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Monthly Archives: December 2016


New Jersey Outlook for Commercial Solar in 2017

nj-commercial-solarAs we look towards 2017 in New Jersey, we are confident that commercial solar will continue to generate strong returns for landlords. In New Jersey, over 5,000 commercial properties have already adopted solar energy. Many more commercial property owners have considered solar energy. In addition, solar can help to differentiate a property and retain or attract tenants.

Reasons to be Optimistic about NJ Commercial Solar

1. Costs are Down
2. 30% ITC was Extended
3. Depreciation (Bonus MACRS) was Extended
4. SREC is Stable
5. Safety is Improved

1) COSTS
Solar panel costs have declined 30% – in just the last 12 months. As the global solar manufacturing industry grows, manufacturing improvements and scale efficiencies continue to drive down the cost of a solar panel. If you received a quote for a commercial solar installation more than 6 months ago, it might be time to refresh that quote.

2) 30% ITC
The ITC or Investment Tax Credit is a 30% tax credit on the cost of a commercial solar project. So, if a solar project costs $1 million, then you are entitled to a tax credit of $300,000. This credit is not a deduction, but is a full credit against tax liability due to the IRS. The 30% ITC was extended by Congress in December 2015 and now extends through December 31, 2019.

3) DEPRECIATION (BONUS MACRS)
In addition to the 30% ITC, the IRS allows an accelerated depreciation schedule for solar – almost 70% of the project cost can be deducted in the first two years. Solar projects completed in 2017 still qualify for this 50% bonus. This benefit was extended by Congress in 2015 and greatly enhances the tax advantages from a solar installation.

4) SREC
The SREC is another source of income from a commercial solar project. The value of the NJ SRECs (Solar Renewable Energy Certificates) continues to support strong returns on investment (ROI). There are many strategies to secure stable SREC pricing for the long-term. Your solar developer/installer should establish the optimal SREC strategy for your project before starting construction.

5) SAFETY
New technologies allow for much safer commercial solar installations. Solar panels can now be monitored and shut down individually. This allows solar companies to de-energize the panels when personnel operate on the roof. In addition, monitoring each individual panel maximizes output and increases income generated. This safety configuration will become more common in 2017 and should be considered on every commercial installation. Again, if your commercial solar proposal is over 6 months old, it might be time to request a refreshed quote from an experienced solar installer that now includes these solar panel optimizers.

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ABOUT US
Keith Peltzman is president and founder of Independence Solar with offices in Cherry Hill, NJ and Boston, MA. Independence Solar is a turnkey installer of commercial solar energy. Since 2007, the team
has developed and built over $200 million of solar projects, including the largest rooftop solar array (9 MW) in North America at the Gloucester Marine Terminal in NJ. Independence Solar forges long-term partnerships to maximize returns on our customers’ commercial solar energy investments.

 

Keith Peltzman
President & Founder
1008 Astoria Boulevard
Suite E
Cherry Hill, NJ 08003
856.393.1250

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Retailers Expect Real Estate Trends to Continue in 2017

The theatrical phrase “to be continued” usually signals an exciting story twist is coming. But anyone hoping for a plot twist next year to the ongoing saga of shrinking apparel retailers won’t be happy with the comments by several top retailers in this segment during quarterly earnings conference calls this past week.

Clothing retail executives generally issued more dour projections calling for more of the same ongoing reassessments of existing store footprints as they make major business adjustments and invest in advancing online sales in a similar situation faced across the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space.

Nearly all apparel execs said they plan to continue closing unprofitable locations, pressing landlords throughout the U.S. and Philadelphia commercial real estate market for concessions, and pushing outlet strategies.

This report, which takes a market-specific look at both national and Philadelphia commercial properties, was made available through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Commentary from retailers peddling other consumer goods throughout the U.S. and Philadelphia commercial real estate market offered more encouragement, however.

The strategies remain the same because the macro trends driving these specific sectors of the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – still are in place. Consumers have not returned to the debt binging from before the Great Recession of 2008-’09, which killed off an era of excess.

Not only have consumers become more cost-conscious and using rapidly changing technologies to guide their buying decisions, they are also rethinking priorities and re-assessing the value material possessions over the best use of their time.

For more information about Philly office space, Philly retail space and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Leor Hemo (leor.hemo@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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Is a Lease Guaranty Enforceable?

commercial lease guarantyA personal lease guaranty is a crucial feature of many commercial real estate leases. A lease guaranty is a separate contract under which a third party guarantor agrees to meet the obligations of the Tenant to the Landlord. Landlords understandably want to ensure that their Tenants – be they individuals or business entities – have the financial wherewithal to meet the obligations set forth in the lease. If a Tenant without sufficient assets breaches its lease by leaving early, refusing to pay rent, or damaging the space, the Landlord will not be able to recover its damages. The Landlord may have nothing to collect against. For this reason, if a Landlord is unsure about the creditworthiness of a potential Tenant, it will often demand that the Tenant provide a guaranty from an individual or entity who has sufficient assets to secure the Tenant’s obligations.

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A lease guaranty is a separate contract under which a third party guarantor agrees to meet the obligations of the Tenant to the Landlord. If the Tenant fails to pay rent, the Landlord can recover the arrears from the guarantor, usually before seeking damages from Tenant. Depending on the scope of the lease guarantee, the guarantor may also be financially responsible for damage to the lease premises caused by the Tenant. In the case of a Tenant entity (i.e. a corporation, limited liability company, or partnership), the guarantor is typically one of the entity’s principal individual owners or a corporate affiliate. In the case of individual Tenants, the guarantor is typically a family member or an investor.

In order to be enforceable, a lease guarantee should state the guarantors’ obligations in clear unambiguous language.

It should explicitly address which obligations the guarantor is securing, how and when can the Landlord collect from the guarantor, and whether there are monetary or temporal limitations to the guaranty. Any ambiguities will be construed in favor of the guarantor. The guaranty should also address the issue of consideration for the guaranty and make clear that the Landlord is entering into the lease in reliance on the guaranty. Finally, the guaranty should be signed by both Landlord and guarantor.

Many commercial Landlords insist upon a lease guaranty up front, but do not then consider how subsequent lease amendments, modifications, or renewals may affect the validity of the guaranty. This is a dangerous mistake. In certain states, a lease guaranty may be limited or even voided if the underlying lease is in any way modified without the guarantor’s express consent.

New Jersey courts take a more nuanced approach to this issue. In New Jersey, a lease guaranty will only be limited or discharged if the lease is subsequently modified in a way that injures the guarantor or actually increases the guarantor’s risk or liability. See Center 48 Ltd. Partnership v. May Dept. Stores Co., 355 N.J. Super 390, (App. Div. 2002). Unfortunately, New Jersey courts have not provided much guidance on what sort of lease modifications actually increase the guarantor’s risk or liability.

Nonetheless, Landlords in New Jersey can take two steps to limit the chances that a lease guaranty will be limited or voided if the underlying lease is subsequently changed. First, the Landlord can include clear language in the lease guaranty stating that the guarantor’s obligations will extend to any increase in rent, extension of the lease term, renewal, or other modification of the lease. The broader and more specific the language the better for the Landlord. The lease guaranty should also explicitly waive the guarantor’s right to consent to such modifications. A second and more effective approach is for the Landlord to require the guarantor to provide a written acknowledgment and consent each time the lease is amended, modified, or renewed.

Lease guarantees provide crucial credit support to commercial Landlords. In order to ensure that a guaranty is enforceable, however, a Landlord must use a carefully drafted form. Simply getting a well drafted lease guaranty executed, however, is not the end of the story. A Landlord must also consider how subsequent lease amendments may affect the enforceability of the lease guaranty and work proactively to ensure that the lease guaranty remains in effect, especially when it comes time to enforce 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.

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WCRE Represents 1835 Underwood in the Acquisition of 1835 Underwood Boulevard from Underwood Boulevard Associates

FOR IMMEDIATE RELEASE

Contact: Andrew Becker

Phone: 856.449.5220

Email: andrew.becker@wolfcre.com

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WCRE Represents 1835 Underwood in the Acquisition of 1835 Underwood Boulevard from Underwood Boulevard Associates

December 19, 2016 – Marlton, NJ – WCRE is pleased to have exclusively represented 1835 Underwood, LLC in the acquisition of 1835 Underwood Boulevard in Delran, New Jersey from Underwood Boulevard Associates, LLC (a related entity of Whitesell Construction Company, Inc).

1835 Underwood Boulevard is a +/-24,000 square foot flex building located in The Millside Business Park in Delran, New Jersey.

Positioned at Chester Avenue and Route 130 in Delran Township, the park is in the heart of Burlington County’s Route 130 commercial corridor and is only minutes from the Betsy Ross and Tacony-Palmyra bridges providing convenient access to Philadelphia.

Building on their successful relationship, the new ownership has retained WCRE to assist in the marketing and leasing of 16,000 square feet which is ideal for any user with the need of both warehouse and office space.

Chris Henderson, Senior Associate for WCRE exclusively represented the Buyer in this transaction.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com,  www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

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How to Survive the Holiday Office Party

survive-holiday-office-partyFor some, surviving your holiday office party can be a challenge. We wanted to that the time to give you some word of encouragement and also a strategy on how to survive your party this holiday season. Your office party doesn’t have to be a time where you’re stressed and trying to figure out what to wear in front of your colleagues that you probably see more than your actual family. Here are some tips on how to survive your holiday office party:

Get Out of your Comfort Zone at the Holiday Office Party

If you’re an introvert that has a favorite location somewhere between the door and the food table,
you need to make extra effort to socialize. The first step in surviving your holiday office party is to approach the nearest person who looks approachable and offer a toast to the holidays. Remember to always have a smile on your face as it reflects your personality and openness to having a conversation. Your willingness to toast in celebration is not only a nice gesture, but it may give you the opportunity to gain a new friend at work.

No Business at the Holiday Office Party

Never talk about that new position opening up, promotion, work gossip, or how much you hate (or hopefully like work). It is inappropriate and potentially awkward to place your colleague in such a situation. Since it’s an office event, it’s pretty common that a business-related conversations might come up, but do your best to sway the conversation in a way to get to know the person you’re talking to better. Here are some common questions that you can ask at your office party:

• If you could go to one country right now, where would you go?
• What are your thoughts on (Name newest movie you’ve seen)
• Have you been to any concerts lately?
• How did you meet your significant other?
• Do you like to go out to eat? If so, where?
• If you could go to 3 concerts, dead or alive, who would you go see?

Be Festive at the Holiday Office Party

Don’t forget to wear red or some form of ugly sweater. And If you do wear an ugly sweater, make sure you reach out to your favorite pre-owned office furniture company. Boomerang with a picture. We will find a way to add you onto your monthly newsletter that’s communicated to thousands of local businesses.

Enjoy Yourself at the Holiday Office Party

Your relationship with your co-workers or your boss should not impact your enjoyment. It is essential to stay in control and not drink beyond your capacity. This may create future awkwardness within the office and you may become a topic of gossip. Be smart and be safe!

Show Up on Time the Next Day

Even if you decide to drink a few than you may have wanted, that’s ok. Make sure you show up to work the next day on time. By arriving to your office at the correct time, your co-workers would know that you can not only handle your own, but also know how to have fun. Being a leader and a trusted resource in the company is important. Forgetting or leaving the stress at home is important, so make sure you use your noggin.

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

FOR IMMEDIATE RELEASE

Contact: Andrew Becker

Phone: 856.449.5220

Email: andrew.becker@wolfcre.com

 

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

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

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

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

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

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at http://lehighvalleyindustrial.com, www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com,  www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

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SBA Financing for Owner-Occupied Commercial Real Estate

sba-financingLet’s explore the benefits of SBA financing for owner-occupied commercial real estate. When acquiring a commercial property it may make sense for you to pay cash, have a seller take back note, utilize a 1031 exchange or go with a conventional bank loan, but you may want to consider some of the beneficial features of U.S. Small Business Administration options. The government is eager to support business owners in financing owner-occupied commercial real estate and can achieve this through the SBA 504 loan participation and SBA 7A loan guarantee programs. The key benefits are longer terms, lower monthly payments, lower down payment, assumable mortgages and additional flexibility not found in
conventional options.

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With SBA financing LONGER TERMS = LOWER MONTHLY PAYMENTS.

With SBA financing you can often get terms that are longer than conventional or private sources will offer. For example loans with fixed rates of 20 or even 25 years are available at below market rates. Conventional loans don’t normally go out more than five or ten years and amortizations often stop at 20
years on owner-occupied commercial real estate projects. By extending the amortization period 5 years as well as the term, you can lower your monthly payments and take advantage of low long term rates while they still exist.

SBA financing means a LOWER DOWN PAYMENT

With either the 504 or the 7A loan programs, lenders are allowed to lend up to 90% Loan-ToValue and in some cases even up to 100% LTV. This means that you can afford that building sooner, can consider perhaps a larger building with room to grow, and all the while can retain cash for other needs with only 10% down!

SBA financing means ASSUMABLE MORTGAGES

504 lenders (Certified Development Companies) make direct loans on behalf of the U.S. SBA in conjunction with financial institutions. These direct loans from CDCs are assumable by the new owner occupied buyers, provided they meet two requirements, they are considered a small business and they are financially viable to assume the debt. Translation, you can have an asset on your books making it easier to sell your Owner Occupied Commercial Real Estate with fixed financing in place already at current long term rates.

SBA financing gives FLEXIBILITY WITH APPRAISAL SHORTFALLS

with the U.S. SBAs 504 loan program there is an ability to cover appraisal shortfalls, so long as they are no more than 10% of the total project cost. For example if a $1 million acquisition only appraises at $900 thousand you don’t have to renegotiate with the seller, or contribute more in permanent working capital. This can save a lot of time and hassle especially in a seller’s market where comps are not keeping up with market realities.

SBA financing allows the FINANCING OF SOFT COSTS

Both 7A and 504 loan programs allow for the inclusion of soft costs to include appraisals, environment due diligence, relocation costs, financing fees and even zoning and planning approvals to name a few.

By financing these costs, you can keep more money in your pocket to run your business!

Financing other project costs over a longer period

In certain instances you can also finance equipment and other related costs such as renovations and fit up within the same loan request. Why does this matter? Because, you can stretch out the repayment of those costs over the longer term of the real estate loan instead of using a line-of-credit or other short term liability thereby increasing your monthly cash flow requirements. In short the U.S. SBA loan programs provide a lot of flexibility to help you or your clients purchase owner-occupied commercial real estate that can make it much easier to qualify for and much easier to afford.

For further questions or assistance please feel free to contact me at 201.251.5368. At Bank of America we have a dedicated specialist devoted solely to SBA financing. We guide clients through the process, which helps to clear up any confusion and shorten the time to closing.

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E-Commerce Growth Shifts Construction Demand from Retail to Logistics

new Jason stats graphic - June 2015The appetite of internet-based sellers and other retailers for newly built logistics properties drove net absorption of industrial real estate to its highest total since early 2000 during the third quarter.

In addition, e-commerce demand in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – appears to be taking a bite out of retail construction and shifting it to the logistics sector. The 53 million square feet of new logistics space delivered by developers in the third quarter was the second-highest quarter on record.

The large amount of new supply in the U.S. and Philadelphia commercial real estate market kept in balance with strong demand as logistics tenants absorbed 56 million square feet of warehouse and distribution buildings, said CoStar’s just released Third Quarter 2016 Industrial Real Estate Review and Forecast.

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

Strong leasing and absorption of logistics buildings currently available in the U.S. and Philadelphia commercial real estate market pushed the country’s logistics vacancy rate down to 7.1%, lower than at any point during the past two real estate market cycles, while year-over-year rent growth remained off the charts at 7.1% for light industrial and 6.4% for logistics assets.

Even by the projected end of the current cycle in 2020, CoStar forecasts the logistics vacancy rate in the 54 largest U.S. markets will rise only to 8.5%, nowhere near its 10.4% average since 2000.

Despite strong demand and sustained rent growth in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – rising levels of new construction paired with the gradually tightening availability of construction financing is beginning to put pressure on vacancies in a growing number of markets as the expansion phase of the logistics market starts to wind down. Thirty of the top 54 U.S. markets posted declining occupancy and rising rents in the third quarter, the most of any major property type.

The demand and absorption drivers for logistics space remain solid. Retail inventories relative to sales are at their highest levels since 2009 as Amazon.com and other e-commerce operations locate their inventories closer to population centers in the effort to speed goods to the consumer at ever-increasing rates.

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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