Tag Archives: Wolf Commercial Real Estate


The Highest Value in Leases for Office and Industrial Real Estate

The top 1,000 corporate, government and institutional occupiers in the U.S. hold leases worth an aggregated rent value of more than $135 billion, encompassing just over 8.4 billion square feet of office, industrial, and flex space across about 115,500 properties, according to a recent analysis of CoStar Group tenant data.

The study ranks occupiers by the current value of rents paid across their U.S. real estate portfolios in CoStar’s database. Total rent value was calculated by multiplying the space occupied by tenants in each building by the estimated rent value per property in the commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – and providing a total lease value for each occupier across markets.

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

Of the top 1,000, Amazon.com had the highest overall rent value relative to its occupied square footage among U.S. and Philadelphia commercial real estate properties with a total $1.34 billion in rent value across 352 U.S. properties totaling more than 130 million square feet of industrial, office, and flex space. Amazon controls large blocks of office space in Manhattan, San Francisco and its headquarters city of Seattle, among other markets.

The high dollar value of the internet retailer’s lease obligations can be attributed to its robust absorption of office space in the U.S. and Philadelphia commercial real estate markets in recent years, along with its growing network of hundreds of fulfillment, customer service, and other distribution facilities.

For purposes of the study, which did not include retail properties, Amazon also has broadened its property footprint with the non-grocery assets in its June acquisition of Austin-based Whole Foods Market, Inc. Amazon occupancy is sure to grow even larger in coming years with the anticipated announcement of the site for its proposed $5 billion HQ2 corporate headquarters campus, which will have capacity for 50,000 employees and 8 million square feet.

The internet seller’s request for proposals (RFP) announcement set off arguably the largest economic development and business attraction scramble involving national and Philadelphia commercial real estate listings in modern corporate history last summer, with Amazon revealing that it received proposals from 238 cities and regions across 54 states, provinces, and local or regional jurisdictions throughout North America. Rumors are swirling that Amazon will soon announce the short list of contenders or even the winning city.

“The number of banks and tech companies among the largest rent payers was revealing,” said CoStar Senior Research Director Corey Durant. “Who would have thought the Dept. of Justice would have the fourth-highest rent value among the 1,000 largest tenants? Amazon, Apple, Google and Microsoft were all near the top as one might expect. However, DaVita Healthcare, with its network of dialysis treatment centers stood out as a definite riser at #21.”

Other significant findings in the study included the high rent value in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – contributed by federal government agencies and other state, local and regional jurisdictions. Of the top 25 occupiers in total rent value, the U.S. Dept. of Justice ranked just behind Wells Fargo at #4, representing total rent value of $822 million in more than 850 facilities totaling 24.5 million square feet.

After Amazon, the #2 and #3 spots involving U.S. and Philadelphia commercial real estate listings are held by two of the nation’s largest banks, Bank of America and Wells Fargo. Other financial institutions in the top 25 include JPMorgan Chase, Morgan Stanley, Citigroup and the U.S. Treasury Dept., which occupies nearly 300 properties for a total of nearly 13.5 million square feet with a rent value of about $347 million, ranking #22 among the top 1,000 occupiers.

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, 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 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.

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.

Off-Price Department Stores Rethinking Locations

Off Price Department Stores

After being one of the few retail bright spots for several years coming out of the great recession, off-price department stores — such as Macy’s Backstage and Nordstrom Rack — appear to be reassessing their business models and making changes to their location strategies following several quarters of declining sales.

In an article written by Mark Heschmeyer for the real estate information firm CoStar, a recent rating agency survey showed several contributing factors for the recent sales declines in same-store performance.

  • Retailers rushed to open more off-price stores when demand was strong leading to the sector being “over-retailed” and prompting more competitive pricing and discounting within the sector.
  • Aggressive sales, promotions and coupons seem to have become a pervasive part of the full-line store strategy.
  • Rapid growth and convenience of e-commerce shopping is also taking its toll on off-price store sales, as it has with other bricks-and-mortar formats.

This report on the reason for recent sales declines in off-price outlets in relation to national and Philadelphia commercial properties is being offered through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

“The internet has bred a smarter customer: she knows where to get the best price; she knows if a bag is made for the outlets — or is the real deal. Sometimes she cares, sometimes she doesn’t, but she does want a great experience, whether it is easy parking, unique stores she can’t find everywhere, or amazing dining,” said the head of one retail advisory firm. “She also wants a smart, educated and engaged store associate. If she can’t get that, she gives up and goes to another store, or shops online.”

How this all plays out in the commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – is still too early to tell, but it seems to be clear that retailers are reassessing their off-price business models as far as store locations are concerned, the study noted.

Macy’s recently announced a change in location strategy for its Macy’s Backstage concept with all the announced openings for new Backstage stores slated to be located within full-line Macy’s stores rather than as standalone stores among other U.S. and Philadelphia commercial real estate properties.

“We are pleased with the performance of our Backstage stores within our Macy’s stores and are excited by the potential of this concept. It is the only mall-based, off-price concept which we now are realizing gives us a competitive advantage,” Karen M. Hoguet, CFO of Macy’s told analysts during the company’s recent quarterly earnings conference call. “Details are still being developed, but we plan to expand it aggressively next year.”

Macy’s executives added that they planned to start experimenting by positioning Backstages in “larger doors” in the future, and were looking at different parts of the online stores where they could be placed throughout both U.S. and Philadelphia commercial real estate listings,

It’s a smart concept, said the retail advisory firm source. “Having Macy’s incorporate its off-price channel into its stores is smart, given that its off-price concept name doesn’t have a lot of brand equity. Their customer is used to the ubiquitous couponing in its stores, and many of its boxes are over-sized and could use a merchandising refresher.”

In contrast, Nordstrom is opting to increase the distance between its Nordstrom Rack locations throughout the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – and the retailer’s full-line offerings, according to the study’s results.

Approximately 42% of its off-price stores among national and Philadelphia commercial real estate listings are currently located within five miles of the nearest full-line Nordstrom store. That’s changing as only 17% of new Rack stores scheduled to open will be located that close to an existing Nordstrom.

While the change in distance between stores when considering all U.S. and Philadelphia commercial real estate listings, could be the result of available real estate, it could also signal that the retailer is trying to mitigate the potential for cannibalization and brand dilution.

“Having plans that were now in hindsight too aggressive caused our teams to have to pull back a little bit,” Blake Nordstrom, president of Nordstrom’s told analysts in a recent conference call. “We think that culminated a little bit in that downward trend that we saw in the third quarter.”

Nordstrom Rack remains a meaningful part of the business, he added.

“Overall, our total off-price business is $5 billion,” he said. “It’s a healthy business and we see lots of opportunities and we are encouraged by it.”

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, 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 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.

Set the Stage for a Successful Commercial Move

Successful Commercial MoveLet’s set the stage for a Successful Commercial Move. Every move is challenging, but a commercial move has so many moving parts to it that it can seem like an overwhelming task. You have two options: coordinate the project yourself, or look to outsource it. If your relocation needs to be a seamless transition that doesn’t impact your day-to-day business, then the most expedient solution is to partner with a commercial move expert who has a field-tested logistics management program in place. So what is a logistics management program? It’s a 5-step protocol that relocation experts use to keep a project on budget and on time. Before you hire a company, interview several candidates, and see which ones will approach your move with these proven parameters:

Download Complete Printable Article (PDF)>>>

Successful Commercial Move Step #1: Relocation Plan & Objectives

Your Logistics Coordinator should develop a project overview and outline that encapsulates all the details involved in your relocation, including:
• Projected timeframe
• Goals and budget
• Space evaluation
• Asset inventory/furniture analysis
• Space planning
• Contents move plan and asset liquidation
• Computer/phone/data migration

Successful Commercial Move Step #2: Physical Survey

An on-site logistics team should survey both the origin and destination locations in order to provide a comprehensive detailed work overview. It’s important to identify property/building management requirements and specifications so that decommissioning at the current office space complies with the guidelines, and any build-outs required at the new office space are completed prior to move day. A physical survey is especially important when relocating stock from several different locations — office, store, or warehouse. Each venue requires an entirely different logistical approach, so don’t assume just giving the logistics team the square footage total is enough information. Nothing takes the place of an actual boots-on-the-ground survey.

Successful Commercial Move Step #3: Budgeting

Your Logistics Coordinator should create a detailed budget that breaks down the move into individual line items. Any vendor services needed should be sent out for comparative bid. Final recommendations should slot into the comprehensive move plan with an associated sub-budget.
• Timeline with confirmed project dates
• Benchmarks and target dates for vendor services
• Budget goals and savings opportunities

Successful Commercial Move Step #4: Finalize Move Plan

Your Logistics Coordinator should develop a final move plan that incorporates all aspects of planning, scheduling, and budgeting. The entire work process should afford you complete transparency throughout your relocation project, so you are an integral part of the move without doing any of the heavy lifting.

Successful Commercial Move Step #5: Project Move Team

Organization and coordination are the foundation to any successful move. Your on-site logistics team should provide real-time updates to you, and act as the liaison with the vendors needed to complete the project. To help you further narrow down your logistics management team options, get answers to these questions when you interview candidates…

Q1. DO YOU HAVE MOVE EXPERIENCE IN MY SPECIFIC INDUSTRY?

When interviewing relocation experts, you should determine whether this company has expertise within your specific industry.
Special handling and insight is required when moving delicate medical and IT equipment, expensive pianos, or irreplaceable art.
If your commercial relocation involves any unique capabilities and resources, don’t settle for anything less. Industries that have
special moving needs include laboratories and hospitals, hotels, restaurants and bars, and libraries and museums.

Q2. DO YOU STORE DOCUMENTS AND RECORDS?

A well-appointed commercial specialist should offer records storage and document management solutions, where records and files
can be kept safe and accessible.

Q3. DO YOU OFFER SHREDDING SERVICES?

A full-service commercial professional should offer shred-on-demand services, as well as weekly shredding programs where pick up
is included.

Q4. CAN YOU DISPOSE OF THE FURNITURE AND ELECTRONICS THAT THE OFFICE NO LONGER NEEDS?

A solid relocation expert should provide purge services, and remove old, unwanted items for you. You’ll want a sustainable recycling
partner to handle plastics, metals, wood, paper and e-waste accordingly.

Q5. ARE YOUR MOVING PRACTICES SUSTAINABLE?

A reputable commercial relocation expert should have many options for unwanted furniture and equipment that doesn’t involve a
landfill. From recycling to liquidation to donation, a commercial move should not hurt the earth.

Q6. CAN YOU COORDINATE OFFICE AND RESIDENTIAL RELOCATION FOR THE ENTIRE COMPANY?

For a commercial relocation that involves a great distance, look for a logistics management team that can handle all the relocation
needs of both company and employees alike. Why? A comprehensive move plan that can coordinate the office relocation along with
the employees’ residential moves will transfer everything at the same time to maximize efficiency and minimize downtime.
A commercial relocation is a major step for any business. Make it your business to hire the best full-service professional for the job.

FOR MORE INFORMATION, CONTACT:

ABOUT ARGOSY MANAGEMENT GROUP, LLC

Argosy Management Group (AMG) is a leader in office relocation and logistics project/move management. AMG services companies throughout the U.S.
and worldwide. AMG delivers a wide range of comprehensive services: move management and transition planning, space planning and furniture needs,
office and industrial relocation and liquidation, storage solutions and asset management, furniture disassembly and installation, and I.T./data center
relocation.
visit www.argosymg.com

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.

# # #

A Look at the Impact New Fed Activity Will Have on Real Estate Valuations

Numerous times over the past several years, rising Treasury yields have prompted commercial real estate investors to speculate how the end of historically low interest rates would influence property values. Invariably, the yields reversed course — even after the Federal Reserve Board of Governors (The Fed) began, in late 2015, to ‘tighten’ monetary policy — and allowed capitalization rate compression to continue.

Investors, however, are once again pondering the question amid the Fed’s announcement earlier this month it would begin to unwind its nearly $4.5 trillion balance sheet. The Fed also indicated it expected a steady rise in the federal funds rate in the coming years affecting the nationwide commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – including a possible hike of 25 basis points in December that would take the benchmark rate to a range of 1.25 percent to 1.5 percent.

The actions are expected to move real interest rates involving U.S. and Philadelphia commercial real estate properties into positive territory, representing a “significant shift” from the negative rate environment that has fueled the recovery, according to an industry economic commentary issued in September.

This report on upcoming Fed action in relation to the valuation of national and Philadelphia commercial properties is being offered through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Real estate observers suggest while the Fed remains methodical and transparent, interest rates in the U.S. and Philadelphia commercial real estate markets will likely inch up in an orderly fashion and won’t shock the market into a credit freeze. Additionally, waves of real estate equity and debt searching for yield should continue to fuel the low cap rate environment, albeit in a choppier fashion, they add.

“If I’m a buyer and I know my return on a piece of real estate is lower than it was a year ago, but there are no better investment alternatives, what am I going to do?” was the question posed by one leading real estate finance expert.

Given the lack of an alternative, this individual added, “Eventually, I’m probably going to go into the marketplace and participate.”

Even contrarians admit it’s tough to envision what could derail the market. Even so, one such noted naysayer said his firm is more frequently turning down investment opportunities involving national and Philadelphia commercial real estate listings after assessing the property’s performance under stressed interest and cap rate scenarios.

“It’s really hard to see how this party ends,” he said. “Investors look into the future and try to see how property values will drop from 20 percent to 30 percent, but at this point nobody sees disruption. I certainly don’t see it, and I’d like to. We do better in those environments.”

While real estate experts say they don’t necessarily welcome higher interest rates throughout the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – they acknowledge the Fed needs to tighten and unwind so it has tools to use in the next recession. With that in mind, the Fed’s timing is particularly critical.

This is because the current eight-year growth in the value of U.S. and Philadelphia commercial real estate listings is less than a year away from becoming the second-longest positive cycle in the post-World War II era, a distinction that is weighing on the psyche of investors.

“The Fed is going to have to be a little bit careful about pushing too hard on interest rates relative to the underlying growth of the economy,” one expert said. “I don’t know when the next recession is coming, but I’m willing to bet we’re closer to it than we are to the previous recession.”

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, 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 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.

Protect Your Property with Ordinance and Law Insurance

Ordinance and Law InsuranceDo you own an older building or is your building subject to significant building code changes, if it needed to be rebuilt? If so, then you may need Building Ordinance and Law insurance.

Most insurance policies are written to allow a building owner to rebuild to the condition it was in prior to the loss. If an ordinance requires more, such as being brought up to code if it sustains more than 50 percent damage to the entire structure, an owner could be facing significant ou tof-pocket expenses, which may range from slight modifications (installing hard-wired smoke detectors) to vastly more complicated and expensive modifications (installing fire sprinklers). To combat the cost of these projects, building owners can purchase Ordinance and Law Insurance. This protects an owner or association against losses resulting from the enforcement of new laws or ordinances, or changes to existing laws.

Download Printable Article >>>

Ordinance and Law Insurance also protects against losses after a disaster. It serves to cover the following losses:

  • Covers losses for rebuilding a portion of a structure when part of it is damaged from a fire.
  • Covers losses when new building codes require that a partially damaged structure be torn down
    and rebuilt, versus repaired after a loss.
  • Covers losses when associations must install improvements that were not part of an existing
    structure before a disaster.

Ordinance and Law Insurance Coverage Details:

  • Demolition Coverage: If the undamaged portion of a structure must be demolished to rebuild the
    entire structure to comply with building codes, this coverage pays for the cost to demolish the
    undamaged part of the structure.
  • Loss of Value: If the undamaged portion of a structure was not technically “damaged” based on
    the verbiage in a typical fire protection policy, then this coverage pays for the loss to rebuild the
    undamaged part of the building.
  • Increased Cost of Construction: Coverage pays for increased expenses for getting a building up to
    code, or to repair a damaged building that currently met building codes prior to a loss.

Ordinance and Law Insurance is Common Sense

Ordinance and Law Insurance is excluded from a typical Property Insurance policy but can be added as an endorsement for a reasonable premium. It is common sense that owners of older structures with greater exposures should purchase this policy to cover “losses” for repairs. To determine if you need this coverage, review your policy and contact Hardenbergh Insurance Group to discuss your exposures. We’re always here to help!

ordinance and law insuranceFor more information, contact:

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

CRE Investors Make Fewer Big Deals, But Raise More Money

The amount of uncalled or undrawn real estate investment capital, or “dry powder,” has grown to staggering levels. This increase has come at a time when the investment climate remains decidedly mixed, with top-quality assets in core markets commanding high valuations after a sustained up-cycle. As a result, investors are increasingly searching elsewhere for properties that offer potentially higher yields.

The effects are showing up in deal volume. The total dollar volume for real estate sales of $100 million or more in the commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – was 19.5 percent lower in the first half of 2017 compared to the same period in 2016. However, the deal volume for properties at prices of $100 million or less was just 2.3 percent lower, according to CoStar COMPs data.

Meanwhile according to Preqin, a leading source of information for the alternative assets industry, investors in U.S. and Philadelphia commercial real estate properties are finding it increasingly challenging to find attractive opportunities for allocating that raised capital, according to Oliver Senchal, head of real estate products for Preqin.

This report on the disruption of new capital flowing into existing investment funds in relation to national and Philadelphia commercial properties is being offered through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

“This [trend] places pressure on less-stablished fund managers, who are facing greater competition for the remainder of investor commitments and will have to find ways to stand out from one another to attract capital,” Preqin’s Senchal added.

Even as the volume of big real estate deals drops in the U.S. and Philadelphia commercial real estate markets, CRE continues to attract more institutional capital allocations. In fact, 2017 represents an important milestone in this regard, according to Cornell University’s fifth annual Institutional Real Estate Allocations Monitor survey.

The survey revealed that for the first time, global institutional investors’ average target allocation involving national and Philadelphia commercial real estate listings surpassed the 10 percent threshold.

Over the past five years, institutional portfolios throughout the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – have increased their exposure from 8.5 percent to 9.1 percent invested. This implies that real estate portfolios have increased by approximately $0.5 trillion in total value, through a combination of capital appreciation and new investments.

Although real estate has enjoyed a steady uptick in target allocations, the report reveals the pace of target allocations is moderating among U.S. and Philadelphia commercial real estate listings. Approximately 22 percent of institutional investors surveyed indicated they expect to increase their target allocations over the next 12 months, down from 30 percent in 2016.

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, 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 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.

Commercial Open Floor Plans: the Architectural Pandora’s Box

commercial open floor plansOpen Floor Plans: No issue generates more discussion in our industry than the architectural Pandora’s box: commercial open floor plans. In cities like Philadelphia, the workforce now skews younger; millennials tend to favor collaborative work environments. An open floor plan doesn’t intimidate them—they’re used to team cultures from their college years onward. However, wide-open spaces aren’t necessarily productive ones for an older generation that cherishes the privacy of four solid walls and a door. Per a 2017 Forbes Coaches’ Council blog post, the pros and cons of an open floor plan are subjectively debatable.

Download Printable Article >>>

open floor plans can simultaneously:

• Disrupt deep work
• Offer a 360-degree viewpoint
• Drain introverts
• Foster inclusion and communication

An approach to open floor plans coincides with a crucial point in the article: it depends on your culture and line of  work. If your company encourages constant collaboration as part of the workflow process, a hybrid open floor plan is a good idea. That’s because: you’ll still need secure spaces for confidential meetings. (We’ve NEVER seen a completely open floor plan!)

Industries most conducive to modified open floor plans include:

• Creative-design or engineering firms
• Light-industrial production and staff assembly
• Product engineering and fabrication
• Small offices with tight spaces
• Technology start-ups

The practical benefits of an open floor plans:

1. Reduced wall, door, and partition costs
2. Lighting can be an open grid
3. Day lighting can flood the space better
4. Both fire suppression and HVAC design are easier
5. More people can occupy less dense floor plans.

Whether you’re a light-industrial manufacturer in need of collaborative design-fabrication space or a business suffocating from “we’re all walls” syndrome, A corporate or industrial architectural firm can reformulate the ideal layout. To discuss opening up your workplace, please contact us at either 856-547-6414 or lee@oneanchor.com. Anchor Point Architecture, Inc.

About Anchor Point Architecture, Inc.

Our clients, CEO’s, Facility Managers and Investors are Building projects in the Industrial Fabrication, Corporate office and Real Estate Development Project Sectors. They find value in early Budgets, Planning approval assistance and Design that improves Branding and Employee increased productivity.

 

Eliseo “Lee”: DiPrinzio, RA, PP
Senior Partner
Anchor Point Architecture, Inc.
Audubon, NJ – Princeton – Philadelphia
856-547-6414
Lee@OneAnchor.com
www.OneAnchor.com

Why Corporate Owned Real Estate is a No No

corporate owned real estate noLet’s explore Corporate Owned Real Estate. A frequent mistake made by small business owners is to have the operating corporation own the real estate, or to have a separate C corporation own the property and lease it to the business. The reason is that when the  company eventually disposes of the property, usually after it has significantly appreciated and been substantially depreciated, a double tax bill will result. First, the corporation will be taxed on the appreciation upon the disposition of the real estate, and then, the shareholder(s) will be taxed on the proceeds of the disposition when they are distributed to them as a dividend or through liquidation. The tax traps are not limited to C corporations. Holding real estate in an S corporation has its own pitfalls. Mortgage debt does not constitute “basis” for tax losses when the accompanying real estate is owned in an S corporation. As most real estate investments yield potentially deductible losses after factoring depreciation on the structure, this could eliminate the tax benefits for a great deal of investors. There are great alternatives to corporate owned real estate.

Download A Printable PDF of This Article >>>

A Better Approach to Corporate Owned Real Estate

corporate owned real estate yesA better approach than corporate owned real estate is for the business owners to own the real estate personally in a limited liability company or in a partnership with other investors, and then lease it to the operating business. Among the advantages:

• The business owner can sell the real estate interest for his or her own account, avoiding tax at the corporate level.

• The owner can refinance the property for his or her own benefit.

• Lease payments received by the property owner are not subject to employment taxes and are deductible by the company as a business expense.

• If the property owner dies while still owning the property, heirs will get it at its stepped-up basis, eliminating tax on all of the gain resulting from appreciation.

It’s particularly important for small business owners to engage in careful tax planning with respect to real estate being acquired for use by their business, and we receive frequent requests for assistance with appropriate tax strategies.

While we’re talking real estate and hopefully that which is not titled in corporate form, do you own a property that has appreciated considerably and that you want to sell? Are you concerned about incurring a large capital
gains tax liability? One option is to structure the sale as an installment sale. Here the buyer pays the cost of the property plus interest in regular installments, frequently for a period of 5 years, enabling the seller to reflect the capital gain for tax purposes over the entire payment period. Sellers who decide on this strategy are cautioned, however, that an installment sale carries more risk than an outright sale of the property. Thus, the seller needs to:

• Carefully assess the creditworthiness of the buyer and possibly obtain personal guarantees, if the purchaser is a business.

• Evaluate the future income producing capability of the property to make sure it provides sufficient cash flow to enable the buyer to make the payments.

• Use an interest rate that is competitive with current market rates in the area so as not to squash the deal.

• Obtain a down payment of at least 20% to have a cushion in the event of buyer default, and to cover the expenses if foreclosure becomes necessary.

Similarly, a topic for another alert is our frequently suggested use of Section 1031 which provides an alternative strategy for deferring the capital gains tax that may arise from a business/investment property sale. As of the writing of this Abo and Company Tip-of-the Month, we’ve read that the days of deferring 100% of gain via likekind
exchanges of real-estate could be numbered if the much talked about tax reform occurs in this particular arena does take place. Republican lawmakers are seeking tax breaks to trim or scrap to offset the cost of significantly cutting the income tax rate for businesses. We’ve seen tax-free real estate exchanges/swaps targeted before nixing like-kind swaps, immediately taxing the full amount of gain or in President Obama’s proposal to cap the deferral at $1 million. If the deferral is curbed, we don’t think the break will be axed retroactively but who really knows at this point.

Business property transactions are often complex, and the services of a knowledgeable CPA (hopefully we at Abo and Company) can be vital in developing strategies that make it possible to bring a contemplated transaction to a successful conclusion.

FOR MORE INFORMATION:

Martin H. Abo, CPA/ABV/CVA/CFF is a principal of Abo and Company, LLC and its affiliate, Abo Cipolla Financial Forensics, LLC, Certified Public Accountants – Litigation and Forensic Accountants. With offices in Mount Laurel, NJ and Morrisville, PA, tips like the above can also be accessed by going to the firm’s website at www.aboandcompany.com.

Despite A National Disappearing Act, U.S. Bank Branches Still Matter

The rate of consolidation among bank branches has increased in the past two years as customers continue to embrace digital banking. Simultaneously, the number of new branch openings continues to fall. Analysts, however, view this as part of a larger shift in how retail branches are being utilized by customers and where those brick-and-mortar institutions need to be located.

Through the first nine months of this year, U.S. banks serving, among other business segments, the commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – have closed more than 2,600 branches. That is about 10 percent more than during the same time frame in each of the two previous years, according to statistics from the Federal Deposit Insurance Corp.

At the same time, U.S. banks involved with such assets as U.S. and Philadelphia commercial real estate properties have opened just 873 new branches this year. That number has steadily fallen each year from nearly 1,300 in the first nine months of 2013.

This CoStar report on the viability of physical bank facilities in relation to national and Philadelphia commercial properties is being offered through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Over the past five years, the net number of bank branches has decreased by nearly 7,900 locations, representing approximately 19.74 million square feet of closed bank space.

Leading the closures list so far this year are:

  • JPMorgan Chase — 143 closures;
  • Wells Fargo — 138;
  • First-Citizens Bank & Trust — 135;
  • KeyBank — 117;
  • SunTrust — 117;
  • PNC — 114;
  • The Huntington National Bank — 109; and
  • Bank of America — 98.

Most of them show up on the list of banks closing the most branches in the last five years, including:

  • Bank of America — 810 closures;
  • JPMorgan Chase — 712;
  • PNC — 615;
  • Wells Fargo — 526;
  • SunTrust — 392;
  • Capital One — 338;
  • Branch Banking and Trust — 312; and
  • Citibank — 309.

Even having closed more than 140 branches this year in the U.S. and Philadelphia commercial real estate markets, and more than 700 in the last five years, JPMorgan officers were asked this week during the firm’s earnings conference call why they weren’t doing more to trim their 5,200-branch network given that mobile banking was up another 12 percent year-over-year.

Marianne Lake, chief financial officer of JPMorgan Chase, was quick to answer: “Because branches still matter.”

The fact is, branches play a significant role for U.S. banks – they are a cheap source of capital.

“Seventy-five percent of our growth in deposits came from customers who have been using our branches,” Lake said. “On average, a customer comes into our branches multiple times in the quarter. I know that all sounds like old news, but it’s still new news or current news, so the branch distribution network matters.”

Still, there’s no doubt customer needs for a physical branch are changing, Lake added.

“We’re not being complacent to the consumer preference,” she said, “We’re building out all of the other sort of omni-channel pieces, as you know, so that we have the complete offering. If the customer behaviors start changing in a more accelerated fashion, we will respond accordingly.”

At Bank of America, customers dealing with national and Philadelphia commercial real estate listings – among other areas of business – and performing mobile banking transactions have increased 47 percent in the past 12 months. Mobile deposits now account of 21 percent of all check deposit transactions, according to Brian Moynihan, chairman and CEO of Bank of America.

“We processed nearly 14 million transactions, and the growth continues,” Moynihan said. “We recently processed a half of billion dollars in a single week.”

But, Moynihan added, the deposits of people that walk into a branch can be typically 10 times higher than the amounts people deposited digitally while dealing with various business segments such as the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space.

“Each day three-quarters of a million people come into our branches, and our teammates serve them well, and our scores at those branches are at all-time highs in terms of satisfaction, and 80 percent of the sales go on in that space,” he added.

That’s why he noted Bank of America would continue to invest in its physical branch network as it relates to U.S. and Philadelphia commercial real estate listings.

“We have been and we will continue to open centers and markets where you have a strong commercial banking wealth management client base,” he said.

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, 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 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.

Preparing Commercial HVAC Systems for Winter

Preparing Commercial HVAC Systems for WinterWith the fall season in full swing, it’s time to start preparing commercial HVAC systems for winter, well before Ol’ Man Winter comes to town. Hutchinson, a leading energy services and mechanical services contractor serving the region’s commercial customers, offers tips to help add life to your systems, enhance comfort and improve your bottom line.

Download Printable PDF>>>

Five Tips for Preparing Commercial HVAC Systems for Winter

1. Use Energy Star Portfolio Manager
Use Energy Star Portfolio Manager to see how your building rates with other similar buildings. If you rate low, there are many things you can do to improve the operation of your building.

2. Check HVAC settings
Check HVAC settings to get maximum efficiency. Set your thermostat at 68°during the day and at 60° at night. You can save approximately 3% on heating costs for every degree under 70.

3. Install a programmable thermostat.
A web and cloud based control system offers peace of mind by keeping settings maintained during and after office hours.

4. Establish a preventive maintenance program.
• Change or clean all air filters, preferably every month.
• Repair leaks in piping, air duct s, coils, fittings and at the unit(s).
• Replace defective equipment insulation, ducting and piping.
• Install/upgrade HVAC controls to include new energy management systems technologies.

5. Clean Heating Ducts
Heating ducts should be cleaned periodically to allow efficient heating and provide fresh, clean air. Also check to make sure the ducts are properly insulated.

6. Take Advantage of Energy Efficiency Programs
Hutchinson is a designated contractor of Direct Install, a program offered by New Jersey Office of Clean Energy. Upgrade to energy efficiency with Direct Install and 70% of the cost will be covered for energy upgrades, including lighting and HVAC equipment. Instead of pumping money into your outdated, inefficient units, why not upgrade to a new, state-of the-art energyefficient system?

7. Conduct daytime/nighttime audits.
Check to see if the lights are on. Is the building comfortable? Make adjustments as needed.

Contact Hutchinson at 888-777-4501 or dicoordinator@hutchbiz.com for help preparing commercial HVAC systems for winter

About Hutchinson
Hutchinson is a leading energy/mechanical service contractor performing energy services, mechanical construction and retrofit installation work in the Greater Philadelphia Tri-State Region. Hutchinson’s
technicians are factory trained, NATE certified and are on-call 24/7 365 days a year. Visit www.hutchbiz.com for more information.

ed-hutchinson