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Monthly Archives: January 2016


U.S. Bankers Ready to Slow Commercial Real Estate Lending If Needed

new Jason stats graphic - June 2015In response to the FDIC’s “stark warning” for commercial real estate lenders to maintain prudent risk-management practices, U.S. banker say they will keep a close eye on CRE loan portfolios and will slow the pace of commercial real estate lending if necessary, according to a news report from the CoStar Group.

Commercial real estate lending at U.S. banks climbed steadily through the third quarter 2015 to a total of $1.8 trillion in outstanding CRE loans, outpacing by about $170 billion the previous peak set at the end of the second quarter 2007, the report said.

U.S. banking statistics also indicate that underwriting standards for CRE loans have eased during the past three years to a level that prompted last month’s FDIC warning in which the federal banking regulators said they would intensify oversight of commercial real estate lending practices in 2016, CoStar said.  The FDIC has not issued a warning regarding CRE lending since 2005.

One CRE lender agreed with the FDIC, telling analysts “the market is a little hot in certain areas,” CoStar reported.  KeyCorp’s Corporate Bank plans to slow CRE lending growth and adjust its housing forecast, telling the analysts KeyCorp would be involved in less construction loan activity.

Despite KeyCorp’s standpoint, other commercial real estate lenders are not yet ready to bow out of the market, citing strong CRE market fundamentals and pricing.

First Financial Bancorp told analysts the market so far has been “pretty strong and healthy,” adding that although some markets are admittedly soft, First Financial focuses on multifamily, health care and build-to-suit office, according to the news report.

BankUnited told analysts it was too soon to determine where to accelerate in the market and where to pull back, but that the company would be watching closely and would react as conditions warrant.  The bank said it had no intention “of eliminating one market and emphasizing another in its entirety,” CoStar reported.

BankUnited also said the FDIC warning didn’t consider the differentiation in CRE property types and markets, but looked at commercial real estate as a single category, the news report said.  The bank said federal regulators clearly are nervous about the more speculative areas of the market, CoStar noted.

U.S. bankers must manage where they are lending, what property types are covered, and the underwriting practices, CoStar explained in the report, adding that in that regard, commercial real estate lenders all plan to be more selective this year.

For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 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 premier Philadelphia commercial real estate broker with expertise in Philly office space and Philly retail 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 that specializes 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.

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Making Distance Disappear Through Technology

MAKING DISTANCE DISAPPEAR (PDF)

By David Leff & Michael Formica of Corporate Interiors, Inc.
In today’s changing work environment, teamwork can be more difficult than it used to be. In the not-so-distant past, people gathered in a conference room and solved problems face to face. Today, the issues organizations face are more complex. Sometimes the people with the best skills to collaborate on projects all work in the same place, but not always. The demands of today’s employees requires them to successfully work across different locations, time zones and countries.

The basic expectation of employees is to be faster, smarter and more innovative. This is hard enough to do when you’re in the same physical location. Now try it with people who are working remotely—some of whom you’ve never met in person and some who are working late at night while you are in the office early and your body still wants to be in bed.

In today’s economic climate, organizations can’t allow distance to be a barrier to effective teams. They need to assemble the best talent to solve problems and make tough business decisions. Requiring people to be in the same location limits the range of skills and experiences that contributes to some of the most efficient and productive organizations.

Yet, workplace collaboration through, “Distributed Teams,” across locations is not just a hurdle to overcome; it’s a powerful catalyst for change within an organization. Distributed teams can eliminate redundancies, while expanding a company’s capabilities by establishing satellites in, “talent-rich locations.” Some organizations think about distributed work simply as a way to speed up projects by keeping work moving around the clock; the bigger opportunity is to fully leverage the organization’s scope and scale. And to do that, organizations need to find ways to make distance disappear.

VIDEO TO THE RESCUE?

In an effort to eliminate people having to be in the same location, businesses have recognized the potential of video to solve these challenges and have dramatically amped up their video use. The biggest hurdle to remote collaboration is poor audio or video quality and a close second is difficulty with sharing content.

Corporate Interiors is an industry leading provider of audio visual video conferencing. Our team of Engineers are experts in integrating technology with an innovative process to create a more effective and productive workplace.

For more information on how to make your work environment more effective and productive please contact:

corporate-interiors

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Commercial Real Estate Market Enjoys One of Best Years Ever

new Jason stats graphic - June 2015The year 2015 is shaping up to be one of the best years ever for the U.S. commercial real estate market, based on November 2015 figures that show market fundamentals reflecting healthy levels of absorption and continued rental gains during the month supporting broad price gains, even as construction levels for office, retail and warehouse space have started a slow-paced increase, according to a new CoStar news release.

Both the value-weighted U.S. Composite Index and the equal-weighted version rose by 0.9% in November 2015.  These two versions of the U.S. Composite Index represent the two broadest measures of aggregate pricing for commercial properties within the CoStar Commercial Repeat-Sale Index (CCRSI), the release said.  The increase was partly responsible for the annual gains in the indices of 12.2% in the value weighted version and 11.7% in the equal-weighted version for the year ended November 2015.

Total property sales volume through November indicates 2015 volume will easily surpass 2014’s record sales volume for the CCRSI, CoStar said.  Composite sales-pair volume reached $110.2 billion for the 11 months ending in November 2015, up 25% from the same period a year earlier.

Commercial property pricing also soared to new heights, particularly for high-quality assets in core markets, the news release reported.  The value-weighted U.S. Composite Index in November 2015 was up 18.4% over its 2007 peak. The equal-weighted U.S. Composite Index for the same time period experienced “solid growth” but stood at 4% below its prior peak, CoStar said. Pricing for the equal-weighted U.S. Composite Index, which covers smaller properties in second-tier locations, was less robust than in the value-weighted version because of a delayed start in its recovery.

The Investment-Grade segment of the equal-weighted U.S. Composite Index inched to within 1% of its prior peak, the release noted.  The Investment-Grade segment reflects the performance of high-quality properties.  The General Commercial Index was unmoved, standing at 4.6% off its prior peak.

Among the three major commercial property types – office, retail, and industrial, net absorption increased to 649.2 million square feet for the full 12-month period of 2015, up 15.5% from the year prior.  It was the highest calendar year annual total since 2007, according to CoStar.

Leasing activity was most active in the higher-quality, investment-grade properties last year, the news release said.  Net absorption was up 23% from 2014 in the CCRSI’s investment-grade segment, compared to flat net absorption in the general commercial segment.

In the office and industrial sectors, the investment-grade segment experienced a notably strong  performance with net absorption averaging 0.5% of total inventory for the office sector and 0.4% for the industrial sectors in 2015, according to CoStar. Net absorption in the retail sector was a more modest 0.2% of total inventory in 2015, despite muted inventory additions.

For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 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 broker that specializes in Philly office space and Philly retail 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 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.

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Philadelphia Suburban Development Corporation Appoints WCRE Exclusive Leasing Agent For 100 Ross Road, King of Prussia

Wolf Commercial Real Estate (WCRE) is pleased to announce that it has been appointed exclusive leasing agent by Philadelphia Suburban Development Corporation (PSDC) for its office location at 100 Ross Road, King of Prussia, PA. PDSC owns more than 100 properties in the region, comprising two million square feet.

WCRE Exclusive Leasing Agent For 100 Ross Road (PDF)

100-ross-road
100 Ross Road is a 87,192 square foot, two-story, elevator served office building located in the King of Prussia/Wayne submarket, minutes from Route 202. The property is highly accessible from Philadelphia. PSDC renovated this property in 2001 and continues to demonstrate a commitment to its upkeep and general improvement. Among many desirable attributes, this property features highly efficient suite layouts, and ample parking in a multi-level lot. Several available suites range in size from 1,500 to 8,100 square feet.

PSDC, which is seeking to make aggressive deals, maintains its headquarters within 100 Ross Road, occupying approximately 7,800 square feet. Having ownership and management on-site will be a great feature for tenants looking for their new business home.
“We’re excited to be working with WCRE’s leasing team. I am impressed with WCRE’s marketing platform and confident they will help us maximize occupancy at this highly desirable property.” said John Peruto Jr. of PSDC.

WCRE’s leasing team of Anthony Mannino and Andrew Maristch added, “WCRE is proud to add PSDC to its growing list of clients in Pennsylvania. We look forward to applying our WCRE 360 marketing approach to bring in new tenants and establish another successful relationship in the Philadelphia region.”

A marketing brochure and tenant information package 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.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com, www.phillyretailspace.com, www.kingofprussiaoffices.com, www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, and www.southjerseyretailspace.com.

About PSDC

PSDC was founded in 1962 by Robert Nicoletti on the core values of honesty, integrity and service. Today, PSDC thrives as one of the largest family-owned commercial real estate developers in the Philadelphia region. Because of strong values and a unique approach to the industry, PSDC clients see the firm as more than just real estate professionals.

As one of the largest developers of commercial real estate in the Philadelphia region, with more than 100 properties and 2 million square feet in its portfolio, PSDC has over half a century of success serving government and social service agencies, as well as businesses. PSDC’s experienced in-house team provides construction, development, and property management, and works with leading architects to deliver custom designs when desired.

PSDC’s goal is to develop properties that help organizations reach their full potential. PSDC’s long tenure in the communities we serve gives us local insights and connections we happily share. Our conservative, debt-averse financial approach gives us stability that’s unsurpassed. Our commitment to honesty and integrity in our business relationships and the highest level of service sets us apart from most commercial real estate development firms in the Delaware Valley.

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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

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How Does The SBA 504 Program Work?

HOW DOES THE SBA 504 PROGRAM WORK (PDF)

By Ashley Heaton, Vice President, The 504 Company January 15, 2016

Mortgage rates as low as 4.83% fixed for 20 years! The SBA 504 Program is one of the best economic development financing tools available to small businesses. A program offered through the U.S. Small Business Administration (SBA) and processed through Certified Development Company (CDC) intermediaries, the 504 Program provides up to 90% loan-to-value, long term, fixed rate financing for owner-occupied real estate and equipment purchases.

Here is how it works: A growing small business is interested in acquiring and renovating a property to relocate from leased to owned space and seeks financing for the project. The 504 Company partners with a bank to provide a 90% loan-to-value mortgage which entails a 50% bank first mortgage (bank determines rate) and 40% 504-second mortgage with a 20 year term, 20 year amortization and a current rate of 4.83% fixed. The business owner benefits from the 504 program in several ways: preserving cash for operations (10% down instead of 20% required for a conventional bank mortgage), locking in 40% of the loan for a 20 year fixed interest rate in a rising rate environment, and the ability to include soft costs into the project. Eligible soft costs include, but are not limited to, appraisal, environmental, architect/engineering fees, borrower’s legal fees, title fees, and transfer tax. The 504 program can also finance construction, renovations, and equipment purchases. Additionally by partnering with The 504 Company, the bank is in a stronger collateral position which typically allows more flexibility for approval on difficult transactions.

The 504 second mortgage can go as high as $5.5 million and the loan application is processed quickly
and professionally. The 504 Company is one of the largest CDC’s in the United States and operates in New York, New Jersey and Pennsylvania.

For more information about the 504 program contact:

ashley-heatonAshley Heaton, Vice President
The 504 Company
1515 Market St, Ste 1200
Philadelphia, PA 19102
484.356.6024
http://www.the504company.com/

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WCRE FOURTH QUARTER REPORT: AN OVERALL STRONG 2015 IN SOUTHERN NEW JERSEY ENDS WITH A NOTE OF CAUTION

WCRE FOURTH QUARTER REPORT: AN OVERALL STRONG 2015 IN SOUTHERN NEW JERSEY ENDS WITH A NOTE OF CAUTION

Pace of Transactions Showed Signs of Slowing Down, But Investment Market Activity Provided Reasons to Stay Optimistic

OVERALL STRONG 2015 IN SOUTHERN NEW JERSEY ENDS WITH CAUTION

January 12, 2016 – Marlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the fourth quarter of 2015 saw the market tap the brakes a bit for the first time in an otherwise strong year in Southern New Jersey. The report noted that there were hints of a slow-down, even while the overall market still showed gradual improvement and expansion, and bellwether companies remained active.

The fourth quarter featured a mixed bag of results, some of which may have been caused by the Fed’s recent decision to raise interest rates for the first time in nearly a decade, and/or by volatility in the financial markets. Positive news included several large leases and renewals above 40,000 SF, signs of increasing new construction for the first time in years, and new investors entering the market. In less encouraging news, there were approximately 384,906 square feet of new leases and renewals executed in the three counties surveyed, which represents a drop of +/- 20 percent compared with the fourth quarter of 2014. Along with a slower pace of transactions, there has been a drop in prospecting, with about 250,000 SF of lease deals in the pipeline and expected to close in the near term.

However, even with the drop in transactions, positive absorption continued, making up approximately 130,202 square feet of total activity. Vacancy rates continued to improve, as well.

“2015 was a strong year for our market, although we began to see more caution amid the optimism during the fourth quarter,” said Jason Wolf, founder and managing principal of WCRE. “The question for 2016 will be whether our market has rebounded to a point where it can ride out some short-term changes and remain strong.”

Other office market highlights from the report:

  • Overall vacancy in the market continues to drop, and is now down to approximately 11.6%. This is a major improvement from a year ago.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.00/sf NNN or $21.00-$25.00/sf gross for the deals completed during the fourth quarter.
  • All of the major private owners and REITS showed moderate leasing and prospect activity for the fourth quarter – with Burlington County vacancies tightening up, many larger vacancy opportunities are also shifting towards Camden County, which is not controlled by these ownership entities.

Last year WCRE 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 fourth quarter Pennsylvania section include:

  • While Philadelphia remains one of the most affordable office markets, rents have been increasing due to rising demand from both users and investors. A record number of Class A office properties was traded during 2015, and investors will continue to concentrate on well located, well leased product. Class A office rents are finding support in the range of $29.40/sf in the central business district and $25/sf in the suburbs.
  • Across all property types and locations, Philadelphia’s retail market is quite strong and well positioned to maintain its strength. The retail market has seen stable asking rents overall, with sharply rising values for Center City. The King of Prussia Mall is expanding, and will be the largest shopping mall in the United States when the project is complete. The retail vacancy rate for community retail properties was at 5.8 percent for the fourth quarter, below the national average of 8.1 percent. The vacancy rate for neighborhood shopping centers was a bit higher at 9.3 percent, but that matched the national average for that sector.
  • Philadelphia’s industrial market had a strong 2015, but after record-setting positive absorption figures in the industrial market in 2014, 2015 was comparatively slow, with 149 industrial property sales totaling $563 million. Still, this was enough volume to maintain stability in rental and vacancy rates, both of which are forecasted to improve as long as macroeconomic factors remain stable. Price per square-foot for industrial sales increased to $41.47 in 2015, compared to $39.75 in the prior year.

WCRE also reported on the Southern New Jersey retail market, noting mixed results there, as well. Highlights from the retail section of the report include:

  • Overall retail vacancy in the tri-county area is hovering around 10.53%, marking an uptick from 2014, but still remarkable improvement from the end of 2012, when it was hovering in the 17-18% range.

  • Class A retail product rental rates continue to show strong support in the range of $30.00-$40.00/sf NNN.

  • The pace of retail sales growth in our area has slowed, but nationwide retail sales are up, sparking many planned expansions and store openings for 2016 and beyond.

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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Foreign Investors Bullish on U.S. Real Estate Investment

new Jason stats graphic - June 2015Foreign investors remain bullish on U.S. real estate investment, according to a new survey that was conducted before Congress passed federal tax reforms that likely will  provide even greater inventive for foreign investment.

The annual survey of the Association of Foreign Investors in Real Estate (AFIRE) found that 64 percent of respondents intend to invest more in U.S. real estate in 2016 while 31 percent plan to keep foreign investment in the U.S. at the same level as last year, according to a CoStar News report.  None of the respondents said they planned to decrease U.S. real estate investments.

Globally, New York took the top spot for foreign real estate investment for the second year in a row, outranking London, while Los Angeles leaped into third place, up from 10th last year, in the survey of the 200-member AFIRE, which represents institutional real estate and other organizations with a combined estimate of more than $2 trillion in real estate assets under management, CoStar reported.

Seattle joined the top five U.S. cities for the first time, tying with Boston for fifth place, according to the news report.  Reflecting the downward spiral in oil prices that played a key role in Houston’s real estate and general economic slowdown, Houston dropped from the third position to the 11th position in the latest survey.  CoStar also reported that San Francisco dropped from second to third, although rental rates and property prices have continued to appreciate rapidly.

Washington, D.C., which tumbled from 10th to 15th place last year, placed well both globally and among U.S. markets, ranking 8th worldwide and fourth in the U.S., up from fifth in 2015.

The AFIRE survey was conducted late in the fourth quarter 2015 before Congress enacted wider tax exemptions for foreign investment in the U.S. under the Foreign Investment in Real Property Tax Act, or FIRPTA, a 1980 bill that imposes income tax on foreigners disposing of U.S. real estate interests, CoStar said.  The tax reforms, which were adopted on December 18 as part of the federal appropriations bill, exempt qualified foreign pension funds and their entities from taxation under FIRPTA.

A key executive at AFIRE told CoStar the FIRPTA changes had been under considered in Congress for some time and foreign investors did not necessarily expect them to pass in 2015.  The changes will provide foreign investors a welcome relief from certain taxes and, in time, further incentive for U.S. real estate investment, James A. Fetgatter, chief executive officer of AFIRE, told CoStar.

Fetgatter noted that the most recent survey demonstrated strongest level of confidence in years about foreign investment in the U.S., even without the FIRPTA changes.

“We have a clearly recovering real estate market and the dollar is increasing. There are not a lot of roadblocks to worry about, like for example the immigration crisis in Europe, stock market fluctuations and a possible recession in China, and bubbles in the Brazil real estate market,” Fetgatter told CoStar.

For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 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 broker that specializes in Philly office space and Philly retail 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 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.

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Will The Design-Build Method Take Over?

Will The Design-Build Method Take Over (PDF)

By Mike Regina, Principal – Big Sky Enterprises, LLC
Let’s explore the design-build method. The desire for one-stop shopping is everywhere. We have become a nation of streamliners and practical thinkers.

design-build-process

Smart players in every industry have been silently rethinking and repositioning themselves for success in today’s economy. What does that look like? Businesses are hand-picking leaders and putting together powerful multi-discipline teams that can handle all parts of a project within one entity. The concept of an interdisciplinary approach is really nothing new. It has been modeled again and again in every business sector.

Is this a monopoly? Or is it business excellence?

The only way to truly answer this question is by asking the most important one: Does it put the customer, or end user, at an advantage or disadvantage? That’s the only real way to gauge a business ideal.

THE CUSTOMER’S NEEDS
When customers are looking for a design-build contract, they are ultimately saying:
• I want one point of contact
• I don’t want to be faced with questions I don’t have answers to
• I don’t want to have to do homework, legwork, or anything else

They’re saying, “Here’s my need. Here’s my budget. Make it happen.” Besides a customer’s ultimate desire to see a project go from concept to fulfillment without financial surprises, delays or disappointment, there are other reasons the design-build model has experienced unprecedented growth over the past decade:

Benefits of the design-build process

design-build-benefitsOne thing I’ve learned over the years is that regardless of the economy or shifts in trends, there will always be a market for excellence. The design build concepts, like the design build process at Big Sky evolved from our ongoing commitment to learn, grow, and improve. In almost every situation, design-build is superior to traditional construction.

The difference between the two is pretty straightforward. With the design build model, both the design and construction of a project are under the umbrella of one single entity. This is completely different
from the traditional, almost lethargic, designbid-build process where the owner chooses the engineer or architect to design the project, and competitive bids are taken from other entities for the performance of construction services. It even sounds like snail-pace.

Design-build keeps the control, and the liability off of the owner, exactly where it belongs. The owner typically provides general design specifications and desired performance specifications, but the
detailed construction plans and specs are the responsibility of the design-build team, instead of the owner’s engineer or architect. Accordingly, the implied warranty of specifications will not follow the trail from the owner to the contractor. Instead, the contractor bears the risk of non-performance.

Other clear benefits of the design-build process include:

Quality – When quality responsibility is on the builder, there is clear motivation to produce superior results. This contrasts with the traditional design-bid-build method, where responsibility falls to the owner.

Financial Savings – When design and construction work hand-in-hand, multiple options can be explored and efficient solutions brought to the table before the production of drawings.

Streamlining for Time Efficiency– Design and construction can overlap and collaboration during the initial design phase can eliminate redesign time. Instead of a bottleneck, construction can actually begin before the working drawings are complete.

Early Cost Guarantee – Without all the “what if” scenarios it’s much easier to procure financing commitments at significantly reduced out-of-pocket costs prior to the availability of loan proceeds.

The Solution to the “Never Ending Change Orders” – With project scope and price out of the way, change orders stemming from design coordination issues are eliminated, along with the headache and lost time. Correction of such issues is the responsibility of the design-builder, not the owner.

Risk Incentive – Incentives are always nice. With the design-build model the incentive to improve efficiency without sacrificing quality translates into innovative ideas, problem solving, proactive thinking, and design and construction teams working together, evaluating alternatives efficiently and accurately, while bringing value to the owner.

Mike Regina – Principal / Co-founder
Co-founder of Big Sky Enterprises, Mike Regina brings over 20 years of industry experience and expertise to the firm. Michael strategizes, oversees and performs multiple mission critical initiatives for Big Sky. His areas of direct responsibility include project feasibility analysis, project management and business development.

For more information contact:

mike-regina-big-skyMike Regina | Principal
Big Sky Enterprises
Phone: 856.435.8400 | Fax: 856.435.8410
2 Eastwick Dr, Suite 101, Gibbsboro, NJ 08026
www.bigskyllc.com

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