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Real Estate Journal — Southern New Jersey — July 15 - 28, 2016 — 7B

www.marejournal.com

M id A tlantic

S outhern N ew J ersey

ARLTON, NJ — Commercial real es- tate brokerage WCRE WCRE second quarter report Southern NJ office leasing takes a noticeable dip, but investment and sales remain strong M unchanged from the previous two quarters.

WCRE has expanded into southeastern Pennsylvania, and the firm’s quarterly re- ports now include a section on transactions, rates, and news from Philadelphia and the suburbs. Highlights from the second quarter in Pennsylvania include: •Although not as pronounced as other “gateway markets”, the Philadelphia CBD office market is attracting attention from international institutional investors. Notable investments include the Korean Invest- ment Fund’s acquisition of Cira Square at 2970 Market St. for $354 million from Brandywine

Realty Trust and 1700 Market St. fromShorenstein Properties for $195 million. Other transac- tions in progress are command- ing all-time-low capitalization rates from some Middle East equity investors. •Beyond the CBD, the sub- urban market has been ex- tremely active, including Saint Gobain’s Headquarters facility, which sold for $123 million at a sub-6% capitalization rate. Additionally, Liberty Property Trust announced a plan to re- develop in the City of Camden, which includes a master plan involving 1.75 million s/f of of- fice, parking garages, hotel, and

apartments. •There has been a flurry of favorable retail activity in the regional market in 2016. Some major projects include PREIT’s sale of three core CBD retail properties to Post Brothers for $45 million at a sub-4% capi- talization rate, RIOCan REIT’s announcement to sell 49 retail properties located throughout the Northeast, with many in the Philadelphia region, for $1.9 billion. In addition to these core assets, there is significant development of net leased prop- erties, including Wawa/Sheetz/ Royal Farms convenience continued on page 11B

•All of the major private owners and REITS showed moderate leasing and prospect activity for the quarter – with Burlington County vacancies tightening up, many larger vacancy opportunities are also shifting towards Camden Coun- ty, which is not controlled by these ownership entities. •New Jersey’s unemploy- ment rate moved higher for the first time in more than a year, coming in at 4.9%. Like the national economic recovery, the New Jersey recovery appears to be experiencing a slight pause.

reported in its latest quar- terly analysis that the slow- down in com- mercial leas- ing activity in Southern New Jersey that began

Jason Wolf

late last year may have been the beginning of a trend. Of- fice leasing totals were down significantly compared to the same period last year, and were lower than the already slower first quarter. Mixed with this bad news were positive signs in the continued high level of activity in the investment and sales market, and an uptick in leasing in Cherry Hill and Voorhees. Overall, caution and uncertainty seem to be guiding factors. “Several unknowns began influencing the markets during the second quarter – from the possible impact of the Brexit vote to the coming U.S. presi- dential election,” said Jason Wolf , founder and managing principal of WCRE. “Businesses are trying to figure out how their plans may be impacted by the uncertainties, but we still believe the overall outlook is still strong.” There were approximately 252,121 s/f of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents a drop of +/- 23% compared with the first quarter of the year. The quarter saw an increase in prospecting, with about 250,000 s/f of lease deals in the pipeline and expected to close in the near term. Still, the trend of positive absorption continued – and improved over the previous quarter – making up approximately 206,000 s/f of total activity. Vacancy rates posted slight increases, but sev- eral large assets changed hands as owners repositioned and new investors entered our market. Other office market high- lights from the report: •Overall vacancy in the market is now approximately 11.85%. •Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.00/sf NNN or $20.00-$24.00/sf gross for the deals completed during the quarter. This is essentially

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