September 2011 AIM by louis kotsinis

UPCOMING EVENTS 8th Annual PAC Reception - October 4 Garden State Awards - October 20

September 2011

Childrenâ&#x20AC;&#x2122;s Holiday Party - December 12

TRANSFORMING OUR COMMUNITIES Renovation Highlight NJAA Sub-metering Measure Approved Energy Efficiency Measures for Multifamily Compliance - Renovation, Repair & Painting NJ Multifamily Market Continues to Perform Well

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1434 Chestnut Ave., Hillside, NJ 07205 Phone: 800.834.WELD 908.687.4494 • Fax: 908.688.6684 www.manhattanwelding.com

Generations of Experience

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ATTENTION MANAGEMENT PROFESSIONALS! You are invited to join us on September 20th & 21st, 2011 for the Governor’s Conference on Housing & Economic Development, hosted by the New Jersey Department of Community Affairs, the New Jersey Housing & Mortgage Finance Agency, the New Jersey Economic Development Authority and the New Jersey Department of State. Atlantic City Convention Center

September 20 & 21, 2011

• Learn from the state’s most distinguished housing professionals, government officials, lenders, developers, nonprofits and consultants.

EARN CREDITS!

• Discover innovations in planning, economic development and preservation in today’s housing industry.

Credits for Management Professionals:

Attend the Property Management Track to receive NAHMA Continuing Education Credits for NAHP renewal, education credits toward RAM designation and .5 bonus points toward 2011 Managing Agent Evaluations.

• Explore neighborhood revitalization, property management, green building, housing for special populations, financial resources and more. • Share ideas, tips and approaches with fellow industry professionals and experts during our networking reception and workshops.

Professional Planners credits:

Earn AICP Certification Maintenance Credits at this year’s conference! Sessions will be offered to train planners and local officials in affordable housing and redevelopment design, financing and property management.

EARLY BIRD REGISTRATION IS NOW OPEN! Register by August 26, 2011 and the cost is only $199 per person!

FOR ONLINE REGISTRATION, HOTEL RESERVATIONS AND MORE INFORMATION VISIT US ONLINE AT WWW.NJHOUSINGCONFERENCE.COM

Table of Contents September 2011 n Issue 6 THE OFFICIAL PUBLICATION OF THE NEW JERSEY APARTMENT ASSOCIATION

F E A T U R E S

Energy Efficiency Measures for Multifamily Facilities

Compliance -- Renovation, Repair and Painting Certification

Sponsorship Opportunities Registration Form

Road to Success

Tools of the Trade

Garden State Awards

Renovation Stories

AvalonCove Chestnut House Dorchester Manor

EXECUTIVE DIRECTOR Jean Maddalon jean@njaa.com VP OF GOVERNMENT AFFAIRS Legislative Editor Conor G. Fennessy conor@njaa.com DIRECTOR OF COMMUNICATIONS Editor Christine Haber christine@njaa.com DIRECTOR OF REGULATORY AFFAIRS & RESEARCH Fast Facts Editor Nicholas Kikis nicholas@njaa.com ACCOUNTING & OFFICE MANAGER Eileen Corbett eileen@njaa.com

After Years in the Regulatory Pipeline, NJAA Sub-metering Measure Approved

EDUCATION & EVENTS MANAGER Niambi Ivery niambi@njaa.com

New Jersey Multifamily Market Continues to Perform Well

Higher Learning

MEMBER SERVICES COORDINATOR Casey O’Brien casey@njaa.com

Regulatory Roundup

32 I N

5 7 8 9 34 37

Special Guests at NJAA PAC Reception

The Honorable James J. Florio The Honorable Donald T. DiFrancesco Jim Hooker

E V E R Y

I S S U E Fast Facts President’s Message New Members Members in the News PAC Contributors Education & Event Calendar

New Jersey Apartment Association - HQ 104 Interchange Plaza, Suite 201 Monroe Township, NJ 08831 Tel: (732) 992-0600 Fax: (609) 860-0060 Legislative Office 172 West State Street, Suite 304 Trenton, NJ 08608 Tel: (609) 393-5200 Fax: (609) 393-5222 www.njaa.com Cover Photo: Before and After kitchen renovations at Avalon Cove, courtesy of AvalonBay Communities TOC Photo: Exterior renovations at Dorchester Manor, courtesy of Value Companies Trademarks, name brands and other copyrighted items used in this publication are the property of the respective owners. AIM Advertising Contact Christine Haber at christine@njaa.com or 732-992-0603 for rates and deadlines.

Fast Facts

Construction & Renovation

September 2011

Although new construction activity has decreased significantly, investment in existing properties through renovations (as measured by the estimated value of construction permits) continues to be robust. New residential construction activity continues to show signs of stress, and nowhere is it more pronounced than in construction of new single family homes, which has markedly declined from a recent peak in 2005 as home values soared. Construction of new multi-family homes had never seen the same spike in construction as in single-family markets, however, declines in completed units show that the recession had a significant impact on the multifamily construction sector. Since multi-family projects have a long time horizon from early planning stages to ultimate completion, data for “housing units certified” (also called “completions”) reflects economic conditions from years prior. Permit data show a pickup in new multifamily construction activity, although not all permitted construction reaches completion, and overall economic weakness (high unemployment, slow job creation, and limited household formation) continues to be a significant barrier to a recovery in New Jersey’s housing markets any time soon.

Dollar Amount of Construction Permits By Type $9,000

Dollar Amount of Construction Authorized

$8,000

(In Millions of Dollars)

$7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0

1996

1997

1998

1999

2000

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New construction

2003

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Additions

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2010

Alterations

New Housing Units Certified (2004-2011) 25,000

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10,000

5,000

2004

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2007

One- and Two- Family Units *2011 data is from first-half 2011, annuallized, and is not seasonally adjusted.

Source: NJAA Tabulations of New Jersey Construction Reporter Data

2008 Multi-family Units

2009

2010

2011*

Officers 2011 Board of Directors Matt Adler, Adler Residential Michael Barry, Applied Development Company Michael Beirne, The Kamson Corporation Andrew Cohen, Rock Properties Joseph Collins, CALECO Vincent Comperatore, Comperatore Associates, Inc. George Cowden, Multi-Housing Depot by ARI John D. Cranmer, Archer & Greiner, PC Dawn Curto, Roseland Property Company Sue Dâ&#x20AC;&#x2122;Angiolillo Apartment Finder William Diggs, Renaissance Equity, LLC Ann Emerson, Equity Residential Larry Falkow, The APTS Jonathan S. Gershen, The Gershen Group Michael Goldberg, Goldberg Realty Associates Dan Gordon, AVCO Supply, Inc. Alan R. Hammer, Esq., Brach Eichler LLC George Jacobs, JK Management, LLC Paul Kaliades, Renters Legal Liability Insurance Jason Kaplan, Kaplan Properties Tom Kretsch Segal & Segal Ronald S. Ladell, AvalonBay Communities, Inc. Anthony E. Lauro, Affiliated Management, Inc. David Legow, Legow Management Company Jack Linefsky, Value Companies Jerome J. Lombardo, C.J. Lombardo Company Jim McGrath, PRD Management Michael Oâ&#x20AC;&#x2122;Dea, Hekemian & Company, Inc. Diana Penn, JMG Realty, Inc. Marshall Rosen, Solomon Organization David Siegel, Coinmach Corporation Meg Viezbicke, Apartments.com John Zoetjes, American Architectural Window & Door

NJAA Board Officers

President

President-Elect and Regional Vice President North Jersey

Jeffrey Smith

Brent Kohere

Kriegman & Smith

Home Properties

Vice President Legislation

Regional Vice President South Jersey

Michael Haydinger First Montgomery Group

Regional Vice President Central Jersey William Dailey

Joseph Spadaccini The Kamson Corporation

Vice President Associate Affairs Ray Fiorica

CIS Management Inc.

AFR Furniture Rental

Secretary

Treasurer

Steve Waters

Lynne Aber

Morgan Propeties

Bertram Associates

Past Presidents Tom Kretsch, Segal & Segal Jonathan S. Gershen, Esq., The Gershen Group David Legow, Esq., Legow Management Company Peter J. Weidhorn Michael Goldberg, Goldberg Realty Associates Paul Kaliades, Renters Legal Liability Insurance Mark S. Rosen, Esq., Solomon Organization Norman A. Feinstein, Esq., The Hampshire Companies Herbert Brien, Lismarc Management Corp. Donald M. Legow, Esq., Legow Management Company Robert Goldberg, Goldberg Realty Associates Andrew B. Abramson, The Value Group, Inc. Richard Segal, Segal & Segal Sam Herzog, S.A.M. Holding Company Alfred Sanzari, Alfred Sanzari Enterprises (1932-2005)

Executive Director Jean Maddalon NJAA

September 2011 | AIM

President’s Message

Transforming Our Communities Through Renovation by Jeff Smith Kriegman & Smith, Inc.

o renovate or not to renovate? That question weighs on the minds of property owners every day. The reasons for undergoing a renovation project of a multi-family community are endless. Whether repairing aging equipment, increasing energy efficiency, or updating a structure with the latest materials and technology, property owners ultimately find a positive and rewarding experience for their efforts. Renovating an apartment community also has its unique challenges resident displacement, expensive materials and anticipating future technology upgrades are just some of the concerns that come to mind. But at the end of the day we realize that maintaining our properties impacts the community and contributes to a positive environment for our customers. Revitalizing our communities is one of the many contributions we make toward providing better homes for New Jerseyans. Renovations improve the quality of life for our residents and enhance the value of the apartments and the surrounding neighborhood. When a project is completed, it may bring new residents and invariably creates additional tax revenues to towns. NJAA members have impressive stories to share. Take a look at some of the recent AIM | September 2011

renovations throughout the state by AvalonBay Communities, Friedman Realty Group and Value Companies starting on Page 22. NJAA’s network of property owners, managers, and associates are a powerful resource with a wealth of collective information and insights about the apartment industry. Reach out to your colleagues to discuss ideas and share success stories. The upcoming Garden State Awards is an excellent way to network with fellow members. Register today by visiting njaa.com or completing the registration form on Page 19. I look forward to seeing you on October 20th at the New Brunswick Hyatt to cheer on all of the finalists and honor the best apartment professionals in New Jersey. I can’t mention Garden State Awards without touching on our Eighth Annual NJAA PAC Reception which will be held on Tuesday, October 4th at Crestmont Country Club. This year we have two Special Guests to headline our reception, including two former New Jersey Governors – Jim Florio and Donald DiFrancesco. These two chief executives will be joined by Jim Hooker, former anchor of NJN News, who will serve as moderator for a lively discussion on the issues facing our State and the multi-family

industry. Tickets are $500 and a sound investment in the future of rental housing. The ability of apartment owners to continue to provide safe, clean, and affordable rental housing to 1 million New Jersey residents, and deliver valued services to them, rests on your financial support of NJAA PAC. Hope to see you at Crestmont on October 4. For more information about the event, see page 33. As you know, there is always something new to learn when it comes to the multifamily housing industry. Check out the full education line up on page 37 which includes sessions on Presentation Skills, Interactive Multifamily Marketing and Fair Housing Basics. How we maintain our properties has a great impact on the revitalization and continued vibrancy of hundreds of neighborhoods and communities throughout New Jersey. The state has an ongoing initiative for creating more affordable housing and renewing our urban centers and older suburbs. When you invest in upgrades and renovations at your properties, you are making an investment in the future of New Jersey. In an industry with frequent challenges and constant change, I truly commend your efforts. n

New Members

Welcome New Members Associates Alpha Property Management Ms. Jane Matthews 25 Clifton Avenue Newark, NJ 07104 Phone: (973) 482-0598 Fax: (973) 482-2230 Merion Realty Management Mr. John Masso 1000 Steward’s Crossing Way Lawrence, NJ 08648 Phone: (609) 882-0007 Fax: (609) 882-7781 If you know of anyone who might be interested in membership please contact Casey O’ Brien at casey@njaa.com.

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Member News

Members in the News PENNROSE MANAGEMENT COMPANY NAMES MULTI-FAMILY PROPERTY VETERAN AS REGIONAL VICE PRESIDENT Pennrose Management Company has recently appointed Kim Tannery as Regional Vice President of the company. As Regional Vice President, Ms. Tannery’s portfolio consists of more than 4,100 conventional housing, student housing and senior housing properties and 65 communities in Pennsylvania, New Jersey and Ohio. Ms. Tannery, a Dallas, Texas native, brings more than 17-years of experience creating and conquering business goals at companies including AIMCO, where she served as Regional Vice-President. WALTERS GROUP ANNOUNCES PROMOTION OF RYLIE RAGAN SMITH AND CARRIE ADRAGNA Walters Group has announced that it has promoted Rylie Ragan Smith of Manasquan to community manager of Stafford Preserve, a new luxury rental community slated for occupancy in the spring of 2012, and Carrie Adragna of Manahawkin to community manager of Atlantic Heights at Barnegat, a luxury apartment community in southern Ocean County. Smith, was previously the community manager at Atlantic AIM | September 2011

Heights at Barnegat. She joined the company in 2007 as assistant community manager. In her new position, Smith will oversee the daily operations at Stafford Preserve including managing, coordinating and accomplishing community objectives as set forth by the asset manager and the Walters Group. Adragna, a licensed Realtor, joined the company in 2004 in the Home Sales division as a sales assistant to the marketing manager at Ocean Acres at Barnegat. Subsequently, she joined Atlantic Heights as a full-time leasing consultant then later moved to Stafford Park Apartments as a leasing consultant and assistant to the community manager. Congratulations Rylie and Carrie!

COMMUNITY INVESTMENT STRATEGIES FILLS NEED FOR AFFORDABLE APARTMENT HOMES IN WOOLWICH TOWNSHIP, N.J. Community Investment Strategies (CIS), Inc. has completely leased its newest affordable apartmentrental community, The Oaks at Weatherby in Gloucester County’s Woolwich Township. Located on Village Green Drive and Center Square Road, The Oaks is the first of three affordable communities to be completed within Weatherby, a 1,600-acre master-planned community. Designed for families with young children, the 86-unit community fills a surging need for affordable, maintenance-free living

options in the county, according to Christiana Foglio, founder/owner and chief executive officer of CIS. The township’s strategic location and access to mass transit, as well as an extensive highway infrastructure and outstanding school district, have transformed this once-rural farming area to a popular suburban bedroom community favored by commuters. SWACHA AWARDS ITS FIRST PAYITGREEN SEAL OF APPROVAL TO NWP SERVICES CORPORATION SWACHA, one of the largest not-forprofit regional payments associations in the country, today awarded Irvine, California-based NWP Services Corporation (NWP) with its first PayItGreen Seal of Approval for their commitment to decrease paper usage and to promote electronic solutions such as Direct Deposit, ePayment, eBills and eStatements. The new seal is offered by NACHA and awarded by associations and businesses within the electronic payments industry. The PayItGreen Seal of Approval recognizes organizations for excellence in removing paper from the process of issuing statements, payments, and bills. To receive this distinction, businesses must complete an online survey which evaluates the use of electronic payments. Applicants are scored on their responses to a series of questions designed to examine the scope of the organization’s electronic billing and payment progress. n

Road to Success

Energy Efficiency Measures for Multifamily Facilities Cut Operating Costs While Adding Value for Your Residents

by Todd Gordon South Jersey Gas

here is an almost endless list of renovations you can make to your multifamily housing complex to attract renters: fresh paint, new carpets and decorative trim work among them. But not one of these upgrades will cut your operating costs while also adding value for your residents. Only energy efficiency measures can accomplish that and, at the same time, help the planet. Every Building Can Make Improvements No matter how many apartments your complex has or how utilities are delivered to the individual units, you can upgrade your existing equipment to cut energy consumption and costs and increase the value of the property. Let’s take a look at three similar buildings and how each can take steps to improve its energy efficiency, and save money, through upgrades to its HVAC and hot water systems. Building A has one centrally-located HVAC/hot water system for all of its units, putting the financial burden for utility bills on the owner. Since tenants are not personally responsible for the bills, their behavior tends to be less than responsible. This costs the owner money. By installing high efficiency natural gas equipment, energy usage is decreased, helping offset costs driven up by tenants with no stake in the monthly utility bill. Building B has individual HVAC/hot water systems for each unit, but only one utility meter for the entire facility. This owner cannot determine how much energy is being used by each tenant. By upgrading these individual systems to high efficiency natural gas equipment, energy consumption and costs are reduced. Furthermore, the owner could take steps to apportion the costs of heating to each resident per applicable law.

Building C already has separate natural gas HVAC/hot water systems and individual utility meters installed for each of its units. Tenants are responsible for their own utility bills and have a far greater desire to conserve energy because they want to save money. By installing high efficiency natural gas equipment, the building owner makes his units more attractive to renters because of the proven energy savings and increased occupant comfort. Beyond the Bill: Even More Benefits While a reduced utility bill is a powerful motivator, there are additional advantages to upgrading your facility’s equipment to more energy efficient models: • Improved occupant comfort and healthier indoor air quality • Enhanced image amongst tenants and potential renters • More stable occupancy levels • Extra flexibility in setting rental rates (due to savings on operating costs) • Reduction in dangerous greenhouse gas emissions • Decrease in environmental risks (with conversion of oil heat to natural gas) • Increased property value Getting It Done with Incentives & Financing The two greatest obstacles to making energy efficiency improvements are knowing where to start and funding the project. First you need to find a company that is dedicated to guiding apartment building owners on the path to greater efficiency and better bottom lines by helping them take advantage of initiatives and incentives from New Jersey’s Clean Energy Program, including: • Free Energy Benchmarking—This is the best first step to weighing your options and it’s free to all multifamily continued on page 12

September 2011 | AIM

S a ve t h e D a t e

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AIM | September 2011

Sponsorship opportunities are available! For additional information contact Niambi Ivery at 732-992-0606 or niambi@njaa.com

Road to Success Energy Efficiency for Multifamily Facilities continued from page 10 buildings. Benchmarking is a rating system that assesses building performance by analyzing energy use in your facility and scoring it against similar buildings. The free report provides a clear picture for identifying and prioritizing the most cost-effective energy efficiency upgrades available to you. Building owners that have implemented measures recommended on their benchmarking report have reduced energy consumption by an average of 20%. • Pay for Performance—This initiative takes a whole-building approach to energy improvements in multifamily facilities with four or more floors, a central heating or cooling system and a peak demand in excess of 100kW, all with the goal of reducing energy consumption by 15% or more. An approved program partner completes a customized energy reduction plan, installs recommended measures and performs a post-implementation benchmarking report. Incentives from New Jersey’s Clean Energy Program cover up to 50% of total project costs (or $2 million, whichever is less). • NJ SmartStart Buildings— A comprehensive initiative of financial incentives covering energy efficiency improvements in all multifamily buildings through retrofits, equipment replacement, renovations, custom measures and new construction performed by a trade ally. Incentives from New Jersey’s Clean Energy Program are dependent upon measures implemented. • Home Performance with Energy Star—This incentive takes a wholebuilding approach to energy efficiency in qualifying multifamily facilities consisting of less than four floors with individual heating or cooling systems for each unit. Building owners can collect incentives up to 50% of the cost of approved, installed measures based on total building energy savings. Check with your utility company about the availability of low interest loans and matching incentives. n As Manager of SJG’s Commercial and Industrial Energy Efficiency Consulting Group, Todd Gordon and his team work with both private and public sector clients to help them identify opportunities to save energy and pay for these measures through sizeable financial incentives from SJG and New Jersey’s Clean Energy Program. Todd has over 20 years of experience in the field of energy and energy efficiency consulting services. To learn more about improving the energy efficiency in your complex, go to www.southjerseygas.com/SJGEE or speak with a representative at 1-800-822-9276.

SAVE THE DATE! 14th Annual Children’s Holiday Party at the Meadowlands Expo Center December 12 Join us at our new location, the Meadowlands Expo Center, on December 12th for the 14th Annual Children’s Holiday Party. The Children’s Holiday Party is a tradition for the New Jersey Apartment Association of making a difference in the life of a child, if only for a day. Our goal is to bring gifts and a day of fun to 1,000 children. These kids need your help today! Let us know if you are able to: Host a Community or Office Toy Drive Volunteer at the event Sponsor the event Bring an unwrapped gift to the Garden State Awards and enter for a chance to win prizes!

Contact Niambi Ivery at niambi@njaa.com or 732-992-0606 for more information 12

September 2011 | AIM

AIM-Ad-halfpg-color-final-bleed:Layout 1 8/11/11 11:30 AM Page 1

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Tools of the Trade

Compliance -- Renovation, Repair & Painting Beyond Training and Certification By Robert M. Dowse CONNOR Institute

y now, you are well aware that on April 22, 2010, the Environmental Protection Agency (EPA) Renovation, Repair and Painting rule (RRP) went into effect. Under the RRP no firm may perform, offer or claim to perform renovations, without certification from EPA or an authorized state, in housing or child-occupied facilities built prior to 1978. Additionally, the RRP requires a Certified Renovator be assigned to each renovation, in order to perform or supervise the performance of lead-safe work practices throughout the renovation. As word of the RRP spread, professional firms did not tarry. They leapt into understanding the requirements of the RRP. These firms sent renovators to the Certified Renovator Initial training course; they filled out the application for firm certification; they purchased new HEPA vacuums and the attachments necessary to use the HEPA vacuum with power tools; they bought rolls of plastic and tape; they did all the things they thought they should in order to comply with the requirements of the RRP. But have they (and you) done enough? Compliance with government regulations is often challenging. When those regulations are changing it becomes even more challenging. EPA updates and rule changes result in many of you questioning your procedures. Two weeks after the RRP went into effect EPA published changes to the RRP. On August 5, 2011 EPA published additional changes to the RRP. Firms, who think they are doing the right thing, need to evaluate and modify their procedures in order to stay in compliance. And doing the right thing is important. Not only does doing the right thing protect workers and occupants, especially those children under the age of six, from the potential hazards of lead-based paint created by

renovations, it protects firms from the potential of being fined $32,500. Or is that $37,500? (It seems a preset inflationary adjustment was made, to the fine amount, after EPA published information on what fines could be levied…) Confusion began to ripple throughout the regulated community. Rumor and speculation were discussed around today’s modern water cooler: The Internet. This confusion manifests itself in many aspects of the RRP. From the very onset people wondered to whom the RRP applied: Were painters the only trade affected? What about carpenters, plumbers, electricians, roofers, flooring installers, etc.? What properties did this really apply to? After all, what exactly is target housing? Or even more confusing, what is a child-occupied facility? Who really can figure out what EPA meant when they defined a childoccupied facility? A child–occupied facility means a building, or portion of a building, constructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two different days within any week (Sunday through Saturday period), provided that each day’s visit lasts at least 3 hours and that the combined weekly visits last at least 6 hours, and the combined annual visits at least 60 hours. And that is not even the entire definition. The definition goes on to fill an entire paragraph of legalese describing exactly what constitutes a child-occupied facility. Once a firm decided a property was target housing (or a child-occupied facility), they had to determine (or assume) the property had lead-based paint on the surfaces to be disturbed. For that matter, they had to learn the correct definition of lead-based paint. Just how do you determine 0.5% by weight or 1mg/cm2? And the EPA-recognized continued on page 16 September 2011 | AIM

2011

Higher Learning

NJAA DIAMOND SPONSORS

DO YOU HAVE NEWS YOU’D LIKE TO SHARE WITH US? We’re always looking for interesting news about our members to publish in the Member News section of AIM. You can send press releases with photos and other member news items such as new hires, promotions, company successes, milestones etc. to Christine Haber ELIAS B. COHEN & ASSOCIATES at christine@njaa.com.

INSURANCE AGENTS n BROKERS n CONSULTANTS

Thank You

Tools of the Trade Compliance -- Renovation, Repair & Painting continued from page 14 test kit: When can you use it? Where can you use it? What do you mean it can’t be used on that substrate? (For that matter, what is a substrate?). Even after deciding if the RRP applied, firms had to figure out how to follow the RRP. Who does the firm have to notify concerning the renovation? When do they have to notify? Do firms really need to notify each affected unit? What if the firm is working in a 1000 unit apartment complex? Do they need 1000 Renovate Right pamphlets? The questions go on and on, and we haven’t even finished the pre-renovation notification (which, by the way, is a portion of the RRP that was changed on July 6th, 2010). Once the maze of possibilities for notification has been navigated, and notification completed, a certified firm can finally begin the renovation. But wait a minute. This job has a general contractor and several different sub-contractors. Who is responsible for following the RRP? Who even needs to be a certified firm? Each step along the compliance path seems fraught with confusion. From who needs to be certified, to who is going to do the work, EPA is very specific in their direction. However, translating 40 CFR 745 (the regulating document) into language a renovator can understand is a challenge. Once a certified firm figures out who is going to be responsible and do the work, the firm must determine how to do the work in a manner that is compliant with the RRP. From the very beginning of the actual work, the firm faces challenges that are often not understood. These challenges can manifest themselves in something a simple as the requirement for Occupant Protection: Firms must post signs clearly defining the work area and warning occupants and other persons not involved in renovation work to remain outside the work area. To the extent practicable these signs must be in the primary language of the occupant (40 CFR 745.85(a)(1)). A firm that has embraced the training of the RRP may post the sign included in EPA’s curriculum for the RRP. Unfortunately this firm has now potentially strayed into a violation of yet another applicable regulation: OSHA’s Lead In Construction Standard. EPA signs posted to exclude occupants from the work area may not meet an OSHA requirement for signs to be posted while workers are exposed to particulate lead. Isn’t it enough that one 16

government body has regulations that affect the firm? Unfortunately, for certified firms to stay in compliance while performing the work, they not only need to understand the RRP, they need to be aware of and comply with OSHA’s Lead In Construction Standard, and HUD’s Lead-safe Housing Rule. Just when the certified firm thought they had the regulatory path figured out, another twist leads to more confusion. Additionally, upon completing the physical work on the renovation the firm still has more work to do. Recordkeeping (and reporting) is the next step along the compliance path. The certified firm needs to maintain detailed records documenting each step the firm took as they performed the renovation. These records must be maintained for a minimum of three years and must be available for when EPA decides to audit your records. The certified firm needs to be prepared to show EPA which properties required compliance with the RRP and then show EPA how the firm complied with those requirements. Even simple missteps, such as failing to record the number of wet disposable cleaning cloths used to complete the cleaning verification procedure can lead to a violation of the RRP. These small violations can add up quickly on each regulated property. At $ 37,500 per violation the consequences of failing to comply may be dramatic. With all this in mind, you need to now move beyond certification and new vacuum cleaners. You have entered the Compliance Zone, a world eerily unfamiliar to most; a world of recordkeeping, documentation, audits, findings and retraining. This phase of the RRP is manageable, repeatable, can be standardized, and requires investment and commitment. n Rob Dowse is a graduate of the United States Military Academy at West Point. It was through his experiences as a Nuclear, Biological and Chemical Officer that he first dealt with compliance issues and various US regulatory agencies. This experience has served him well as Director of Training and Compliance for CONNOR Institute. Attention to detail, and a keen eye for intricacy, are traits that Rob uses to ensure CONNOR Institute’s clients are always prepared for the challenges posed by the regulatory world.

September 2011 | AIM

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July 2011 Retail Center $2,475,000 Newark, NJ

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Save the Date for the 2012 Annual Meeting The 2012 Annual Meeting will be held on January 25 at the Imperia on Easton (1714 Easton Avenue, Somerset). Join us as we thank President Jeff Smith and install incoming President Brent Kohere. For more information contact Niambi Ivery at 732-992-0606 or niambi@njaa.com.

20 11

Celebrate Your Properties and Staff at NJAA’s 2011 Garden State Awards Thursday, October 20, 2011 Hyatt Regency New Brunswick

Each year, the Garden State Awards celebration recognizes the successes and accomplishments of our members and the professionalism of the companies for which they work. In its 18th year, the Garden State Awards celebration continues to bring together over 500 of the best and the brightest in the industry making it truly a memorable event. Excitement is in the air the night of the event, and this year we expect it to be even more palpable. Each individual finalist will receive a “Finalist” ribbon to attach to their badge as well as a Finalist certificate for display. Be sure to congratulate all of the finalists during our 1 ½ hour cocktail reception which has been extended for additional networking time. A dinner and Awards ceremony will follow the cocktail reception where the finalists will be recognized and the winners will be announced and asked to come to the stage to accept their Garden State Award. We can’t wait for this event and look forward to seeing you there! Use the registration form on the next page to register today!

Sponsorship Opportunities Are Still Available! Signature Event Sponsor (3 remaining) $5,000 CIS Management Inc • Signage at the Awards Dinner including your company logo* on screen • 10 complimentary tickets to the Awards Dinner for your clients and or staff • Premier seating at the Awards Dinner • Company recognized on printed Award Finalists Certificates • Signage including your company logo* displayed at registration • Recognition in the printed Awards Program (deadline Sept. 16) • “Signature Sponsor” ribbons on your event name badge • Company name recognition on NJAA Website • Acknowledgement in AIM magazine, both pre-awards and in post-awards issue

Centerpiece Sponsor (3 remaining) $500 LEW Corporation, Ellis, Central Wholesalers • Company name displayed within the centerpiece at each table • Signage including your company name or logo* displayed at registration • Recognition in the printed Awards Program (deadline Sept. 16) • “Event Sponsor” ribbons on your event name badge • Company name recognition on NJAA Website • Acknowledgement in AIM magazine, both pre-awards (deadline Aug. 8) and in post-awards issue

For more information please contact Niambi Ivery at niambi@njaa.com or 732-992-0606.

photos by Larry Falkow, The Apts (2010)

Cocktail Reception Sponsor SOLD OUT $1,000 Acadia Windows & Doors, Conifer Realty, Comcast, Law Office Of Michael Mirne, LLC • Company name or logo* printed on the drink tickets • Company name or logo* printed on the cocktail napkins used during cocktail hour • 2 complimentary tickets to the Awards Dinner for your clients and or staff • Recognition at bars and table tops during Reception (deadline for name Sept. 30) • Signage including your company name or logo* displayed at registration • Recognition in the printed Awards Program (deadline Sept. 16) • “Event Sponsor” ribbons on your event name badge • Company name recognition on NJAA Website • Acknowledgement in AIM magazine, both pre-awards and in post-awards issue

18th Annual Garden State Awards & Recognition Dinner

Registration Information:

• Your name badge will reflect your entrée selection. If an entrée is not indicated on the registration form, the chicken entrée will be ordered for you.

Thursday, October 20, 2011 Hyatt Regency New Brunswick

20 11

• Tables are assigned on a first come first served basis. Parties with less than 12 people will be seated with other attendees. No changes can be made to the seating arrangements at the event.

Cocktail Reception: 5:30pm n Dinner & Awards: 7:00pm

Registration Form

$135.00 per person by September 30*

• Bring an unwrapped new toy to the event and receive a raffle ticket for one of many gift baskets. The toys will be distributed at the NJAA Children’s Holiday Party.

$160.00 per person after September 30*

Contact: Name: ___________________________________________________________________ Company: _______________________________________________________________ Telephone: _________________________ E-Mail: ______________________________

• This event is open to NJAA members in good standing only.

Registrations: (Attendee name and property/company will be listed on badge as indicated below)

• Mail completed registration and payment to: NJAA Attn: Niambi Ivery 104 Interchange Plaza, Suite 201 Monroe Township, NJ 08831

Name: _________________________________________________________________

or fax to: (609) 860-0060

Property: ________________________________________________________________

• Contact Niambi at (732) 992-0606 or at niambi@njaa.com with questions regarding registrations.

Entree:

Property: ________________________________________________________________ Entree:

o Vegetarian

o Kosher

Name: _________________________________________________________________

• Registration Cancellation Policy: All cancellation requests must be in writing and sent to Niambi Ivery. Cancellations made prior to September 30 will be refunded minus a $25 processing fee per attendee. Cancellations made between October 1 and October 7 will be less the $25 late fee and the $25 processing fee per attendee. Refunds will not be issued after 5:00pm on October 7 for any reason. Substitutions can be made at any time. Registrations must be paid by September 30 to avoid surcharge. Registrations received after September 30 will be subject to a $25 surcharge. All registrations received after September 30 must be paid in full by October 14.

o Chicken

o Vegetarian

o Kosher

Name: _________________________________________________________________ Property: ________________________________________________________________ Entree:

o Chicken

o Vegetarian

o Kosher

Name: _________________________________________________________________ Property: ________________________________________________________________ Entree:

o Chicken

o Vegetarian

o Kosher

Name: _________________________________________________________________ Property: ________________________________________________________________ Entree:

o Chicken

o Vegetarian

o Kosher

Name: _________________________________________________________________ Property: ________________________________________________________________ Entree:

o Chicken

o Vegetarian

o Kosher

Name: _________________________________________________________________ Property: ________________________________________________________________

Payment Information:

o Visa o MasterCard o AmEx o Check Enclosed

o Chicken

Name: __________________________ Card # __________________________ Exp Date ________ Sec Code _______ Total $___________________________ Signature _______________________

Entree:

o Chicken

o Vegetarian

o Kosher

Name: _________________________________________________________________ Property: ________________________________________________________________ Entree:

o Chicken

o Vegetarian

o Kosher

Name: _________________________________________________________________ Property: ________________________________________________________________ Entree:

o Chicken

o Vegetarian

o Kosher

For NJAA Only:

Name: _________________________________________________________________

ID: _______________ Payment: _____________

Property: ________________________________________________________________

Reg #: ____________ Table #: ______________ C#: _________ V#: _________ K#:_________

Entree:

o Chicken

o Vegetarian

o Kosher Signature Sponsor

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cast in 6-feet of gold stares down over the main entrance of the Puck Building on Lafayette Street

ÇÎ ÇÓÈ { ÓäÊUÊnää { x n£Çx www.americanarchitectural.com

For a professional evaluation of your projects needs please call,

the current renovation project and history of this landmark building.

American Architectural Window & Door is honored to have been chosen and given the opportunity to join in

now contains both office space and ballrooms for large events on both the ground floor and the top floor.

the Puck Building as the work location of lead character Grace Adler played by Debra Messing. The Puck Building

of Public Service and department of Sociology moved in. Fans of television’s sitcom Will & Grace will recognize

In the 1980s, it was the home of Spy Magazine and in 2004, the New York University Wagner Graduate School

company who employed Alger Hiss, the former Assistant Secretary of State brought down in a 1950s spy scandal.

Numerous printing and related industry firms have called the building home including an office stationary

an example of Romanesque Revival architecture, designed by Albert & Herman Wagner, constructed in 1885.

Once the printing facility of Puck Magazine which ceased publication in 1918, this historic Puck Building is

red-brick design from the street, of a building rich in history.

in lower Manhattan. He is a reminder to all, who pass through the doors or those who admire the gorgeous

he iconic Puck, Shakespeare’s character from A Midsummer’s Night Dream, a plump impish figure

Renovations & Rehabs

Before and after photos of the outdoor area at Avalon Cove.

AvalonBay Remodels Avalon Cove Creating Classic and Comfortable Homes in the Heart of Jersey City’s Waterfront District AvalonBay Communities, Inc. is in the process of renovating its 504 apartment-home community, Avalon Cove, which is situated on an 11 acre parcel located in the heart of Jersey City’s Hudson River Waterfront District. Originally constructed in 1997, the 2 five story mid-rise buildings consist of 4 studio, 204 one-bedroom, 224 two-bedroom, 49 three-bedroom, and 23 four-bedroom apartments with lofts and penthouses available on select models. Offering spectacular Manhattan skyline views with convenient access to NYC via car, PATH train, and ferry, as well as the excellent local shopping and dining, Avalon Cove’s apartment and amenity enhancements are consistent with the vibrancy of its location. Avalon Cove apartments are being renovated with a blend of classic design and comfort in mind. A few of the features that can be found in each of the apartments are designer gourmet kitchens which include new countertops, stainless steel appliances, hardwood floors, and espresso cabinetry. Additional features include marble tile bathrooms, full size washer and dryers, 9-foot ceilings with fans, private patios or balconies, high speed internet, and disability access. For those seeking genuine luxury, there is the option of one of Avalon Cove’s more exclusive penthouse apartments, which are equipped with granite countertops and subway tile backsplash, five-burner stoves, beautiful bay windows and skylights, spacious walk-in closets, and gas burning fireplaces. In order to truly enhance the lives of its residents, renovating apartments simply was not enough. Exciting upgrades to Avalon Cove’s numerous amenities began with the expansion of the fitness center from approximately 1,500 SF to approximately 2,300 SF in order to incorporate a weight room and brand new Life Fitness cardio and fitness equipment wired for TV and Audio. Additional recreational activities such as the indoor racquetball and half-court basketball and two lighted tennis courts, also received various improvements. Providing a place for children to run and play was a priority which entailed the addition of an outdoor tot lot and relocating the leasing office and modifying the existing space as a kid’s room complete with private restroom and changing

facilities, flat screen TV’s, chalkboards and kitchenette. Relaxation is key to this community’s lifestyle and residents can unwind by taking a leisurely stroll along the waterfront walkway characterized by newly installed trellises, landscaping and decorative pavers, or swimming in the newly refinished sparkling outdoor heated pool which includes the addition of an elevated deck available year round for gatherings or sunbathing. When entertaining, residents have the option of utilizing the clubhouse which features a renovated kitchen and lounge area, three flat screen TVs and brand new billiard table or, enjoying an outdoor BBQ in the newly landscaped courtyards complete with picnic areas, new grills and furniture. The team at Avalon Cove has initiated measures to promote sustainability throughout its apartment community. Sustainable measures in each apartment include programmable digital thermostats; Energy Star® lighting and appliances; low-flow lavatory faucets and shower heads; and the use of low-VOC carpet to enhance air quality. Sustainable measures found throughout the community also include the installation of new and more efficient HVAC systems in the common areas and plans to incorporate single-stream recycling in the near future. AvalonBay Communities continually strives to implement improvements of both design and function that address the wants and needs of both prospective and existing residents. A newly renovated kitchen.

Editor’s Note: Thank you to Ron Ladell and Christopher Frank of AvalonBay Communities for sharing this story with NJAA.

Renovations & Rehabs

Before and after photos of kitchen renovations at Chestnut House.

Friedman Realty Group Transforms Chestnut House into Gem of Haddonfield Originally built in 1965 as a three-story office building in historic Haddonfield, New Jersey, Chestnut House survived a 1978 fire and was converted to include 18 apartment homes on the second and third floors and maintain approximately 8,000 square feet of first-floor commercial office space. While previous ownership kept the property neat and clean, they did not operate it to its full potential, letting Chestnut House sit untouched for 30 years without renovation or modernization. In January 2011, B&D Chestnut House Associates, LLC, an affiliate of Friedman Realty Group, Inc., successfully acquired Chestnut House Apartments and Offices. Brian K. Friedman and David B. Friedman, the principals of both the ownership and the management company, were armed with a bold vision and a comprehensive capital improvement program designed to position this property as Haddonfield’s gem. Through only six months of ownership, dramatic improvements have been made to the interior and exterior of the property.

cabinets. The new Energy Star stainless steel appliances, including a built-in microwave, faux granite countertop, subway tile backsplash, recessed lighting, and cherrycolored hardwood laminate flooring created a modern and sophisticated look. Continuing their apartment renovations, the living room was finished with stately features such as six-paneled doors, levered door handles, crown molding and custom paint. The bathrooms similarly received beautiful new ceramic tile on the floors and walls, new fixtures and vanities, and custom paint.

Among Friedman Realty Group’s immediate objectives was to achieve environmental efficiency and cleanliness. These objectives led to the replacement of an old, oilfired boiler with a new high-efficiency gas heating system and an independently gas-fired domestic hot water tank. Further reducing energy consumption, Friedman Realty Group is currently converting incandescent lighting to fluorescent throughout the exterior grounds and interior common areas. In addition, an extensive exterior cleanup was performed, which included trimming of overgrown trees, painting of the entrance porticos, and power washing of the brick façade. The cleanup was followed by a new custom landscape design that incorporated new plants and colors to highlight the colonial features and historic charm of both the building and community. However, the most dramatic improvements have resulted within the apartment interiors. Recognizing the need to modernize the kitchens, Friedman Realty Group tailored the kitchen renovations to complement a beautiful feature not recognized by the former owners: the natural cherry

The residential lobby has undergone major renovations as well. Custom mahogany panels were installed around the entire elevator car and the lobby and management office received a chestnut-colored paint, new window treatments, carpet, furniture, lighting, and artwork to bring warmth and elegance to the main residential entrance. The final phase of the interior design will be complete by the end of 2011. This includes new carpet, paint and light sconces in the second and third story hallways as well as new handicap-accessible bathrooms for the first-floor commercial space. Chestnut House is not only a splendid building, but also boasts unparalleled location within the heart of downtown Haddonfield. It is situated just onehalf block from all of the fabulous restaurants and shops historic Haddonfield has to offer, two blocks from the NJ PATCO for an easy commute to Philadelphia, and provides an abundance of parking at its front and back doors. Friedman Realty Group is excited to have acquired such a fantastic property and looks forward to the continuing improvements.

Editor’s Note: Thank you to David Friedman and Nicole Jackson of Friedman Realty Group for sharing this story with NJAA.

Renovations & Rehabs

Before and after photos of Dorchestor Manor.

Value Asset Management Completes Turnaround at Dorchester Manor in Bergen County Dorchester Manor, a rental community in the Bergen County, NJ Town of New Milford, is now one of the region’s most well-performing assets and apartment communities and one of the best managed properties thanks to the efforts of Value Asset Management (VAM), a division of the Clifton, N.J. based Value Companies, which provides full-service management capabilities and customized asset solutions to real estate investment and property owner clients. Less than one year after VAM was retained by the property’s owners to direct the management, leasing, operations and marketing efforts, the apartment community located at 195 Dilworth Road is nearing full occupancy of its 200 apartment homes. Dorchester Manor is a collection of one-and two-bedroom apartment homes situated in 18 buildings on a professionally-landscaped site, minutes from major shopping and commuter outlets. What’s more, the company recently completed an aggressive $1 million capital improvement program to modernize and significantly update the community. The upgrades include insulated energy efficient windows and apartment entry doors, new shutters, removal and installation of new landscaping, new roofs on select buildings and apartment renovations. Additionally, VAM is looking forward to pursuing more improvements in the near future. While Dorchester Manor was already well known in the region as a rental address and a great asset, the owners of the property wanted a new set of eyes that could take the complex’s performance to the next level. To accomplish this, VAM incorporated certain aspects of traditional management with a more modern technique and a more technologically-advanced approach. The end result is an efficient and effective management operation, a high

level of customer service and satisfaction and an increased leasing velocity and resident retention. Value Asset Management offers a “hands on” approach, staffing communities with the kind of multifamily professionals, leasing agents and maintenance personnel that have been instrumental in crafting Value’s sterling reputation for customer service and management efficiency. As its corporate name suggests, Value Asset Management also, but not exclusively, specializes in value-add multifamily investments; properties where there are opportunities to redevelop, reposition, or generally improve the fixed assets, curb appeal, resident relations, maintenance operations and other programs that make improving real estate an exercise in community building and value creation. Another added bonus is Value’s unique skill set that comes from developing, owning and managing a variety of properties, including large-scale suburban and urban sites and low-and mid-rise buildings. For more information on Value Companies’ third party property management services, please contact the company headquarters at 973473-2800 or visit www.valuecompanies.com.

Editor’s Note: Thank you to Jack Linefsky of Value Companies and Robert Kelly of Cahn Communications for sharing this story with NJAA.

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Regulatory Roundup

After Years in the Regulatory Pipeline, NJAA Sub-metering Measure Approved By John Cranmer, Esq. Archer & Greiner, P.C.

ew Jersey’s Board of Public Utilities (BPU) has reversed a long-standing ban on sub-metering in rental housing by permitting water sub-metering in new, multifamily rental development, thereby joining the other 49 states in permitting at least some form of sub-metering. This significant step resulted from the New Jersey Apartment Association’s work to legalize sub-metering, an effort that spanned 10 years and six Governors. The BPU’s August 2011 Order approving the NJAA’s Petition to permit sub-metering is a significant achievement and one of the first-implemented energy policy recommendations from Lt. Gov. Kim Guadagno’s bi-partisan Red Tape Review Commission Report. The need to revisit New Jersey’s restrictive policy on submetering in rental housing was listed as a specific policy recommendation in the Red Tape Report of April 2010. NJAA received support from 15 state Legislative leaders as well as Plan Smart NJ, a leading planning and land use organization. (see page 29 for a full list of our supporters) What is Sub-metering? “Sub-metering” enables end users to pay only for their own water usage, rather than all users in a building either paying the same regardless of consumption “in rent” or paying an arbitrary fixed amount in addition to rent known as “RUBS”. Most commonly, a property owner or manager will hire a sub-metering firm to install sub-meters and then read them monthly. The sub-metering firm then bills each resident for the amount of water actually used. Once the sub-metering company has collected the payments, the money is turned over to the property owner to cover the water company’s bill to the apartment development. New Jersey’s Regulation of Sub-metering Sub-metering in New Jersey has a somewhat complicated history and regulatory scheme, including different rules depending on the property location and commodity provider. Some properties are served by a BPU-regulated

utility, while others are served by a municipality or municipal utility authority (MUA). While most electric and gas service is provided by regulated utilities and therefore subject to BPU jurisdiction, water service is split evenly between BPU-regulated utilities and MUAs. MUAs that provide utility service are not subject to BPU regulation. As a result, while MUAs have the power to regulate submetering, most do not, which leaves landlords and their counsel to determine whether they have the authority to sub-meter and, if so, under what terms. Unlike MUAs, utility companies are subject to BPU jurisdiction, and while there are no statutes or regulations governing sub-metering, the BPU takes the position that a 1931 New Jersey Supreme Court decision left the decision whether to permit sub-metering to the BPU’s discretion. BPU policy permits sub-metering of electric and gas service in: 1) industrial or commercial buildings; 2) publicly financed and government-owned buildings; 3) cooperative housing or condominiums; and 4) eleemosynary (charitable) institutions. Historically, the BPU had explicitly prohibited sub-metering electric and gas, and, by extension, water, in rental housing. A significant factor in the BPU’s historical prohibition of sub-metering appears to be an institutional distrust of rental housing providers and, to a lesser extent, the lack of reliable technology available during formulation of BPU’s submetering policy. In March 2000, the NJAA submitted a Petition requesting BPU approval of water sub-metering. Four years later, on April 20, 2004, the BPU’s staff recommended denial of the Petition. While the BPU never formally adopted the 2004 recommendations, the Board instituted an extended working group process that led to a five-year pilot program on sub-metering in conjunction with the New Jersey Housing and Mortgage Finance Agency (HMFA). This pilot program was limited to electric and gas sub-metering and continued on page 28

September 2011 | AIM

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AIM | September 2011

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Regulatory Roundup After Years in the Regulatory Pipeline, NJAA Submetering Measure Approved continued from page 26 was restricted to HMFA-financed, subsidized/affordable buildings. On November 20, 2009, under somewhat controversial circumstances, the BPU suspended the pilot program, effective January 1, 2010. The 2010 NJAA Petition On December 9, 2010, Archer & Greiner, P.C., acting as attorneys for the NJAA, filed a Petition with the BPU requesting the legalization of water sub-metering in newly constructed, multifamily rental housing. The narrowly crafted Petition was designed to build upon sub-metering’s inclusion as a key policy recommendation in the Lieutenant Governor’s bi-partisan Red Tape Report and steer clear of the historically most contentious issues that have raised obstacles to sub-metering, including rent reductions and conservation issues in retrofits. NJAA submitted overwhelming evidence of the conservation benefits of sub-metering, including a 2004 study by the U.S. Environmental Protection Agency (EPA), which found an average water savings of 15% after sub-meters were installed in multifamily rental communities. Dartmouth University also conducted a study that year, which identified savings of 20% to 32%. These studies concluded that sub-metering encourages people to conserve when they are fiscally responsible for paying the bill and held accountable for personal usage. Sub-metering also allows building owners to remove from their side of the ledger an unpredictable and difficult-to-control utility expense that has been rising faster than inflation, and to place the expense with the party that can directly control usage. After eight months of extensive discovery and meetings with BPU staff and the New Jersey Division of Rate Counsel, the BPU approved water submetering in newly constructed rental housing. The Meaning of the BPU’s 2011 Order Under the August 2011 Order, sub-metering is permitted in new construction, subject only to the terms of the lease and, critically, the definition of sub-metering. The BPU’s convoluted definition of sub-metering boils down to the following: Sub-metering is permitted when the primary consumer (the utility’s customer of record, that is, the building owner or manager) charges the tenant for actual usage, provided that the sum of such charge(s) shall not exceed the cost incurred by the primary consumer for providing the utility commodity. In addition, the sum of such charge(s) may not exceed the amount that the utility serving the primary consumer would charge a private 28

residential customer for the same service. The resale of water for profit is prohibited. New construction has been broadly defined by the BPU to permit sub-metering in new construction and, in some cases, renovation of existing rental multifamily housing. The Order states as follows: Any building, where, as of the effective date [of the Order], pipes, service lines or other water infrastructure has not been installed beyond the utility company’s meter, will be permitted to sub-meter. Repurposing existing buildings for residential use will be considered new construction and such buildings will be permitted to sub-meter pursuant to this order, only if, as part of the conversion, all existing pipes, service lines or other water infrastructure beyond the utility company’s meter are removed and new pipes, service lines or other water infrastructure are installed. In order to sub-meter, care must be taken to draft a lease provision or addendum that clearly lays out the responsibilities of the property owner or manager, submetering company and resident. The sub-metering program must be designed so that the property owner does not inadvertently “make a profit” and must meet the BPU’s definition of sub-metering. Additionally, the cost of installing the sub-meters and any associated equipment may not be directly passed on to the residents. The BPU Order does not affect sub-metering water in properties that are serviced by MUAs nor does it permit sub-metering of water in existing apartment buildings. The battle to permit sub-metering in existing apartment buildings – and the billions of gallons of water that could be saved – is left to another day, and will surely be a hotly contested and controversial issue. n John D. Cranmer is a member of NJAA’s Board of Directors and Legislative/PAC Committee, as well as the Utility Sub-Metering and COAH task forces. He is a partner in the Haddonfield office of the law firm of Archer & Greiner, where he concentrates his practice in the areas of real estate development, real estate transactions, commercial real estate, commercial lending, real estate brokerage, utility issues, fair housing law, affordable housing law, land use and environmental permitting and liquor licensing. If you have any questions concerning the BPU’s Order permitting sub-metering, do not hesitate to contact John at 856-616-2686 or jcranmer@archerlaw.com. September 2011 | AIM

T h a n k Yo u

Thank You to Our Legislative Allies The NJAA’s advocacy effort to secure BPU approval of our water sub-metering petition included outreach to several key Legislative leaders in both houses and on both sides of the aisle. In addition to the 15 Legislators who supported our petition, PlanSmart NJ, a leading land use and planning advocacy group in Trenton, also sent a letter to BPU President Lee Solomon expressing support. Assembly

Assemblyman Joe Cryan, Majority Leader (D-Union) Assemblyman Alex DeCroce, Republican Leader (R-Morris) Assemblyman Jon Bramnick, Republican Conference Leader (R-Union) Assemblyman Dave Rible, Republican Whip (R-Monmouth) Assemblyman Scott Rumana, Deputy Conference Leader (R-Passaic) Assemblyman John McKeon, Chair – Environment Committee (D-Essex) Assemblyman Lou Greenwald, Chair – Budget Committee (D-Camden) Assemblywoman Pam Lampitt, Chair – Higher Education Committee (D-Camden) Assemblywoman Mary Pat Angelini (R-Monmouth)

Senate

Senator Jeff Van Drew, Chair – Community & Urban Affairs Committee (D-Cape May) Senator Tom Kean, Republican Leader (R-Union) Senator Kevin O’Toole, Republican Whip (R-Essex) Senator Bob Gordon, Vice Chair – Environment Committee (D-Bergen) Senator Steve Oroho, Member – Permanent Red Tape Review Commission (R-Sussex) Senator Sean Kean (R-Monmouth)

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Higher Learning

New Jersey Multifamily Market Continues to Perform Well By Jose Cruz HFF (Holliday Fenoglio Fowler, L.P.)

s we approach the end of the summer and the start of the 4th quarter of 2011, the New Jersey multifamily market continues to steam ahead with steady closings and aggressive pricing. The investor demand for Class A and B multifamily product in the Garden State has been strong since the real estate market began to recover in March 2010. We have seen the bid/ask spread between buyers and sellers narrow and have even begun to witness certain properties trade above the whisper pricing. Thatâ&#x20AC;&#x2122;s a good sign for investors on both sides because it usually signals that product flow will begin to increase. In addition, this summer we witnessed the portfolio premiums begin to emerge, given the pricing on the AIG portfolio pool #1 that traded in July 2011. This was a 2,185-unit, six-property portfolio that traded for $241.5 million in New Jersey. In addition, there are certain â&#x20AC;&#x153;finiteâ&#x20AC;? life equity funds that must invest or return capital in the next six to nine months as these were raised the last few years. These funds are searching for product in a fairly aggressive manor. Given the demand that I just highlighted, investors are expected to migrate up the risk curve slightly, although they are very still cognizant of the current economic conditions. Developers are positioning themselves to begin new projects during the remaining months of 2011 in towns like Hoboken, Morristown, and the Waterfront, as demand from renters in those towns fuels rent growth helping to further justify new construction. There has been limited new development, however projects that have been constructed like the Monaco in Jersey City leased in record time. Meanwhile, the return-on-costs have dropped below eight percent now in the suburbs and are in the six to seven percent range on the Waterfront depending on the project. Cap rates had declined to record levels over the last 12 months and they have held steady at a range of 4.6 to

5.2 percent for Class A product and a range of 5.85 to 6.7 percent for Class B product. We do not expect them to dip further and given the transactions we are seeing price in the market right now, the caps are holding steady for multifamily product. In addition, the debt markets have been extremely favorable for multifamily product through July 2011. The agencies are still underwriting aggressively (typically 75 to 80 percent loan-to-value), however life companies and regional banks have now caught up and are presenting more competition on rates. The majority of recent sales have included existing debt, which has led to long assumption periods or expensive prepayment penalties. Class B product has been in high demand as investors like the reasonable price per unit, the usually in-fill location, and the strength of the working class renter at those properties. We have seen cap rates for B product in good locations price at a sub 6 percent cap rate with several bidders positioning to win the sales process. Current occupancies for Class A multifamily product are 96.5 percent on average based on our apartment sampling and 94.7 percent for Class B product. The waterfront market as a submarket ranging from Edgewater to Jersey City is currently running at 97.8 percent for Class A. The New Jersey multifamily market has seen concessions disappear for the majority of the rental product and rents have climbed on average between four and six percent over the last three months. Although we do see a slight leveling off of the rent growth given the speed at which the market has recovered. We expect it to pick back up in September through November and then possibly level off again as the holidays are not historically busy times for the rental agents.

September 2011 | AIM

Higher Learning There are some key economic indicators to keep an eye on such as rising interest rates that may have a dampening effect in the mid-term on the multifamily market, but at this point this doesnâ&#x20AC;&#x2122;t appear to be a factor. NOIâ&#x20AC;&#x2122;s have to rise 12-16 percent to offset a 100 basis point move in the rates. In addition, the jobs reports specifically the unemployment data in New Jersey is an important leading index for multifamily demand for obvious reasons. Any prediction on the near term future of the commercial real estate market will be tied into the health of the economy. If the equity markets continue to decline, investors will be searching for a safe haven and hard assets such as real estate will become more prevalent. If all holds steady in the capital markets, we do expect multifamily in the New Jersey market to continue to perform well and draw significant investor interest. n Mr. Cruz is a Senior Managing Director in the New Jersey office of HFF (Holliday Fenoglio Fowler) with over 20 years of experience in commercial real estate. He specializes in investment sales in New Jersey, New York State and Connecticut. Over the course of his career, Mr. Cruz has been involved in over $17 billion of office, industrial, retail, multi-housing and land sales. Mr. Cruz joined the firm in March 2010. Prior to HFF, he was the Executive Director of Cushman & Wakefieldâ&#x20AC;&#x2122;s New York Area Investment Sales Group where he spent more than 17 years. Cruz began his real estate career as a Real Estate Analyst at PaineWebber, UBS, Inc.

AIM | September 2011

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Special Guests at the 8th Annual PAC Reception The Honorable James J. Florio - Governor, State of New Jersey (1990-1994) Governor James J. Florio is a founding partner of Florio Perrucci Steinhardt and Fader. Governor Florio has been a University Professor for Public Policy and Administration at the Edward J. Bloustein School at Rutgers, The State University of New Jersey. As the Governor of New Jersey from 1990 through 1994, he was responsible for signing into law the Clean Water Enforcement Act (1990), one of the strongest Environmental laws of its type in the nation. He also signed the Quality Education Act, which provided greater equity in New Jersey’s school finance system, a landmark welfare reform package, a health care cost-reduction program and the nation’s toughest assault weapons ban. While in Congress from 1974 through 1990, representing the 1st District of New Jersey in the U.S. House of Representatives, Governor Florio authored the Comprehensive Environmental Response Compensation and Liability Act, known as the “Superfund” law, our nation’s primary program for cleaning up hazardous waste sites. Governor Florio also wrote the legislation that privatized Conrail and served on the U. S. Secretary of Energy’s Advisory Board. Governor Florio entered public service in 1969, serving three terms in the New Jersey General Assembly. Previously, he was an attorney in private practice in Camden County. Governor Florio received his Juris Doctorate from Rutgers University Law School in Camden. He graduated magna cum laude from Trenton State College and attended graduate school at Columbia University, where he received a prestigious Woodrow Wilson Fellowship. Governor Florio holds numerous honorary degrees and was the 1993 recipient of the Profile in Courage Award by the John F. Kennedy Library Foundation.

The Honorable Donald T. DiFrancesco - Governor, State of New Jersey (2001-2002) The fifty-first Governor of New Jersey and a long-time member of the State Senate, Donald T. DiFrancesco served the citizens of New Jersey with distinction for more than 25 years. Gov. DiFrancesco’s career in public service began with his election to the New Jersey General Assembly in 1975 when he was just over 30 years old. In a special election on November 6, 1979, Gov. DiFrancesco was elected to the New Jersey State Senate. He served as Minority Leader from 1982 to 1984. In 1992, he was chosen to serve as President of the Senate, setting a record for his decade-long service in that role. On January 31, 2001, when Gov. Christine Todd Whitman resigned to become Administrator of the US Environmental Protection Agency, Gov. DiFrancesco became the first New Jersey legislator since the amendment to the 1947 State Constitution to serve in the dual role of Governor and Senate President. He served with distinction, providing New Jersey with outstanding leadership, particularly during the difficult period following the terrorist attacks of September 11, 2001. Gov. DiFrancesco’s legacy of leadership relating to health care, children and families is evidenced in the success of the Catastrophic Illness in Children Relief Fund, which has provided more than $100 million in grants to over 4,000 families whose insurance and income cannot meet the medical bills for children with major illnesses. He was also the prime sponsor of the Family Leave Act in New Jersey, the first of it kind in the United States. As Acting Governor, he also unveiled the $53 million “KIDSNEEDS ACTION PLAN,” which supported a range of initiatives for children. Gov. DiFrancesco graduated from Pennsylvania State University in 1966 and Seton Hall University School of Law in 1969.

Jim Hooker - Political Commentator and Former Anchor - NJN News A veteran of State House politics for more than twenty years, Jim Hooker has covered some of the biggest news stories in recent New Jersey history. Jim and his NJN team won a national CINE award in 2005 for a special broadcast he wrote, coproduced and hosted. Jim also was a member of the NJN News team that won a 1996 Mid-Atlantic Emmy Award for best newscast. His contribution to the entry was a story about the concerns of residents of a North Jersey neighborhood that is home to a federal Superfund site which was visited by President Clinton. He has also won numerous individual national, regional and local press awards. Before joining NJN, Jim was a staff writer at three newspapers and spent 10 years with The Times of Trenton and the Asbury Park Press. As a member of the Asbury Park Press State House bureau, Jim shared first place honors from the New Jersey Press Association for the bureau’s reporting on the 1993 governor’s race. Jim was also recognized in 1994 by the New Jersey Chapter of the Society of Professional Journalists for public service for a series of reports on sex offender notification programs in Washington State and their impact on neighborhoods and offenders. The series ran as New Jersey lawmakers were debating Megan’s Law.

8th Annual NJAA PAC Reception Tuesday, October 4, 2011 7:00 to 9:00 PM Crestmont Country Club, West Orange Special Guests:

The Honorable James J. Florio Governor, State of New Jersey 1990-1994

The Honorable Donald T. DiFrancesco Governor, State of New Jersey 2001 - 2002

Moderator

JIM HOOKER Political Commentator and Former Anchor of NJN News Host Committee Michael Barry, Applied Property Company William Dailey, CIS Management Inc. Jonathan Gershen, The Gershen Group Michael Goldberg, Goldberg Realty Michael Haydinger, First Montgomery Tom Kretsch, Segal & Segal Jeff Kurtz, The Kamson Corporation David Legow, Legow Management Jeff Smith, Kriegman & Smith Host Committee in formation Paid for by NJAA PAC

THANK YOU TO OUR 2011 PAC CONTRIBUTORS Deposited as of September 6, 2011 Lynne Aber Bertram Associates $1,000

Larry Falkow The Apts $1,000

Jack Linefsky and Andrew Abramson Value Companies $1,500

Matthew Adler Adler Residential $1,000

Ray Fiorica AFR Furniture Rental $1,000

Jerome Lombardo and Jay Lombardo C.J. Lombardo Company $2,000

The Barry Family Applied Development Company $10,000

Jonathan Gershen, Esq. The Gershen Group, LLC $1,000 First PAC Contributor of 2011

James McGrath PRD Management, Inc. $1,000

Michael Beirne The Kamson Corporation $1,000 Andrew Cohen Rock Properties $1,000 Jonathan J. Cohen and Neil A. Owens Elias B. Cohen & Associates $1,000

Michael Goldberg Goldberg Realty Associates $1,000 Alan Hammer, Esq. Brach Eichler LLC $1,000 Michael Haydinger First Montgomery Group, AMOÂŽ $1,000

Michael Oâ&#x20AC;&#x2122;Dea Hekemian & Company, Inc. $1,000 Diana Penn JMG Realty, Inc. $1,000 Carol Richards Corsa Management $1,000

Thomas E. Cohn, Esq. Coughlin Duffy LLP $500

George Jacobs JK Management, LLC $1,000

Marshall Rosen, Mark S. Rosen, and Marc S. Solomon Solomon Organization $3,500

Vincent Comperatore Comperatore Associates, Inc. $1,500

Jason Kaplan Kaplan Properties $1,000

David Siegel Coinmach Corporation $1,000

George D. Cowden Multi-Housing Depot By ARI $1,000

Brent Kohere Home Properties $1,000

Ron Simoncini Axiom Communications $500

John D. Cranmer, Esq. Archer & Greiner, P.C. $1,000

Tom Kretsch Segal & Segal $1,000

Jeffrey Smith Kriegman & Smith, Inc $1,000

Dawn Curto Roseland Property Company $1,000

Ronald Ladell AvalonBay Communities, Inc. $1,000

Stephen Waters Morgan Properties $1,000

William Dailey CIS Management Inc. $4,500

Anthony Lauro Affiliated Management, Inc. $1,000

Jeffrey Wiener and Robert Holland Kislak Company, Inc. $1,000

William Diggs Renaissance Equity, LLC $1,000

The Legow Family Legow Management Company $27,000 Largest Family Contribution of 2011

John Zoetjes American Architectural Window & Door $1,000

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Prepare for SHCM Exam Online Affordable housing management professionals can now prepare to earn their Specialist in Housing Credit Management (SHCM) certification by studying online. This convenient and affordable Webinar-based study method is based on the National Affordable Housing Management Association’s (NAHMA) “Practical Guide to Tax Credit Housing Management” workbook. Participants will receive course materials in pdf format. Register at http://www.naahq.org/ onlinelearning.

Attention Independant Rental Owners The new Independent Rental Owner Professional (IROP) designation program is offered to the rental owner who manages their personally held multifamily property or properties. The independent rental owners who take the IROP course will learn the many business practices of professional property managers and can now earn the IROP designation and certificate after completing the course of study and passing the online exam. Visit http://www.naahq.org/IROP

September 2011 | AIM

2011-2012 Education and Event Calendar S E P TEMBER 15 FREE

Capture and Retain Residents through Popular New Media Channels by Apartments.com

O C TOBER 4 $500

8th Annual NJAA PAC Reception Crestmont Country Club, West Orange

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Presentation Skills by Jackie Ramstedt, Ramstedt Enterprises

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18th Annual Garden State Awards Hyatt Regency, New Brunswick

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Fair Housing Basics by Chris Hanlon Esq., Hanlon Niemann, P.C.

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Unless otherwise noted, all sessions are held at NJAA Headquarters.

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For more information and non-member rates contact us at 732-992-0600 or visit the Events Calendar at njaa.com. Share Your Expertise with NJAA Members Now Accepting Education Proposals for 2012! Do you or your company have knowledge on a particular topic or subject that would be of interest to fellow NJAA members? If so, now is the time to submit your presentation proposal. All proposals will be considered, provided they include subject title, speaker name(s), program length and brief program outline. Additionally, we are in need of instructors for the following NAA Designation courses and programs: National Apartment Leasing Professional (NALP), Certified Apartment Managers (CAM) and Fair Housing and Beyond. If interested, please complete and submit a Proposal Request. If available, please include handouts, PowerPoint and other session materials intended for class use. Please call Niambi Ivery directly at (732) 992-0606 for more information.

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