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

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

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.”

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

2011: The buildings in the 1950 photo were razed as part of the Steamtown Mall Project. The site of the old bank building is now home to the central portion Boscov’s department store.

When Daron’s trucks rumble by, the vibrations are enough to rattle the porcelain cups and dishes right to the edge of the shelf.

For Evann Xanthis, it’s the dust. The chalky, pervasive dust that coats everything and jams air conditioners.

Ms. Xanthis can’t remember the last time she opened a window. Being across the street from Daron is “like living in a catacomb,” she said.

For Daron and its neighbors in Lower Green Ridge, this winter is the beginning of the end for what was an uneasy relationship from the start.

In November 2007, the masonry and concrete company announced it would relocate its plants from Scranton and Ashley to an industrial park in Archbald, with production beginning there in February.

Winding down

As Daron readies to move, there has been less truck traffic, and dismantling began of its heavy machinery. The 16-acre property at 530 Electric St., a tax-free Keystone Opportunity Zone through 2010, is listed at $3.5 million by Hinerfeld Commercial Real Estate.

To residents, Daron’s departure is a relief, though bittersweet because it took so long.

Four lawsuits are pending against the company for the detrimental impact it allegedly had on residents’ lives, namely the dust, noise and traffic, which Daron denies. In 2005, the company paid a $3,700 fine to the state Department of Environmental Protection for air-quality violations.

Daron’s tenure in Scranton wasn’t rosy for the company, either. In 2007, it threatened to sue if city council banned trucks from Dickson Avenue. A few months later, it sued resident Daniel Hubbard and the Lower Green Ridge Neighborhood Association for slander.

Mr. Hubbard accused Daron of violating zoning law and causing “long-term lung damage.” The case was later discontinued, and Mr. Hubbard issued a public retraction as part of the settlement.

Repeated calls and visits to Daron in attempt to speak with general manager David Lewis about the move to Archbald were unsuccessful.

Breathing a sigh of relief

Daron’s presence has been maddening to perhaps no one more than Ms. Xanthis, who chokes back tears as she talks about her daughter’s breathing problems and the medical bills they have incurred.

After 20 years on Dickson Avenue, Ms. Xanthis is selling her home, though she would love to stay just long enough to see Daron leave first.

A block away on Sanderson Avenue, 20-year-old Katie O’Neil said Daron has been more of an annoyance than a bane, but she won’t miss needing to clean dust off the car and backyard deck.

Mr. Prendergast, one of the four residents suing Daron along with Ms. Xanthis, blames the city and believes officials could have better protected the neighborhood. He also worries about what will come in Daron’s place.

In recent weeks, council discussed rezoning the Daron property from light industrial, citing a DEP report that recommended such a change. But Dan Penetar, the zoning board solicitor, advised against that action, saying it would be illegal “spot zoning.”

Already, though, it is apparent the pall Daron cast on the neighborhood is lifting.

Look no further than Debbie Roth, who bought a house on Delaware Street in June. Ms. Roth said before her Realtor could convince her to move in, there was one thing she needed to hear — that Daron was moving out.

- Courtesy of The Times-Tribune

Although Franklin’s birthday was actually in January, the alumni group met Sunday at the East Mountain Inn to commemorate the day. Franklin is the founder of the university.

Each year, the alumni group picks a fun topic to celebrate. This year, the group chose “Ben and Me,” a book written by Robert Lawson in 1939, which tells a fictitious tale of how a mouse named Amos is really the one to be credited with all of Franklin’s great inventions.

Harry Rothstein, of Dallas, and a 1943 graduate of the university, played the part of Franklin, while Jeff Denis, of Clarks Summit, and a freshman at the University of Pennsylvania, portrayed Amos Mouse. Since Denis was one of the main characters, and is on spring break this week, the celebration was held Sunday so that he could participate.

“I’ve never portrayed a mouse before,” Denis said. “But I’m excited about it. It’s kind of neat.”

Denis, 19, who is majoring in engineering and business, said his favorite part of the “Ben and Me” story is that when the mouse first introduces himself to Franklin, the inventor doesn’t even seem a bit fazed that a mouse is talking to him. “He just starts talking to him like he’s a person,” he said.

During the luncheon, Tony Brooks, the alumni chairman for the June 2008 100th anniversary celebration, announced that he has been making progress in contacting descendants of the four original founders of the Northeastern Pennsylvania alumni club.

“We’re proud of the fact the class song was written by a Wilkes-Barre resident,” Brooks, of Wilkes-Barre, said. William John Goeckel, born in Wilkes-Barre, and an 1896 graduate of the university, composed music for the song, “The Red and Blue,” as well as two other university songs, “Memories” and “Houston Club March.”

Bill Runner, president of the alumni group, said that on June 1 a celebration will be held consisting of local alumni, visitors from the university and descendants of the club’s founders. The Northeastern Pennsylvania branch of the alumni club has about 2,500 members.

The alumni association is also responsible for interviewing potential freshmen at the school, easing their tensions about attending college, and talking about their past experiences at the Ivy-league school in Philadelphia.

“No Penn alumni club has done this before,” Runner said about telling the story of Amos and Franklin. Normally, he said, groups focus on actual events, which the NEPA club has done and will do in the future.

“But this just makes it more fun,” Runner said.

In the book and in Sunday’s performance, Amos Mouse credits himself for the Franklin Stove invention, as well as bifocals, the printing press and electricity. “It’s a fun thing,” said Rothstein, who wrote the script. “As I began writing it, I found it easy to come up with dialogue.

“Of course, it’s a true story,” Rothstein joked. “And Amos has passed away, so we can’t get verification (that it happened).”

-Courtesy of The Times Leader

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

J&J Snack Foods Corp./MIA Products bought the 42,000-square-foot structure at 625 Rocky Glen Road for warehousing, MIA vice president and general manager T.J. Couzens said. MIA employs about 200 people.

The company will relocate storage operations from a leased site in Scranton to the Moosic building by April 1, Mr. Couzens said.

John Cognetti, president of Hinerfeld Commercial Realty, which represented seller Carl Touhey, of Albany, N.Y., said the structure was built in the early ’80s for Federal Express.

Its most recent tenants were DHL Express and Jack Williams Tire & Auto Service Centers.

-Courtesy of The Times-Tribune

]]> http://blog.hinerfeldcommercial.com/21/snack-food-firm-expands-holdings/feed/ 0 http://blog.hinerfeldcommercial.com/29/offices-should-have-quite-a-view/ http://blog.hinerfeldcommercial.com/29/offices-should-have-quite-a-view/#comments Wed, 13 Feb 2008 06:00:21 +0000 administrator http://www.blackouthosting.com/hinerfeld/?p=29 PLAINS TWP., PA – Keystone Commons should be more than an idea by next February.

Construction of the twin office buildings planned for high ground in the East Mountain Corporate Center is expected to begin by the end of this year, or sooner, said Chris Siegel, chief executive office of Ruckno Construction Co.

“That will be the tentative goal,” Siegel said Monday after he and Ernie McCabe, president of Ruckno’s commercial division, visited the site along Baltimore Drive.

The Luzerne builder is the construction manager of the estimated $12 million to $13 million project for owner Paul Francis Realty. The Commons sits on 8.3 acres and is comprised of two, 45,000-square-foot buildings, parking lots and a roadway system.

It’s taking multiple professionals to see the multi-component project through from concept to completion.

Siegel is responsible for marketing. McCabe has been doing the behind-the-scenes work of securing permits and guiding along the Commons. Kyle Kinsman of William Kinsman Lewis Architecture, Wilkes-Barre, designed the project. Mike Detter of Hinerfeld Commercial Real Estate, Scranton, is leasing space.

“They’ve got a lot of interest already,” Siegel said. The project has caught the attention of businesses looking to sign on as anchor tenants, he said.

The Commons has some very unique attributes, McCabe added. There are two opposing structures of very similar design linked by a pedestrian courtyard and the location literally elevates the project above other office buildings.

“A three-story building: you’re about 75 feet high. You could imagine the view,” McCabe said.

-Courtesy of The Times Leader

]]> http://blog.hinerfeldcommercial.com/29/offices-should-have-quite-a-view/feed/ 0 http://blog.hinerfeldcommercial.com/27/hinerfeld-commercial-real-estate-leases-13000-sf/ http://blog.hinerfeldcommercial.com/27/hinerfeld-commercial-real-estate-leases-13000-sf/#comments Fri, 25 Jan 2008 06:00:30 +0000 administrator http://www.blackouthosting.com/hinerfeld/?p=27 SCRANTON, PA – Keystone Community Resources, Inc. leased 13,000 s/f of space at 215 Hickory St. from DDRC Realty Company. The space consists of 8,000 s/f of showroom and workshop space, 3,000 s/f of warehouse space and 2,000 s/f of unfinished space.

John Cognetti, SIOR, CCIM, who represented DDRC in the lease negotiations, said that the space was a perfect fit for this particular tenant. Their need was for space for an adult day activities center for persons with mild and severe disabilities, a storage facility for equipment and supplies that would serve all their facilities and office space plus adequate parking and space for client transport. The space at one time was home to a Harley Davidson franchise and recently was a showroom and production space for vinyl products contractor.

“Seeing beyond what was there took the creative efforts fo the Keystone staff, their architect and the owners who are general contractors,” said Cognetti. The location within two blocks of an entrance/exit ramp to the Central Scranton Expressway provides convenient access to all of Lackawanna County. Also it is near Downtown Scranton and accessible to all parts of the City.

-Courtesy of Mid Atlantic Real Estate Journal

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