PhillyDeals: Finding alternatives in slowing market

Joel Harden grew up in Germantown. Buying and selling properties, he has also become a major landlord in his old neighborhood. Now he's looking for alternative ways to make money from real estate as the market slows.

Harden dropped out of Temple University in 1991 to fight at Don Warner's gym at Chelten and McMahon. Once the Carver High School graduate figured out boxing wasn't going to be his career, he says he went to work as a freelance home-rehabber.

He's built that into a group of real estate companies and a property portfolio that includes Germantown's former Asher chocolate factory, where he has his office, and the nearby former Singer sewing-machine factory and Germantown Farmers Market in the neighborhood's worn downtown retail district.

Harden says his firms' payroll totals 80, including a mostly Chinese-American construction crew and 35 real estate agents at Harden's Fairmount Park Real Estate Corp.

Sales are down 50 percent over the last year, even in the predominantly African American moderate-income neighborhoods where Harden does business. He says those locales aren't normally affected by "the highs and lows" of Center City. Harden's response to the slump includes three new businesses:

A $25 million fund to invest in the kind of small home-rehab crews in which he got his own start. "We're close to completing the fund," Harden said. He hopes it makes its first investments before midyear.

Though Harden says he has funded previous projects with help from Royal Bank America and other local lenders, he has had a tough time raising money for the project locally; out-of-town banks and investors, whom he won't name, have put up most of the money.

A real estate board game, Mogul, which Harden started selling last fall at www.buymogul.com. It's like Monopoly, but with promissory notes, cap rates, unsecured loans, noncredit tenants and other real-world elements.

"In high schools, they don't teach basic financial literacy. Understanding what the game teaches can help them learn to achieve the lifestyles they want to live," Harden said. He said he had sold "a few thousand" games, at $99.99 each, to clients like Andrew Carswell, a University of Georgia economics professor, who said: "It really gets down to the intricacies of property transactions."

A mortgage-restructuring brokerage, Fairmount Mortgage Corp., which will charge homeowners a month's payment on their current mortgage to restructure payments, rates and even principal, promising refunds if there's no deal.

"Typically the borrower is not sophisticated enough to do this," Harden said. "The banks don't have enough infrastructure to hold the borrowers' hand."

Fairmount will be the Philadelphia franchise of investor Sal Puglia's for-profit, loan- restructuring company, Hope Now Modifications L.L.C., of Cherry Hill, said business manager Eric Simkin.

For-profit, mortgage-restructur- ing agencies, like the one Harden is forming, compete with nonprofit counseling agencies, which typically counsel borrowers for free, said

Stan Collender

, spokesman for the

Treasury Department-backed Hope Now Alliance

, a Washington advocacy group that refers troubled borrowers to local counselors via

» READ MORE: www.995hope.org

and 1-888-995-HOPE.

Liberty Property Trust

and partner

Synterra Partners

have lured money manager

Penn Capital Management

from Cherry Hill to a 17,000-square-foot space at

Three Crescent Drive

, in the

Navy Yard Corporate Center

.

Cushman Wakefield

represented Penn Capital.

To attract suburban tenants, Three Crescent offers free parking, plus state and city tax breaks under the Keystone Opportunity Zone program.

It's not just oil companies that are stockpiling petroleum while it's still cheap.

Citigroup Inc.

, the big, currently U.S. government-funded lender, has anchored "a full oil tanker offshore of northern Scotland to profit from higher prices later this year," reports

Bloomberg News

.

The company's commodities-speculation group, Phibro L.L.C., "is keeping up to one million barrels" in the ship as speculators "hoard" oil, hoping prices will rise. Oil has been sitting unused in tanks and tankers as demand drops, but oil futures are rising as traders bet OPEC will cut production, driving up prices.