January 2023

N ew J ersey S hopping C enters S outhern NJ S potlight

M id A tlantic Real Estate Journal — Southern NJ — January 2023 — 7B


Leasing and sales are down, and some deals in progress are disrupted WCRE Q4 2022 Report: SNJ & Philly Markets Buffeted By Rapid Interest Rate Hikes, Inflation


Even with rapidly rising in- terest rates, the sales market stayed hot, with 1,994,264 s/f actively on the market or under agreement. Already down, total cost and s/f of completed sales dropped substantially in the fourth quarter, with $15,870,000 in completed sales comprising 167,605 s/f. Average rents for class A & B product remain unchanged, as they continue to show strong support in the range of $10.00- $15.00/sf NNN or $20.00- $25.00/sf gross for the deals completed during the quarter. These averages are essentially unchanged and have hovered near this range for more than a year. WCRE has expanded into southeastern Pennsylvania, and the firm's quarterly reports now include a section on trans- actions, rates, and news from Philadelphia and the suburbs. Highlights from the fourth quarter in PA include:

generation restaurant space in the courtyard. The location at Southwood will be their first New Jersey based location. The cheesesteak shop offers handcrafted cheesesteaks and boasts that their ribeye is the differentiating factor in their spin on the classic Philly Cheese Steak. Certa Pro Painters occupies +/- 1,200 s/f of office space in the courtyard. Certa Pro is a professional painting fran- chise owned and operated by an experienced entrepreneur. They choose Southwood Shop- ping Center because of its location within Gloucester County as the county contin- ues to experience exponential residential, commercial, and industrial growth. Ivy Rehab will occupy +/- 2,500 s/f of retail/medical space in close proximity to the existing Riverside Ur- gent Care. Ivy Rehab is a national provider of physical therapy services. Southwood Philadelphia’s office leasing market is still averaging 15% below the three-year average from before the pandemic, and net absorption was negative 2.2 million SF for the past 12 months. Still, these metrics represent vast improvement since the worst days of the pan- demic. The metro area’s office vacancy rate of 10.5% for Q4 is the second lowest among the top 15 markets. The industrial sector in Phil- adelphia continues its incred- ible run. Over the past 12 months, 15.7 million new s/f of inventory became available, and the sector saw 9 million s/f in net absorption. Rents grew an average 10.6%. Retail remains the sector most responsive to market con- ditions, but it has also proved to be the most adaptable. Av- erage retail net absorption in Philadelphia is strong but came in lower during Q4 at 1.6 mil- lion s/f for the 12 months just concluded. Retail vacancy for

Shopping Center was identi- fied because of its accessibil- ity to all major surrounding markets via Rte. 45. The above-mentioned new tenants will join a well-es- tablished list of existing ten- ants, including Abbey Car- pets, Family Dollar, Sherwin Williams, Old Towne Music, Orange Cleaners, Bank of America, a Barber Shop, and Riverside Urgent Care. Some of the existing tenants have had tenancy for over 50 years. Ownership is honored to main- tain the tenancy of the exist- ing tenants and believes that the existing tenants will be pleased by the transformation. Giletto is looking forward to fully leasing the center within the next year! Giletto is actively seeking new tenants and is prepared to lease the former JoAnn Fabric’s space at +/- 11,300 s/f, the former Aldi’s space at +/- 15,000 s/f, and +/- 1,200 to 2,800 s/f of space in the courtyard. MAREJ Gloucester County rose slightly, to 11.1%, with average rents essentially unchanged in the range of $17.67/sf NNN. WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment proper- ties in Southern New Jer- sey and the Philadelphia region. MAREJ Philadelphia stood at 4.5% for the quarter. WCRE also reports on the Southern New Jersey retail market. Retail highlights from the report include: Retail vacancy in Camden County posted another im- provement, to 7.8%, while average rents fell somewhat to $16.26/sf NNN. Burlington County retail va- cancy rose almost three-quar- ters of a point in Q4, to 7.5%, while average rents jumped nearly 20% to the range of $17.02/sf NNN.

ARLTON, NJ — Commercial real estate brokerage

Jason Wolf , founder and managing principal of WCRE. “Suburban retail, life sciences, and industrial remain strong, but across the market CRE had a tough quarter.” In the fourth quarter there were approximately 248,831 square feet of new leases and renewals executed in the three counties surveyed (Burling- ton, Camden and Gloucester). This is a 15% decrease from Q3. Leasing dropped steadily through 2022. New tenant leas- es comprised approximately 114,274 square feet, or about 45.9% of all deals for the three counties. Despite the slowdown in leasing, prospecting remains on track, with a pipeline of approximately 450,000 s/f of pending lease deals expected to close in the near term. Other office market high- lights from the report: Overall vacancy in the mar- ket is now approximately 15.80%, a slight increase over the previous quarter.

WCRE re- ported in its analysis of the fourth quarter that commercial real estate indicators, like much of the rest

Jason Wolf

CHERRY HILL, NJ — Vantage Commercial lined up five new tenants for the highly anticipated redevelop- ment of Southwood Shopping Center. The brokerage sold the asset in 2021 to local in- vestors with the intent to fill the center and breathe new life into the underutilized units. Vantage Commercial, Vantage Property Manage - ment and new ownership are working together on this asset. Corinne Giletto , director of client services, and Andrea Hannigan , property manag- er, are well positioned to lease up the remaining vacancies and maintain the integrity of the center. Leasing large anchor slots and in-line spaces to major users, including health care, service businesses, and res- taurants, is the key to the redevelopment of the center. Ownership is positioned to start remodeling the center in the next few months. The of the economy, performed poorly. Stubbornly high infla- tion, rising interest rates, a sagging stock market, and fear of a recession created a drag on leasing and sales in Q4. Despite a slowdown overall in CRE, the industrial sector remained strong, at 40% above pre-pandemic levels. Suburban retail also provided needed good news. “Amid several forces weigh- ing on CRE, much higher borrowing costs and the sud- denness of the rate hikes es- pecially caused havoc,” said

Vantage Commercial Inks Five Leases at Southwood Shopping Center West Deptford, NJ Center to be Revived

Southwood Shopping Center

anticipation of the complete transformation of the center has aided in the signing of five new tenants. Modern exterior design concepts will increase the aesthetic ap- peal of the center and its functionality. Renovations to include a new elevation for the façade, brick columns and crisp exterior colors. Gemelle Salon, Fruggie Too, Whit or Whitout sandwich shop, Certa Pro Painters, and Ivy Rehab are among the new tenants signed at the location. Gemelle Salon will occupy +/-2,500 s/f of retail space

within the center. The interior is being transformed into an upscale salon that will provide its clients with the ultimate beauty experience. Fruggie Too occupies +/- 1,600 s/f of retail space within the courtyard section of the re- tail center. The juice, smoothie and health food store is fully operational and open for busi- ness. This location is their second franchise in Southern New Jersey and the company plans to expand into more centers statewide. Whit or Whitout will oc- cupy +/-1,200 s/f of second-

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