April 2023

8A — April 2023 — Spring Preview — M id A tlantic Real Estate Journal


N ew J ersey B roker

By Barbara Gross, Sheldon Gross Realty It’s a once-in- a-century moment

we strive to put the pan - demic’s im - pact behind us. With - out a prec - edent for guidance, we have all manner of W

situation varies based on geography, industry, and also the type of property with which we’re dealing. My customers have a range of perspectives and attitudes. Fortunately, many have leases, which limits their overall exposure and enables them to be somewhat nimble. But, even leasing presents pitfalls – many of my custom - ers still aren’t quite ready to make longer-term com - mitments. That said, when work’s required to build out their spaces, they quickly

discover it can’t be amortized over the shorter term, and is instead added to their base rent. Compounding this, in - terests rates are increasing, impacting the cost of work landlords finance. Just 3-5 years ago, build - ing owners could sell with relative ease. Interest rates were low, as was inventory – particularly for industrial and flex buildings. A new phenomenon is that while the current industrial market re - mains relatively tight, we’re now seeing office buildings

sell for less than industrial properties … a situation that, just a decade ago, would have seemed impossible. In fact, we’re even seeing office struc - tures leveled and the land rezoned. I wonder if the pen - dulum will swing so far the other way that office space inventory again tightens and prices increase once again. So, what am I seeing with my current customers as they address their real estate needs? • Two law firms, both ex - panding – with one adding

a new satellite office. Both continue to provide private offices for each attorney; li - braries are gone. Conference rooms abound, and they’re often showplaces, while file rooms are shrinking as all records are digitized. And, as with other industries, kitchens have become cen - ters of collaboration, with gourmet snacks and coffee. • A couple of companies are being acquired providing great sublease opportunities, with emphasis on below- market rents, decent lengths of time remaining, and new furniture available for free. • A shipping customer with international contracts recognizes the world’s chang - ing – including a radically different layout, reflecting hybridization in office versus home schedules – resulting in a reduction of its office footprint. • A customer, listening to his golf buddies’ tall-tales about how much they got for their buildings, continues rejecting appropriate offers for his own. And, his building continues to sit, unsold. • In a “B” building I’m marketing, we’ve signed leases with three new ten - ants in six months, with a fourth in negotiation. Why this success? Low rent, plus the landlord’s willingness to offer short-term leases. This is important to assuage the economic fears of companies. And as we’ve all seen, once ensconced in a building, ten - ants are disinclined to move unless motivated by space- related considerations. These are scary times for everyone, from brokers to owners to banks to corpora - tions. I do believe that “this, too, will pass,” but we need more creative marketing, persistence, and careful lis - tening to our customers’ new and very different needs. Fortunately, we’re in a business that continues on through thick and thin. To quote Gone With The Wind’s Gerald O’Hara, “Why, land is the only thing in the world worth working for, worth fighting for, worth dyin’ for, because it’s the only thing that lasts.” Barbara Gross is executive vice president of Sheldon Gross Realty. MAREJ

e’re experiencing a once-in-a-cen - tury moment, as

Barbara Gross

“experts” telling us the mar - ket’s down … or brimming with opportunity. Further complicating matters, the

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