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Are You Facing an Office Relocation Project?

Office Relocation ProjectThe daunting task of managing your office relocation project can be overwhelming, time consuming, and expensive. There are many questions you’ll ask yourself when moving your company to a new office space. Here are a few keys areas you’ll want to consider before you begin:

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PLANNING

Are you moving across town? Are you reducing your footprint because your employees are now working from home? Or are you working with an architect on developing customized space?

BUDGETS & SCHEDULES

How far in advance should I plan for my company’s move and how much should I budget? Who should I appoint as the leader for my relocation project? This individual will work with a relocation expert throughout the project and communicate updates to employees, schedule regular meetings, and ensure timelines and budgets are being met.

SPACE PLANNING & FURNITURE NEEDS

When should I decide what’s moving and what’s not? What is the most efficient and cost effective method for removing my company’s old furniture? Can I donate it to charity? When should I purchase new furniture and plan out my company’s new space?

PHONE & DATA MANAGEMENT

How do I plan my company’s data center and I.T. relocation?

EMPLOYEE COMMUNICATION & PREPARATION

How can I minimize downtime and reduce anxiety for my employees? How can each employee prepare for packing his office/workstation?

Every company is different therefore every move is very different. Taking the following steps will help ensure a successful relocation and transition into your new space:

9-12 Months before Moving:

• Partner with an office relocation project and logistics project management company for a single-source operation. Obtain the necessary bids and establish your preliminary budget.
• Conduct a pre-move assessment, and decide what’s moving and what’s not.
• Work with your office relocation project management company to identify preliminary timelines, phases, and schedules. This will also minimize downtime and disruption to employees, and reduce expenses long term.
• Finalize your space plan.

6-9 Months before Moving:

• Review your furniture needs. Decide whether you require disposal of existing furniture or the purchase and layout of new furniture.
• Make decisions on existing phone system, security requirements, cabling, and I.T. data infrastructure. Order new services if needed.

3-6 Months before Moving:

• Acquire floor plans for both new and existing facilities.
• Determine move requirements, packing needs, and specialty equipment to be moved.
• Finalize on-site record of existing furniture and equipment, recycled items, and items to be disposed.

8-12 weeks before Moving:

• Update move schedule and communicate internally as needed.
• Verify your Certificates of Insurance are up-to-date, and re-check your insurance.
• Schedule a commercial cleaning service for both old and new spaces.
• Order new stationary and forms with your new address and phone numbers, and update your website.

2-8 weeks before Moving:

• Monitor and finalize move schedule.
• Notify vendors and clients of your move.
• Begin packing and purging.
• Create a move ‘map’ plan for new space.
• Obtain moving crates, cartons, etc.
• Confirm Certificate of Occupancy.

1-2 weeks before Moving:

• Ensure coordination of schedules is in agreement, and communicate expectations to employees.
• Back up computers!!!
• Pack desks, office contents and label.

Moving Day:

• Arrange staff to assist at both old and new spaces.
• Arrange furniture according to plans.
• Install/reconnect computers and equipment.
• Hang artwork in new space.
• Leave old space in ‘broom swept’ condition.

Once you’ve completed your move and have settled in to your new space, there are post move activities that still need to be done. You’ll want to schedule a ‘post move’ walk through at both facilities, collect old keys and key cards, update service agreements, etc. Remember, it’s all in the details! Having a detailed plan results in a more efficient and cost effective office relocation project, which is good for your company and your employees! But it’s most important for your bottom line.

About Argosy Management Group, LLC:

Argosy Management Group (AMG) is a leader in office relocation and logistics project/move management. AMG services companies throughout the U.S. and worldwide. AMG delivers a wide range of comprehensive services: move management and transition planning, space planning and furniture needs, office and industrial relocation and liquidation, storage solutions and asset management, furniture disassembly and installation, and I.T./data center relocation. AMG also offers disinfection services for your office space to combat COVID-19 and other viruses.

For more information, contact: Shawn O’Neil at 609-744-4112 or visit www.argosymg.com.

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Understanding Section 45L & Section 179D Tax Credits

Section 45L & Section 179D Tax CreditsThe recently enacted Covid-19 relief package titled “Consolidated Appropriations Act, 2021” has extended the Federal Energy Tax Credit (Section 45L) through December 31, 2021 and made the Energy Efficient Commercial Building Deduction (Section 179D) permanent. While both tax incentives offer significant value and the qualification process is simple, they are often overlooked by developers and homebuilders.

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Section 45L Federal Energy Tax Credit 

Section 45L is a tax credit of up to $2,000 for each new or rehabilitated energy-efficient dwelling unit that is first leased or sold by the end of 2021. If you qualified for the credit but did not take advantage of it in previous years, your tax returns can be amended for up to three past years—2017, 2018 and 2019—to get you the credits you are entitled to.

Qualifying dwellings include newly constructed or rehabbed single-family homes, low-rise apartments, and other complexes of three stories or less, including condominiums, townhouses, senior living facilities, and student housing.

The projected annual heating and cooling cost of the dwelling or residential unit must be at least 50% below the annual energy consumption level based on 2006 standards. Most new developments today exceed these standards simply through energy-efficient features, such as high-R value insulation and roofing, windows, doors, and/or HVAC systems.
To capitalize on the 45L credits, you must engage a licensed professional to certify energy improvement standards have been met.

The cost of certification is typically much less than the financial rewards gained from the tax credit. For example, consider a three-story apartment complex with 60 qualifying units that were fully leased or sold in 2020:

• Tax credit = $2,000/unit x 60 units = $120,000
• Project Certification Fees (estimated) = $400/unit x 60 units = $24,000
• Net benefit of the 45L credits = $96,000

Section 17D Energy Efficient Commercial Building Deduction

The 179D Energy Efficient Commercial Building Deduction of a maximum of $1.80 per sq. ft. per qualifying property is available to those who have built or renovated properties they own with energy-efficient commercial building property (EECBP). EECBP includes interior lighting, materials used on the building structure, and mechanical systems. The 179D deduction is also available to those who have designed or built government-owned buildings, such as engineers, architects, and contractors. In certain situations, more than one of the companies designing and building a property will qualify for the credit, so it is important to address the issue up front in the building contracts.

Both the Section 45L and 179D tax incentives have been available for years, but few developers and builders who qualify take advantage of them. If you think you might qualify for either one, call your tax advisor. It could mean a significant financial benefit to you and your company.

ABOUT THE AUTHORS

Michael Wolf, CPA, Principal

Michael Wolf is a Principal of HBK CPAs & Consultants and works primarily out of the Blue Bell, PA. office. He leads HBK’s Construction Industry Group in the Mid-Atlantic Region. He can be contacted at 215-628-8080 or by email at mrwolf@hbkcpa.com.

Patrick Higgins, CPA, Manager

Patrick is a Manager at HBK CPAs & Consultants and works out of the Blue Bell, PA office. He has many years of experience working with construction contractors to help them achieve their goals. Patrick is a member of the Construction Accounting Network (CAN) and an associate member of Associated Builders and Contractors (ABC) – Eastern Pennsylvania Chapter. He can be contacted at 215-628-8080 or by email at phiggins@hbkcpa.com.

About HBK Construction Solutions Group

At HBK, our Construction Solutions is comprised of dedicated team members devoted to keeping pace with industry changes impacting your business and in turn providing you and your company with strategies and solutions customized to fit your unique needs.

Our specialized group serves a broad range of clients throughout the region who include general contractors, heavy construction, home builders, bridge painters and other specialty trades.

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Commercial Parking Lots: 4 Things You Should Know

Commercial Parking Lots 4 Things You Should KnowWhen it comes to commercial parking lots, a well-paved and maintained parking lot has a greater impact on the customer experience than you may realize. Parking lots are the first thing that your customer sees when entering your business. You want to make a great first impression because you never get a second chance to make it right.

If your asphalt parking lot is filled with cracks, potholes, unsightly striping and other signs of deterioration, this could drive away potential business before they even make it through the door. Being proactive with having a parking lot maintenance plan allows you to be ahead of the damage and improve the safety and curb appeal of your commercial parking area.

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Commercial Parking Lots: 4 Things You Should Know

Condition

Just like the human body, asphalt grows weak over time, and without a preventative maintenance plan it can lead to serious damage and potential liabilities. The most effective approach in parking lot maintenance is being proactive rather than reactive. Don’t wait until the damage is done to fix it. Services like sealcoating not only make your parking lot appear new but help fight against the oxidation from the sun and damage from traffic. Having a parking lot maintenance plan in place will help keep your parking lot safe and fresh year after year.

Repairs and Maintenance

Some repairs are unavoidable, even when a parking lot maintenance plan is in place. The best way to avoid trip hazards and automobile damage is to walk your parking lot quarterly. Check to see if there are new cracks or potholes, uneven surfaces and proper drainage. If any of these arise, contact your trusted preventative maintenance partner to assess the damages and get started on the repairs.

Compliance

We all want parking lots to look aesthetically pleasing, but are they compliant with the law? ADA Compliance ensures that parking lots with 20 parking spaces or more, have at least one designated area for those with disabilities.

Always make sure that you are following the accessibility regulations to avoid fines and to ensure you are providing a safe parking lot for your customers that require handicap spaces.

Parking Spaces

Are the parking spots on your lot clearly defined? Do they have enough space in between them? Providing comfortable distance between parking spaces is essential in decreasing the risk of liabilities and providing safety for your patrons. Clearly defined parking spaces create a seamless appearance and experience for your customers. Up-keeping on your line striping helps the flow of your lot and the safety for everyone traveling through.

If you are looking to create the best first impression, contact American Asphalt Company for your complimentary parking lot assessment. American Asphalt Company is New Jersey asphalt manufacturer, commercial asphalt paving and parking lot maintenance company. With three asphalt plants in the South Jersey area, and two commercial parking lot maintenance and paving locations in New Jersey, American Asphalt is your full service asphalt company.

Patrick Polazzo

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While Covid-19 Caused Office Vacancies…WCRE Moves and Doubles Office Space in Marlton, New Jersey Headquarters

WCRE Moves & Doubles Office Space in Marlton, NJ HeadquartersDue to COVID-19, office space vacancies have risen throughout the country and some companies have been forced to scale back. But not Marlton, New Jersey based Wolf Commercial Real Estate (WCRE); they moved in early March 2021 to larger headquarters and doubled their space. A full-service Philadelphia and South Jersey commercial real estate brokerage, advisory and property management services company, they are proud to announce their move to One Holtec Drive, Marlton, NJ. The firm specializes in office, retail, medical, industrial, and investment properties in the Greater Philadelphia region, Southeastern Pennsylvania, Northeastern Pennsylvania, the Lehigh Valley and Southern New Jersey.

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Bucking the trend in office space vacancies, Managing Principal and Founder Jason Wolf is proud of WCRE’s ability and need to move. He explained,

“Our move is an indication of our belief in the future. While we have all struggled in so many ways through the Pandemic, we are feeling optimistic and see great potential in the market.”

Wolf is betting on the idea that, despite the downsizing that has occurred in response to the pandemic, the pendulum will swing back, and WCRE will be well-positioned to meet the anticipated demand for office space. He continued,

“We know that people thrive in an energized work environment, and collaboration breeds success. We embrace that philosophy fully.” Wolf adds more about future opportunities, and said, “What’s going to start happening over the next few years is flight to quality. Tenants in this market, especially post-pandemic, are looking for healthier, newer, inspired spaces to encourage their staff to return to the office.”

WCRE also takes great pride in their place in the community, as Wolf explains,

“This is our home, our mission, our work, and our play. Our community is growing, and we are part of that through our charitable arm – The WCRE Foundation. Our staff gets totally involved in our charities, and their commitment to helping others is a great demonstration of their dedication to our clients as well.”

The WCRE Foundation supports six local charities with strong personal connections to their employees. Bancroft, CARES Institute at Rowan University, the American Cancer Society, Susan G. Komen Foundation-Philadelphia, Samaritan New Jersey, and the Jewish Federation of Southern Jersey are the Foundations current beneficiaries. Each year, The WCRE Foundation hosts both a Celebrity Charity Golf Event and an Ice Hockey Event, that includes 6 Philadelphia Flyers Alumni playing in a competitive ice hockey game with donors and enthusiasts that support their mission. Flyers Alumni that have participated in past events include Brian Propp, John LeClair, Todd Fedoruk, Doug Crossman, Kjell Samuelsson, Andre Faust and Brad Marsh. Lou Nolan (Flyers Emcee) and Kerry Frasier (Retired NHL referee) are also involved each year.

WCRE oversees more than 200 properties

WCRE oversees more than 200 properties, comprising 4.8 million square feet, and still embodies the values set forth when Wolf founded the company: integrity, quality, teamwork, and focus.

In addition to teamwork being a core pillar of the company’s philosophy, it resonates on another level with several of the staff members who are former collegiate and professional athletes. Brian Propp played for the Philadelphia Flyers, Ryan Barikian played college football at Towson, Mitchell Russell played national championship caliber lacrosse at Duke University, Sean Kelly played baseball for Rutgers University, Phil Costa played college football at University of Maryland and in the NFL for the Dallas Cowboys, and Michael Scanzano played college baseball for University of Pittsburgh and minor league professional baseball.

About WCRE

Built on keen market expertise and intensely personalized service, WCRE has been operating in Southern New Jersey and the Greater Philadelphia area since 2012. 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. They 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 intensive focus on clients’ business goals and their highly personal approach to client service, WCRE is creating a new culture and a higher standard, going well beyond handling property transactions and serving as a strategic partner invested in clients’ long-term growth and success.

WCRE’s innovative and analytical approach to the market, using SEO, digital media, blogging and a very strong social media presence, has cultivated a massive, highly engaged customer base with followings almost ten times those of some of their competition. Their unparalleled expertise and commitment to service has earned the trust of a broad array of clients, and the firm has been a five-time winner of the prestigious CoStar Power Broker Award, which recognizes the “best of the best” in commercial real estate.

WCRE’s South Jersey headquarters can be reached at 856-857-6300 and inquiries for the PA offices in both Philadelphia and King of Prussia may be directed to 215-799-6900.

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  southjerseyofficespace.comsouthjerseyindustrialspace.comsouthjerseymedicalspace.comsouthjerseyretailspace.comphillyofficespace.comphillyindustrialspace.comphillymedicalspace.com and phillyretailspace.com.

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How to Prepare Your Parking Lot Post Winter

How to Prepare Your Parking Lot for Winter

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Did you prepare your parking lot for winter? Most property owners neglect this because many property managers and commercial property owners are unaware of how the winter weather, salt and plowing can cause damage to their parking lot. Winter weather can wreak havoc on a commercial parking lot, specifically in our region. Harsh winter weather can and will wreak havoc on your asphalt parking lot. The best way to protect your parking lot from the freeze-thaw cycles that we experience is by having a preventative maintenance plan in place. When you add snow plowing and rock salt to an existing damaged parking lot, it will erode the asphalt and cause further damage.

It is always important throughout the year to conduct a physical inspection of your parking lot. When you notice signs of cracking, potholes, or the asphalt color looks faded, it is best to contact your asphalt parking lot service provider to assess the damage and devise a parking lot maintenance plan that suits your needs.

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3 Ways Prepare Your Parking Lot Post Winter

Crack Sealing: 

A part of preventative maintenance is to crack seal. Crack sealing prevents water from seeping into the sub-base. During the winter season, when water seeps into the cracks, the freeze thaw cycle will make the water expand and contract. The once small cracks can become potholes.

Undetected potholes may appear as snow and frost thaw. Many times, these damages are caused by snowplows or existing cracks hat have been affected by the freeze thaw cycle. It is imperative to seal cracks and fill potholes to prevent potential.

Asphalt Repairs:

Potholes can be repaired with hot mix asphalt in the fall months. Damaged asphalt is saw cut and removed, then the area is cleaned and prepared for the installation of new asphalt. When hot asphalt is unavailable, EZ Street high performance cold asphalt is a great alternative. This material works in cold temperatures, and can even be applied in water. Neglecting potholes, especially in the colder months, can be very dangerous. As the asphalt continues to break apart and the holes become larger and larger, this creates a safety hazard for both pedestrians and vehicles.

Inlet Repairs:

When water seeps into your inlets, the inside structure deteriorates. Salt and ice melt used in the winter months also washes into the storm drains, which further erodes the walls. To avoid a potential sinkhole, make sure your catch basins are structurally sound, the interior walls are parged, and the surrounding asphalt is intact.

To Prepare Your Parking Lot for Winter, contact the experts at American Asphalt Company to help address any immediate hazards. We will be able to provide a complimentary assessment of your parking lot and keep you within budget.

For more information on ways to prepare your parking lot for winter, contact:

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Working With a Commercial Real Estate Broker

Working With a Commercial Real Estate BrokerDo you want to rent a commercial property for your business? If so, you need to make an important decision. It’s time to hire a commercial real estate broker to help you locate an ideal spot for your company. Here’s a deep dive into how to work alongside your broker successfully.

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What Does a Commercial Real Estate Broker Do?

There are a few similarities between commercial and residential real estate brokers. If you’ve ever purchased a house with a broker, you know they guide buyers through the process from start to finish. These professionals are licensed by the state to perform various tasks, including finding properties and negotiating sales.

That’s the same for every broker, no matter what they sell. However, you should know that commercial brokers tend to work with multiple parties since more people are involved in these sales. It’s also standard for commercial brokers to know their clients’ financial situation so they can prioritize their bottom line.

Essentially, you hire a commercial broker to find a property that aligns with your company’s needs, wants, and goals.

Reasons to Hire a Commercial Real Estate Broker

Reasons to Hire a Commercial Real Estate BrokerIt’s smart to hire a broker for many reasons. If you’ve never rented a space for your business before, you might not know how to navigate the process alone. That’s a thought many people have before they rent a property. Let’s take a look at how a broker will help.

1. Negotiate Terms
Are you a natural negotiator? If not, you’re certainly not alone. Many savvy business owners don’t feel like they can negotiate successfully. These professionals will consider your finances as they review rent prices and other fees. Additionally, they might negotiate points like parking, utilities, and more. That’s all to arrive at a better agreement between you and the landlord.

2. Evaluate Leases
You need to fully understand lease agreements before you sign one. This space will be under your business’s name. If you need someone to help you evaluate leases, your broker can assist. That’s a bonus when you might look at two or three agreements in one week.

3. Market Knowledge
If you’ve rented commercial space before, you know you have to look far and wide to find properties that are both quality and affordable. Brokers can access listings that might not be available publicly. It’s essential to consider more than one rental so you can get the best deal. As a result, you can benefit from their market knowledge. These are only a few reasons why brokers can be helpful when you want to find commercial rental properties.

What to Remember When You Hire a Commercial Real Estate Broker

These professionals have various advantages that make them worth every penny. However, you might be curious about how to “use” your broker effectively. After all, you don’t want to pay someone who doesn’t meet your expectations.

Take a look at what you can do to work with your broker correctly.

1. Make a Checklist
Do your best not to expect your broker to read your mind. This individual won’t know your needs, wants, and goals unless you communicate with them. If your company requires a commercial garage door, for example, you need to jot down that point, as well as any special features that you need from it. These details will allow your broker to find the best location for you as quickly as possible.

Set a meeting with your team to determine what your rental space needs to look like. Consider everything from bathrooms to storage to location. Be sure to outline your budget, and don’t forget outdoor space, too.

Do you need a highly visible spot for advertising? Take every point into consideration.

2. Conduct Enough Research
It’s smart to choose a broker who specializes in your industry. If you own a coffee shop, you don’t want to work with someone who’s only rented office buildings. That’s where research comes in handy. Do your best to find an individual broker or entire brokerage for your specific situation.

How do you know whether a broker will be a good fit? Ask them to discuss their recent transactions. If you see they’ve had success with companies similar to yours, you’ve probably found someone who can help. It’s always important to ask for referrals, too. Call any references to discuss their strengths and weaknesses. Keep in mind you might have to interview several brokers before you find a connection with one. It’s essential to plan ahead so you have enough time. Otherwise, you’ll likely feel rushed and overwhelmed.

3. Don’t Sit Back
There are times when your broker will need to “take the wheel,” such as when you want to negotiate lease terms. This point doesn’t mean you should check out entirely. It’s still important for you and your partners to be involved. If you don’t know what happens throughout the process, you’ll inevitably run into obstacles later. Nominate someone from your company to visit rental properties and attend related meetings when you don’t have time.

4. Always Ask Questions
Don’t be afraid to ask questions and offer comments. It’s your business’s space, so you need to have the final say. If you’re curious about something during the search, you should be vocal. It’s key to trust your broker, but you don’t want to let things slide that might affect your prospects.

5. Look at All Options
However, you also need to consider every broker you come across. Don’t limit yourself to whichever broker you find first. If your friend recommends a specific professional, you should certainly speak with them — but you don’t want to pick them just because you got a recommendation.

Be sure to look at multiple brokers in your area. There’s a chance you’ll find someone along the way who meshes with your company better than anyone you interviewed beforehand. It’s always smart to cast a wide net. These tips will help you build a strong relationship with your broker so you can find an ideal commercial rental space.

Use These Tricks to Build a Relationship With Your Commercial Real Estate Broker

It’s not always an easy process to find a commercial property for your business. Fortunately, you can hire a real estate broker to help. Be sure to use these tips to form a successful relationship with whoever you choose. This way, you can find the best possible space.

Rose Morrison is a residential and commercial real estate writer and the managing editor of Renovated. To see more of her work visit: https://renovated.com/

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WCRE APPOINTED EXCLUSIVE LEASING AGENT FOR COLWICK BUSINESS CENTER

LEASING AGENT FOR COLWICK BUSINESS CENTERWolf Commercial Real Estate (WCRE) is pleased to announce that it has been appointed exclusive leasing agent by Golden Gate Management for its recently acquired Cherry Hill office portfolio located at Colwick Business Center, 53-55-57 Haddonfield Road in Cherry Hill, New Jersey. Colwick Business Center consists of three office buildings comprising of approximately 173,000 square feet.

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Among many desirable attributes, Colwick Business Center features highly efficient suite layouts, private 24/7 access to each tenant suite, and ample parking. Available suites range in size from 2,500 to 29,475 square feet.

Current anchor tenants of this premier office complex include Virtua Health, Rutgers University and the State of New Jersey.  The new owner, Golden Gate Management, is committed the southern NJ marketplace with recent acquisitions of flex and office parks and their ability to enhance value with the lease-up of the available space in these buildings.  

“We are excited to be working with WCRE’s leasing team of John Mozzillo, and Bethany Brown, and I am confident they will be very successful in marketing this premier business center,”
– Fishel Schlesinger Principal, Golden Gate Management

All of the available buildings in Colwick Business Center are single story office properties with private entrances, offering all useable space with no loss factor. The efficient layouts not only provide cost savings but also help to ease the logistical and safety concerns Covid-19 has posed for tenants in multi-story properties that require elevators and common areas.

Colwick Business Center is located just west of the Cherry Hill Mall on a stretch of Haddonfield Road that has recently undergone a massive redevelopment renaissance. The area features affluent residential communities, retail centers, hotels, and other amenities attractive to office tenants. Additionally, The Garden State Towne Center, home to Wegman’s, Best Buy, Home Depot, Dick’s Sporting Goods and other high-end retailers, is conveniently located a short distance away on Haddonfield Road.

Colwick Business Center

 

A marketing brochure and tenant information package is available upon request and also in at this link

 

About Golden Gate Management

Golden Gate Management has led the development and repositioning of more than 1,500,000 million square feet of best-in-class commercial and residential properties. The company is highly experienced in managing all aspects of the development process, from site selection and
entitlements, through coordination of tenant move-in.

Golden Gate’s 10-year history as a preeminent management company is unmatched. Reflecting the company’s core competencies and start-to-finish execution capability, Golden Gate has served as a single-source solution for small and large tenants with its full breadth of its in-house capabilities of construction services thus building relationships with their tenants, Leveraging the strength of its experienced team, Golden Gate has emerged as a first-class project management firm.

 

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.comwww.southjerseyindustrialspace.comwww.southjerseymedicalspace.comwww.southjerseyretailspace.comwww.phillyofficespace.comwww.phillyindustrialspace.comwww.phillymedicalspace.com and www.phillyretailspace.com.

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Change to the Bankruptcy Code Protects Landlords

Change to the Bankruptcy Code Protects LandlordsLet’s look at how a temporary change to the bankruptcy code protects landlords. The Consolidated Appropriations Act of 2021 (CAA), signed into law on December 27, 2020 provides money for governmental departments, coronavirus stimulus to individuals and businesses, but also made a temporary change to the bankruptcy code. Some of those amendments directly affect the rights of landlords of commercial properties.

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Since the pandemic started, landlords have been working with their commercial tenants by reaching deferral and waiver arrangements for payment of rent in arrears. Landlords are concerned that if their tenants filed a bankruptcy petition, payments made outside the ordinary course of the lease could be recovered by the bankruptcy estate, if the trustee brought a lawsuit to recovery of those payments under Section 547 of the Bankruptcy Code. Sections 547 and 550 provide for the avoidance and recovery of payments made on or within 90 days before the debtor filed for bankruptcy or one year if such transfer was to an insider, known as the preference period.

Under the CAA landlords have temporary protection from preference and claw back litigation. The safe harbor is geared toward encouraging landlords to work with their struggling commercial tenants, reaching agreements on the payment of rent without the fear of having to turn over those payment to a bankruptcy estate. To qualify, the payment arrangement should have been entered into on or after March 13, 2020, and the payment arrangement should not include, fees, penalties, or interest in an amount greater than what the tenant would have if paid on time and in full.

Landlords should also be prepared that if a tenant does file for bankruptcy, Section 365(d)(4) allows additional time for debtors to assume, assign, or reject nonresidential real property leases. Under the CAA, a Chapter 11 debtor has an initial 210 days to make a determination, and a 90-day extension provision with landlord written consent. However, debtors will still be required perform all of their obligations under the lease in a timely manner, unless the court directs otherwise.

Since these amendments will sunset on December 27, 2022 unless extended, it is important to understand the developments in case law and provisions of the change to the bankruptcy code. Our professionals can assist you in navigating the new rules and how they can impact your rent collection actions.

This e-alert is provided by Hyland Levin Shapiro LLP as a general summary of the topics discussed; it does not replace the need to consult with a legal professional and is not intended to be a substitute for competent professional advice, including any advice regarding the effect of the Consolidated Appropriations Act of 2021 on your particular business. If you have any questions about the provisions summarized above, please contact Angela L. Mastrangelo, Esquire at mastrangelo@hylandlevin.com or 856.355.2989.

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.

Angela L. Mastrangelo, Esquire

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Why Reviews Matter in Business

Reviews Matter to ConsumersLet’s examine why reviews matter to consumers. The wide-spread and long-lasting effects of COVID-19 remain to be seen, but one thing we can all agree on is that both retail and consumer behaviors have been forever changed. Prior to COVID, consumers were gradually shifting to a more digital landscape, mostly driven by convenience. This past year, business and consumers were forced to drastically alter their behaviors and operate almost completely online overnight. While hopefully, some normalcy will return, studies are finding that customers prefer the digital transformation and many conveniences that it provides.

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What does this mean for businesses? Being online is no longer a luxury or an afterthought, it is a necessity for survival. Even further than that, a company’s online reputation and reviews has now become their biggest marketing and piece of influence.

Consumer’s are spending more time than ever looking at business listings, in fact 31% of consumers say they are more likely to check a Google listing before visiting than they were pre-pandemic. They are also referencing online reviews, not only to research the service or product, “they are confirming the safety of businesses by checking reviews” (https://lnkd.in/dKZ3Ky3).

As a small business, retailer, start-up company or commercial real estate firm, your online reputation can be your biggest advantage or your greatest liability. According to Aversa PR, “No matter your resources and budget, this Reputation Management should be a key principle in operating any business” in 2021.
(https://www.inquirer.com/business/covid-online-sales-small-business-fraud-reputation-risk-20201117.html).

Why Do Reviews Matter?

Choosing a new business or product is a risky decision and while making it, customers are looking to trust factors that show that this business is the best choice. Online reviews serve as Social Validation that a business is trustworthy. Consumers turn to online reviews as a judgement of approval from their peers to guide their purchasing choices.

In fact, 92% of B2B buyers said they purchased from a company after reading positive online reviews, while 72% said they ended their conversations or prospecting with a company due to negative reviews. The customer base has changed, over half of customers today grew up with the internet, cell phones, social media. They have been taught to consult the internet, and believe the internet, for every decision. Many businesses grow from word of mouth or direct referrals, online reviews are now the reference of choice from consumers.

A study from BrightLocal showed that 87% of customers (91% of 18-34yr olds) trust online reviews as much as a personal recommendation and that 93% of people Google first, then decide to engage based off their discovery. When it comes to your online reputation, it is simply too important to not have a proactive strategy or plan in place. Simply asking for reviews isn’t enough anymore. From responding to customers, analyzing review trends, managing the platforms and listings, it is easy to understand why companies quickly become overwhelmed.

With a firm strategy and execution plan, companies are able focus on growing their business offline with the piece of mind that their reputation is being protected and built positively online. Many commercial real estate brokerage firms employ these business and marketing strategies. Whether you choose to manage the process inhouse or use a full-service reputation management agency, to succeed in 2021, your online reviews can no longer be an afterthought.

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Sale and Leaseback of Commercial Real Estate

Sale and Leaseback of Commercial Real EstateLet’s explore the sale and leaseback of commercial real estate. With COVID-19 affecting so many businesses many may be looking at their real estate holdings to see if they should entertain a sale-leaseback transaction with a nonprofit real estate foundation for a particular property to free-up cash tied up in their real estate. For mission critical buildings that are being leased from non-profit or for-profit landlords, they may consider negotiating with the property’s owner for a sale-leaseback with a nonprofit real estate foundation, attempting to reduce rent expense. A nonprofit real estate foundation is a third-party nonprofit entity that sources low-cost capital to acquire or develop properties used by hospitals in furtherance of their charitable mission. The sale-leaseback option for so monetizing these non-core assets will work as well with traditional sources like insurance companies, REITs and other institutional investors.

Confer with the professionals at WCRE or ask us for a seasoned real estate or tax attorney but here’s one technique Abo has seen work well with business clients. Although real estate is generally thought of as an illiquid asset, some liquidity can be achieved by taking out a loan backed by the property. Alternatively, a sale and leaseback may be used effectively if a company’s balance sheet is burdened with excessive debt or just having difficulty in obtaining new capital. Typically, the transaction involves the company owned property being sold to a third party and then leased back to the company under a long-term lease.

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Sale and leaseback transactions may be on the rise but clients need to be aware that the IRS often focuses on transactions between closely-held corporations and their controlling shareholder to make sure that these transactions benefit the company as well as the shareholder. In one common type of sale and leaseback transaction, the company sells the land with a building on it to the shareholder and, in turn, the shareholder leases it back to the company. Some of the financial and tax benefits we’ve seen have included:

The rental deductions the company could take might be significantly larger than the former depreciation deductions if the property had been in service for many years.

After the sale and the leaseback transaction, the shareholder’s basis in the property will be its fair market value which is usually greater than the price paid for the property by the corporation. Thus, the shareholder’s depreciation deduction would be much greater than what was previously available to the corporation (also still need to consider the tax consequences of the sale to the corporation).

The sale and leaseback may enable the shareholder to generate passive rental income that could be offset
against passive losses of the shareholder.

The IRS would obviously be concerned that these transactions have economic substance and that they are
based on reasonable market conditions, and not just designed to generate larger tax deductions. Thus, for
a sale to be valid, the controlling shareholder should have taken an equity interest in the property and also
assumed the risk of loss. For the leaseback to be valid, four tests come to mind that really should be met:

1. The useful life of the property should exceed the term of the lease.

2. Repurchase of the property by the corporation at the end of the lease term should be at fair market value and not at a discount.

3. If the leaseback allows for renewal, the rate should be at a fair rental value (speak to WCRE, not necessarily the accountant).

4. The shareholder should have a reasonable expectation that he or she will generate a profit from the sale and leaseback transaction based on the value of the property when it is eventually sold and the rental obtained during the lease term.

I suspect one of the biggest risks for the seller-lessee is the loss of a valuable asset that could have substantially appreciated over its useful life. Also, the rental market could drop, leaving the seller locked into a rental rate in excess of fair value. On the other side of the table, the seller could move or default, leaving the buyer with unattractive real estate in a soft market.

Even if there are no other problems, the benefits of the deal could be substantially reduced if the IRS deems that it is merely a “financial lease.” In that case, the IRS will treat the seller-lessee as the true owner of the real estate, with all the appropriate tax assessed, and the buyer-lessor will be treated as a lender-mortgagee.

Since sale and leaseback transactions can be quite complicated and also have to pass IRS muster, as I stated earlier, whether you are a buyer, seller or investor, you are well advised to consult with WCRE and seasoned real estate/tax counsel about your financial and tax consequences and the manner of structuring and implementing them to withstand possible IRS challenge.

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

 

Martin H. Abo, CPA/ABV/CVA/CFF
307 Fellowship Road, Suite 202
Mt. Laurel, NJ 08054
(856) 222-4723
marty@aboandcompany.com
For more information, contact:

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Winter Weather Liabilities

Winter Weather LiabilitiesLet’s explore some winter weather liabilities. The winter months bring more than just cold weather and shorter days; they bring the possibility for winter weather and storms that may result in a snow and ice-covered landscape. While it may be a winter wonderland for some, as a property manager, snow and ice buildup means a hazard with the potential for costly liability.

If you deal with either commercial or residential property, you are responsible for the side effects of winter. In legal terms, snow and ice are the same as any other hazard presented on a property, and just like any other hazard, property managers can be held liable if they cause injury. To avoid litigation resulting from winter injuries, it is important that you are vigilant in your snow and ice removal efforts.

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RECOGNIZING AND PREVENTING HAZARDS

Winter brings a variety of hazards that you need to prepare for; slips and falls are by far the most common injury associated with winter weather conditions. Diligent snow and ice removal can go far in keeping walkways and parking lots safe. Remove snow quickly after snowfalls, and salt regularly to keep ice from building up.

Not all winter hazards are under foot, however, icicles, along with other accumulations of frozen or heavy snow above walkways and building entrances, can cause serious injury if they fall on those below. Remove icicles and other buildup as soon as possible. If it still appears to present a hazard, consider rerouting foot traffic around the area.

Performing preventative maintenance in the summer and fall can also keep you prepared for winter storms. Make sure eaves are properly installed, and check that downspouts are aimed away from walkways. If eaves leak or downspouts direct water onto walkways, snow that melts in the heat of the day has the potential to freeze and create a hazard with cooler nighttime temperatures.

TRANSFERRING RESPONSIBILITIES TO TENANTS

For smaller residential rentals, such as single family homes or duplexes, the responsibility for snow and ice removal is commonly accepted by the tenant. To make sure responsibility is clearly established in this situation, the lease should include a provision citing the tenants as responsible for any snow and ice removal. This section of the lease should also establish how long after a snowfall the tenant has to clear public areas such as sidewalks, as most municipalities have laws requiring prompt snow removal. It is important to be as specific as possible to avoid any unnecessary liability or disputes after heavy storms.

CONTRACTING SNOW REMOVAL

Based on the size and number of properties you manage and the average snowfall in your area, you may be inclined to contract out snow removal to an independent company. While this can save you the time and costs associated with managing snow removal yourself, it is important that you choose wisely to avoid complicating matters.

First, make sure the contractor has sufficient resources to meet your demands. It is important that they can be onsite quickly after, or even during, a snowfall to make sure walkways and parking areas are cleared. It is also important that they have the equipment and manpower to finish the task quickly to reduce any disruption to tenants’ lives or businesses.

Second, make sure the company you hire carries the proper insurance, covering both its operations and its employees. The last thing you want is to end up being liable for a worker’s injury when liability for injury is the very thing you were trying to avoid. Also, much like the lease agreement with a residential tenant, it is important to specify the conditions and time constraints for removal in writing. When contracting any type of service, it is essential to have a written contract that will guarantee you receive the services you pay for.

It should be noted that hiring a removal service does not absolve you of liability. If the company you hire provides poor service, or simple does not show up at all, you are still the party responsible for any injury resulting from a winter hazard. Make sure to pick a reputable company that you can trust to do a good job, and always have a plan of action for removal if they are unable to complete the work as quickly or effectively as you require.

For additional questions on your risks and exposures, or on appropriate coverages to protect you from liability or costly disputes, contact Hardenbergh Insurance Group today.

For more information, contact:

winter-weather-liabilitiesBrian Blaston
Commercial Lines – Manager
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955
www.hig.net

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Who Owns the Fixtures at Lease Expiration

Who Owns the Fixtures at Lease ExpirationLet’s examine who owns the fixtures at lease expiration. In order to facilitate a smooth transition between commercial tenants, it is important for landlords to understand their rights regarding items attached to their property. Generally, a lease will govern these rights. However, if the lease is silent on the issue, articles annexed to the property deemed “fixtures” must stay with the property, while articles deemed “trade fixtures” may be removed by a vacating tenant.

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In New Jersey, a fixture is an object that “become[s] so related to particular real estate that an interest… arises under real estate law.” N.J.S.A. 12A:2A-309(1)(a). In contrast, an article may be considered to be a trade fixture if: (1) the article is annexed to the property for the purpose of aiding in the conduct of a trade or business exercised on the premises; and (2) the article is capable of removal from the premises without material injury thereto. Handler v. Horns, 2 N.J. 18, 24-25 (1949). As such, an important distinction between fixtures and trade fixtures is whether removal of the item will cause material injury to the premises. See e.g.
GMC v. City of Linden, 150 N.J. 522, 534 (1997). In applying this test, courts infer that if removal of an article would cause material injury to the premises, the parties must have intended for the article to remain beyond the lease term. Id.

A typical conflict involving this nuanced distinction may involve a vacating tenant removing an item from the leased premises under the assumption that it was (1) attached to the premises for the purpose of conducting a trade or business; and (2) capable of removal without material injury to the premises. A landlord may dispute one or more of these assumptions, arguing that the article was not used in the conduct of business (that it was in fact attached to improve the structure) or is not capable of removal without material injury to the premises.Over the years, vacating tenants have attempted to remove countless items from leased premises, including air conditioning systems, irrigation systems, bolted down light fixtures and even circuit breaker panels, by arguing these items were trade fixtures. See e.g. In re Jackson Tanker Corp., 69 B.R. 850 (Bankr. S.D.N.Y. 1987).

However, it isn’t difficult to imagine a hypothetical where the traditional landlord and tenant arguments are reversed – that is, where the tenant argues that the article must remain with the property and the landlord argues that the tenant is responsible for its removal. This unusual fact pattern may especially arise where the tenant’s business is specialized in nature, and where equipment is not easily removed from the premises.

For example, Landlord rents out space to Tenant, who plans on operating a restaurant. The lease does not specifically address what does and does not constitute a trade fixture. Tenant plans on installing a walk-in freezer and other specialized, complex systems. After several years of operating, Tenant declines to renew the
lease, closes, and vacates the premises. Tenant removes the furniture, appliances not fixed to the premises and other items it deems to be trade fixtures and leaves the walk-in freezer infrastructure. Tenant refuses to remove the walk-in freezer, arguing its removal will cause substantial damage to the premises. Unable to re-let the premises to a restaurant tenant, Landlord is left with a walk-in freezer occupying a substantial portion of the premises. It is important that during the lease negotiation, landlords think carefully about the business their prospective tenant is in, the kinds of equipment the tenant will install and what will happen to that equipment upon termination of the lease. This same thought process applies when landlords receive requests for alterations. In the above hypothetical, Landlord could have avoided being left with a walk-in freezer and a less than desirable space if it addressed the issue during negotiation of the lease. A discussion with prospective tenants concerning the specific kinds equipment the tenant will install is always a good idea, followed by specifications and drawings for approval. Landlords are wise to reduce these conversations to writing, and specifically address each party’s expectations regarding the disposition of specific equipment when the lease inevitably comes to an end. As always, an ounce of prevention is worth a pound of cure.

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.

William F. Hanna, Esquire
Hyland Levin Shapiro LLP
hanna@hylandlevin.com
Hyland Levin Shapiro LLP
6000 Sagemore Drive, Suite 6301
Marlton, NJ 08053-3900
(p) 856.355.2900

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