Weiss Realty Acquires 48,492 SF Office Building in Neptune, New Jersey, for $8.6M

Weiss Realty Acquires 48,492 SF Office Building in Neptune, New Jersey, for $8.6M

Hackensack Meridian, the Department of Treasury for the State of New Jersey and West Lake Pharmacy are tenants at the 48,492-square-foot office building located at 1800-1836 W. Lake Ave. in Neptune, N.J.

NEPTUNE, N.J. — An affiliate of Weiss Realty has acquired an office building located at 1800-1836 W. Lake Ave. in Neptune for $8.6 million. James Gunning, Donna Falzarano and Kyle Saviano of CBRE Capital Markets Debt and Structured Finance arranged a $6 million permanent loan from Natixis of behalf of the buyers, West Lake Neptune LLC and West Lake Neptune 11 LLC, for the acquisition. Built in 2010, The three-story building offers 48,492 square feet of office space. Current tenants include Hackensack Meridian Health, the Department of Treasury for the State of New Jersey and West Lake Pharmacy. Fred Meyer of NAI Mertz and Jack Sudia of NAI Atlantic Coast Realty brokered the transaction. The Meyner and Landis Law Firm of Newark, N.J., represented the undisclosed seller, while Saverio Celeste of Fort Lee and William Schmidt of West Orange represented the buyer in the deal.

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NJ Warehouse Market at Historic Levels

The growth of online shopping, which is stretching package delivery systems across the U.S., is sparking a frenzy in New Jersey’s commercial real-estate market.

Despite a feverish pace of construction in recent years, tight inventories and surging demand are driving rents for New Jersey warehouse space to new highs, according to a report from CBRE Group Inc.

By the third quarter of this year, developers added about 7.8 million square feet of space, 83% more than in all of last year, according to CBRE. By the end of 2017, new industrial space completed is expected to reach 11.2 million square feet, more than twice the amount built in 2016 statewide.

Rents have been on an upward march since 2012, surpassing a 2004 high of $6.23 a square foot last year and reaching $6.64 in the third quarter of 2017.

The demand for space isn’t expected to let up anytime soon, real-estate brokers and consultants said, and so rents could keep rising.

Demand for New Jersey Warehouse Space Skyrockets
Behind the growing demand, in addition to online shopping and the drive for faster deliveries, is the ability of larger ships to get to local ports, expansion of food and beverage delivery, and displaced warehouse tenants from New York, said Bill Waxman, an executive vice president at CBRE.

“It has been nonstop,” he said of businesses’ hunt for space. “From paper companies to packaging companies to internet sellers, brick-and-mortar sellers…everybody is looking at their supply chain. New Jersey is unique in its location and ability to service a huge consumer zone.”

New Jersey’s real-estate market is being swept up in a sea change that is reshaping the U.S. retail sector as online shopping gains ground. Department-store chains and clothing retailers have been among the most prominent casualties, shuttering thousands of store locations across the U.S. in recent years, leading mall landlords to scramble for new tenants.

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Reputed Mobster Sells Land to NJ Transit

NJ Transit wanted the land for its plan to build a tunnel connecting New York and New Jersey. After the project was canceled, the family of a reputed mobster that owned the land wanted the money.

Now the family of Carmine “Papa Smurf” Franco have gotten a nice payout from the transit agency to help settle the dispute: $6.13 million, according to a settlement agreement NJ Transit.

The settlement ended a seven-year dispute with Franco’s family since the land was condemned for the rail project, which was supposed to double the train capacity between New York and New Jersey. The project was canceled by Gov. Chris Christie in October 2010. Much of the money was expected to be distributed through wire transfers by Sept. 1.

NJ Transit said it approved the settlement with Franco’s family four months ago. NJ.com made the settlement public in an article this week. NJ Transit confirmed the settlement to Patch and emailed a copy of the agreement.

The 1.89-acre tract is located on the border of Hoboken, Weehawken and Union City. The two sides fought in court over the land that was valued at $8.15 million.

Franco, a 77-year-old Genovese Crime Family associate, has long been suspected of having mob ties and was once banned from the trash business in New Jersey, court papers said. In 1998, he was sentenced to prison and agreed to pay $11.5 million to the state and Bergen County for illegally carting trash out of state.

Franco was then busted in 2013 for being the ringleader of a scheme to control crooked waste management companies, law enforcement officials said.

Franco was one of 32 people in New York and New Jersey charged in the FBI-run takedown that included members of several crime families, authorities said. Franco was allegedly at the center of a scheme involving three well-known mob families, the Genovese, Gambino and Lucchese crime families.

According to U.S. Attorney’s Office release, Franco was one of 12 people who controlled crooked waste management companies that were officially owned by people who had no past ties to organized crime, who were known as “controlled members.” He was later convicted in 2014 and served a year in jail.

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How will new tax bill affect Real Estate in NY and NJ?

The U.S. Senate and House of Representatives on Monday began the grueling process of hashing out the disparities between their tax bills — a task that will require reconciling hundreds of billions of dollars in differences.
The two versions of the legislation are a bit of a mixed bag for the real estate industry — disproportionately favoring the commercial sector over residential. Limited liability companies (LLCs) and real estate investment trusts win big under both. Homeowners? Not so much.
Heidi Learner, chief economist of Savills Studley, warned that the benefits will likely come at a cost. After all, the $1 trillion that is expected to be added to the federal budget deficit — as estimated by the Joint Committee in Taxation — will need to be made up for elsewhere.
“From the commercial front, the treatment is quite favorable,” Learner said. “But any perks could be offset by higher interest rates.”
The Real Estate Board of New York has also spoken out against the elimination of the federal deduction of state income taxes, and has voiced concerns over the impact the House’s version will have on affordable housing construction.
“The tax reform legislation under consideration contains elements that will promote economic growth and job creation,” REBNY President John Banks said in a statement. “There are several issues, however, with which we remain deeply concerned.”
Here are the issues that will most dramatically impact the real estate industry:
1. Pass-through deductions
The biggest developers and investors in New York City, Los Angeles and Miami rely extensively on LLCs and partnerships. For this reason, the increase in tax cuts for pass-through entities — which don’t pay income taxes at the corporate level — is likely a significant boon to the industry. The House version caps the pass-through rate at 25 percent, down from the current 39.6 percent. The Senate version allows such businesses to exclude 22.4 percent of their income from taxes.
“This could certainly cause a lot of people to rethink how they structure their business,” Learner said. She noted that more owners may opt to form LLCs or other partnerships to benefit from the deduction.
Real estate investment trusts (REITs) will also benefit from the lower pass-through rates, as the New York Times noted.
2. Corporate tax cuts
Both the Senate and House versions of the bill slash the corporate tax rate from 35 percent to 20 percent. The House version kicks in next year, while the Senate version starts in 2019.
3. Depreciation
The Senate bill shortens the depreciable life of commercial assets from 39 years to 25 years, meaning that the rate at which property owners can take these deductions is sped up, according to the Times. Shimon Shkury, founder of Ariel Property Advisors, says the change is a win for commercial property owners.
“The property owner has a non-cash deduction, and essentially shelters more income,” he said.
4. Estate tax
This one’s for the real estate dynasties. The Senate version of the bill would double the federal estate tax exemption levels — currently a 40 percent tax on estates worth more than $5.49 million for individuals, and nearly $11 million for married couples. The House bill would do the same until 2024, when it proposes to repeal the estate tax altogether. According to the Times, President Trump would save $1.1 billion under the House’s bill.
5. Private activity bonds
City officials estimate that the elimination of private activity bonds would mean 10,000 less affordable housing units will be created or preserved each year — in New York, that could cut the de Blasio administration’s goals roughly in half. These bonds are used to claim 4 percent tax credits each year (which yield approximately 30 percent of the cost of constructing low-income housing over a 10-year period), and are a major source of funding for affordable housing across the country.
“You would be looking at a 65 percent reduction in the production of affordable housing [nationwide],” said Chris Eisenzimmer, director of affordable development at Greystone. “It’s creating a lot of uncertainty amongst investors and owners.”
The House bill revokes private activity bonds, while the Senate version leaves them intact.
6. Mortgage and property tax deductions
The House version caps mortgage interest deductions at $500,000, down from $1 million. The Senate’s bill doesn’t change the cap on these deductions but eliminates them for home equity loans, the Washington Post reported. The Senate version has also decided to follow the House in allowing deductions on property taxes of up to $10,000.
Bonus: Private jets!
The inclusion of a tax break for private jet owners in the Senate version of the bill inspired a flurry of angry tweets and stories this month. The measure, however, actually tweaks an existing tax law to assure that private jet owners don’t get hit with a “ticket tax,” which is intended for commercial airlines, according to the Wall Street Journal. Still, the private jet owners out there — Steve Witkoff, Jeff Greene, Michael Stern and Richard LeFrak, to name a few — are probably pleased with the change.
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One Newark Center SOLD

A Chinese firm is investing in Newark.

Beijing Ideal Group, a investment and development company, purchased most of One Newark Center, a 22-story building on Raymond Boulevard near Military Park and Newark Penn Station, commercial realtor JLL announced this week.

The financial details of the company’s purchase from its previous owners, Mack-Cali Realty Corp. and The Praedium Group, were not disclosed. But, Cushman and Wakefield, a real estate services firm, announced earlier this month it had secured $66.58 million in financing for the Chinese company to buy the sixth through 22nd floors of the building. The first five floors will remain Seton Hall Law School, and were not part of the sale.

Morgan Stanley put up the 10-year, fixed rate financing for the sale, Cushman and Wakefield said.

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Cushman & Wakefield Brokers $66.6M in Financing for One Newark Center in New Jersey

Cushman & Wakefield Brokers $66.6M in Financing for One Newark Center in New Jersey
Located at 1085 Raymond Blvd. in Newark, N.J., One Newark Center features 423,028 square feet of office space.

NEWARK, N.J. — Cushman & Wakefield has arranged $66.6 million in acquisition financing secured by One Newark Center, located at 1085 Raymond Blvd. in Newark, for Beijing Ideal Group. Morgan Stanley Bank provided the 10-year, fixed-rate financing. The property in the transaction represented floors 6 through 22 of One Newark Center, a 22-story, 423,028-square-foot office building, along with the adjacent 10-story parking garage. John Alascio, Sridhar Vankayala and Noble Carpenter of Cushman & Wakefield represented the borrower in the transaction.

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The Importance of a Tenant Representative

The Importance of a Tenant Rep

By Don Catalano

When you’re looking to relocate your offices or are expanding to a whole new market, you want to end up with the best space for your needs and be able to secure that unit for a fair price. Having a tenant rep broker on your side is crucial to accomplishing those goals.

Here are the top reasons why you should contact one before you begin searching for properties:


1. The Landlord Isn’t On Your Side

The goal of any landlord is to maximize the income that they make from renting their units. When you get to the negotiating table, you need someone who knows the commercial real estate market inside and out looking after your interests. Otherwise, you can’t be certain that you’re receiving a fair deal.


2. You Can’t Get In to See Every Property

Often times, office spaces in highly desirable buildings and locations within a city fill up before the property is even advertised as being available. If you don’t have a tenant rep broker who can get you in the door at places that are newly vacant, you could miss out on great opportunities in your area.


3. You Have Enough to Do Already

If you truly want to get the best space for your business needs and your budget, you need to invest plenty of hours familiarizing yourself with the market and searching through listings to find properties that are a good match. A tenant rep broker will take over the responsibilities for you, so you can focus on running your business, not following the commercial real estate market.


4. You Don’t Know the Lingo

The language that is printed in commercial real estate leases and tossed around in negotiations isn’t something that you encounter every day. A tenant rep broker can take the time to explain unfamiliar terms to you and provide you with advice and guidance that can keep you from making the wrong decision.

5. You May Not Know Exactly What Space Is Right

You know your business inside and out, but you may not be able to see all the ways that your office space impacts your business. When you’re searching for a space, you may not think of an amenity or feature that could improve productivity, lower costs or otherwise benefit your business. With years of experience working with companies like yours, can help to identify just what you need from a space and help you find it.


6. You May Not Know the Right People

As negotiations progress, you may need the help of an outside professional like a real estate attorney or a licensed interior designer. Tenant rep brokers have established networks with professionals in a variety of fields and can help you easily find the right provider.


Having a tenant rep broker at your side can greatly improve your chances of securing the ideal space for your needs at a fair cost. Best of all, you won’t have to pay for his or her services. The tenant rep broker only gets compensated if you sign a lease, ensuring that he or she will go to great lengths to help you find your dream property at the right price.



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Hovnanian Sells World Headquarters

K. Hovnanian Enterprises, one of the nation’s largest homebuilders, announced last week it was accepting an unsolicited offer for the company’s world headquarters, 110 West Front St. While company representatives did not reveal the purchaser in the Sept. 7 press release, OceanFirst Bank, headquartered on Hooper Avenue in Toms River, has announced it is under contract to buy the site and will use the West Front Street location for additional offices for administrative uses.

“We’ve had significant expansion over the past two years,” said Jill Apito Hewitt, OceanFirst’s director of investor relations and corporate communications. With OceanFirst’s recent acquisitions and with another currently pending, the banking operation needed the additional location, she said.

K. Hovnanian plans on relocating to office space off Garden State Parkway Exit 120, in the Matawan/Old Bridge area. And while K. Hovnanian “remains committed to its roots in New Jersey” and will keep its official headquarters in Monmouth County, the company’s press statement acknowledged New Jersey represents about only five percent of its national homebuilding business. For the last 15 years Ara Hovnanian, the company’s chairman, president and chief executive officer, has maintained his offices in New York City, where he and his family live. “Mr. Hovnanian spends a significant amount of his time travelling across the country to the various divisions across 14 states,” the press release indicated.

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3 Tips To Make Search For Warehouse Space For Rent Easier!

A warehouse space for rent becomes a lifeline for your business if the nature of your business involves selling, storing and shipping physical products. You may rent an industrial space to store the inventory or purchase it, whichever suits you the most. However, renting comes affordable and quicker when you want to start your business activities right away. Warehouses fall under the category of industrial spaces which you can utilize for the storage of goods as and when needed. Take a sneak peek below to make your warehouse rental, your best initiative ever.

1. Pick A Strategic Location:

The foremost step while heading with a warehouse space for rent is to pick a strategic location that supports your business activities. Analyze how the location of the warehouse is impacting your business. The location should be such that it cuts down the logistics cost to optimal. For instance, picking a place located close to the airport could be your best bet for warehouse rental if the company indulges in international shipment.

2. Keep Room For Future Expansion:

No matter if you are currently operating out of a small warehouse, but it should have a room for expansion if the needs arise in future. Over time, your business may need to expand and demand more space, so you should better look out for a facility that can accommodate to the evolving needs.

3. Prefer A Safe Storage Environment:

The storage space must be mold free and well-maintained. You don’t want to end up spoiling your products with fungi and molds. The storage environment must be pest-free, especially if you are going to store perishable products. Furthermore, the warehouse must have a provision of air-conditioning for the sake of protecting your business goods. The warehouse design should restrict debris entering into the facility.

Looking for a warehouse space for rent NJ? Let Steven Muller help you get the best deal to fulfill your business needs. The listings for industrial space for rent/sale stay at the Steven’s fingertips, so his realty advice could save you thousands of dollars. He is a realtor who could make things work even on a small budget. Contact him now!

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Industrial Space Market Tightens Even More

Vacancy in the New Jersey industrial real estate market at mid-year 2015 dipped below 8.0 percent for the first time in more than six years, and occupancy gains finished in the green for the tenth consecutive quarter, according to East Rutherford-based Cushman & Wakefield. The commercial real estate services firm’s latest research findings also show continued brisk demand, a modest rise in asking rental rates and a healthy construction pipeline.

Overall vacancy dropped to 7.6 percent during the second quarter, down 0.4 percentage points from the end of March. Within the warehouse/distribution sector, the rate is nominally lower at 7.4 percent. “The warehouse market has strengthened considerably, with user demand offsetting significant product coming online in the form of new speculative development and large space dispositions,” noted Cushman & Wakefield’s Jason Price, research director – tri state suburbs. “We expect it will tighten even further during the second half of the year.”

New Jersey posted more than 5.9 million square feet of leasing activity during the second quarter, slightly ahead of the pace set during the first three months of 2015. With 11.8 million square feet of year-to-date leasing, the state is just behind the pace at mid-year 2014 (12.5 million square feet).

Fourteen new commitments in excess of 100,000 square feet were executed during the second quarter; half of these transactions were 200,000 square feet or greater. The largest involved Amazon’s 1.1 million-square-foot lease at 8003 Industrial Avenue in Carteret, Romark Logistics’ 359,950-square-foot lease at 23 Mack Drive in Edison and FedEx’s build-to-suit commitment for 315,000 at 1075 Secaucus Road in Secaucus. Renewal activity was strong as well, with 10 renewals in excess of 100,000 square feet. Among them, National Packaging Services signed a 300,000-square-foot renewal and expansion agreement at 1000 New County Road in Secaucus.

“This activity resulted in more than 3.3 million square feet of industrial space being absorbed year-to-date,” Price said. “Tenants absorbed 946,195 square feet in the second quarter alone. The Lower I-287, Upper I-287 and Meadowlands submarkets each recorded over 300,000 square feet of occupancy gains during the past three months.”

On the pricing front, New Jersey’s $6.38 per-square-foot average direct asking rental rate for industrial space is 3.1 percent higher than it was at mid-year 2014. In the warehouse/distribution sector, the average direct asking rent of $5.73 per square foot represents a hike of more than 13.0 percent over the past three years. The Lower 287, Port Region and Exit 8A submarkets saw their average direct rental rates edge higher in recent months.

Improving market fundamentals also continue to support new development. “After reaching a 14-year high in 2014, industrial construction remains steady in New Jersey,” Price said. “Just under 1.2 million square feet of product has been delivered year-to-date, including speculative buildings at 965 Cranbury South River Road (550,050 square feet) and 11 Corn Road (308,276 square feet) in South Brunswick.”

With another 3.3 million square feet currently under construction – heavily concentrated in the Lower 287 and Exit 8A submarkets – industrial space deliveries in 2015 are expected to outpace four of the previous five years in terms of volume. “Much of the product being developed is on a speculative basis,” Price said. “However, with net absorption easily outpacing construction the market is in no risk of becoming overbuilt in the near future.”

Price noted that Cushman & Wakefield anticipates the market will remain on track through the balance of 2015. “Healthy demand, including strong activity involving 3PLs and e-commerce retailers, should drive up rents in key submarkets through the end of the year,” he noted. “And despite a number of speculative space deliveries on the horizon, this demand will also result in space availabilities continuing to tighten – especially along the New Jersey Turnpike.”

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