6C — December 22, 2017 - January 11, 2018 — The Year in Review 2017 — M id A tlantic
Real Estate Journal
www.marejournal.com
FEB. 24 - MARCH 9, 2017 The Meridian Group c loses its second fund with $231.6M raised for DC real estate Houlihan-Parnes Realtors celebrates Independence Plaza Shopping Center opening The Blau & Berg Co. continues strong leasing activity at the Short Hills Executive Center in Short Hills, NJ Divaris adds two new assignments with 249,000 s/f portfolio Three new tenants to join Trader Joe’s at The Shops at Kenilworth REMCO sells investment property for $3.57 million Cushman & Wakefield : Red Bank, NJ Office Campus trades for $26 million Shaz Perrone joins NAI DiLeo-Bram& Co. as vice president Company inks 473,000 s/f lease with GSA for New Federal Communications Commission HQ Lantian Development announces new corporate structure, opening of second office MRP Industrial breaks ground on Eastgate 2.5M s/f park located in Hartford County, MD Wohlsen breaks ground on 222,000 s/f industrial building High Concrete Group awarded Contract for total precast concrete FDNY building in Brooklyn Houlihan Parnes Realtors sells 7-story multi-family inMount Vernon, NY Feinberg Real Estate Advisors, LLC represents Girl Scouts of EPA
Year in Review 2017
By Carlo Batts, MAI, Rittenhouse Appraisals Industrial space finishing 2017 strong, overshadowing office space
F
or small and medium investors in commercial real estate, 2017 was
JLL Philadelphia Research reports office rents hit cycli- cal highs in the third quarter,
construction fell. Coming up in 2018, I expect the action to shift to flex-use
another solid year; 2018 i s l o ok i ng promising as well but the demand mix is changing. In the past year, vacan- cy rates fell
Coming up in 2018, I expect the action to shift to flex-use industrial construction. The ecommerce that is killing the retail shop is giving new life to warehouses that hold the inventory ecommerce companies ship to customers.
Carlo L. Batts
in the Philly suburban office market, according to data from Cushman & Wakefield dropping to 11.1% in the third quarter of 2017 from 12.5% a year earlier. No surprise that
the most recent period with available data. The indus- trial vacancy rate fell to 3.4% from 4.9% in the same period as net absorption rose and
industrial construction. The ecommerce that is killing the retail shop is giving new life to warehouses that hold the inventory ecommerce compa- nies ship to customers. This is a national trend. According to CBRE’s 2017 Americas Inves- tors Intention Survey, one- third of those who answered the survey rated warehouse the top investment vs 28% for multi-family and 18% for office. Much of the new industrial space in the local region is heading to the county. Cam- den, New Jersey, is likely to be a winner for real estate in the office market and resi- dential. It’s easy to get to by subway and is close to Philly: Residents can live there and avoid city taxes while still enjoying the benefits of an urban lifestyle. Capitalization rates on projects were fairly steady in 2017, holding around 6.5% to 7%. I expect them to edge hire next year by about 0.25%. That’s a slower pace than some might expect – many market watchers expect the Federal Reserve to raise base- line interest rates by more than 0.25%. But I think banks will be selective in their lend- ing practices, keeping a lid on interest rates. I don’t see the commercial real estate markets awash in liquidity. For investors, returns are likely to hold steady, depend- ing on the project, between 12% to 15%. Neighborhoods to watch for small to mid-sized develop- ment: • University City, where development is about to take off • Northern Liberty and Fishtown, with further ex- pansion in South Kensington • Below Broad & Ridge Av- enue as well as Francisville/ Fairmount Carlo L. Batts, MAI is the principal of Rittenhouse Appraisals. n
Commercial • Multifamily • Retail • Industrial 267–314–8635 www.rhappraisals.com PA-NJ-DE
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