M id A tlantic Real Estate Journal — Fall Preview — September 25 - October 15, 2020 — 11C
www.marej.com
N ew J ersey B roker
By David A. Simon, SIOR, NAI DiLeo-Bram & Co. State of the Market
ndustrial - While the pandemic suppressed activity with- in most sectors of the com- I
rents. Consumer behavior has changed due to the pandemic, and services that blend conve-
tor, it is possible, with proper municipal approvals, to see va- cant retail buildings converted
there has been a significant de - cline in the number of sales in all sectors. However, investors
Investments within the office and retail sectors may present considerable upside opportu- nities for investors who are able to purchase properties well below replacement value, given current leasing veloc- ity. The retail sector is the riskiest of these asset classes, but investors with the finan - cial resources to withstand a prolonged economic recovery will benefit as leasing activity increases. David A. Simon, SIOR is chief operating officer at NAI DiLeo-Bram & Co. MAREJ
mercial real estate indus- t r y a t the b e g i n n i n g of the year, there is no denying that i n c r e a s e d on-line shop- ping spurred
New Jersey’s prime location, situated between New York and Philadelphia, provides access to more than 35 million consumers within a two-hour drive. Additionally, its superb access to ports and diverse labor force make it extremely desirable for occupiers, owners, investors, and developers.
David A. Simon
nience and efficiency, such as curb side pick-up, will remain for the foreseeable future. As foreclosures occur in this sec-
into medical, warehouse or other uses. Investment Sales - Since the pandemic began,
continue to be drawn to the in- dustrial sector because it has demonstrated very reliable and consistent rent growth.
growth of third-party logistics and eCommerce firms, which generated significant demand within the industrial sector during 2020. With no indica- tion that any changes in con- sumer shopping behavior may occur within the near future, it is fair to anticipate that robust activity in this sector will continue throughout 2021. New Jersey’s prime location, situated between New York and Philadelphia, provides access to more than 35 million consumers within a two-hour drive. Additionally, its superb access to ports and diverse labor force make it extremely desirable for occupiers, own- ers, investors, and developers. Office - Understandably, employees returning to offices are doing so very cautiously, and many employees will continue work- ing from home (WFH) on a full or part-time basis for the balance of this year and into next year. Market dynamics are enabling tenants to obtain favorable lease terms. In ad- dition to more people work- ing remotely, landlords are competing with an increased availability of sublease space. This will put additional pres- sure on owners to lower rents. Tenants with leases that are expiring soon are electing to negotiate shorter lease terms and are requiring cancella- tion options to maintain flex - ibility. New Jersey will also see its share of interest from companies looking to reduce their footprint in Manhattan and move to suburban set- tings where there is reduced personal contact and less need for mass transportation. Retail - The retail sector has been hit the hardest and will take the longest to recover. As vacancies increase, flight to quality opportunities will exist and properties with outdoor areas for shopping and eating will achieve higher
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