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Philadelphia Inquirer Article

Jacob Adelman of the Philadelphia Inquirer recently published an article detailing how the Philadelphia City Council has approved a real estate transfer tax law that will close existing loopholes, and could have a huge impact on future transactions.

I found it very informative and wanted to share with anyone else that was interested in the Commercial Real Estate industry.

Click this link to view the article!

Posted in: Commercial Real Estate

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The Cities are Hot, The Suburbs are Not

The Cities are Hot, The Suburbs are Not

The Cities are Hot,   The Suburbs are Not

The world of commercial office space is changing.  The questionsis not only how it’s changing but where?

In the 1940’s and 1950’s, returning GI’s left the cities to buy their dream homes in the suburbs.  The developers were more than happy to accommodate and thus began the suburban sprawl.  Office buildings were built to accommodate companies that wanted offices near their owners, employees, and customers.  For over 50 years, this cycle repeated itself throughout the country and suburban office markets boomed.

This changed in the first decade of the new millennium.  The millennials, raised on digital social connectivity, wanted social connection in real life and a lifestyle incorporating working, living, and playing, in the same proximity.  They moved to cities, both large and small, that could accommodate their lifestyle: New York City, Los Angeles, San Francisco, Chicago, Boston, Denver, Salt Lake City, Nashville, Austin, Portland, and Phoenix.  Technology and other industries followed, driven by their need for millennial talent.  As a result, the millennial population and businesses grew exponentially in the cities while declining dramatically in the suburbs.

The question is how long will this new paradigm last?  It has been predicted that once the millennials reach forty years old they will start families, want houses, and move to the suburbs.  Since the millennials are defined as the demographic born between 1980 and 2000, the first 40-year-old millennials won’t reach us until 2020.  All we can do is wait; time will tell.

Posted in: ITRA Global

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Low Ceiling with Gray Skies, or Blue Skies caused by FASB Rule Changes?

low_ceilingimg_87581 blue_skiesimg_86911









In the Spring 2016 Issue of National Association of Realtors magazine, Commercial Connections, in an Advocacy Article titled “A Look at Several of The Issues Important to your Business” under “Lease Accounting” there is information on the new FASB Standards that were released in February 2016. This is a reference to the Financial Accounting Standards Board, FASB Accounting Standards Update No. 2016-2 February 2016, Leases (Topic 842).

This is the first big change in something like 40 years to the standards for Lease Accounting.  It does apply to all leases, not just commercial real estate leases.  For companies that use GAAP accounting it goes into effect December 15, 2018.  Most private companies have until 2019 for fiscal years beginning December 15, 2019 to transition to the new rules. There is a lot to digest. And I suspect companies that use GAAP accounting are working now to get their arms around this.  And they may need either more accountants and/or real estate brokers to  assist with gathering and organizing the data and formulating a strategy for office, industrial, and retail leases.

From NAR’s article under Lease Accounting they ask “What does this mean for my business? The new standards could harm businesses of all sizes, especially lessees and lessors of commercial real estate.  With more bloated balance sheets, some companies may see their debt to equity ratios increase and find it more difficult to obtain credit, especially those with heavy debt loads or still recovering from the recession. The new standard could also complicate compliance with debt covenants or agreements between the bank and borrower, which usually prohibit companies from borrowing more than they are worth.  By capitlalizing new and/or existing leases, some businesses could show more debt than allowed in their agreement with the lender, and therefore be in default of their loan.  This could force some firms to put up more capital for existing loans or even have their credit lines revoked. “

“Additionally, the elimination of off-balance-sheet financing could be detrimental to commercial property owners. More frugal lessees will want less space and shorter-term leases without renewal options or contingent rents, which will decrease cash flow for property owners.  Short-term rents will likely reduce the borrowing capacity of many commercial real estate lessors, who rely on lessees and the value of the property as collateral in order to obtain financing.  Ultimately, property owners would be forced to increase rent rates due to market uncertainty and reduce tenant improvements due to shorter recovery periods.  Conversely, this change could encourage some firms to consider buying instead of leasing commercial real estate.”  We shall see what kind of weather this causes for CRE.


Posted in: Commercial Real Estate

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Montgomery County Office Trends 2016


Let’s look at trends in the office markets in Montgomery County mid year to the Fall 2016.

Vacancy in the overall market is just under 12%. The average gross rent is $24.00 psf per year, BUT quality matters. Looking at vacancy and rental rate trends in Class A Office Space in Montgomery County PA you now see a vacancy in 7.3% and rates average $28.00 psf, please see the graphs below.

Office Montgomery County PA


Vacancy & Rental Rates

Just shy of $24.00


Class A Office Space in Montgomery County PA


Within Montgomery County vacancy and rates vary by location within the county. It is broken down into towns and A, B, C class office space.


Office Market Mid-Year 2016


                                   CLICK TO ENLARGE

Montgomery County

Class A, B, C


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Hiring a Commercial Real Estate Agent

With the advent of the internet and the wealth of information available online…. do I really need a commercial real estate agent to assist with my commercial real estate transaction?

Yes, and here is why.

As you can imagine finding a business location and/or a lease renewal for a location is a process. It is not just identifying a building and zip code it is more, and for those purchasing, it is a long term investment.

It is most efficient if you select a commercial real estate broker who can help you do the following:

  • See the Big Picture
  • Understand the Value of your Purchase
  • Negotiate the Best Terms Possible
  • Devote the Manpower and Time to Achieve all your Goals

Most commercial real estate agents work on a contingent basis, meaning they will get paid upon the purchase, or signing of the lease, which is usually paid by the Seller, or  Building owner. This type of arrangement is often a win-win situation for the company as they are not obligated to make a purchase. With that being said a company may also enter a retained agreement  with a retainer for services for a larger project that will take several years. Also most agents are working for the Buildings Owner. If you are a business looking for a location, or faced with a lease renewal, select an agent to represent your business.

If you decide to hire a commercial real estate agent we suggest you interview a few professionals and choose someone you like, trust and who has experience!

Posted in: Corporate Office Space

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Tenant Representation or Personal Shopper?

Tenant Representation is like being a personal shopper for a very large and complicated purchase; an industry term is Transaction Manager for the Tenant.  The women of C.R.E.W., Commercial Real Estate Women, might agree this is one reason women make great commercial real estate brokers. Women know what they want, how to find it and are excellent negotiators.

tenant representationPeggy Gallagher, owner of PG Commercial Real Estate and a woman real estate professional weighs in on the benefits of Tenant Representation and the value it has to a Business.

What makes an office space purchase, or lease, a complicated purchase? For starters the multiple layers from identifying the properties, to financing, to space layout, to taxes and orchestrating the move itself.

  • Knowledge of the language in contracts and the business terms associated with it
  • Distinguishing factors and expectations of different property classes: A, B etc
  • Setting expectations and help to compare industry standard in a purchase or lease, which can assist with the negotiation process
  • Access to information on available property and market information
  • Value & Cost Comparisons Breakdown of actual cost per square foot to compare Buildings
  • Assist you in building your Real Estate Team with key players
  • Compare and contrast similar properties

If you are approaching a lease renewal, or looking to move office space, and in need of a personal  real estate shopper, contact Peggy for how to get started!

Posted in: Corporate Office Space

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Considering Office Space in Montgomery County?

Considering Office Space in Montgomery County?

Is your business considering new office space in Montgomery County, PA?  If you have not does so already there are a few things you can do before you start hunting for properties. First things first.

Assess and summarize your current use of office space. 

Here are a few topics and ideas you may want to consider when choosing to look for new office space. This will help guide you to what you might need or want to look for that you may not have already considered.


Start with a basic list of PROS and CONS of your current office space. What do you like? What do you not like? How is the office layout? Where are the problem areas? Is the office layout conducive to the work environment and individual or team dynamics?


Do you plan to expand or downsize your staffing needs over the next 5 to 10 years? Although hard to predict a business usually knows based on sales projections and a working business plan when more staff, or production space will be needed.  This should be a strong consideration in finding new space to be sure that you can grow into it, or have the option to add more space, if or when needed.


Employees, Customers & Prospective Employees. Will your move affect your current employees commute? Will a move to another town improve visibility to prospective employees?


Posted in: Corporate Office Space

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Las Vegas ITRA Global Conference 2013

Las Vegas ITRA Global Conference – April 5th to 7th, 2013

So far 2013 has been a busy one, here is a quick recap from my trip to Las Vegas!

April 5th to 7th I attended the ITRA Global Conference hosted in Las Vegas.  A special thanks to Banner Travel in Rockledge, PA for assisting me in making my travel arrangements for this trip via Southwest Airlines and the Wynn Hotel.  When I arrived I was able to get tickets to the Cirque Du Sole show, KA at the MG M Grand. Ka was a spectacular show, if you get a chance to see it, go! Ka has been described as the following: “Ka… signifies life-force, consciousness, duty and destiny. In the vulgate, or low speech, it also means a place to which an individual must go.” ITRA Global Logo located on the homepage of PG Commercial Real Estate the website of Peggy Gallagher Commercial Realtor in Montgomery County, PA


On Friday, Melissa Meyer President of Bruce International, Inc. (transcending translations) presented and did an excellent job. It was amazing to listen to her Top Ten Questions to ask our customers who maybe relocating out of our country, sending a team aboard, or a company locating in the US from somewhere else. Melissa also cited examples that highlight the reasons for using a specialized company, such as Bruce International, to assist with translations and customs of a culture if you are planning to do business outside of your own country.  There are cases where the  same words in a language can have different meanings or uses varying with the local culture; just think about the differences in the expressions of the British versus the US English.  During the presentation the question of the accuracy of Google Translation came up. This was an excellent example of a great tool that can translate out of context. The lesson we walked away with was, it is not worth it to insult or offend a client and to rely on a human translation vs an automated translation to ensure the translation is accurate to the situation and in context!

Many of the conference speakers were principals of other ITRA Global Affiliates. Other guest speakers included Matt Weirich and Ani Rangarajan, co-founders of ReaLync. On Saturday one of our ITRA Global members, Ron Pollina, Ph.D., shared his valuable experience in completing  Sale/Lease backs transactions.  The transactions  he used as examples were huge, significant sizes, in terms of dollar volume.

I gained a lot of good useful information  by attending the conference.  As an organization (ITRA Global) three new members were accepted to be exclusive ITRA Global Affiliates for Orange County (Corporate Realty Advisors), Los Angeles County (Mazirow Commercial), California, and Salt Lake City (Logical Move), Utah. Congratulations to our newest members, welcome to the team!

Vegas MoutainsWynn Hotel Street ViewTerrible's HotelPoolside Garden - Wynn

Hotel Lobby - WynnTreasure Island HotelWynn Lobby



Posted in: ITRA Global, Peggy's Travels

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What do commercial real estate business women do on the weekends?

Empire State Building

What do some commercial real estate and business women do on the weekends?

Have fun, of course! On Sunday April 14th a group of professional women took a Bolt Bus ride to New York City to see Breakfast at Tiffany’s at the Cort Theatre.  We had a delicious lunch at a fabulous Greek restaurant on 44th Street between 5th and  6th Avenues. We are a group of professional women that work hard and take trips to NYC thanks to our organizer Maureen Mastroieni, President of Mastroieni Associates. Our group included: Nancy Mastroieni from Mastroieni Furniture, Susan Giraldi of The Philomena Construction Group, Eileen Lynn of E, H. Lynn & Associates, Diana Sperle from Unisys, and me Peggy from PG Commercial Real Estate.

Here is a photo from our trip of the Empire State Building and the Hotel New Yorker – 2 iconic locations in NYC.  Do you spend quality time with your professional contacts outside of work?


Posted in: Peggy's Travels

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