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Monthly Archives: October 2016


Importance of a Phase One Environmental Site Assessment ESA

enovirnmental-site-assessmentWhen buying property, A Phase One Environmental Site Assessment ESA is the first step in proper Due Diligence and is always recommended. It is important to avoid costly and time consuming issues further along in the process. A Phase One Environmental Site Assessment ESA is the first step in accomplishing this goal. Sometimes referred to as a Preliminary Site Assessment or Level One Environmental Site Assessment, the ESA is the initial screening process done on a property to identify potential or existing environmental health hazards or environmental liabilities. In today’s world where every property is subject to potential environmental risk, an ESA can help to determine whether a property has been contaminated by previous or current activities. It is cheap insurance that allows a buyer to purchase an asset knowing that there are no environmental liabilities associated with it. It protects the buyer and limits their liability by discovering environmental concerns prior to the purchase of the property.

Creditors also often require an ESA, as this helps them determine if there are any environmental risks that could affect the value of the property or the borrower’s finances. The ESA process involves an evaluation of both the physical improvements to a property as well as the underlying land. By evaluating past and current property use, surrounding land uses and consulting with various regulatory agencies, the environmental risk associated with a subject property can be quantified and recommendations made for further evaluation as warranted.

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3 Components of a Phase One Environmental Site Assessment

1. Site inspection is a thorough visual assessment of the property. It includes a comprehensive ocular inspection of the interior of any structures within the property, the exterior areas surrounding these structures and the property lines. It also includes observing and inspecting nearby or adjacent properties. The site inspection aims to discover and identify any evidence of previous activities that may have contributed to any incidence of soil or water contamination. The presence of gasoline stations, dry cleaning operations, industrial facilities, residential heating oil tanks and illegal garbage dumping within or around the property in question may be indicators of impending environmental issues.

2. Reviewing the regulatory records of the property brings its history to light, and may reveal any past instances of hazardous substances at or near the property, which may have contaminated the site. A property, for example, may be the present location of a business without any environmental
concerns, but perhaps years ago it may have been the site of an auto repair shop that may have allowed oil and other waste substances to leech out into the surrounding soil and water sources.

3. Interviews with former owners, tenants and workers may also be conducted. Having spent much of their time on the property, the first-hand experience of these people may prove valuable to any assessment, as they may also offer useful insights on the previous use and the current
state of the property.

DON’T LET PAST PROPERTY LIABILITIES BECOME YOURS.
Get a Phase One Environmental Site Assessment
KNOW BEFORE YOU BUY NOT AFTER!

About Dan Caldwell
Stout & Caldwell Engineers, LLC
Dan Caldwell is a Principal of Stout & Caldwell Engineers, LLC. He has over 15 years working in the environmental industry as a NJPDES permit compliance professional for a NJDEP Certified Testing Laboratory.

Visit http://www.stoutcaldwell.com to see how Dan and Stout & Caldwell Engineers can help you.

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Law Firms Downsizing Office Space Needs

new Jason stats graphic - June 2015Law firms this year are leasing on average far less office space than at any time since the commercial real estate recovery took hold in 2009.

The trend reflects seven years of rising office rents in the U.S. commercial real estate market – one that includes Philly office space, Philly retail space and Philly industrial space — coupled with a slowdown in legal services employment growth, which has averaged less than a half a percent each year since 2008, according to the Bureau of Labor Statistics.

This report on law firm office space, in relation to national and Philadelphia commercial properties, was made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

So far this year, the average square footage of space leased by law firms both in the U.S. and Philadelphia commercial real estate markets that measures more than 5,000 square feet had, in the past, been 18,600 square feet, according to CoStar data, down from an average of 22,795 square feet in 2014.

Gross asking rents for U.S. and Philadelphia commercial real estate properties leased by law firms have risen from about $32/square foot on average in 2009, to $40.30 this year – an increase of 26%.

Faced with the pressure of high rents, declining fees and stagnant headcount growth, many of the nation’s largest law firms are continuing to downsize their office space, paring back the perk of corner offices, according to a number of real estate services firms recently interviewed on this particular topic of change involving a combination of national and Philadelphia commercial real estate listings.

As law firms continue to look for ways to reduce expenses, many are considering switching to universal or standard-size offices when it comes to new space in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space. Along this trend, many law firms are reducing the super-sized corner office in favor of standardized spaces measuring 150 to 165 square feet for associate and partner alike.

Moreover, in addition to reducing upfront costs by allocating fewer square feet to each attorney, universal office sizes also mean lower transition costs since offices no longer need to be reconfigured to make room for a newly-promoted partner, for example.

While many firms have reduced their space in both U.S. and Philadelphia commercial real estate listings over time, some of the largest reductions of space occur when firms move to more efficient construction in new buildings. For example: In San Francisco this summer, one firm signed a new lease at 101 California St. for 40,000 square feet, downsizing from approximately 70,000 square feet at 55 2nd St.

In New York City earlier this, another firm renewed 200,000 square feet but shed approximately 40,000 square feet at its 1251 Avenue of the Americas location by giving back a floor.

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) 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, 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.

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7 Winter HVAC Maintenance Tips for Commercial Properties

Is your commercial HVAC system winter ready? Whether your system needs an upgrade or a tune-up, Hutchinson Mechanical Services is the region’s “go-to” provider of commercial HVAC services for commercial properties. Check out these HVAC tips to help add life to your system, enhance comfort and improve your bottom line.

COMMERCIAL PROPERTY WINTER HVAC MAINTENANCE TIPS (PDF)
By Ed Hutchinson, President Hutchinson Mechanical Services

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 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. Conduct daytime/nighttime audits.
Check to see if the lights are on. Is the building comfortable?

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

5. Establish a preventive maintenance program.
• Change or clean all air filters, preferably every month.
• Repair leaks in piping, air ducts, 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.

6. 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.

7. Take Advantage of Energy Efficient Programs
Hutchinson has once again been named a designated contractor of Direct Install, a program offered by New Jersey Office of Clean Energy that pays up to 70% of 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 energy-efficient system?

Contact Hutchinson at 888-777-4501 to schedule an energy assessment appointment.

ed-hutchinsonEd Hutchinson, President
Hutchinson Heating and Air

W: www.Hutchbiz.com

T: 888-777-4501

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TECHNOLOGY IS IMPACTING THE WAY WE LIVE AND THE WAY WE WORK

Technology is Changing the Design of Healthcare Spaces

Integrating technology into healthcare spaces is just as important as it is in a commercial office. In this
edition of “This Office Deconstructed,’ we’ll take a look at some of the ways that technology is impacting the way healthcare spaces are being designed and furnished. Here are just a few examples from Humanscale showing just how technology and ergonomics are integrated for seamless patient care.

Mobile Health Carts for Healthcare Spaces

cart for healthcare spacesHumanscale’s Mobile Healthcare cart integrates the digital tools of the healthcare environment. A monitor arm that tilts and rotates, height adjustment, long-life batteries, integrated keyboard support and fully mobile. It makes individual patient care so much easier! Built for exceptionally intuitive one-hand operation, the T7 is a revolutionary innovation in the TouchPoint line of medical technology carts. Its Auto Fit™ technology instantly adjusts to each caregiver’s entered height, while its Power Track™ steering allows for virtually effortless maneuvering and complete user control. With a beautifully simple design, the T7 makes cleaning easy and promotes a healing environment.

Download Printable Article>>>

Wallpoint Technology Workstations for Healthcare Spaces

workstations for healthcare spacesFlexible monitor arms, fold away keyboards, integrated cable management… It’s a sleek, smooth approach to delivering quality healthcare. It is built with both the healthcare professional and patient in mind and the IT department will also love it!

Healthpoint Technology Cabinet for Healthcare Spaces

technology-cabinet for healthcare spacesAt just four inches deep, the H1 is unobtrusive and requires minimal space allowance. Featuring an electronic keypad to ensure confidentiality, the H1 can be positioned safely in public spaces, allowing caregivers and IT staff to effortlessly access and enter crucial patient data without security concerns.
With a smooth finish for enhanced infection control, an anti-glare, scratch-resistant screen and a built-in cable management system, the H1 serves as a “touchdown” station, encouraging workplace flexibility and supporting busy caregivers as they move throughout their space.

If you’d more information about how technology is being increasingly integrated into the modern workspace, don’t hesitate to contact us…

cofco-office-furniture

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WCRE Third Quarter Report: Southern New Jersey Office Leasing Rebounds

WCRE Third Quarter Report: Southern New Jersey Office Leasing Rebounds, Still Lags Behind 2015 Levels

Office Leasing Posts Strongest Quarter of the Year, Investments, Sales, and Philadelphia Remain Areas Of Strength

wcre_3qtr2016_reportMarlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the Southern New Jersey office market has bounced back nicely from the slow-down in commercial leasing activity that began late last year. Office leasing totals for the third quarter were the strongest they have been all year, though they are still off from the same time last year. The investment and sales market continued its hot streak, and the city of Camden is seeing progress from the Grow New Jersey program.

“The Brexit vote was something of a shock to the system during the second quarter, but this region showed its resilience and the strength of its fundamentals,” said Jason Wolf, founder and managing principal of WCRE. “The upcoming election means more uncertainty in the near term, but the overall tone is one of cautious optimism.”

There were approximately 365,224 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents an incredible improvement of 44 percent compared with the second quarter of the year. The quarter saw a slight decrease in prospecting, with about 225,000 SF of lease deals in the pipeline and expected to close in the near term. Still, the trend of positive absorption continued, making up approximately 195,000 square feet of total activity.

Overall market vacancy dropped as well, with Camden County leading the way.

Download the Report>>>

Other office market highlights from the report:

Overall vacancy in the market is now approximately 10.65%.

Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.00/sf NNN or $20.00-$24.00/sf gross for the deals completed during the quarter. This is essentially unchanged from the previous several quarters.

All of the major private owners and REITS showed moderate leasing and prospect activity for the 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.
On the sales and investment side, about 416,050 square feet of properties worth a total of more than $52 million were traded.

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

Philadelphia and the surrounding suburbs continue on an upward trajectory in terms of construction for multi-family and repositioning of older Class B/C assets to core Class A properties. Despite these trends, we are witnessing some hesitation from the banking community regarding the viability of these extraordinarily high pricing levels. With thousands of units either under construction or slated for development in the Philadelphia region, the question regarding rental rates and vacancy levels is coming to the forefront of many deals.

Aramark signed a lease at 2400 Market Street in Philadelphia for a new headquarters. The 280,000+/- square foot space will be state-of-the-art with unparalleled views of the Schuylkill River. This international entity looked elsewhere in the region for space but chose to remain in Center City, which bodes well for the future of the market.

Five Below chose the Lits Building for its new Center City headquarters. The company also plans on leasing 180,000 square feet of office space and 15,000 square feet of retail space at 701 Market Street.

Strong demand continues in the industrial market, as evidenced by increasing prices and rental rates. Though much of the institutional activity appears to be in central Pennsylvania and the Lehigh Valley, pricing for non-institutional assets, especially in Philadelphia and the surrounding counties, is stronger than ever.

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

Overall retail sales and spending dropped again, although restaurants, grocery stores, and clothing stores did post modest gains for the third quarter. Interestingly, consumer confidence grew at the same time, hitting a post-recession high.

Retail vacancy in Camden County stood at 11 percent, with average rents in the range of $12.20/sf NNN. This is a slight increase in both vacancy rates and average rents.

Retail vacancy in Burlington County stood at 10.2 percent, with average rents in the range of $13.15/sf NNN. This is a notable drop in vacancy, while rents stayed essentially unchanged.

Retail vacancy in Gloucester County stood at 6.9 percent, with average rents in the range of $12.01/sf NNN. This represented an uptick in vacancy with rents unchanged.

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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No Response, No Appeal: Assessor’s New Jersey Rental Income and Expense Information Requests

If you own income-producing commercial property in New Jersey, you may have recently received a
rental income and expense request by certified mail from the tax assessor for rental income and expense information.

Print Full Article with Citation Links>>>

NJ Rental Income and Expense RequestsOwners must respond to Chapter 91 requests within 45 days of the date of the rental income and expense letter or lose their rights to appeal their tax assessment for the applicable year to either the County Tax Board or New Jersey Tax Court, subject only to a “reasonableness hearing.” Ocean Pines Ltd. v. Point Pleasant Bor., 112 N.J. 1 (1988). (In a reasonableness hearing, the inquiry will focus solely on whether the valuation could reasonably have been arrived at in light of the data available to the assessor at the time of the valuation.) New Jersey courts have strictly applied the harsh remedy of dismissing an appeal when a Chapter 91 request was not returned. You must complete the entire form accurately. If a form is incomplete or misleading, the tax appeal may still be dismissed for an inadequate response. In order to preserve your rights to appeal, you should respond by certified mail, so you can prove you responded.

Even if your property is not income-producing, you should respond to the rental income and expense request in writing within the 45 day window and let the tax assessor know the reasons for the non-response. Properties leased to related entities, affiliates or wholly owned subsidiaries may be considered income-producing, even if the underlying leases are not arm’s length and do not reflect market rents. SKG Realty Corp. v. Wall Tp., 8 NJ Tax 209 (1985). Transactions among related companies are not privileged, and the assessor may decide whether to consider the information furnished. Id. Similarly, properties subject to leases whereby the owner receives compensation from a franchisee tenant based on a percentage of gross profit are considered income-producing, even though such compensation may not be classified as “rent.” Southland Corp. v. Dover Tp., 21 NJ Tax 573 (2004). Nursing homes and hotels are considered income-producing properties, even though they do not collect rent. Rolling Hills of Hunterdon LP v. Clinton Tp., 15 NJ Tax 364 (1995). In these cases, the complaints were dismissed for failure to respond in a timely manner.

Tenants who pay real estate taxes directly to the tax authority or indirectly through expense passthroughs in net leases should be careful that they do not lose their appeal rights because their landlord does not respond to Chapter 91 requests. Similarly, a contract purchaser should confirm, during the due diligence process, that its seller responded to a Chapter 91 request, so that the purchaser does not inadvertently lose its appeal rights. Purchasers should also consider including a seller covenant in the purchase agreement that it will timely respond to any Chapter 91 request.

Dismissal of an appeal can be especially punitive where the taxpayer is the subject of a municipal-wide
revaluation and the assessment has increased significantly. In that case, you may receive a much higher
tax bill without recourse to challenge it.

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

rental income and expense requests

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Outstanding CRE Debt Expected to Surpass Pre-Recession Peak

new Jason stats graphic - June 2015Commercial nonresidential debt outstanding in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space — increased 5.4% in the past year and is just $14.4 billion shy of the last peak in 2008, according to the latest data from the Federal Reserve for the second quarter.

Commercial nonresidential debt in the U.S. and Philadelphia commercial real estate markets grew by $34.6 billion last quarter. At that pace, it is likely to surpass its pre-recession peak this quarter.

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

Multifamily residential debt has never really stopped growing — surpassing each previous year’s volume in seven of the last eight years. And it continues to rise at a double-digit pace, up 10.15% in the past year, according to the Fed.

Total commercial/multifamily debt outstanding rose 6.8% year over year to $3.707 trillion. Multifamily debt outstanding rose to $1.137 trillion, making up 31% of the total volume. Nonresidential debt outstanding rose to $2.571 trillion.

At its peak in 2008, the multifamily portion made up just 25% of outstanding CRE debt.

Government-sponsored enterprises Fannie Mae and Freddie Mac account for a huge amount of that growth. GSE-backed mortgage pools are now the third-largest holders of multifamily debt, growing their holdings 22.7% in the past year. They have more than doubled their holdings since 2008, surpassing private multifamily mortgage securities issuers.

“The amount of commercial and multifamily mortgage debt outstanding grew to a new record during the second quarter, despite a record drop in the balance of CMBS loans outstanding,” Jamie Woodwell, MBA’s vice president of commercial real estate research, reported in MBA’s analysis of outstanding debt among U.S. and Philadelphia commercial real estate properties. “The CMBS market is seeing far more loans paying off and paying down than new loans being originated.”

Private CMBS issuers continue to see their share of outstanding CRE debt in both national and Philadelphia commercial real estate listings shrink. Their total volume of multifamily debt shrunk 16.5% in the past year and now is 49% below their peak volume in 2008. The nonresidential debt outstanding shrunk 7% in the past year and total volume is 54% less.

U.S. REITs have also been shrinking their overall outstanding debt in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – with one distinction: nonresidential debt is down 8.8% from a year ago, but multifamily debt is up 4.3% from a year ago.

Government and private pension funds, too, have been avoiding debt investments with their combined holdings down 8.8% from a year ago.

U.S. banks and life insurance companies, the first and second-largest holders of CRE debt in both U.S. and Philadelphia commercial real estate listings, continue to increase their holdings of both, and more than make up for the declines of CMBS issuers, REITs and pension funds.

Banks surpassed their 2008 peak in 2015 and have grown their multifamily holdings 15.8% in the past year and their nonresidential assets 9.5%.

Life insurance companies have been growing their portfolios a little more evenly. Multifamily is up 10.1% in the past year and nonresidential is up 9.7%.

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) 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, 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.

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