12B — March 30 - April 12, 2012 — Commercial Office Spotlight — Mid Atlantic Real Estate Journal



By Bill Gladstone, CCIM, SIOR, Bill Gladstone Group of NAI CIR Real Estate is on the move!


am always very skepti- cal that the real estate market is improving until

stated. In December, 223,000 new jobs were created or re- instated. In January it was 284,000 and in February it was 227,000 jobs. This has created more opportunities for people to earn income. Additional spending by the American public has now in- creased by billions of dollars. Although the unemployment rate at 8.3% did not fall in February, it was the first time that has happened. But that was caused by another positive sign; a million newAmericans had gone looking for work at the rate of 500,000 a month in both January and February. And there is a correlation here to commercial real estate. As people have work and there is more money to spend, real estate markets improve. We have seen this here locally in South Central Pennsylvania. Sometimes is can be difficult to recognize, simply because in days gone by (prior to the Great Recession) the real es-

tate market all moved at one speed. Whatever the speed was, all segments moved at that speed. What has hap- pened in the years since the recession is that the differ- ent segments of the market started moving independently of each other. For example, land sales are now very slow- moving and will remain slow- moving mostly likely until late 2013. On the other hand, flex space deals in the last quarter of 2011 and so far in the first quarter of 2012 have abounded. Concessions are still being granted, but the im- portant thing to note is there is a lot of new activity coming into the market absorbing flex space. Additionally, office leasing is improving, but there is a tremendous amount of office space that needs to be absorbed into the market. So again, this segment moves forward, but at a slower pace than the flex market. The sale of small commercial and office

buildings (about 7,000 s/f or less) continues to keep its hold on pricing as it trades between $80 - $90 per square foot and $100 - $110 per square foot for B and A space respectively. Of course, much of this depends on location, deferred mainte- nance and financing, but so far it has stayed steady for the past year. Other segments of the market (warehousing, retail, investment) are also ex- periencing movement at their own rate. Again, are we out of the woods? Absolutely not! How- ever, are we seeing a light at the end of the tunnel, which when seen previously was just a bubble and was not the real thing? I think at this point in time there has not been enough happening in the market to substantiate that things are actually changing for the better and that we will continue to improve unless something catastrophic derails this process as we move into

the future.

I think one of the biggest indicators we have is our of- fice space for lease. If condi- tions continue to improve, the overall occupancy rate in our market should strengthen to between 94% - 95% and of that, A space will stay close to the 98% occupancy while B space increases to between 96% - 97% occupancy. Overall net absorption should start returning to the consistent levels we saw prior to the Great Recession - somewhere between 80,000 - 90,000 s/f. For everyone who was part of the process since the Great Recession and has survived, I would not say it is time to start drinking champagne and toasting. However, I do think it is time to take the glasses out of the closet. Bill Gladstone, CCIM, SIOR, Bill GladstoneGroup of NAI CIR. ■

I have sub- stantial evi- dence that this is the case. There are so many times that people “ring the bell” in- d i ca t i ng a

Bill Gladstone

positive movement in the mar- ket, only to find that 30 to 60 days later it was only a bubble. A certain set of circumstances may have occurred during that time period and an uptick in the market was then falsely reported. This happened in the first quarter of 2010, but the increase in consumer spending and some other key indicators were not as strong then as they are now. The last 90 days have been pretty steady, especially em- ployment which has improved as jobs were created or rein-

NAI Hanson announces sale of retail/office site

Crampsie of NAI Summit leases 6,000 s/f of office space in Bethlehem, PA

20 East Prospect Street in the downtown area of Waldwick, NJ

WALDWICK, NJ — NAI James E. Hanson, a New Jer- sey-based commercial real estate firm, announced the sale of a 4,375 s/f site at 20 East Prospect St. The two-story property is located on a one-acre lot and has 3,414 s/f of space on the first floor and 961 s/f on the second. NAI Hanson VP Joan Cenico- la represented the seller, Wells Fargo Bank, in the transaction. The buyer was Mansueto and Morgan, LLC. Terms of the deal were not disclosed. According to Cenicola, the

new owners are currently leas- ing space in a strip center next to the property forAndrea’s, an Italian restaurant. They plan to renovate the building and relocate the popular eatery to the site. “The new owners will now have a larger location that meets their expansion needs and additional on-site park- ing,” Cenicola said. “Most definitely, the location was the key factor in selling this property. The restaurant has become a community staple and the owners welcome the opportunity to expand.” ■

100 Gateway Drive, Bethlehem, PA business and estate preserva- tion services, wealth manage- ment services, and investment consulting. According to Mike Molewski, founder of Molewski Financial Partners, “John’s knowledge of the market en- abled us and the landlord to

BETHLEHEM, PA — John Crampsie, principal at NAI Summit, recently represented the tenant in the renewal of 6,019 sf of office space at 100 Gateway Dr. The tenant, Molewski Finan- cial Partners, LLC, provides

reach an agreement based on current office market condi- tions in the Lehigh Valley. His commercial real estate expertise was essential in our renewal being finalized while we were able to concentrate on our core business.” ■

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