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Understanding New Jersey Liquor Licenses

New Jersey Liquor Licenses

New Jersey Liquor Licenses

Let’s examine the changing landscape of New Jersey liquor licenses. There is no denying the restaurant industry and retail sectors of commercial real estate are undergoing major shifts brought on by changing consumer shopping patterns and tastes. With the rise of e-commerce, the need to visit physical locations has diminished and retailers increasingly need to offer a unique experience or destination in order to attract customers. This, combined with changing dining habits and palates that desire more convenient and varied food and alcohol options, has expanded the alcoholic beverage industry through the country, including in New Jersey.

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With this increased interest and its impact on retail spaces, it is important for landlords, property owners, brokers and other real estate professionals to have a basic understanding of New Jersey liquor licenses.

Restaurants, bars and liquor stores cannot sell, buy or serve alcoholic beverages in New Jersey without the applicable legally required license or permit. There are different categories of New Jersey liquor licenses, but the most relevant for retail purposes are (i) plenary retail consumption licenses, which are used at bars and restaurants to permit the sale of alcoholic beverages for on-site consumption, often referred to as “33” or “32” licenses; and (ii) plenary retail distribution licenses that allow for the sale of alcoholic beverages in original containers for off premises consumption, known generally as package good stores or “44” licenses. In New Jersey, licenses are generally issued and regulated at the municipal level, subject to further approval, oversight and enforcement by the State’s Division of Alcoholic Beverage Control.

The number of retail consumption and distribution licenses available in a municipality is dictated by the size of the population. New licenses can only be issued where updated Federal Census data warrants the creation of a new license, and the local issuing authority must follow specific methods established by New Jersey statute and regulations for awarding a new license. Consequentially, the pool of available licenses in a municipality is limited and the overwhelming majority of New Jersey liquor licenses must be purchased through private transactions. The price for a license is determined by supply and demand, with licenses in highly sought after municipalities being quite expensive. The limited supply and high price of liquor licenses in our State is somewhat unique, with many other jurisdictions having separate beer and wine only licenses widely available for restaurants or quick food concepts. Indeed, because of the way the liquor license industry works in New Jersey, some restaurant concepts that include wine and beer sales in their operating model in other jurisdictions find they are not able to similarly operate in New Jersey because either a license is not available or it is cost prohibitive. Landlords and brokers should be cognizant of this when considering attracting out of state restaurants or other alcoholic beverage businesses to a property.

Existing New Jersey liquor licenses are purchased through a transfer process by which the purchaser files a personto-person transfer application (and a place-to-place application when locating a license at a new premises) with the municipality or other local issuing authority. The local issuing authority then reviews the transfer application and performs due diligence on the purchaser, including investigations and criminal background checks on any individuals holding an interest in the license. Local issuing authorities must confirm that a purchaser is not disqualified from holding an interest in a liquor license, that the transfer does not violate applicable laws, and that the source of the funds used to purchase the license is legitimate. In addition to evaluating a purchaser, notice of the transfer must be published in local newspapers, and the transfer must be scheduled for public hearing and approved by the local issuing authority at the public hearing. A purchaser cannot utilize a liquor
license until its transfer is formally approved by the local issuing authority. Moreover, a transfer cannot be conditionally approved or approved subject to the satisfaction of certain contingencies.

Once a liquor license transfer is approved it cannot be undone except by accomplishing another transfer. Given this process, real estate owners and other professionals must be mindful of timing and should include adequate approval time periods and extension rights in contracts and leases involving liquor licenses. Closings on New Jersey liquor licenses are typically completed in escrow since (1) the purchaser cannot make use of the license until it is approved and thus does not want to pay the purchase price over to the seller until it has received formal approval, and (2) the seller cannot undo a transfer once approved and therefore usually requires that funds be deposited in escrow prior to the hearing to ensure that the purchaser pays for the license. As such, parties should carefully address specific escrow and closing instructions in their agreements. Where a landlord
holds the license and expects it to run with the shopping center, special attention must be paid to the arrangement between landlord and tenant concerning the license at lease expiration or termination.

Besides the more traditional New Jersey liquor licenses discussed above, property owners are increasingly encountering local winery and craft brewery establishments as tenants. These licenses are issued by the State directly and are subject to their own separate regulations. Similar to plenary retail licenses, property owners and others need to be aware of the unique issues present in the alcoholic beverage industry.

When Your Tenant is a Franchisee

Commercial landlords often view franchisees in well-known franchise systems as attractive retail tenants. Leasing space to a franchisee, however, raises a number of unique issues and may require you, as a commercial landlord, to negotiate not only with the franchisee/tenant, but also the franchisor.

This article addresses the peculiar issues that may arise when your retail tenant operates a franchise. Site selection and continuity of operations are critical components for successful franchise systems. A franchisor, therefore, will often seek to maintain a level of control over the space occupied by its franchisee. In order to protect its interests in the “locational goodwill” that develops at a successful franchisee site, a franchisor will often insert itself into the landlord/tenant relationship. A franchisor does this in two common ways. First, the franchise agreement may require a franchisee to negotiate certain provisions into its lease. Second, a franchisor may seek to have a landlord execute a separate “lease rider”, which provides the franchisor with additional rights upon the franchisee’s default of its lease.

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FRANCHISE SPECIFIC LEASE PROVISIONS

When Your Tenant is a Franchisee

A standard franchise agreement will include a description of lease provisions that the franchisee is required to include in its lease in order for franchisor to approve its form. As a landlord, therefore, you should not be surprised to see a prospective franchisee tenant provide you with a list of franchise specific revisions to your proposed lease. Franchisor-mandated provisions for the lease commonly include:

1. A use clause limiting the permitted uses to the type of business permitted by the franchise agreement (i.e. the franchised concept only). The franchisor wants to know that the franchisee will not be selling items the franchisor has not specifically approved, nor assigning the lease, in bankruptcy or otherwise, to a party other than the franchisor or an approved franchisee.

2. A requirement that the lease term must be tied to the franchise agreement term. The franchisor wants to know that the franchisee will have a location to operate its franchised business during the term of the franchise agreement, and conversely it does not want its franchisee to have leased property without franchised rights to operate. Thus, the lease term and the franchise agreement term are to be co-terminous.

3. A clause confirming the franchisee’s right to use the franchisor’s marks and required signage package at the property, in order to maintain system uniformity. This provisions makes it clear that the landlord’s signage and other design restrictions will not preclude the franchisee from utilizing the franchisor’s mandated branding scheme.

4. A strict no subletting or assignment provision, except to the franchisor or its designee. This provision prevents an unauthorized sale of the franchisee’s business or the franchisee trying to avoid the franchise agreement’s non-compete provision.

5. A clause entitling the franchisor to take an assignment of the lease, at its option, upon franchisee’s default.

6. Language providing that the franchisor shall receive all notices of default, prior to eviction, and shall have right to cure. When a franchisor receives a copy of a notice of default sent to the tenant/franchisee, it can decide whether it will declare an event of default (a cross-default) under the franchise agreement – which is often an option for the franchisor.

7. A provision allowing the franchisor to enter the leased property upon termination of the franchise agreement in order to de-image the location so as to properly distinguish it from the franchise system. Upon termination of the franchise agreement, the franchisee is required to take down its signs and otherwise de-image from the franchised concept. If it fails to do so, franchisor needs to be able to cause the required de-imaging, without being guilty of trespass.

Despite the importance of the provisions to the franchisor, a franchisee will derive little benefit from these provisions, and in fact runs the risk of angering its new landlord (you) with the additional burden of negotiating these points. Therefore, the franchisee does not have a strong desire to push hard for these points. In practice, a franchisee will often negotiate its lease with you, present it to its franchisor for approval, and only then learn (be reminded) of the importance of the franchisorrequired provisions. Going back to the landlord at that point is an uphill battle for the franchisee. Like the franchisee, the landlord will often be disinterested in the franchisor’s requests. You will not want to further negotiate your “standard” form and specifically, will not want the administrative burden of sending notices and lease amendments to both the franchisee and the franchisor. Nor will you want to add time to cure periods. As a landlord, you need to weigh these burdens against the value of having a recognized franchise system and brand, likely with a strong track record marketing its locations.

LEASE RIDERS

Franchisors can live without many of the provisions listed above, but the collateral assignment (also known as a lease option agreement) is the one that really counts. Ideally, for a franchisor, the franchisee’s lease will be collaterally assigned to the franchisor. The collateral assignment acts as a promise by the franchisee to assign the lease to the franchisor in the event of default. This document, often known as a “Lease Rider” is a tri-party agreement; signed by each the franchisee, franchisor and landlord. Having the landlord and franchisor as signatories to the Lease Rider will confirm that the franchisor has a clear right to enforce the provisions against you, regardless of franchisee’s position, including as a debtor under a bankruptcy proceeding.

There are five main components of a well-drafted collateral assignment of lease for a franchisee:

• A clear expression that the agreement is for collateral purposes only and that the franchisor will not incur any liability, unless and until it takes possession and assumes the tenant/franchisee’s obligations.

• Upon a default under the lease (prior to eviction) or the franchise agreement, the franchisor has the option to take possession or assign the lease to another franchisee.

• The franchisor will receive copies of notices of default.

• The lease will not be modified without franchisor’s consent.

Upon expiration or termination of the lease, and in the event franchisor elects not to assume the lease, franchisor is granted the right to cause a de-imaging of the premises, without being guilty of trespass. Again, the only party who will push hard for these rights will be the franchisor. Other than for the purpose of “getting the deal done”, the franchisee will have little incentive to cause you, as landlord, to comply. The franchisee will usually want to save its negotiation chips for points directly in its favor. Similarly, the landlord will typically want flexibility with the space if the tenant is having problems. Accordingly, many landlords are unwilling to grant collateral assignments of leases. As in most cases, the respective leverage of the parties drives the issue.

Landlords counter these franchisor-required provisions by requiring that the franchisor guaranty the lease. A landlord will insist upon an agreement by the franchisor to cure all arrearages in full, prior to assumption. In response, a franchisor will argue that the arrearages for which it is responsible should be capped based on a time period (e.g., 45 days moving backwards from the date franchisor receives notice of default). Thus, the landlord, who may view additional notice parties as an administrative headache, will be motivated to send default notices to the franchisor before its tenant becomes too far behind in rent.

Landlords generally want to limit the transferability of the lease. For example, a landlord will permit assignment, without its consent, only to the franchisor, and not to another franchisee or other designee. No landlord wants a revolving door of failed franchisees. Often, a compromise is a franchisor guaranty for a limited period of time following an assignment.

CONCLUSION

Successful franchisors work hard to maintain a level of control over their valuable locations. Although it may seem like the franchisor is merely trying to exert its influence over the landlord/tenant relationship during lease negotiations, the franchisor has a vested interest in securing these protections. You, as landlord, will weigh the value of having a tenant offering recognized and popular goods and services in its center, together with a franchisor standing behind its operator, at one level or another, against the burden of these additional negotiations. The next time you are involved in a lease negotiation for a franchised unit, hopefully you will have a deeper appreciation for the franchisor’s motivation and be able to more effectively negotiate these franchise-specific issues.

Air Quality Management for Commercial Buildings

Air Quality Management for Commercial Buildings

Air Quality Management for Commercial Buildings

Let’s look at air quality management for commercial buildings. The health of your property’s occupants can be jeopardized by poor air quality, and it is your responsibility to provide a healthy indoor environment, whether it is protecting against airborne infections like H1N1 or pollutants from equipment. From mechanical problems like a faulty exhaust fan to the measure of air volume exchanges, there are many factors that are easily overlooked. An Indoor Air Quality Management Plan is a good way to ensure that residents’ health is not endangered by the air in the building.

The plan you design must address the specific needs of each space, and should never be limited to HVAC maintenance. The task should be assigned to one person who is charged with identifying problem locations and staff whose activities might affect the quality of the air.

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Air Quality Management Practices

(1) STUDY THE EXCHANGE RATE

The air volume exchange rate is a factor that property managers must consider. The American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) recommends a minimum exchange of ten cubic feet per minute per person in an indoor environment. This rate can be tested by a certified engineer. If your rate is too high, you will be alerted to problems like a faulty variable air volume box.

(2) TAKE STEPS TO IMPROVE YOUR AIR QUALITY MANAGEMENT PLAN

Ensure that you will easily be able to update your plan for any legislative or other changes that affect air quality. Follow these guidelines for creating a plan that is appropriate to your situation:

• Consult the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) for advice on the maintenance of air quality if you renovate or add on to your property.

• Schedule routine maintenance of motors, fan belts and filters with certified mechanics. Revisit everything every 90 days.

• Specify filter selection and maintenance. If the property has mixed uses, each occupant should have a separate filter schedule:

• Specify which Minimum Efficiency Rating Value (MERV) is necessary in the filter. The higher the number, the higher the filtration rate.

• In sensitive environments, use a high efficiency particulate air (HEPA) filter.

Design procedures for reacting to complaints by occupants, including those regarding humidity or odors. Air quality professionals may be able to analyze air samples to identify appropriate solutions, which might include dehumidifiers or air scrubbers.

• Verify that all cleaning products comply with Environmental Protection Agency (EPA) standards.

(3) WORK WITH OCCUPANTS

Inform your occupants your air quality plan, and ask for their help in maintaining good air quality. There are steps occupants can take to improve air quality, including the following:

• Refraining from smoking within 25 feet of the building

• Using entryway cleaning systems, such as grills and mats, to reduce the amount of dirt, dust and pollen that enters the building

• In sensitive environments, using ultra-violet lights to kill bacteria circulating in the air

CONTACT US

For more air quality management and loss prevention tips, contact Hardenbergh Insurance Group. Our insurance specialists are available to help you solve your property and casualty issues.

Brian Blaston, Partner
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955

www.hig.net

2017 Summer HVAC TIPS

Summer HVAC TIPS2017 Commercial HVAC tips. The June 21 Summer Solstice marked the official start of summer! And with that comes fun times at the shore, BBQs… and hot and humid weather! But don’t sweat, with a little planning, you can ensure a comfortable working environment in your office.

Hutchinson, a leading energy services and mechanical services contractor serving the Tri-State Region’s commercial customers, offers tips to help add life to HVAC systems, keep you feeling comfortable, and improve the bottom line.

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Get an AC inspection and tune up.

Hutchinson’s certificated technicians will test the HVAC system to determine if any repairs are needed. Preventive maintenance will keep the system running smooth and efficiently, and extend its service life, too.

Change filters.

It’s a new season, which means it’s time to change your filter. As a rule of thumb, change filters every quarter or as needed.

Install programmable controls.

Get peace of mind knowing your AC is set just right – not too low and not too high – with a 21st century control system. It provides greater efficiency and can be controlled from a mobile device. Plus, Hutchinson’s Honeywell Web Certified technicians can access temperature controls online, and quickly monitor and repair any heating or cooling issues remotely.

Get ductwork inspected and cleaned.

Leaks or cracks can reduce energy efficiency in HVAC systems and result in higher utility bills. A duct system that’s properly cleaned and sealed can save businesses money and promote wellness and comfort.

Keep outdoor areas clear.

Check out your exterior HVAC unit. Is it clear from brush and debris? Make sure plants or branches aren’t blocking or touching the unit. A good rule of thumb is to have two feet of clearance around the unit.

To learn more about Hutchinson and its energy service offerings, contact Dicoordinator@hutchbiz.com or call 888-777-4501 to schedule an energy assessment.

Title Insurance In Commercial Real Estate

title insuranceWhat is the importance of title insurance in commercial real estate? Purchasing a commercial property for some can be both daunting and exciting. It is important to note that purchasing title insurance for any commercial transaction is imperative, and finding out that title is “clean or “clear,” will ease some of those overwhelming thoughts.

Clear Title is defined as title without any kind lien or encumbrances from creditors or other parties and poses no question as to who is the legal owner. Commercial Real Estate involves high risks for the buyer, seller and the lender who have a vested interest in the overall transaction. Although viewed as a mere formality in the residential transaction process, it is an integral part of both the due diligence phase and the closing process due to the typical high acquisition cost of commercial real estate.

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Title Insurance, by definition, “is an insurance policy that covers the loss of ownership in property due to legal defects.” What defines those defects?

1. Undisclosed heirs
2. Illegal Deeds
3. Forgery
4. Errors in public records
5. Liens and encumbrances that have not been properly removed
6. Unknown easements
7. Survey Issues

In the title search process, most of these defects should be uncovered and corrected. However, on the outside chance something is missed, such as a prior lien, your policy is in place to cover you.

All lenders require a buyer to get title insurance if they are taking out a mortgage. More specifically, they are looking for a lenders title insurance policy, which only protects their interest. An owner’s policy can also be purchased, and this protects the owner and their heirs for as long as they have interest in the property. If the property is being bought for cash, it is up to the buyer whether or not to obtain a policy. However protection when purchasing any asset is key and the cost far outweighs the potential loss.

A new buyer or the most experienced one can learn more about the process of title insurance from a real estate attorney or title company that specializes in commercial transactions. Most title companies either work in conjunction with an attorney to provide settlement on the deal or with the purchaser directly.

Purchasing title insurance is just one of the items necessary in the due diligence process prior to purchasing a property. Whether you are purchasing your first commercial property or your tenth, having a seasoned real estate attorney and title company as part of your team will set you up for a successful closing.

FOR MORE INFORMATION:

rms title insurance

Letters of Intent: Good Idea?

letters of intentCommercial real estate players use letters of intent (LOIs) or term sheets all the time. Buyers and tenants present offers this way, often to see if a deal can be reached before incurring the costs of negotiating an agreement of sale or a lease (the Definitive Agreement). The key question is whether these agreements are binding or not. The legal principles are fairly easy to state: If the parties intend not to be bound to each other prior to the execution of a Definitive Agreement, the courts will give effect to that intent and the parties will not be bound until the agreement has been fully executed and delivered. This is true even if all issues in the negotiations have been resolved. Conversely, if the parties intend to be bound prior to the execution of a Definitive Agreement, the court will give effect to that intent, and the parties will be bound even though they contemplate replacing their earlier understanding with a later written agreement. Courts have consistently stated that the most important factor in determining whether or which provisions in an LOI are binding is the language used by the parties in the letters of intent themselves.

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Typically, parties draft letters of intent to be partially binding. The letters of intent will contain provisions not intended to be binding and provisions expressly intended to be binding on the parties. The non-binding provisions consist primarily of the “deal points”, such as a description of the key components of a proposed transaction and any important conditions. For an agreement of sale, these include the purchase price, deposit, due diligence period, deal contingencies (e.g. financing, licensing and land use approvals), time for closing and broker payment obligations. For a lease agreement, these include the rental rate, security deposit, tenant allowance, responsibility for repairs and replacements, use and exclusivity terms, brokers and any unique arrangements. The binding provisions focus on the negotiation time period, including access to information, confidentiality, a “no-shop” or exclusivity provision in which the seller or landlord agrees not to sell or lease the subject property to another for a specified period of time, broker representations and protection and non-disclosure (to third parties) obligations. There should be a termination provision and natural end date for the life of the LOI.

The main purpose of typical letters of intent is for the parties to formulate deal points without committing to the actual transaction. Letters of intent provide counsel a blueprint for preparation of the Definitive Agreement, saving time and money. Letters of intent can keep the deal momentum moving forward while negotiating the details of a Definitive Agreement, especially when they contain milestones for delivering a draft and executing a final version. Moreover, an LOI may be necessary for a lender or investor to move to the next step of its process.
However, there are also potential risks in using LOIs. If inartfully drafted, or if the parties act as though they have reached a deal, the LOI may be deemed a binding contract, obligating the parties prematurely.

Further, many courts have found that execution of a letters of intent  creates an obligation for the parties to negotiate, in good faith, a reasonable agreement, which may be an unintended consequence of signing. Another
possible disadvantage of using an LOI is that a party may share the letter with a competing bidder to shop the deal to see if they can get a better offer. Even worse, deal momentum may die while negotiating a trivial LOI provision for a simple transaction that could have gone straight to the Definitive Agreement.

Indeed it is often the case that conceptual agreement on the basic deal points will allow a buyer to prepare
an agreement of sale, without the need to incur the time and expense of negotiating letters of intent. But, for
the complex commercial transaction, an LOI can provide a necessary level of comfort prior to expending significant resources on investigations, inspections, analysis and negotiation of a Definitive Agreement.

If you use letters of intent, be clear and specifically describe the binding provisions, carefully distinguishing them
from the non-binding provisions. If there are no special conditions or complicating factors, go straight to the Definitive Agreement instead of preparing an LOI to avoid unintended consequences, such as a forming a contract or creating an obligation to negotiate in good faith.

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.

WCRE Honored With 2016 CoStar Power Broker Award

WCRE, a local South Jersey commercial real estate firm was selected by commercial real estate’s largest research organization (CoStar) as one of the top leasing and sales firms in the market. 

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Wolf Commercial Real Estate (WCRE) has been selected by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, to receive a CoStar Power Broker TM Award. This annual award recognizes the “best of the best” in commercial real estate brokerage by highlighting the firms and individual brokers who closed the highest transaction volumes in commercial property sales or leases in 2016 within their respective markets.

With the largest independently researched database of commercial real estate property information available online, CoStar can easily identify the top firms and brokers in each market throughout the U.S. and Canada. All awards are based on transaction data maintained in CoStar’s commercial real estate database.

WCRE qualified as one of the top commercial brokerage firms in the Philadelphia region based on total leasing transactions closed during the year. In order to be selected for this honor, WCRE’s overall transaction volumes were evaluated by CoStar against other commercial real estate brokerage firms active in its region, and subsequently ranked among the top firms in the market.

“We are thrilled to have earned this recognition from CoStar for a fourth consecutive year. I am grateful to our entire team and to all our clients and associates. Congratulations to all the winners,” said Jason Wolf, managing principal of WCRE, who was separately honored as a Top Office Leasing Broker.

“With such an active year in commercial real estate, CoStar is proud to honor the individual brokers and firms who perform at the industry’s highest level,” said CoStar Group founder and CEO Andrew C. Florance. “These industry leaders deserve to be recognized for their expertise, hard work and superior deal-making abilities. We extend our congratulations to this year’s winners on their exceptional sales and leasing success.”

The complete list of 2016 CoStar Power Broker Awards winners can be found at CoStarPowerBrokers.com.

About CoStar Group

CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. LoopNet is the most heavily trafficked commercial real estate marketplace online with more than 10 million registered members. Apartments.com, ApartmentFinder.com, ApartmentHomeLiving.com, and Westside Rentals form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Through an exclusive partnership with Move, a subsidiary of News Corporation, Apartments.com is the exclusive provider of apartment community listings across Move’s family of websites, which include realtor.com®, doorsteps.com and move.com.  CoStar Group’s websites attracted an average of nearly 24 million unique monthly visitors in aggregate in 2016. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Canada with a staff of over 3,000 worldwide, including the industry’s largest professional research organization. For more information, visit www.costargroup.com. 

About WCRE

Wolf Commercial Real Estate 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.

Prevent Flooring Moisture Issues in Commercial Buildings

flooring-moistureFlooring moisture usually comes from a concrete base. Concrete slabs are the most common flooring base used in a range of buildings. Unfortunately, excessive moisture found in concrete slabs prior to a flooring installation can cause significant floor covering system failures such as:

• debonding of coatings
• microbial growth
• flooring expansion
• high pH attack on floor finishes
• release of adhesives

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There are, however, several steps that can be taken to mitigate and potentially prevent flooring moisture issues before a floor covering is installed. These steps can be taken for either new or remodel projects.

The first step is to conduct flooring moisture testing. Substrate surfaces must be tested for moisture emission prior to starting the installation. Most manufacturers and flooring installation contractors recommend Relative Humidity probe moisture testing, as the results of this type of test are typically more accurate, reliable and consistent than other testing methods.

If flooring moisture emission is discovered, then proper precautions, such as the use of several topical applications prior to the flooring installation, can be used for moisture mitigation. Some of these topical applications include using reactive penetrants and moisture retarding coatings.

Finally, consider selecting a floor covering that has a higher tolerance for flooring moisture and can perform in concrete slabs with elevated relative humidity levels. Some flooring options, such as a textile composite flooring with pre-applied adhesive backing, perform in areas with elevated moisture. The breathable nature of these flooring products allows moisture to pass through the backing rather than trap it underneath. This method of vapor transmission enables the flooring to be installed with no moisture mitigation.

Taking these steps prior to installation can save money and mitigate potential flooring system failures.

About J+J Flooring Group:
For 60 years J+J Flooring Group has crafted intelligent and beautiful commercial flooring products for diverse
applications. As a division of Engineered Floors, LLC, we have proudly grown to be the third largest carpet company in North America. We engineer all of our flooring solutions with a steadfast commitment to design, quality, service, integrity and sustainability.

J+J Solutions for High Moisture Concrete:
J+J Flooring Group offers Kinetex – an advanced textile composite flooring that combines key attributes of softsurface floor covering with the long-wearing performance characteristics of hard-surface flooring. Kinetex textile composite flooring will perform in elevated RH slabs up to 99% when using PreFix pre-applied backing. The breathable nature of this product allows moisture to pass through the backing rather than trap it underneath. This method of vapor transmission allows Kinetex to be installed without costly moisture mitigation as long as the Relative Humidity Test reads 99% or below.

For more information on flooring moisture solutions for high moisture concrete slabs contact:


Tina Vilic, Sales Representative

o: (800) 241-4586 x7811
m: (215) 444-6421
tina.vilic@jjflooringgroup.com
www.jjflooringgroup.com

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

Understanding Energy Deregulation for Commercial Real Estate

energy-deregulationLet’s explore why commercial real estate property managers need to understand energy deregulation and its impact on their bottom line. Under energy deregulation, each part of energy service is broken down into separate pieces that are provided by different companies. Delivery of electricity as well as all necessary service is still provided by the local utility company, which ensures that the consumer will be provided with safe and reliable electricity. Suppliers of energy, other than the local utility, are licensed and registered with state and federal agencies and are not in competition with the local utility. Since the local utility does not make any money on the energy, only on the delivery and service of electricity, they support consumers who choose to switch suppliers. Smaller suppliers provide deregulated energy to the existing grid and the local utility company still delivers that energy directly to a consumer’s home or business.

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The utility continues to makes a profit on deregulated energy delivery, however consumers are able to enjoy significant savings and other benefits by buying their electricity or gas on the open market from other suppliers. The commercial real estate industry is directly affected by energy costs. Energy represents 30 percent of the typical office building’s costs and is one of the top five operating expenses for most real estate assets. As such, building owners and property managers are always searching for innovative ways to cut costs, control expenses and save money. With electricity and natural gas energy deregulation, building owners and property managers in many states now have the power to choose from a variety of energy suppliers resulting in a drop in energy costs. Having the ability to choose an energy supplier allows a property manager to maximize operational excellence by :

• Reducing energy costs and operating expenses
• Increasing asset value
• Enhancing tenant satisfaction, attraction, and retention
• Increasing occupant productivity and health
• Demonstrating environmental leadership by reducing energy usage

Property managers have a responsibility to provide the best service to their clients and tenants including
becoming educated as to the benefits of being able to choose alternate energy suppliers that will provide safe and reliable energy at a competitive price.

Did you know these energy deregulation facts…

1. 30% of energy in buildings is used inefficiently or unnecessarily- basically wasted, but paid for.
2. Lighting currently accounts for about 20% of U.S. electricity consumption.
3. Only 10% of energy in a light bulb is used to create light. Ninety percent of a light bulb’s energy creates
heat. Compact fluorescent light bulbs (CFLs), on the other hand, use about 80% less electricity than
conventional bulbs and last up to 12 times as long, while LED capabilities exceed even CFLs.

“Are we doing anything to save money on energy costs?” Hopefully, when your boss asks, you are able to provide an affirmative answer. You may even be able to list off some of the actions your company has taken thus far. Now it is time to ask yourself, “Am I doing everything I can to help my company save money?” This may be a little more difficult to answer.

New America Power (NAP), www.newamericapower.com

We are Newtown, Bucks County, based Energy Broker and Consulting company, assists in educating their clients of the ongoing changes and advancements in the energy industry and assist them with making decisions on energy procurement, management and curtailment. We also provide our clients with many products and services to facilitate entry into the renewable energy market. We offer a variety of energy products ranging from Fixed-all-inclusive, Index adder, Block and Index, to Wind, Green, Carbon Neutral and more… We work closely with our clients and take advantage of market behaviors that favor our clients’ energy cost. We have partnerships with a considerable number of energy suppliers to offer future energy purchasing options up to 18 months in advance. This allows businesses currently under contract with another supplier to hedge future purchases and take advantage of the current market’s rates.

As a leading energy consultant, NAP offers a broad array of electricity products and services to fit all of your energy needs:
• Electric and Natural Gas Procurement
• Energy Audits and Benchmarking
• LED/ Lighting Design
• Utility Incentives/Rebates
• Energy Tax Credits
• Demand Response registration, monitoring and management

Changing Energy Suppliers is Easy
• NO switching fees
• NO visit required
• NO interruption in power delivery
• Same reliable delivery service from your local utility company

new-america-power

Shutting Off Utilities During a Disaster

Shutting Off Utilities During a DisasterShutting off utilities during a disaster is important when utilities have been disrupted. There may be a need to turn off certain utilities in order to control additional damage from the disaster. This usually involves turning off one or more of the following: natural gas, water and electricity. Emergency service providers and utility employees will be overwhelmed following the disaster, so it’s important that your family and your neighbors know how and where to control the utilities. Pre-planning and fast actions can save both lives and property.

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Shutting Off Natural Gas Utilities During a Disaster

• Natural gas leaks and explosions are responsible for a significant number of fires during and after disasters. It is vital that all household members know how to shut off natural gas. Gas meters can usually be found on the side of the house.
• Because there are different gas shut-off procedures for different gas meter configurations, it is important to contact your local gas company for any guidance on preparations and response regarding gas appliances and gas service to your home.
• When you learn the proper shut-off procedure for your meter, share the information with everyone in your household. Be sure not to actually turn off the gas when practicing the proper gas shut-off procedures.
• If you smell gas or hear a blowing or hissing noise, open a window and get everyone out quickly. Turn off the gas, using the outside main valve, if you can, and call the gas company from a neighbor’s home.
• Caution: If you turn off the gas for any reason, a qualified professional must turn it back on. NEVER attempt to turn the gas back on yourself.

Shutting Off Water Utilities During a Disaster

• Water quickly becomes a precious resource in a disaster situation. It is crucial that all household members learn how to shut off the water at the main house valve.
• Before an emergency happens, locate the shut-off valve for the water line that enters your house and label this valve for easy identification. Make sure all household members know where it is located. You should also make sure the valve can be completely shut off. It may be rusted open or it may only partially close. If so, replace it.
• Cracked lines may pollute the water supply to your house. It is wise to shut off your water until you hear from authorities that it is safe for drinking.
• The water in your hot water heater and toilet tanks may drain due to gravity unless you trap it in your house by shutting off the main house valve. (This is not the street valve in the cement box at the curb; the street valve is extremely difficult to turn and requires a special tool.)

Shutting Off Electrical Utilities During a Disaster

• Electrical sparks could ignite natural gas if it is leaking, and they could also cause other flammable materials to catch fire. It is wise to teach all household members how to shut off the electricity.
• Locate your electrical circuit box. For your safety, always shut off all the individual circuits before shutting off the main circuit. If your house has fuses instead of circuit breakers, keep extra fuses on hand in case one blows during an emergency. Never replace a fuse with one of higher amperage.
• Finally, make sure your circuit breaker or fuse box is properly labeled so you know exactly what switches cut power to which areas of the house.
In addition to insuring your home, Hardenbergh Insurance Group is committed to helping you and your loved ones stay safe when disaster strikes. If you would like more information on developing a family emergency plan or building a disaster supply kit, please contact us at (856) 489-9100 or http://www.hig.net today.

Shutting Off Utilities During a DisasterBrian Blaston
Commercial Lines – Manager
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955
email: brianb@hig.net