Written by DKatz

Camden is Still Strong

Read more about The Ruby Match Factory in this story from The Philadelphia Inquirer here.

Alan Razak at Ruby Match Factory

Achieving Pay Parity in Commercial Real Estate

CREW Network’s 2018 white paper, Achieving Pay Parity in Commercial Real Estate, presents expert insight, data, best practices and action items for company leadership, human resources, and women professionals to close the gender pay gap. The publication also explores why the pay gap exists and what’s on the horizon for equal-pay-for-equal-work legislation globally.


Top Ten Issues Affecting Real Estate™ 2018-19

CRE today shared the 2018-19 Top Ten Issues Affecting Real Estate™—the issues and trends most likely to impact commercial and residential real estate. Jacqueline Buhn is a long standing member of The Counselors of Real Estate®, the global professional association which annually creates this list. Members of The Counselors organization are recognized property experts who provide specialized, objective real estate advisory services to clients.


Current Issues Impacting Real Estate

Topping the Current Issues list is the cost of money—Interest Rates and the Economy. As interest rates rise, the commercial and residential real estate markets are experiencing decreasing demand for commercial property, and higher home mortgage rates. Rate increases also limit value appreciation for commercial real estate and make housing less affordable.


Politics and Political Uncertainty was a close second on The Counselors’ list.  Tax reform and policies enacted to change the balance of trade with other countries impacts jobs, incomes and property of all types, commercial and residential.


Other current issues include:

  • The lack of Housing Affordability across nearly every income bracket with the exception of the wealthiest households.


  • Effects of Generational Change and Demographics—for the first time in more than half a century, there are four distinct groups exerting influence on both commercial and residential real estate–aging Baby Boomers, a similar number of Millennials, and the smaller groups on either side of Millennials (Generation X, now mostly middle-aged), and Generation Y, including students and those in their early 20s.


  • E-commerce and Logistics—the growing practice of online shopping is affecting the retail sector with pressure on providing convenience, selection and fast delivery times, while impacting warehousing and infrastructure with increased demand.


Longer-Term Issues Affecting Real Estate


Infrastructure leads the list of longer-term issues—roads, bridges, airports, water and sewer lines, electricity, even public transit, all necessary to sustain and expand cities and communities—are rapidly deteriorating.  U.S. infrastructure was given a D+ rating in the American Society of Civil Engineers 2017 Infrastructure Report Card. As much as $4.5 trillion is estimated by that organization to improve critical infrastructure by 2025.


Disruptive Technology—ranked second of the longer-term issues. Examples include advanced robotic manufacturing and warehousing; driverless cars and trucks; the extensive availability and utilization of personal and transactional data (which enhances all kinds of business decisions), “smart” building technology that enables efficiency; global connectivity; automated business processes; and information protection through cybersecurity.


Other longer-term issues include:

  • Natural Disasters and Climate Change—projected to result in property and environmental damage from events such as severe storms, wildfires, floods, earthquakes, volcanic activity, and rising sea levels.


  • Immigration—if reduced by law, will have a negative impact on new housing starts and home purchases as well as worsen the current skilled labor shortage in the U.S.


  • Energy and Water—natural resources important to property and quality of life, yet threatened by not only environmental damage but also by entangling state and local regulations which complicate development; there are no national regulatory standards.


On the Watch List are four additional issues—Construction Costs, Urbanization/Suburbanization, Tax Cuts and Societal Leadership.

View the full list of issues and trends with explanations and interpretations on The Counselors of Real Estate’s website.


Alan Razak member of city Naturally Occurring Affordable Housing subcommittee, or NOAH

I’m honored to be a member of a newly formed City subcommittee to help deal with affordable housing in Philadelphia. The Naturally Occurring Affordable Housing subcommittee, or NOAH, will help inform the Affordable Rental Housing Preservation (ARHP) Working Committee’s recommendations for preserving Philadelphia’s supply of housing to be incorporated into the City’s Housing Action Plan.


A majority of America’s affordable housing operates without subsidy and is referred to as Naturally Occurring Affordable Housing (NOAH). These rental properties provide housing at rates affordable to low- and moderate-income households.  Over the past decade, Philadelphia has lost 24,000 apartments with rents of $750 or less – the city needs more safe, quality and affordable housing.


In November, an inclusionary zoning bill was introduced that got the real estate industry’s attention. As Chair of Mission Advancement for the ULI Philadelphia District Council, I joined Chair Paul Commito and Executive Director Laura Slutsky in offering the city ULI’s considerable expertise on the subject of affordable housing, gathered from years of research in communities all over the country, analyzing what works and what doesn’t in various housing markets. ULI isn’t a political or advocacy organization, so we offered to provide impartial assistance by providing a forum to analyze, understand and discuss the options for achieving the important goal of maintaining affordability of housing in the Philadelphia market. One result of this invitation is ULI’s participation in NOAH, in collaboration with LISC (Local Initiatives Support Corporation), a national community development nonprofit.


The team will review needs for best practices research, review research findings and initial recommendations, and finally present top recommendations.

The Latest at Suburban Station

There has been a lot happening at Suburban Station so far this year. You’ve probably seen SEPTA hard at work installing Key Card fare gates at Suburban Station. Now that SEPTA has begun to phase out token sales they are encouraging riders to switch to SEPTA Key, the latest step in the fare modernization project. These fare gates will make the use of the Septa Key card easy and smooth at Suburban Station and other stations around town. If you haven’t made the switch to the Key Card, give it a try. You’ll be happy you did. Read more about it here.  And here!


When Faber newsstands closed, commuters asked where they could buy their daily paper in the station. Still, right here! We contacted The Inquirer and encouraged them to send a newspaper hawker to the station. Look for him in the Regional Rail portion of the Station, in front of Milkhouse from 7:00am to 10:00am weekdays.


Hub of Hope opened at the end of January. Hub of Hope is an 11,000 square foot facility aimed at providing social services that can help people transition out of homelessness, plus other services like laundry, showers and referrals to other agencies. The facility is operated by Project Home.


Last but never least, we just launched a Station Shops at Suburban website. Visit for up to date operating hours, a complete list of stores, leasing opportunities, a map and more.

Bryn Mawr Film Institute: Before and After


AthenianRazak helped save The Bryn Mawr Film Institute on Lancaster Ave. from destruction and transformed it into one of the nation’s top film institutions.


As Development Manager, we led a ten year, multi-phase redevelopment of the historic theater.


The $6 million renovation program included finishing public interior areas, opening the historic skylight, adding an additional two new theaters, the addition of a third screen and upgrades to the HVAC and other building systems.

What is the Federal Historic Rehabilitation Tax Credit?

What is the Federal Historic Rehabilitation Tax Credit? It provides federal income tax credit for the rehabilitation and re-use of historic, income-producing buildings that are determined by the Secretary of the Interior, through the National Park Service, to be “certified historic structures.” This program has been one of the nation’s most successful community revitalization programs, encouraging private sector investment, creating jobs and preserving our architectural heritage for future generations. Since 1976, the program has generated almost $132 billion in private investment involving nearly 43,000 projects, according to a report by Rutgers University and the National Park Service.


We’re pleased to say that this tax credit program survived the tax reform bill, but not without some significant changes: it modifies the 20% Historic Rehabilitation Tax Credit, repeals the 10% tax credit for the rehabilitation of non-historic buildings, and provides transition rules for both credits. These and other changes to the Internal Revenue Code definitely reduce the value of HTC’s and may affect a taxpayer’s ability to use them at all.


The 20% tax credit functions like free equity: a developer can use it to offset its federal corporate tax liability or, more often, sells the credits to investors to generate capital for equity. The most impactful change of the bill is to require taking the credit spread over a 5-year period, rather than all at once in the year the project is placed in service. What’s the big deal you ask? Because a dollar today is worth more than a dollar tomorrow, that 5 year stretch reduces the credit’s value by almost 20%. Could a developer think twice about rehabilitating a historic building with this 20% change? Absolutely, because it can leave a big gap in project financing, rendering a once-feasible project infeasible.


In Philadelphia alone, you can thank the pre-reform HTC for projects including The Victory Building, The Divine Lorraine, Lit Brothers Building, The Sheridan Building, The Cosmopolitan and Historic Landmarks for Living projects such as The Wireworks condos in Old City. We were able to revitalize 833 Chestnut Street with the help of the HTC and plan to do the same for our Ruby Match Factory project in Camden, NJ. Fortunately, there is a 30-month grace period for historic projects already in the works at the time of the bill’s inaction, so the capital stack for that project wasn’t toppled.


Given that many predicted its complete elimination, we are relieved that the HTC still exists. Still, the new bill is not as good as the old one because it made it harder to bridge the equity gap that frequently thwarts rehab and preservation projects. Though historic buildings will still have a chance at a new life, the reduction in the credit’s value will doubtless mean that some preservation projects will not happen. Read a little more about The Historic Tax Credit here.


There is a subtle but profound difference between Development Management and Project Management services. A Project Manager delivers a defined project within a given budget and schedule, while a Development Manager defines the project itself, making sure it truly serves the needs of the Owner. The Development Manager defines and coordinates the efforts of the entire project team from concept through operations, keeping a continuous focus on achieving the Owner’s overall goals and adjusting sub-budgets and schedules to do this effectively. Project Management is essentially a sub-set of Development Management. There are four phases of Development Management:

Predevelopment Planning

While the Owner sets initial project goals and outlines the development strategy; a Development Manager can help ensure success for the project by surveying Owner and project stakeholders to refine goals and to better understand project issues. This process builds a working project description with clear internal alignment. Once goals are in place, the Development Manager assembles the project team, including the design and construction teams, a process in which timing and method are critical to the project’s success.

Preconstruction & Development

A Development Manager, working closely with the Owner, will help make sure that the project goals and needs as defined earlier are met when setting the overall project scope, budget and schedule. The Development Manager then coordinates team members to design the right project at the right price to be built in and at the right time. It’s at the end of this process that a Project Manager would typically come on board.


During the construction process, the Development Manager can perform the Owner’s Representative or Construction Project Manager’s role, overseeing the day-to-day work of the project team on the Owner’s behalf. They also provide oversight of the budget, schedule, quality and conformity of work, providing periodic reports to the Owner. Keeping the team engaged in the project and maintaining an atmosphere of collaboration and mutual respect is a key part; the job also includes making the hard choices.

Post-Construction Phase

Upon completion of construction, the project segues from contractor control to the Owner’s control. The Development Manager can make sure the project team is focused on the project through final completion, achieving effective turnovers and training, punch list completion, and a warranty library for the building management use. The key to success in this difficult phase is to focus attention on building operations early. A good Development Manager begins the data-gathering while the team is still intact, and implements a rigorously structured documentation submission checklist and monitoring system during the early phases of development. Having the Development Manager involved from the outset maximizes the value of the project for the Owner.

Five Myths about The Grow NJ Assistance Program




  • You cannot use the capital allocation method in a lease scenario.
  • The New Jersey Economic Development Authority (EDA)’s Grow NJ tax credits provide incentives for businesses to bring jobs to Camden, or keep them there. If you’re leasing space, you can apply for credits either based on the number of jobs you will have in Camden for 15 years, or the total capital outlay made to provide and fit out your space.



The program ended this year with the change in administration.                                   
Grow NJ is a program of the State of New Jersey and so is not affected by federal elections. Although New Jersey will have a new governor in 2018, this is not currently expected to impact the GROW NJ credits. By current law applications for these credits may be submitted/approved up to June 2019, after which a company would have up to three years to occupy their property. It is always possible, however, that the NJ Legislature will amend this law to allow for less, or more, time for these credits.


  • The tax credits are in cash.
  • The awards aren’t cash; they’re credits against New Jersey state income taxes. 10% of the credits are awarded each year for the first 10 years of occupancy.


  • Grow NJ only works for large companies, not those who don’t have enough NJ State tax to use the credits.
  • Most companies with more than 35 employees are eligible for the tax credits. Targeted industries with as few as 10 employees are also eligible, as are nonprofits, and many companies currently located in Camden. If you don’t have sufficient New Jersey tax obligations, you can readily sell them for cash.


  • The tax credits aren’t subject to federal tax.
  • In general, the incentives are subject to federal tax. Some companies treat them as capital gains (20% tax) by delaying their sale, and some treat them as ordinary income at their company’s tax rate. Non-profits are not taxed.


For more information on Grow NJ, click here or call Cooper’s Ferry Partnership, Camden’s private non-profit economic development group, at (856) 757-9154



Regional Leadership and Catalytic Ideas from The Economy League

AthenianRazak strongly supports the regional leadership and catalytic ideas provided by Josh Sevin and the Economy League. Please read this op-ed in the Philadelphia Business Journal about Philadelphia’s civic infrastructure highlighting the Economy League’s role in driving regional collaboration. It’s co-bylined with ULI Philadelphia Executive Director Laura Slutsky and World Trade Center of Greater Philadelphia President Linda Conlin.


Jackie Buhn is a member of the Economy League’s Board of Directors.