2A — March 29 - April 11, 2019 — M id A tlantic
Real Estate Journal
www.marejournal.com
M id A tlantic R eal E state J ournal Publisher, Conference Producer . .............Linda Christman AVP, Conference Producer ...........................Lea Christman Publisher ........................................................Joe Christman Account Executive ........................................... Steve Kelley Account Executive ............................................. Kim Brunet Senior Editor/Graphic Artist ..........................Karen Vachon Office Manager ...............................................Kerrin Devine Contributing Columnist ......... Jay Haines, NAI Summit; Bill Stevenson, Target Building Construction Mid Atlantic R eal E state J ournal ~ Published Semi-Monthly Periodicals postage paid at Hingham, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal 350 Lincoln St, Suite 1105, Hingham, MA 02043 USPS #22-358 | Vol. 31, Issue 6 Subscription rates: $99 - one year, $148 - 3 years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Phone: 781-740-2900 | Fax: 781-740-2929 www.marejournal.com
M id A tlantic Real Estate Journal
The Missing Piece.
Jay Haines, NAI Summit
Market Trends and Future Impacts C losing the book on 2018 and moving into 2019 and beyond the zeit- geist generated in the past year seems to have fueled an air of continued economic expan- sion and real estate optimism. Above average corporate per- formance, strong consumer de- mand, and a business friendly tax policy have propelled the U.S. economy through another solid year. Multifamily investment and development remained king up 8% from the previous year. Considering that earlier pre- dictions had single family homebuilding outpacing multi- unit development. Multifam- ily was followed by industrial transactions continuing to be driven by e-commerce’s un- quenched thirst for distribu- tion/warehouse locations. 2018 saw a net improvement in this sector of 26%. U.S. metroplex markets, especially Seattle, San Francisco and Chicago are seeing an acceleration of multi- story warehouse construction. Rising construction costs and less available land are the driv- ers of this new trend; though for Europe and Asia this is nothing new. Investor optimism has been further spurred on by the U.S. Treasury Department and In- ternal Revenue Service’s roll out of the national Opportunity Zone program touting the po- tential of more than $6 trillion in unrealized capital gains be- ing eligible to be deployed into zones nationwide. The focus of the program is to bring private sector investment to under-
70% of the cost will be covered.
Upgrade to energy efficiency with Direct Install from New Jersey’s Clean Energy Program™ and
Direct Install is brought to you by the New Jersey Board of Public Utilities.
HIGH EFFICIENCY LIGHTING / HVAC / WATER / SOLAR
888-777-4501 • hutchbiz.com WilliamA.HutchinsonJr,LMP,PlumbingLic.#5041.EdwardP.Hutchinson,MasterHVACContractorLic.#22700.HutchinsonHICReg.#13VH01747500. FOR BUSINESS
The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
served areas in exchange for generous tax cuts. If the initial interest and investment prior to launch are any indicator the results should track positive. Upward market trends can’t be discussed without the pro- verbial ‘elephant in the room’ being mentioned. That being the tech sector, data centers and the scurrilous demand for more data capability. Usurping even location in the market- place access to connectivity and data storage are paramount. Regional leaders, such as, Northern Virginia, North Caro- lina and parts of the Midwest will continue to see significant expansion. However, these ex- pansions may still fall woefully short of demand. And, just for sake of a mention add to that mix Amazon’s HQ2 nationwide search competition to flush out every trend possible. As for the remaining market sectors of office and retail the past year’s trends seem to be continuing. On the office side it is “steady as she goes” with lease rates and absorption remaining stable at current levels. The retail market might best be summarized by, “retail isn’t shrinking, but growing painfully in a new direction.”
While certain retailers have and will face choppy waters ahead; others are expanding and using new concepts to fos- ter consumer confidence. The simple fact is the paradigm of buying has changed never to return to its’ former state. The existing retail bricks and mortar is and will continue to see new and creative adaptive reuse. Despite of all the kudos of the past year it was not without its own set of outlier issues. A few worth noting that may cre- ate consequences are national infrastructure needs being a possible black swan event slow- ing expansion and development projects nationwide. Another outlier are interest rate hikes. Three modest hikes occurred in 2018; and Federal Reserve Chair, Jerome Powell seemed to adopt a mantra of the medi- cal profession, “do no harm.” Outwardly, it appears most companies had prepared in advance for this eventually. A final lingering item throughout the calendar year has been the unresolved tariff’s question. When and how this critical topic plays out could have sig- nificant impacts on multiple continued on page 3A
PRE-CONSTRUCTION CONSTRUCTION MANAGEMENT GENERAL CONSTRUCTION DESIGN ASSIST/DESIGN BUILD 1124 Chester Pike Crum Lynne, PA 19022 610.521.3300 | targetbuilding.com
Made with FlippingBook - Online catalogs