A local real estate firm bought a multifamily community in West Virginia for $43 million.
DLP Real Estate Capital of Hanover Township, Northampton County, said it bought Wexford Village at Devonshire Apartments, a 340-unit apartment community in Scott Depot, West Virginia, a submarket of Charleston, South Carolina.
The company made the announcement in a news release today, noting that it’s DLP’s first footprint into “The Mountain State.”
Wexford Village has 340 units in 14 buildings, ranging in sizes from one to three-bedrooms. The property has shown monthly rental growth in the past year, with total income 7.9% higher in July 2019 than July 2018.
By adding the property to its portfolio, DLP Real Estate Capital said there is a pent-up demand for high-end interiors, which it will invest in providing to its current and future residents.
Charles Wentworth, senior vice president of Colliers International, brokered the sale.
“For renovations, we’ve budgeted to bring phase I unit interiors in line with those of phase II, namely by adding stainless steel appliances, upgraded counter tops, new cabinetry, as well as a combination of new carpeting in bedrooms complemented by luxury plank flooring in the wet/living areas,” said Nicholas Lanni, senior associate of investments at DLP Real Estate Capital in a statement. “Additionally, we’ve outlined a budget for the following attractive, modern amenities and external treatments to be added to complement the luxuries and conveniences at the property: facade updates, pool upgrades, fitness center upgrades, and a bark park, as well as bettering the parking areas and HVAC.”
At present, DLP manages roughly 40 communities, some of which are singular properties and others of which are portfolios of multiple, geographically-proximate assets.
The owner of The Social Tour, a new traveling networking company that opened in downtown Easton, hopes to create an atmosphere for creative professionals to gather and work on their craft.
The space inside 12 S. Sitgreaves St. allows creatives to get together for networking, but also to create networking events in other cities and states.
“I wanted to connect other creative individuals off of their social networks,” said owner Justin Little. “We will travel city to city and state to state.”
He plans to build the locations and networking events around the people who gather at the Easton headquarters.
Though the headquarters opened Friday, Little said he started the first networking event at Montclair Chill, a venue in Montclair, New Jersey, in April. Then, The Social Tour hosted an event at Revel Social, a now-shuttered bar/nightclub in Bethlehem.
Next, he is planning to host a networking event in Los Angeles on April 18.
Little has been doing photography since he was 17 and had always wanted to create a place where creative people could gather. He was inspired to start The Social Tour after an open mic event in March, 2018.
For its grand opening, The Social Tour hosted a mini-festival on Feb. 29 and an art show on Feb. 28 with an art show featuring artists from all over the Allentown, Bethlehem and Easton area, he said.
The Easton headquarters offers free membership in addition to a monthly paid membership for $12, which included a one-on-one workshop.
The space offers a venue for hosting podcasts, poetry readings, art activities and other events.
A Berks County boat parts manufacturer plans to expand in the county and move its out-of-state headquarters there as well, committing more than $11 million for the project and creating nearly 100 jobs.
Gov. Tom Wolf said Seakeeper, which makes gyroscopes for boats, is expanding its Berks County manufacturing operation in Mohnton and moving its Maryland headquarters to Pennsylvania. The project will create nearly 100 family-sustaining jobs in the region.
“Just as boats need gyroscopes, businesses need guidance to stabilize and optimize their operations,” Wolf said in a news release. “Seakeeper’s decision to move its headquarters to Pennsylvania signals that we offer the support needed for businesses to have a competitive advantage and see a future in the commonwealth.”
As part of Seakeeper’s expansion and relocation, the company will renovate its existing campus at 2 W. Wyomissing Ave. in Mohnton and acquire an adjacent building, increasing its operational space to seven buildings and 180,000 square feet. The expansion will create 97 new full-time jobs and retain 97 existing jobs. The company says it will invest $11.1 million in the project. The site will also be its new headquarters. Company officials were not immediately available for comment.
“We are extremely grateful to have found our home here in Berks County, and thankful for the support of the Governor’s Action Team,” said Seakeeper President and CEO Andrew Semprevivio, in a statement. “We have incredibly passionate and hardworking employees and we’re in a town and state governed by leaders who recognize innovation and support growing local businesses. This community is our family.”
Seakeeper received a funding proposal from the Department of Community and Economic Development for the project. The proposal includes a $400,000 Pennsylvania First grant, $291,000 in job creation tax credits to be distributed upon creation of the new jobs, and a $66,000 workforce development grant to help the company train workers. DCED also encouraged the company to apply for a $2.4 million loan through the Pennsylvania Industrial Development Authority.
The Governor’s Action Team coordinated the project. The group of economic development professionals reports directly to the governor and works with businesses that are considering relocating to or expanding in Pennsylvania.
“Greater Reading knows the power that comes from supporting the expansion and growth of our existing businesses,” said Greater Reading Chamber Alliance Executive Vice President and COO Pamela Shupp in a statement. “Companies like Seakeeper are important economic engines for our community and garnering state support for these expansions is critically important.”
Seakeeper is a global leader in marine stabilization. Their innovative technology changes the boating experience by eliminating up to 95 percent of boat roll – the rocking motion that causes seasickness, fatigue, and anxiety.
States where medical or recreational adult-use marijuana has been legalized have seen a boost to their commercial real estate markets.
“As more states legalize marijuana, the real estate market will progressively have to adjust,” said Jessica Lautz, vice president of demographics and behavioral insights for NAR. “From property owners, to manufacturers, to those who simply want to engage for leisure – it all touches real estate in some form.”
A survey conducted by the NAR found that more than a third of its members in states that legalized marijuana for medical and recreational use saw an increase in requests for warehouses or properties used for storage. In those same states, up to a quarter of members said the demand for storefronts grew, while a fifth said there was a greater demand for land.
But, Pennsylvania, which has only legalized medical marijuana, isn’t seeing quite as much of an impact as other states with medicinal marijuana. And Realtors in the region say they think the impact of the legalization of recreational marijuana, which is being promoted by Lt. Gov. John Fetterman, would be significant but not extraordinary.
Del Markward, president of the Markward Group in Allentown, has been keeping an eye on how the relatively new medical marijuana industry is impacting commercial real estate in eastern Pennsylvania.
“We worked on a couple of the original grow buildings in the area,” he said. “They [the state] didn’t issue very many permits so it’s not that big of an impact.”
The buildings being used by the industry are smaller than those typically used by manufacturers, Markward said. A growing facility is typically between 25,000 and 50,000 square feet, while many other manufactures in the region have facilities that are several hundred thousand square feet.
The real impact is in warehousing, he said, and since the eastern half of the state already has a robust warehousing market it’s not filling a real need.
“I have friends out in Colorado bragging that their rents are going up,” Markward said. But, since this region already has such a competitive market, he isn’t seeing that much of an impact. Likewise, because of the limited number of permits being issued, the impact of medical marijuana on the retail market hasn’t been huge.
There would be a larger impact if recreational adult-use marijuana was legalized because there would be a need for places for people to buy and perhaps even use the marijuana, Markward said.
Still, size is an issue.
Markward said there is an obvious need to fill empty retail store fronts in the region and marijuana retail locations will be filling some of that need – just not enough of it. Current dispensaries and any marijuana retailers that might appear if cannabis is legalized for recreational use, tend to be between 2,000 and 10,000 square feet.
“When you have all of these empty Kmart and Sears stores that are 120,000 square feet that’s not a huge net absorption,” he said.
Ultimately, Pennsylvania would see a positive impact on its commercial real estate market should marijuana legalization laws be extended, just not a huge one.
“Staff and leadership at the Greater Lehigh Valley Realtors have been actively monitoring marijuana legislation coming out of Harrisburg and are keeping a pulse on how current and future legislation could affect real estate, both residentially and commercially,” said Justin Porembo, CEO.
For residential real estate Porembo said the organization is honed in on how marijuana legislation could affect or change fair housing and anti-discrimination laws.
The Association, however, has not taken an official position on the legality of marijuana, whether for medicinal or recreational purposes.
A multi-story building that’s been vacant for several years is now home to new coworking space in downtown Easton.
Mark Calafatello and his wife, Maryanne Russell, two former New Yorkers who live in Williams Township near Easton, completed the transformation of the six-story building at 403 Northampton St. into high-end co-working space and had a soft opening last week.
They plan to have an official ribbon cutting on March 2 and will begin their advertising campaign in mid-March.
The property, Reeds403 Co-working Lounge, has 3,000 square feet available on the first and second floors, and another 3,000 square feet on the upper floors if needed.
So far, the feedback they’ve received is positive, he said. Users have 24-hour access to the building via a key on the member’s smartphone. Members pay $100 per month to use the space.
“The range of age and industry has been great, everything from professors at Lafayette to people who are newly displaced and looking for places to work,” Calafatello said.
People are also showing interest in using the space as a gathering place, including women’s groups who want to use it for potluck dinners, he added.
The space as not just serving office workers but people in the community looking for a place with a relaxing, yet high-end vibe.
He’s seeing different types of people getting together in the space, “bridging communities with like-minded ideas.”
“For me, diversity is what keeps it exciting and interesting,” Calafatello said. “So far, all the feedback has been great.”
A Dollar General store is under construction on Walbert Avenue in South Whitehall Township, with a targeted completion this spring.
Mike Goffredo Jr., vice president of MSG Associates of Moore Township, said his company is building the store, which will be about 9,000 square feet and should be finished in May.
His company has built several Dollar General stores and this project should cost about $1 million, he added.
Workers are completing interior framing, finishing the roofing and trim, concrete and sidewalks as well as site utilities and storm water drainage, in addition to plumbing, mechanical and electrical work. Parking will be on the east side of the building.
The new store will be at 2032/2070 Walbert Ave.
The site is near Kay Builders 788-unit mixed-use project set to go up at the corner of North Cedar Crest Boulevard and Walbert Avenue.
MSG Associates recently relocated from Wind Gap to 553 Nazareth Drive in Moore Township, according to Goffredo.
“We are still getting a ton of offers on anything for $400,000 and below,” said Jack Gross, president of GLVR. “It’s a great time to be a seller and a challenge to be a buyer. Until inventory increases, I don’t see a change to it.”
The 25.4 percent decrease in inventory from the previous year, as reported in the GLVR annual data for 2019, when inventory was already low, was a surprising figure, according to Gross. In addition, this led to a months’ supply of inventory that was down 25 percent to 1.8 months, a record low, according to the annual report. In a housing market balanced between buyers and sellers, the months’ supply of inventory is between six and seven months.
“A lot of the new construction being done is apartments,” Gross said. “There’s definitely a lack of inventory and that’s a problem.”
However, nationally, there could be hope for an increase in housing construction.
Nationally, new home construction sales should increase 10 percent in 2020, according to Lawrence Yun, chief economist for the National Association of Realtors.
“National median home price growth is in no danger of falling due to inventory shortages and will rise by 4 percent,” Yun said in the report.
Yun and others would like to see more affordable units in the market to help ease shortages and slow price gains in that segment.
For the Lehigh Valley, new listings decreased 20.8 percent to 644 in January, a drop from 813 in January 2019.
Pending sales were up 15 percent to 613 in January, an increase from 533 in January 2019.
Inventory levels shrank 34.8 percent to 1,138 units in January, a drop from 1,745 in January 2019.
Prices stayed even with last year, as the median sales price held steady at $185,000.
The figure for days on the market dropped 14.9 percent to 40 days, a drop from 47 days in January 2019.
Also in January, the months’ supply of inventory was down 36 percent to 1.6 months, a drop from 2.5 months in January 2019.
In addition, the average sales price decreased slightly, down 2.6 percent to $211,777, a drop from $217,403 in January 2019.
According to the GLVR, low interest rates and low unemployment, coupled with rising national rents, should encourage healthy buyer demand for the spring housing market.
A special committee appointed by Easton Mayor Sal Panto has urged city council to approve a plan to add nearly 200 apartment units, artist studios and 32,000 square feet of combined retail, office, and entertainment space to downtown Easton on the former Days Inn property.
The committee recommended Peron Development of Bethlehem as the developer of the nearly 4-acre site at the corner of Larry Holmes Drive and South Third Street. The committee interviewed the developers, ranked and rated their proposals, and held a subsequent clarification meeting to confirm their finalist.
City council will review the committee’s recommendation and plans to make a decision on the developer on March 11.
According to a presentation on the city’s website, the proposal calls for a mixed-use project called The Confluence, comprised of three buildings that overlook the Delaware and Lehigh rivers. The project at 185 S. Third St. would include 227 parking spaces. City Hall is next door, which has a capacity of 236 spaces.
Project amenities would include a kayak/bike share for residents, the construction of a rooftop park to offer views of the waterfront, and walkability improvements.
The project would go up across from the Heritage Riverview project under construction, the future home of Hearst Magazines.
Peron is also developing the Easton North Third Street Apartments, also called, The Seville, a 70-unit apartment building on the North Third Street parking lot.
Matthew Malozi, president of Civitas Regio of Allentown, a civil engineering firm that’s part of the development team, said the design is still in progress, largely driven by the public nature of the project.
The city has a desire for the community to be involved in the process, he added.
Fourteen of the 17 committee members voted in favor of the proposal, he said. Furthermore, the city will host several public meetings about the proposal throughout the fall.
“The initial proposal was very sensitive to the historic district,” Malozi said. “It appears to me that the city is taking its time because they want a quality project, they want community involvement.”
The other firms that are part of Peron’s team on this project are USA Architects of Easton, Boyle Construction of South Whitehall Township and Omnes Landscape Architecture Planning & Art of Easton.
John Callahan, director of business development for Peron Development, said Easton offers a very strong quality of life and there’s a tremendous opportunity for high-end apartments.
He plans to start construction on The Seville project in April, which adds more residences to the downtown.
“We are very bullish on Easton and tried to present a development that has a very broad mix of uses,” Callahan said.
That includes the potential for a 60-room boutique hotel on the former Days Inn property, in addition to the other uses.
“Our first preference would be to put a hotel there,” Callahan said. “We are very early in the process. There’s a lot to work our way through. The plan really reflects a lot of the wishes of the committee.”
He estimated the project would be in the $70 million range.
Since the property is in a floodplain, the developers would elevate the structures on the land, which allows for parking on the ground floor. On the side closer to Fourth Street, there’s potential for underground parking, he added.
A local firm has begun offering a $1 billion private real estate investment fund that combines debt funding with equity investments.
DLP Capital Partners of Hanover Township, Northampton County, announced the DLP housing fund last week at an investor dinner at ArtsQuest in Bethlehem.
Company executives describe the fund as an “evergreen” or open-ended hybrid fund that combines the firm’s multifamily investment and direct lending strategies in a single fund.
“Historically, we have had two separate funds, lending and multifamily,” said Larry Hickernell, senior investor success manager of DLP Capital Partners. “Lending has always been a separate fund.”
On the equity side, DLP’s multifamily investment fund was a closed-end fund that expired at the end of a five-to-seven year term.
With the housing fund, DLP never plans to close it, since the firm will be buying and selling properties all year long, Hickernell said.
The housing fund is DLP’s eighth fund in eight years and it allows the firm to work with larger investors, he said. DLP targeted 12% or higher equity returns for this fund.
“They get the benefits of investing in real estate, but in a passive way,” Hickernell said.
The frequency of distributions is also different, as this fund allows the firm to provide monthly distributions to investors so they can grow their portfolio.
Overall, the housing fund offers investors greater flexibility. They have the ability to stay in the fund, buy more shares or exit if they want, said Richard Delgado, managing director of DLP Capital Partners. DLP structured the fund so investors can exit after a year.
Furthermore, DLP pays investors before the fund takes any money from them, added Hickernell.
Today, the company has almost 850 investors, whom Delgado described as high-net-worth individuals.
“People invest retirement money with us as well,” Delgado said. “We have a huge group of investors in the Lehigh Valley. When we did a $1 billion fund, we wanted to accommodate those larger investors.”
The target minimum investment for this fund is $250,000.
Throughout the year, DLP will conduct about 15 to 20 events to promote the housing fund to investors.
“We commit to no less than 5% invested cash,” Delgado said. “We are actually investing alongside them. Right now, the firm invests about 40% of its own money in its other funds.
For the housing fund, DLP is investing 5%.
Overall, many of DLP’s investors are long-term clients.
“People like staying with us because they like our returns, understand our strategy,” Hickernell said.
The housing fund allows DLP to buy assets that it can hold longer, which benefits investors greatly, said Delgado.
The source of these funds comes from non-luxury, affordable housing investments.
On the equity side, DLP buys affordable multifamily housing complexes, both apartments and houses.
“We think in America, there’s a huge shortage and that continues to grow,” Delgado said.
Apartments that typically rent for $600 to $900 are always going to hold as an asset in cyclical markets, and there’s particularly strong demand in the southeast, he said.
The firm then adds upgrades and sometimes provides better management to increase the value of the property.
“We do a lot to make these appealing places to live,” he added.
Since the firm offers short-term loans to investors, Delgado said there’s minimal risk.
“They get their money back very quickly,” Delgado said.
DLP Capital Partners is part of the DLP Real Estate Capital family of companies.
The owner of a number of local mall properties announced today that it plans to acquire another major mall operator for about $3.6 billion.
Simon Property Group Inc., which is headquartered in Indianapolis, said it plans to acquire Taubman Centers Inc. of Bloomfield Hills, Michigan.
The company said it will acquire 80% ownership of the Taubman Realty Group Limited Partnership for $52.50 per share in cash.
The Taubman family will remain a 20% partner in TRG.
Simon is the owner of such shopping centers as the Lehigh Valley Mall in Whitehall, The Crossings Premium Outlets in Tannersville and the Philadelphia Premium Outlets in Pottstown.
David Simon, president, chairman and CEO of Simon Property Group, said the acquisition will help TRG invest in “innovative retail environments for retailers and consumers, deliver exciting shopping and entertainment experiences to consumers, and create new job prospects for local communities.”
Simon said he expects to fund the $3.6 billion deal with existing liquidity.
The buildings and structures that comprise the long dormant Allentown State Hospital will start coming down this summer.
Demolition contractor Neuber Demolition & Environmental Services of Gilbertsville, Montgomery County, will start July 10 and finish in February 2021, with a completion of its contract work in May 2021, according to a proposal.
The Pennsylvania Department of General Services selected the firm last year for the demolition of the 100-year-old structures and buildings on the state-owned property at 1600 Hanover Ave.
The $10 million project includes demolition of 44 buildings and other structures on about 200 acres, treatment of hazardous materials, utility termination, site restoration, historical salvage, and design documents.
State Rep. Mike Schlossberg (D-Lehigh), said the property costs taxpayers $2 million a year for maintenance. He supported demolition because he believes the value of the property will go up once the buildings go down. A mixed-use site would be the best use of the property, he said.
“It’s a huge site with a lot of potential,” Schlossberg said.
The new use could include light industrial/manufacturing, which is in demand in the area, Schlossberg said.
“You can turn the property into something that will generate jobs,” Schlossberg said.
In addition, the property could have some small components of retail and residential uses, preferably age-restricted housing, he added.
“There’s definitely traffic and access concerns,” Schlossberg said.
However, starting with a cleared site would allow for a fresh start to redevelopment, he added.
Overall, he said the redevelopment should fit in with the neighborhood.
Schlossberg is on a committee that oversees redevelopment of the site and also solicits and accepts proposals for redevelopment.
“There’s going to be a public outreach component,” he said. “We want to be further ahead in the demolition process before we start that.”
Lehigh Financial’s Mike Gilbert said the Martinezes, who renovated part of the project last year, will use the new funding to make extensive renovations to the main building and a large portion of the storage buildings.
“We refinanced to be able to add a new roof to the main building, paint the outside, install new windows, upgrade the HVAC and overhaul another building in the back of the 25,000-square-foot-property,” Martinez said.
When they finish renovations this summer, Martinez said he hopes to find new tenants for the other building near the restaurant, which could offer space for medical or commercial tenants. He currently has a mix of contractors, landscapers and smaller self-storage units in the building.
The first Mex Grill in the valley opened in the College Hill section of Easton in 2011. However, it closed in June when Lafayette College began building dorms on that block.
Martinez said the college was upfront in letting him know their plans for building student housing on that block about four years ago. Martinez said the college’s decision is why he is renovating a space inside The Spot that will become a new Mex Grill location at the base of College Hill near the college.
“We will be instrumental in helping him get financing for that as well,” Gilbert said.
Martinez has a lease agreement with Lafayette, which owns the property, and he will use the entire site for his restaurant, which will have the same menu as his other locations.
“We are a month away from opening,” he said. “We developed an awesome relationship with students and staff. For now, the goal is to continue to add more value for our customers.”
Martinez said he began the relationship with Lehigh Financial last year.
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