Steve Carroll represented the buyer, 1228 Bethlehem Pike Associates LLC, in the purchase of an 8,076 industrial building in Sellersville, Bucks County PA. Building features include approximately 2200 SF of office space and 5876 SF warehouse space with 5 drive in doors, all situate on 3.83 acres.

Steve has 20 years experience serving commercial/industrial clients encompassing the Philadelphia region through Northeast PA.

Real Estate Round Up with John Cognetti – September 17, 2011

John Cognetti speaks on Real estate Round Up September 17, 2011

OLYPHANT – A New England truck parts remanufacturer opened a facility in the Midvalley that will employ 10 people within a year.

The Enfield, Conn.-based Camerota Truck Parts leased 5,016 square feet of space at 1155 Mid Valley Drive, a building operated by Mericle Commercial Real Estate Services. The Northeast Pennsylvania presence is the eighth branch for the company that remanufactures truck drive-trains.

Camerota officials have been looking to the Scranton area as an expansion opportunity for a long time, said Jacki Tamayo, human resources director for the company. Its closest branch is in Trenton, N.J.

“The truck traffic in that area is phenomenal,” she said. “We wanted to be in the Scranton area for a long time and are very happy.”

The company provides its remanufactured drive trains and differentials to independent repair shops and fleet operators of trucks of all sizes. Through its branches, it offers delivery and customer support.

Jim Hilsher, vice president at Mericle, coordinated the lease with Ellen Ranieri of Hinerfeld Commercial Realty, who represented Camerota.

Mr. Hilsher said Camerota will be the sixth tenant in the 60,000-square-foot building, which Mericle built in 2000.

Camerota is a family-owned business founded in 1960. The company employs 180 in its factory and eight branches.

This year, the Automotive Parts Remanufacturers Association named Camerota the heavy duty remanufacturer of the year.

Despite the setback of being denied KOZ status, much Mount Pleasant space (the finished building rendered above) has already been gobbled up by Physicians Health Alliance and Valley Oral and Maxillofacial Surgery.

Michelle Dempsey, principal with Dx Dempsey Architecture, says that one of the newest commercial structures in northeastern Pennsylvania (NEPA) is representative of the designs of the future.

The $6 million, 31,000-square-foot medical and professional center facility, known as the Mount Pleasant Corporate Center, is located at Linden Street and Seventh Avenue in Scranton. A product of Beacon Medical Real Estate in collaboration with Summit Associates of New Jersey, the project launched in 2008 after the acquisition of the property by the Scranton Lackawanna Industrial Building Company (SLIBCO).

Dempsey, principal architect for the job, explains that Mount Pleasant economically delivers Class A office space with an invigorating atmosphere and a design that is appropriate for the blooming NEPA market. The building sports a very functional interior with state-of-the-art medical technology and no waste.

“We made careful choices within a rightfully economical budget for Mount Pleasant,” says Dempsey. “The course of many new buildings in the future will undoubtedly be just like this one.”

Dempsey’s team secured the Mount Pleasant job by utilizing a professional network that included her engineering professor at Lafayette and an association with the Greater Scranton Chamber of Commerce. She also is excited about the strong possibility that a Mount Pleasant sequel will be constructed in the near future.

The building serves as a signpost for NEPA’s future in another way. All of the parties involved in the construction agree that the presence of The Commonwealth Medical College (TCMC) served as a catalyst for the economic growth needed to erect such a structure.

“The Mount Pleasant building is proof of TCMC’s economic impact,” adds Dempsey. “Beacon Medical also believes in the future of NEPA more than many of the people living in NEPA do.”

Tri-state activity

Victor Angeline III, principal with Beacon, points out that the company has erected 70 medical buildings during the last 20 years throughout New York, New Jersey, and Pennsylvania. The company still manages 35 of these projects.

He explains that Beacon and Summit, who have collaborated on two medical construction sites in New Jersey, quickly identified the Scranton region as fertile ground for a similar projects after TCMC became established. In short, the school and the region’s plentiful supply of regional hospitals added up to a good investment prospect.

“We see medical buildings as good returns, and have been very successful with buildings near medical campuses,” says Angeline. “We also like NEPA, and our faith became justified when 60 percent of the Mount Pleasant building was pre-leased.”
The Beacon success formula, which is incorporated into the Mount Pleasant site, includes leasing to only “solid” medical practices with relatively no out-of-pocket expenses and ample free parking for patients. Additionally, tenants may enter into a joint venture where the physicians can become part owners of the building.

Angeline also comments that the rental space at Mount Pleasant turned out a bit more upscale than originally intended.

“We believe in a stable construction environment, long leases and very flat long-term leases,” says Angeline.

As the Mount Pleasant project unfolded, Beacon did experience one major setback that eventually lowered the net rental income and decreased the job’s profitability. The Scranton School District, in somewhat of a surprise move, refused to extend Keystone Opportunity Zone (KOZ) designation to the site, thereby removing the building from a group that enjoys select tax benefits.

Angeline also confirms that the potential is strong for construction of another Beacon medical building in NEPA. He says the company is also looking at similar opportunities in cities like Carlisle and Lewisburg, but that obstacles, such as delayed leasing due to the economy and the unknowns from health reform, could serve as a brake to delay project launches.

“Our return to investors is typically about 8 percent to 10 percent, and Scranton, as a whole, has been friendly for our business,” says Angeline. “As TCMC grows, there will be a need for more medical facilities with turn-key construction.”

Healthy demand

Mike Detter, associate broker with Hinerfeld Commercial Real Estate, has been named the leasing agent for Mount Pleasant. He comments that demand for the building’s space materialized very quickly as the Moses Taylor Health System’s Physicians Health Alliance (PHA) grabbed 13,000 square feet of space and Valley Oral and Maxillofacial Surgery leased another 3,500 square feet.

Detter agrees that the presence of TCMC was a prime driving force behind Beacon’s involvement in NEPA. Other positives in the decision to build included the prime location, and the decision to create a very functional no-frills structure that would decrease the operating expenses of the medical practices who leased the space.
He also approves of Beacon’s business plan which offers the option of equity partnership for tenants. This practice is common within Beacon projects in New York and New Jersey, and many physicians have declared that they often prefer to own their space.

Detter identifies the loss of the KOZ exemption as the only real disappointment that occurred in the Mount Pleasant saga.

“When the school board shot down the request for a KOZ extension, it was unfortunate,” says Detter. “Yet, the project moved on, and there is great hope Beacon will create another similar project in NEPA.”

Automotive Distributing Co. of Tunkhannock purchased the 81,204-square-foot former yearbook publishing facility in the Scott Technology Park for $1.8 million.

Company President Raymond Bach said 21 employees will move to the newly purchased facility in late April with an eye toward hiring the additional employees by year’s end. Its current home at 189 East Tioga St. will be put up for sale.

Mr. Bach was sold on the building because of its condition and location.

“We have eight trucks that have to drive half an hour after getting off I-81,” he said. “This facility is two miles from 81. The savings in fuel and time alone will be great.”

Mr. Bach and co-owner Lannie Ross have decades of experience in the auto parts business but started this venture at the beginning of the recession.

“It was rough going, and we had to take market share from the competition,” Mr. Bach said. “Now, we see even more growth.”

Automotive Distributing has 14-acres at the Scott Technology Park. Mr. Bach said the company may consider acquiring adjacent land from the Scranton Lackawanna Industrial Building Co., the development arm of the Greater Scranton Chamber of Commerce, to expand the building in the near future. The Scranton Plan’s Kristin Driesbaugh helped negotiate the deal. Hinerfeld Commercial Realty of Scranton represented the seller.

“The building is adaptable to a variety of uses, including manufacturing and warehouse/distribution,” said Stephen Carroll of Hinerfeld. Another plus was the proximity of the building to Interstate 81.

Automotive Distributing Co. serves seven states.

Herff Jones closed in September, putting 100 out of work.

Construction of new Mt. Pleasant Medical Center continues Teusday near Linden Street in SCranton

Workers on Tuesday started to install a steel frame for a 30,000-square-foot building in Scranton at the Mount Pleasant Corporate Center.

Two existing city medical businesses have signed on as tenants at the new building, under development by Beacon Summit at Scranton LLC, officials said Tuesday. The two tenants will be Physicians Health Alliance and Valley Oral and Maxillofacial Surgery, both currently located on Adams Avenue.

About 50 jobs are expected during the life of the construction, which will result in a two-story building projected for occupancy by the early fall.

“We’re excited,” said Dan Siegel, a partner in Linden, N.J.-based Beacon. “With the building 50 percent leased and with the steel going up, we’re very hopeful we’re going to lease the balance of the building.”

The $5 million building project on the former brownfields site will generate local taxes, Mr. Siegel noted.

The Keystone Opportunity Zone status, which provided those in the zone with tax breaks, expired at the end of 2010.

The work marks a step forward in a long-standing project led by the Greater Scranton Chamber of Commerce to develop the 23-acre corporate park, a site off the McDade Expressway. Now, officials say they hope construction of the Beacon building with two expected tenants will spur additional development. “This building should be the catalyst, it should kick start the whole business park,” said Mike Detter, of Hinerfeld Commercial Real Estate, the listing broker agent. “It’s a fantastic location, one of the gateways of the city.”

A little over 17 acres and four lots remain.

The chamber’s development arm – the Scranton-Lackawanna Industrial Building Co. – sold the 3.26-acre property to Beacon for $792,000 in 2009.

“It is good to see some activity there, hopefully it will spur interest and help us sell the other lots,” said Karl F. Pfeiffenberger, chamber project manager.

Meanwhile, Scranton City Council is considering legislation it tabled that would allow the city to accept a driveway and storm water basin – each for $1 – at the park.

Mr. Pfeiffenberger said construction is permitted to continue without transfer of the rights of way. But, he added having public infrastructure in place helps the chamber market the remaining lots. “Any business wants to be located off public infrastructure,” Mr. Pfeiffenberger said.

Valley Oral and Maxillofacial Surgery declined to comment, while efforts to reach Physicians Health Alliance were unsuccessful.

Contact the writer: jmrozinski@timesshamrock.com

Representatives from LIFE/SLIBCO, The City of Scranton, Lackawanna County and Beacon Summit at Scranton, LLC gathered to break ground on the Mount Pleasant Medical & Professional Building. Beacon Summit at Scranton, LLC purchased the 3,26

acre lot from Scranton Lackawanna lndustrial Building Company (SLIBCO) in October with plans to build a professional office building.

Beacon is an elite real estate development partnership that has been established since 1990. The principals of Beacon have designed, developed and managed over 1.5 million square feet throughout New Jersey, New York and are now making their mark in Pennsylvania with the first purchase at Mount Pleasant Corporate Center was on Friday, October 9, 2009.

Mayor Christopher Doherty, Lackawanna County commissioners Corey D. O’Brien and Michael J. Washo, Austin J. Burke of The Greater Scranton Chamber of Commerce and Vincent Visceglia of Beacon Summit at Scranton, LLC all gave remarks celebrating the commencement of construction on the 30,000 square foot, two story medical/professional services building. Space in the building will be divisible from 1,200 square feet to 30,000 square feet; the project has an expected completion date of fall2010.

“We are extremely pleased with our local team, architect Michelle Dempsey, engineer Tom Skibinski and real estate broker Mike Detter,” Vincent Visceglia, partner, Beacon Summit at Scranton, LLC commented during the morning’s ceremony. “The approved 30,000 square foot building we break ground on today is one of many new developments

in this city and county and we appreciate the opportunity to contribute to such a meaningful revitalization.”

Beacon Summit at Scranton is the first development within the Mount Pleasant Corporate Center, a 23 acre tract of land that SLIBCO purchased in March 2008 from Keystone Concrete Block Supply. The Corporate Center is a $7 million dollar project that SLIBCO expects will result in the development of over 210,000 square feet of buildings and the creation of 1,000 jobs. The park will consist of five lots ranging from 1.7 to 9.5 acres available for commercial and office development.

“SLIBCO’s investment in the future of Scranton provides the quality office setting that leading firms demand for their clients and their employees. This gateway to our city is being transformed into a beautiful, productive setting of which we can all be proud” stated Austin Burke, executive vice president, SLIBCO.

The 30,800 square-foot state-of-the-art medical and professional office building features great accessibility with abundant free on-site parking. It’s located less than five minutes from local hospitals and equity partnerships are available.

Right now, Hinerfeld can offer:

• Aggressive rents;
• Landlord to provide turn-key build-out of space;
• Space planning to custom design your suite;
• We’ll pay half of your Mercantile Tax for the original lease term; and
• One month of free rent for each year of the original lease term.

The Scranton-Lackawanna Industrial Building Co., which is the development arm of the Greater Scranton Chamber of Commerce, sold the lot to the Linden, N.J.-based Beacon for $792,000.

The chamber argued unsuccessfully before the Scranton School Board during the summer to garner Keystone Opportunity Zone status for the business park, which would have given developers a 10-year real estate and state tax forbearance. The park is on Linden Street, the former site of the Keystone Block Co.

In the end, the draw of the Commonwealth Medical College outweighed the economic hit from losing the tax incentive, said Beacon partner Daniel Siegel.

“We had this property under contract, and we were extremely disappointed,” Mr. Siegel said. “But we think there is a need for a facility like this in Scranton. So we have to work harder.”

The medical school will prompt an expansion in the medical sector and demand for high-quality office space, Mr. Siegel said. The building will be all-steel construction, brick clad, with a porte-cochere, gurney-sized elevators, energy-efficient windows and mechanicals, and about 130 parking spaces. The groundbreaking will be in November, and the building will be ready for occupancy by the spring of 2011, Mr. Siegel said.

Beacon has been involved with the development of 1.5 million square feet of space in New York, New Jersey and Pennsylvania. Tenants can receive a share of equity in the property, becoming partial owners of the building.

Chamber President Austin Burke said he’s grateful Beacon stuck with the project, but said the lack of economic incentives to offer prospective employers will mean that it will take longer to fill the other four or five lots at the business park.

“We will be successful in bringing in new employers, but it will take longer,” he said.

The former BAE Systems Specialty Defense System of PA Inc. building in Dunmore recently sold for $235,000 to 530 Sherwood Development LLC.

“Our plan is to develop residential townhouses for sale at the location,” said Jerry Ferrario, who is developing the property with brother Joe Ferrario and Mike Vacendak.

The developers are seeking borough approval to construct 16 units on the one-acre-plus property located at 530 Sherwood Ave.

Dunmore Borough Code Enforcement Officer Gene Walsh said the land development plans for the project are currently under review.

“Based on what I what I saw, it looks like a really nice-looking development,” he said.

John Cognetti, president of Hinerfeld Commercial Realty, was involved in the property transaction and said the developers’ plans “would be providing a type of housing that’s not (currently) available.”

If the land development plans are approved, the brothers say they will demolish any existing buildings on the property. Joe Ferrario said demolition would start soon “with approval and no unforeseen issues.”

Despite a rough economy, Mr. Cognetti said it wasn’t hard selling the property “because of the uniqueness of the product. Dunmore is a desirable place (to live) and there’s not a lot of land available to purchase.”

The brothers are also keeping the economy in mind when talking about the potential project’s timeline.

“We’re cognizant of the recent economy and based on that, we’re cognizant of the potential timing change that may be involved,” said Joe Ferrario.

-Courtesy of The Times-Tribune