Recently the International Council of Shopping Centers held an extensive three day workshop on Debt Workout, Transactions and Repositioning of Distressed Assets” held at the prestigious Wharton School of Business at the University of Pennsylvania.  Jacobs Realty Groups Vice President Peter Zingoni and President Jim Jacobs both attended the event and received their certifications as experts in the industry.

“We were the only local brokerage firm attending- and we definitely learned an awful lot with some of the best in the business throughout the country. There were some fantastic in-depth case studies, in terms of selling and buying distressed notes and repositioning a troubled asset. At Jacobs Realty Group, we’re dedicated to being the top 10 % in the industry, and this is certainly a terrific certification to have for sure….The course material was challenging for sure”.

The Jacobs Realty Group has since been working with several banks and portfolios to help them maximize value in this real estate recession. “We’re talking with banks on a daily basis. While this is a tough time for many, this also represents a tremendous opportunity for buyers with cash” said Jacobs. “We’re dealing with many different portfolios right now, and banks keep calling us to dispose of the assets. It’s unlike anything I’ve seen or any of us have seen for sure”

For more information contact:

Jim Jacobs

Jacobs Realty Group, LLC

610-293-2222 ext 102

jjacobs@jacobsrg.com

“All the agents on these transactions certainly got their share of grey hairs working on these deals!”said Jim Jacobs, the founder and president of the Jacobs Realty Group. “However, we’re a boutique firm and all about execution and getting deals to the finish line. One property had significant environmental issues and another was underwater with some mortgage issues. However the agents on all the transactions were able to get every deal to the finish line. In this economy and lending environment, that’s great to see that a brokerage is still making things happen!”.

Three properties recently transacted- a medical office building in Bryn Mawr of 9240 SF by former Philadelphia Flyer and Phantom, Peter Zingoni, a cluster of industrial buildings totaling 22,000 SF on 12 Acres in Exton by Bob DiSimone, and a former restaurant of 10,000 SF on 2 Acres in Spring House PA by Jim Jacobs. The Jacobs Realty Group has received much press lately, including being mentioned on the first page of USA Today newspaper a few months ago for their efforts.

For more information, or to sell or lease your property, contact the Jacobs Realty Group at 610-293-2222 ext 102

For more information:

Jim Jacobs

Jacobs Realty Group, LLC
610-293-2222 ext 102

jjacobs@jacobsrg.com

“Bryn Mawr, especially the medical office submarket, has many barriers to entry…” said Zingoni…”A client contacted me wanting to purchase a building in the Main Line for their medical office. It’s a tougher assignment than you would think because of supply and demand, however, we were able to identify a few alternatives and the clients are extremely pleased. You really need a broker who not only knows the properties on the market, but the ones off market and the special requirements that physicians have for their practices. We understand this and were able to get the deal done”

Peter recently procured a buyer for 1201 County Line Road in Bryn Mawr. “It’s a fantastic building with a long history of doctors making people better on the Main Line. “ said Jim Jacobs of Jacobs Realty Group….

Andy Spillard of Vista Realty Partners handled the listing side of the transaction.

The new partnership purchased the property for approximately $1,213,000 for 9,240 SF, or approximately $131 per SF.

For any doctors or medical groups looking to purchase or sell an office building, please contact Peter Zingoni at pzingoni@jacobsrg.com or 610-292-2222 ext 106.

A few observations from a productive week at the International Council of Shopping Centers “think-tank” held at the Wharton School of Business at the University of Pennsylvania…

Bottom line: We’re not out of this yet, and have a ways to go.

(Author note: 5 hour energy does NOT last for 5 hours- that I can assure you)

The hot topic today is buying distressed properties or distressed “notes” from the banks during the worst commercial real estate meltdown since the great depression…Kind of reminds me of  “Tulip-mania” in Wall Street 2- if you’ve ever seen the movie…

(Here is an excellent documentary on “tulip-mania”… )

An aging  Gordon Gekko talks about “bubbles”- and has an excellent picture about “tulip-mania”….In the 17^th Century, the most speculative “bubble” was of all things tulips…A status symbol, which eventually resulted in people bidding up “tulips”, having them worth “less than they paid for them” and crashing the Dutch economy.

Sound familiar?

OVER-EXTENDED is the word. Its ugly- but most bank notes are selling at about 85-90% of initial value. So far, this is much different than the RTC days in the early nineties, where properties were selling for $.50 on a dollar.

The issue is really going to be coming in the next three years. Most commercial properties are bought with a 5 year balloon where the owner refinances. So to keep things simple, if a person buys a property for $4 million dollars, and puts down 25%, and finances $3 million in 2008, five years later in 2013 the remaining principal balance becomes due.

Well, what if the property declined 20% in value, and owner has put up his home as collateral and is now underwater on that (with most times the same bank that finances the commercial property) and now the balloon payment is due. Now what happens?

GOLDEN OPPORTUNITY! Welcome to the real estate markets of 2012, 2013 and 2014- where fortunes will be made!

We’re already starting to see it. Cash is DEFINITELY king, and a bird in hand is worth 15 in the bush! Since January of this year, there is no more “pretending” from property owners- and they’re willing to unload for cash and quickly with banks now very much scrutinizing companies balance sheets, and the pendulum is still not to make a risky loan. I know a commercial real estate attorney who mentioned broad strokes on a medical office building transaction where over 10 doctors were on a small building they had practiced in for over 15 years and each had to sign personal guarantees despite purchasing the property at a below market appraisal! Just much different from the old days for sure…

If you a qualified  accredited investor and looking for the right commercial real estate investment, please contact Jim Jacobs of Jacobs Realty Group at 610-293-2222 ext 102 or jjacobs@jacobsrg.com to discuss….Jim has recently been certified attending a 3 day long class on Distressed Debt and Note Sales, to help provide investors with better opportunistic deals….

With only a small amount of inventory that a distant relative placed in the store on consignment, Gene set out to beat the odds and turn Wallcovering Ltd. into an immense success. Now, 38 years later, Wallcoverings Limited, and its spinoff business Doma Designs, after designing custom kitchens and baths for some of the most prominent athletes and celebrities throughout Philadelphia and the Main Line, are closing their doors.

With the decline in the economy, the nose dive of the housing market, and lack of credit lines and lending from banks for home renovations, Wall Coverings Limited and Doma Designs, the 12,000 SF store which has been a landmark in Bridgeport, PA,  for generations, is closing its doors for the last time. The store’s final day was February 29^th.  After 38 years, the building has been put up for sale, and after some intense competition, the owners selected the Jacobs Realty Group to sell the property.

“It’s an incredible story, and what America is all about. This is a true Rocky story. Gene Nelson started this business renting out a small 1,000 SF space in this building with a family and very limited savings. He operated one of the most successful kitchen design businesses in the tri-state area for almost 40 years and eventually bought this building. He’s certainly someone I admire, and our firm is proud to have been chosen among the many great firms to list this fantastic property”- said Jim Jacobs , President and founder of the Jacobs Realty Group, which was voted the Best Commercial Real Estate brokerage on the Main Line in 2011.

The property is 66,000 Square feet on over two and a half acres. It sits prominently on the corner of Front Street and Route 202, right over the bridge from Norristown.  It has become a landmark for many Bridgeport natives. However, Jacobs reveals that there is even more value than a potential buyer may initially see.

“This piece is 2.5 acres and sits at a traffic light. It could be a fantastic retail play.” Or, there may be an opportunity for residential apartment conversion. “There are over 1,400 jobs coming to Valley Forge with the opening of the new casino- these workers are going to need to live somewhere and with the high ceilings and lofty feel, this building certainly lends itself to a fantastic loft/apartment conversion.” says Jacobs. ”What is really exciting is this piece sits right in front of a 32 acre parcel that Brian O’Neill of O’Neill Properties owns- and Brian is one of the biggest dawgs in the area. Brian sees the vision and has a fantastic track record re-developing industrial sites, so to say there is an incredible amount of upside on this piece, which sits right on the Schuylkill River, is an understatement. Its an awesome time for an incredible deal, and if a buyer shows the faith and confidence that Gene Nelson showed in 1974 despite a rough economy, they’re going to make out just fine!”

(More on Brian O’Neill’s development can be found on his website at oneillproperties.com (Bridgeview development). For information on the property, contact Jim Jacobs of Jacobs Realty Group at 610-293-2222 ext 102 or via email at jjacobs@jacobsrg.com. )

Having previously worked at Colliers International and Metro Commercial Real Estate, Inc., Damon brings a wide range of experience in all aspects of commercial real estate brokerage, including work with start up ventures, private developers, national retail chains, and REITs.

Damon has coordinated the leasing and sales efforts of several retail assignments in Pennsylvania and New Jersey including bank and restaurant pad sites, strip centers, community and neighborhood shopping centers, and multiple 400,000 SF+ new Target anchored centers. Notable transactions for Damon include deals with Rite-Aid, Susquehanna Bank, GNC, Snap Fitness, Subway, Quiznos, Metro PCS, Sprint, Members 1st Federal Credit Union, and many others. Additionally, Damon has performed corporate market research and site selection analyses for Target, Brooks Brothers, Don Pablo’s, Popeye’s Chicken and others.

Damon is a member of the International Council of Shopping Centers, and is licensed in both Pennsylvania and New Jersey. Additionally, he holds both a B.S. and M.S. degree from Saint Joseph’s University in Philadelphia, PA. Damon resides in Haverford Township with his wife and two children.

It’s a great book but apparently too many people have read it because everything that is leasing now seems to be a food use.

If you want a hoagie, you have battles between a Subway, Planet Hoagie, Primos Hoagie, Quizno’s and the list continues. Grab a burger? Battles between Five Guys, Bobby’s Burger Palace (Bobby Flay now has his own “burger” place? Wow- talk about niche market!), Sonic and any other fast food restaurant.

Frozen Yogurt? Whew- I just looked at locations with three different companies entering the Philadelphia market….For FROZEN YOGURT! I mean, I have a frozen yogurt maybe once a month for 5-6 months a year if that.

It’s a neat concept, with incomes down across the board, the loose definition of “fast casual” is a type of restaurant that does not offer full table service, but delivers a higher quality of food and atmosphere than a fast food restaurant. The concept seems to be positioned between fast food and casual dining, with the typical cost per meal in the $8 to $15 range.

It makes perfect sense. Incomes are down and people don’t eat out at restaurants as much. Ever stop at a Panera Bread? Free Wi-fi and great sandwiches but the phenomenon has become the death of the small office space. I’ve gone in and have seen full business meetings with documents and 8 people at a table working on a business problem or proposal.

While empty retail stores aren’t good for anyone, I wonder what the true impact will be a few years from now by placing close to 50% of tenants as a food use in a retail center.

To me, this looks like it could be the next “retail bubble”. It’s just an observation but how much food can people eat? The retail strip center is morphing into a giant “food court”.

For example, years ago, Superfresh and ShopRite seemed to be the “hot supermarket deals”. Then Genuardi’s- which sold to Giant, and now Wegman’s is the hot “supermarket” experience in the market here in Philadelphia. Instead of buying a vacation home, I told my wife Wegman’s is now in the market! It is a pretty remarkable experience for sure.

I was in Wynnewood, PA last week for a lunch meeting and I couldn’t believe my choices. In addition to a full food court in Genuardi’s, we had our choice of Delancey Street Bagels, Poppi’s Pizza, Sam’s Grill, Yapple Yogurt, Santa Fe Burrito, Elevation Burger and Tiffin Indian Cuisine. Of  the 19 tenants, 8 of them are food. The other occupants were Old Navy, a bank, a dry cleaners, barber shop and a few generic stores. The guy you gotta feel for is Sam of Sam’s Grill who has been there forever (not sure of the exact term, but as long as I remember). Just because there are more food tenants it does not mean people are eating out more. It simply means they have to make a choice as which one place they will spend their money. What ends up happening is the retailer watches his sales decrease because they are constantly adding food into a shopping center with the lack of other retail expansion and growth of speciality items purchased over the internet.

I wonder who’s going to fill these spaces in the next 10 years? Owners of strip centers watch the  evening news and their customers check their twitter feed. Owners are excited to get a Foot Locker or Payless deal  as a tenant- I just bought my first pair of shoes from Zappos.com. They offer free shipping, and  make just 1% margin on what they sell? That can’t be good for a retail strip center owner.

I loved the movie Wall Street 2 where Gordon Gekko talks about “Tulip-mania” and the “next bubble”. If you’re looking to buy a strip center and 50% of the center is food, are you buying a strip center or buying a food court?  With the majority of expansion being “fast casual” right now, what are we going to have in 10 years besides dry cleaners, barber shops and a gazillion different categories of food?

I have no idea, but I can’t dwell on that since I’m hungry and want to get something to eat….Any suggestions on where I should go?

Jim Jacobs is the president of Jacobs Realty Group, a commercial real estate brokerage and advisory firm. He can be reached at jjacobs@jacobsrg.com

Zingoni played two seasons for the Philaldelphia Phantoms from 2006 to 2008. In 128 regular season games he scored 38 goals and added 27 assists for 65 points. During the Phantom’s 2008 playoff run Zingoni added 3 goals and 2 assists in 11 games. He was drafted by the Columbus Blue Jackets in the 2000 NHL Entry draft and eight seasons in the United States and Europe.

Today Peter Zingoni serves as Vice President of Jacobs Realty Group focusing on business development in the Greater Philadelphia region. His focus is on Retail, Restaurants and office space.

Connect with Peter Zingoni on LinkedIn!

As economic uncertainty surrounds the global economy, Philadelphia has emerged as a bright spot for the retail industry. A recent article by Peter Tobia on the Shopping Center Business website points out the bright spots in Philadelphia commerce and why retailers see it as a place to grow.

The article shows the growth in the Center City area of Philadelphia and compares it to the growth seen in cities like New York, San Francisco, Washington and Boston. Major retailers continue to see Philadelphia due to the walkability and dense population. Apple opened in the Summer of 2010, Jack Wills opened in 2011 and Marshalls recently announced plans open a store downtown.

We can credit some of the success to the support of the city. Organizations like the Philadelphia Retail Marketing Alliance was formed in 2008 to help foster the grow in all industries in Philadelphia. According to their website the organizations mission is to “enhance the quality and quantity of Center City’s retail offering and to tell the “New Philadelphia story.” They help retailers with marketing, real estate and other needs to make a move to Philadelphia more appealing.

As the economy continues to recover Philadelphia has positioned itself to be one of the premier locations for retailers looking to expand.