Chapter Chatter
August 2, 2019

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This monthly newsletter features news and information on the Commercial Chapter, including courses and events.  It also features state and national REALTOR association news items and select news impacting the local commercial real estate market.

Learn About Qualified Opportunity Zones in the Philadelphia Region at September 10th Seminar


The Suburban West Commercial Chapter is excited to host an upcoming panel discussion that will help inform commercial practitioners about the federal Qualified Opportunity Zones (QOZs) program which could be beneficial to investor clients. This program, part of the 2017 Tax Reform, is intended to spur investment, development and job creation in distressed communities while also providing a tax incentive to investors.
The Qualified Opportunity Zones: Overview and Local Perspective seminar (September 10; 3pm-4:30pm, Suburban West office, Malvern) will provide a broad overview of the program and highlight specific zones in Chester, Delaware and Montgomery counties. Panelists include:
  • Dan Connelly - Econsult Solutions
  • Pat Killian - Delaware County Commerce Center
  • Dave Zellers - Montgomery County Commerce Department
  • David Sciocchetti - Economic Development Consultant for Chester County
Don't miss this unique opportunity to learn more about the QOZ program and the opportunities available to you and your clients. And come early (2:30pm) for some networking and appetizers in our state-of-the-art classroom in Malvern!
Register online (once logged in, access the Event tab and Upcoming Meetings) or call 610-560-4800.

Suburban Apartment Sales on Pace for a Record Year


Apartment properties in Philadelphia's western suburbs have been trading at such a strong clip this year that sales are on pace to potentially be a record year. Some of the properties that have sold so far include: Pantzer Properties paid $77.8 million for the Riverworks in Phoenixville; Morgan Properties paid $82 million for Marchwood in Exton; UDR Inc acquired Park Square in King of Prussia; Madison at Glen Mills was part of a larger $370 million sale; and Relative Properties paid $87 million to buy Riverwalk at Millennium in Conshohocken.
The suburban multifamily market has fared well in spite of the increase in new apartment construction. Overall rents grew in the second quarter by 3.1% according to Delta Associates second quarter report. Drilling down to the county level, Montgomery County saw rents rise by 3.5%, Delaware and Chester counties combined jumped by 3.2% and Delaware County by 1.4%. The vacancy rate has ticked up but remains healthy at 4.1% in June 2019, from 2.5% a year ago, according to Delta. In Montgomery County, vacancies stand at 5.5% and it is 3.4% in Delaware and Chester counties.
There are several drivers for the uptick in multifamily sales. Many of the new suburban apartment properties have been developed by merchant builders. There's also a lot of capital in the market chasing multifamily properties, and low interest rates are also fueling deals. The torrid pace of apartment sales is expected to continue for the remainder of 2019. 
Source: Philadelphia Business Journal; July 29, 2019

Judge Orders Philadelphia City and Schools to Repay Nearly $50M in Tax Revenue to Commercial Property Owners


Ruling in one of the largest assessment challenges in Philadelphia's history, a judge ordered the city and School District of Philadelphia to repay commercial property owners nearly $50 million, after finding that their properties were unconstitutionally targeted for revaluation due to "political pressure" to boost revenue. Senior Common Pleas Court Judge Gene Cohen said the city and district must repay the money collected in 2018 taxes to the owners of about 700 of the city's most prominent and valuable office complexes, apartment buildings, and hotels. The reassessment was illegal, Cohen ruled, because commercial properties were revalued while residential assessments were left largely intact.
Cohen's ruling nullified the 2018 assessments for the properties involved in the case and ordered the city refund the difference between the 2017 and 2019 taxes. He set a refund deadline of July 2021. That amount includes property and use-and-occupancy taxes and totals up to $48 million, city spokesperson Mike Dunn said, with $14 million owed by the city and $34 million owed by the district. The city is "very likely to appeal the ruling, Dunn said.
Source: Philadelphia Inquirer; July 18, 2019

REMINDER - NAR Partners with Commercial Listing Platforms to Offer Members Discounts and Enhanced Services


Commercial real estate professionals say in surveys that having a public-facing platform to market their properties is a critical need for their business. Now, those pros are getting a choice of tools to widen their exposure in the marketplace as the National Association of REALTORS inked two partnerships earlier this month with commercial real estate listing platforms to offer discounts and enhanced services for members:
In addition to discounts for REALTOR members, each of these programs will integrate with the REALTORS Property Resource.
Click here to learn more about these new partnerships.

Member Benefit Spotlight: PAR Commercial Standard Forms


Standard forms are a critical tool for many REALTORS because they minimize the risk for the agent, the brokerage and the client. The Pennsylvania Association of REALTORS has a library of more than 100 forms for both residential and commercial practitioners.
As a commercial REALTOR with the Pennsylvania Association of REALTORS, you can access the following forms through either the PAR website or through an electronic forms provider like zipForm (also FREE for REALTORS):
  • Agreement of Sale for Commercial Real Estate
  • Commercial Buyer/Tenant Agency Contract
  • Commercial Lease
  • Commercial Property Information Sheet
  • Operating Expense Addendum to Commercial Lease
  • Residential Use Addendum to Commercial Agreement of Sale
  • Sample Fee Clauses for Commercial Listing Contract
In addition to the forms themselves, some of the above have Guidelines for Preparation and Use that essentially serve as a manual to help explain provisions included in the respective forms and its usage. Forms that have an accompanying Guidelines document include: Agreement of Sale, Agency Contract, Lease, and the Operating Expense Addendum. The Guideline documents can be accessed by REALTORS on PAR's website (login is required).
Have questions about a form or suggestion to improve an existing form, visit the Questions or Feedback page on the PAR website.
Not a Commercial Chapter Member? Click here to learn more about the Chapter or call 610-560-4800
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Malvern, PA | 19355 US
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