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By Dees Stribling Photograph Courtesy of Roy Gumpel
Despite turmoil in the financial markets, deals will be done. What attracts investors when the only certainty is uncertainty? Recently New Jersey & Company sat down with three New Jersey-based players in commercial real estate investment to talk about what they’ve been buying and why.
Joel Bergstein is an executive vice president of Lincoln Equities Group LLC. Lincoln Equities, based in Rutherford, is an owner and developer of office properties in metro New York, with about two million square feet in its portfolio. The company amassed its office property portfolio in the early 1990s by pursuing a contrarian investment strategy, buying properties from institutional owners during that real estate recession.
Moshe Glick is regional development vice president of Tucker Development Corp., with offices in Newark. Tucker specializes in the development of shopping centers and mixed-use properties in Illinois, Wisconsin, Michigan, Pennsylvania, and New Jersey, and the company launched an equity investment opportunity fund in October 2007. The fund’s focus is retail and mixed-use development in New Jersey; Tucker’s initial foray into the state is Liberty Plaza, an office and retail development in Newark.
Mark Zurlini is a principal of Palisades Financial LLC, headquartered in Fort Lee. Palisades is a leading commercial real estate lender, providing bridge, mezzanine, and equity financing through its Palisades Regional Investment Funds. Palisades specializes in commercial real estate and secured corporate lending, and has completed over $2 billion in transactions.
Given the difficulties of the current real estate market, what are you investing in?
Bergstein: Lincoln Equities recently closed on a $400 million acquisition in Berlin, a total of 69 properties consisting of 4,473 rental and 180 commercial units. That acquisition brings our overall portfolio in that city to 5,800 units. We’re bullish on Berlin because it’s an undervalued market with tremendous upside potential. It has all the attributes for significant asset appreciation, such as growing demographics, attractive pricing, and limited new inventory.
Glick: Since launching our fund, which is devoted exclusively to investing in New Jersey, we’ve been able to identify several strategic investment opportunities here, such as Liberty Plaza in Newark—the first new Class A office development in that market in over 15 years. We like Newark’s growth prospects, and this project will provide the city with office space at the center of the state’s transportation hub.
Companies are beginning to understand the multiple-value propositions of locating in Newark. The Urban Transit Tax Credit Hub is the icing on the cake, because it will save companies more than $100 million over the next 10 years.
In Fort Lee, through one of our affiliates, we’ve acquired a $29 million loan secured by the proposed Centuria development.
Zurlini: We are looking to minimize development risk. So at the moment, we’re reviewing substantially completed residential and commercial projects where the current lender has project fatigue or requires liquidity.
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