20A — January 12 - 25, 2018 — 2018 Forecast — M id A tlantic

Real Estate Journal


2018 F orecast

By William C. Hanson, SIOR, NAI James E, Hanson Connectivity is key: Three trends that will power commercial real estate in New Jersey in 2018 O ften, when I am asked to make a year-end prediction, I must of meaningful development. 2. Retail Connectivity running throughout New Jer- sey – Connectivity. 1. City Connectivity

over as the primary modes of transportation. This trend is quite literally driving how development takes place and will continue to do so for the immediate future. Connected cities and towns, those that are connected to mass transit networks, friendly to rideshar- ing and connected to their residents’ wishes are going to be the ones that can attract the investment money looking for viable projects. Those cities and towns that eschew con- nectivity to hold out hope for a return to the past are going to struggle to attract any level

impact on brick and mortar retail has been overstated. 2018 will see a shift towards more connected retail with a focus on experiences and the repurposing of obsolete or redundant retail assets to better fit within omnichannel corporate retail businesses. Retail operators might con- vert a store into a showroom where customers can try out new products before purchas- ing them online to have them delivered directly to the store for easy pickup. Retailers will look to a further enhance their synergistic customer experi- ence across their enterprise and develop a truly connected retail business model merging the best of online and physical retail with an optimized sup- ply chain. 3. Supply Chain and Logis- tics Connectivity Both trends mentioned above are only possible if goods can be delivered to con- sumers quickly and efficiently. Positioning of warehouses and fulfillment hubs will be vital as online order delivery win- dows continue to shrink and e-commerce sales eat up more and more of consumer spend- ing. Although operators want to be located nearby the costly New York City metro markets, New Jersey benefits from a dense network of highways and interstates that enable developers to balance afford- ability with connectivity. We will continue to see develop- ers looking for opportunities to meet e-commerce’s insa- tiable demand for industrial space further to the western and southern portions of the states that are tapped into the regional transportation network but boast lower bar- riers to entry. It is clear that 2018 will be the year of connectivity in com- mercial real estate. Whether it is building more connected towns or more optimized con- nected logistics networks, this core concept will drive the direction of our field in the new year. Brokerage firms, like NAI James E, Hanson, that are connected to the lat- est macroeconomic trends and consumer demands will be the ones who are able to make the most of what will surely be an exciting upcoming year in commercial real estate. William C. Hanson, SIOR is president of NAI James E. Hanson. n

New Jersey boasts some of the highest per capita rates of retail square footage in the world. With strip malls, big box stores and malls dot- ting towns throughout our state, the much-discussed “Retail Apocalypse” had many sounding alarm bells. Looking at the underlying numbers though, the retail apocalypse is increasingly looking like a retail shift. The impact of e-commerce is no doubt the genesis of this shift but its profoundly devastating

b r e a k t h e p r e d i c t i o n d own i n t o i n d i v i d u a l asset class- es to offer a comprehen- sive look at the next 12 months. Of-

The continued evolution of the residential and office asset classes has led to a new synergy where the line between a purely residential or a purely office project has been blurred. Over the past several years we have seen an erosion of the idea of a dedi- cated office park, instead re- placing it with the mixed-use or metroburb concept. There are less young people driving than ever before, as rideshar- ing and mass transit take

William Hanson

ten these predictions tend to operate somewhat inde- pendently of the others. This year, however, I see a broad overarching unifying theme




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