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June 18, 2014
Philly's Apartment Heat Wave
Thought today's temps were hot? Try Philly multifamily. (Figuratively, of course... most units in the city have air conditioning.) Values are rising because there's a ton of equity driving deals—buyers are even underwriting more aggressively than brokers. And expect an even more sweltering summer, according to HFF senior managing directors Mark Thomson and Zac Pierce.
The duo just closed on the $38M sale of the 150-unit Presidential Palace in Lebanon, NJ (above) and brokered the sale of the 502-unit Charter Court at East Falls (below) in March. Even though HFF onlyopened its Philly office in December, it's already amassed $400M in total inventory. Zac and Mark say that their collaboration with other HFF offices—including Northern NJ (wow, North Jersey is willing to sneak away and play with Philly behind NY's back... scandalous!), whose Jose Cruz recruited them from Marcus and Millichap—helps them to import capital from other East Coast markets where cap rates have compressed. (Treetop Development out of Teaneck, NJ, made Charter Court its first area buy.)
Zac adds to expect a flurry of activity over the summer as multifamily occupancy increases, with focus on Center City and transit-oriented Main Line towns. (Probably the surest forecast we've heard since that octopus predicted all the World Cup games.) They're also looking toward expanding their Conshohocken office, which covers the Tri-State, Central PA, and Central Jersey. So far, HFF debt and equity specialists Ryan Ade and James Conley, retail specialist Chris Munley, and seven support staff are already on board.
MontCo's One-of-a-Kind Towers
The Towers at Wyncote, a 1,095-unit, three-building complex, has a new owner. Lindy Property Management purchased the property from Fairfield Residential through a $92M acquisition loan arranged by Meridian Capital, accounting for 80% of the purchase price. CBRE's John McFadden and Bob Miller repped the seller, while SVP David Fisher of Meridian's NJ team repped the buyer on the loan, which came from New York Community Bank. For its size and location, the property is one of a kind, says Israel Schubert, Meridian's senior managing director and NJ office head, calling the recently renovated product a great deal for the price. The buyer will seek to enhance the sense of community among the towers—it certainly has lots of amenities to make it into a destination, he says (think tennis courts, a swimming pool, spa, sports complex, and business center... we'll grab our sunscreen).
Spire Creative Group Builds Brands
Spire Creative Group, a boutique real estate creative agency, continues to take on a diverse array of marketing challenges in an aspiration to grow its national presence. Clients include giants such as JLL, Cushman & Wakefield, HFF, NGKF, and Vornado (and many others) who rely on Spire for graphic design, branding, creative cartography, motion graphics, interactive projects, and other components of the digital age. President Tom Sepanski (orange shirt) considers their creativity, innovation, attention to detail, and can-do attitude to be Spire's core strengths. Its highly customized approach allows its clients to differentiate properties in a crowded real estate environment. Whether it's office memorandums for office/hotel/industrial/multifamily assets, high-end leasing brochures, or complete branding campaigns, Spire has successfully helped to market over 8,000 commercial real estate properties nationwide. For more info on our sponsor, and to check out Spire's work online, click here.
The New Safety Dance
As anyone knows, going an entire quarter without a mishap is a pretty big deal (we can't even avoid papercuts every few days). Skanska's greater Philly office was able to achieve zero lost-time incidents at its area projects in Q1, like its $15M renovation of the Sterling Apartment Complex on JFK Boulevard. At its sixth annual Injury-Free Environment Subcontractor Outreach event last week at Drexel, it brought together more than 65 regional contractors to discuss best practices for preventing accidents at construction sites. Here, Skanska EVP Ed Szwarc (second from left) and Philly safety director Frank Baxter (right) join Component Assembly Systems' John McTear, Battaglia Electric's Phil Immediato, Degli Obizzi & Sons' Ralph Degli, and Cippco Contracting's Mercedes Cippolloni.
No, a pesky Asian tiger mosquito didn't get loose in the room. They're doing what Skanska calls “stretch and flex,” which Ed tells us is performed at all of its job sites and offices before work, part of what allowed them to be accident free. Ed says that safety begins with regular communication with workers (he visits at least one job site every week) and by instilling it as a new way of life that's not just exclusive to the job. At the Sterling Apartment Complex, pedestrian safety is at the top of the list, he says, as the building's lobby, retail spaces, fitness center, and rooftop pool are renovated and upgraded.
YOU TELL US: Should Real Estate Drones Be Regulated?
While the FAA has yet to decide how to regulate drones for commercial use, the remote-controlled, unmanned aerial vehicles are already being put to work in commercial real estate. Developers and construction managers are using them to keep track of a development's progress, while owners and brokers are using them to show space from an entirely new perspective. While many folks in the industry are embracing the new technology, it's also been met with some reservations, with naysayers citing “huge invasions of privacy” and safety concerns. Should regulations be put in place for drone use in commercial real estate? Read our story in Real Estate Bisnow National and tell us your thoughts by clicking the survey to the left.
Last Chance to Register for Bisnow's Delaware State of the Market
Bisnow will be at the state-of-the-art Chase Center on the Wilmington Waterfront June 19 (yes, that's tomorrow) to host our 2nd annual Delaware State of the Market event. Speakers include Delaware Economic Development Office's Alan Levin, Brandywine Realty's Larry Maister, BPG's Karl Wagner, and CBRE's John Kaczowka. They'll discuss the latest commercial real estate happenings in the First State, including which submarkets are showing resurgence, the best asset classes, direction of rental rates, and investment opportunities. Don't miss out—register now!
