deal. As government budgets have become tighter over the years, the need for revenue has led to new transfer fees and legislation closing long-standing ‘loopholes” that allowed parties to legally avoid transfer taxes. The amount and type of tax owed varies widely based on the location of the property, its value, and the structure of the deal.

Transfer Taxes in Pennsylvania and New Jersey

In Pennsylvania, the state Realty Transfer Tax is 1% of the sale consideration. Local realty transfer taxes bring the overall rate to anywhere from 2% (most counties) to 5% (transfers within the City of Reading). There are exemptions from the transfer tax; examples include certain intra-familial transactions, transactions involving religious organizations, and property passed under wills or intestate succession. Properties within Keystone Opportunity Zones are not exempt from the realty transfer tax.

In New Jersey, the tax is called a Realty Transfer Fee and rates are uniform statewide. There is one schedule of rates for properties less than $350,000 in value, and a different set of rates for properties greater than $350,000 in value. For properties under $350,000 in value, there may be partial exemptions for seniors, the blind or disabled, or low and moderate income housing.

New Jersey also imposes an additional 1% fee on any property transfer in excess of $1 million. Commonly called the “Mansion Tax,” this fee originally applied only to residential properties; it was expanded in 2006 to apply to the transfer of most commercial properties.

The ability to structure transactions to avoid paying transfer tax has been significantly curtailed over the last decade. Parties often avoided transfer taxes by transferring a controlling interest in an entity owning real estate rather than the real estate itself. One example of this was the “89/11” rule; if less than 90 percent of a property-owning partnership was sold, the remaining 11 percent could be transferred three years later to avoid paying the tax.

In Pennsylvania, a series of legislative measures enacted in 2012 and 2013 largely closed the “89/11” loophole and imposed closer scrutiny on transactions that transferred an interest in entities owning real estate, particularly if more than one level of entity was involved. New Jersey instituted a Controlling Interest Tax (CIT) in 2008, which imposed a 1% tax on transfers of controlling interests in entities that directly or indirectly own real property. The CIT applies to most types of commercial property.

There may be ways to structure a transaction to avoid transfer taxes – such as long-term leases – but the deal usually needs to be sufficiently large enough to justify the cost and complexity. If you are facing a commercial real estate transaction where transfer taxes may be a consideration, WCRE and its team of experts can help guide you through the process.

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 or Philly retail 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 or Philly retail 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.

For More Information Contact:

transfer-taxesAnthony V. Mannino, Esq.

P: 215 799 6900

D: 215 799 6140

F: 856 283 3950

M: 215 470 6084