January 2023

8D — January 2023 Forecast — M id A tlantic Real Estate Journal


2023 F orecast By Jonathan Glick, Sheldon Gross Realty Looking ahead into 2023


these won’t be at historical “value of land per buildable foot” levels. Office In my more than 35 years in this business, I’ve learned it’s quite daunting to make projec - tions related to the corporate and neighborhood office sector. For 2023 – and leaning as I typically do toward the glass being half full – I’m inclined to envision positive results. My reasoning on this is based on a trio of factors, the first of which is many towns being in the process of re-zoning office sites to better address local needs, whether that means creating more ware - houses, residential properties, or mixed-use sites. Next, even though there may be signifi - cant scheduling modifications, corporations remain commit - ted to employees working in the office. And, finally, many owners are investing in their office properties to ensure they’ll continue to be up-to- date work environments. At Sheldon Gross Realty, we’re anticipating that 2023 will be present multiple op - portunities – and we’re looking forward to our current and new clients reaping the rewards. Jonathan Glick is executive vice president of Sheldon Gross Realty. MAREJ PARA focuses on three key projects into 2023 PERTH AMBOY, NJ — Fu- eled by Perth Amboy’s strategic location at the crossroads of New Jersey, the city has a unique opportunity to create more mixed-used communities and generate more tax revenue within its many redevelopment areas. The Perth Amboy Rede - velopment Agency (PARA) has identified three key projects that it is now advancing for 2023. Some initiatives build upon older plans that have been discussed for years, while others have been brought forth by developers eager to take advantage of all that Perth Amboy offers as a waterfront urban core. “A key reason for the enor - mous interest in Perth Amboy is our unparalleled transpor - tation infrastructure,” said PARA Chairman Joel Rosa. “The city has a NJ Transit continued on page 11D

ooking ahead into 2023, we at Sheldon Gross Realty are care -

and vacant industrial land. Industrial Given the current status of capital markets, investments in industrial real estate have paused. As a result, it’s logi - cal to assume lease rates and sale prices will remain steady throughout the current year. That said, without capital mar - kets competing to purchase properties and driving down the cap rate, we anticipate a leveling both of lease rates and purchase prices for exist - ing warehouses. The number of companies looking to “right size” their inventories should

ensure that demand remains strong, while at the same time creating sufficient supply to enable the majority of buyers and tenants to be successful. One exception is likely to be new construction in the most attractive, favorable locations, which we expect will benefit from record high lease rates. Industrial Land The demand for outdoor, industrial storage will remain high. In some geographic areas, including those close to New York City and East Coast ports, and those provid - ing quick access to trucking

routes, there will be modest valuation increases. All other areas should simply continue to get lease rates and purchase prices at record highs. Unfor - tunately, industrial land – ei - ther with or without approv - als to build – won’t perform as well as during 2022, at least not until the industrial capital markets return to the mix. Industrial properties will continue to be built and put into service, but at rates more akin to what we saw before the recent industrial real estate boom. This means there won’t be as many transactions, and

fully track - ing develop - ments, do - ing our due diligence, and hoping for the best. With a few caveats, I suppose I’d

Jonathan Glick

define us as cautiously op - timistic. We’re inclined to believe that 2023 will be a con - tinuation of 2022, with similar demand for warehouse space

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