Real Estate Journal — New Jersey — April 15 - 28, 2016 — 9B
www.marejournal.com
M id A tlantic
S outhern N ew J ersey WCRE first quarter report
Seasonal slow-down, shaky financial markets take toll on southern NJ, but areas of strength remain
M
•All of the major private owners and REITS showed moderate leasing and prospect activity for the first quarter – with Burlington County va- cancies tightening up, many larger vacancy opportuni- ties are also shifting towards Camden County, which is not controlled by these ownership entities. •New Jersey’s unemploy- ment rate moved lower for the 13th consecutive month, down to 4.3 percent. It is down by two full points over the past year and is now at the lowest level since August 2007. 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 first quarter Pennsylvania section include: •The Philadelphia regional office market is continuing its positive trajectory from 2015 in terms of rental rate growth and decline in vacancy rates. While much of this is felt in the CBD core, some of the subur- ban markets are experiencing similar activity. Repositioning of older class B product to Core class A assets coupled with the
strong investor appetite for value-add deals is anticipated to continue through 2016. •Center City Philadelphia, specifically Market East, is experiencing a resurgence of activity including PREIT’s “top-to-bottom” renovation at the Gallery at Market East. Rental rates in the CBD are at all-time highs while de- mand from both regional and national tenants continuing to flock to the market. In terms of the suburban markets, the appetite for core assets continues to be paramount from institutional investors with value-add plays on older
center, similar to the office market. Target will be open- ing two of its TargetExpress- brand stores in Center City Philadelphia in the summer of 2016. •The Philadelphia regional industrial market is strong, with large distribution fa- cilities continuing to hold the greatest demand from institutional players. Rental rates continue to increase while vacancy rates are hold- ing steady. There have been a variety of transactions, specifi- cally in the expanded market area with prices fetching all continued on page 11B
ARLTON, NJ — Comme r c i a l r ea l es tate brokerage
WCRE r e - ported in its latest quar- terly analy- sis that 2016 began much a s 2 0 1 5 ended: with S o u t h e r n New Jersey
Jason Wolf
commercial real estate growth slowing down somewhat. The report included some reasons to stay optimistic, such as con- tinuing healthy activity levels among local bellwether indus- tries, the ongoing decline in office vacancy rates, and signs of gradual business expansion. “The first quarter was marked by volatility in the financial markets, which seemed to have stabilized by the end of the quarter,” said Jason Wolf , founder and managing principal of WCRE. “This uncertainty, coupled with the expected cy- clical slow-down due to winter weather seem to have been a drag on our market, but we believe the overall outlook is still strong.” There were approximately 326,533 s/f of new leases and renewals executed in the three counties surveyed, which rep- resents a drop of +/- 30% com- pared with the first quarter of 2015. The quarter also saw a drop in prospecting, with about 200,000 s/f of lease deals in the pipeline and expected to close in the near term. Still, the trend of positive absorp- tion continued, making up approximately 146,532 s/f of total activity, up about 10% over the previous quarter. Vacancy rates continued to improve, as well, and several large trophy 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 continues to drop, and is now down to approximately 11.45%. This is a slight im- provement over the previous quarter. •Average rents for class A & B product continue to show strong support in the range of $10.00-$14.00/sf NNN or $21.00-$25.00/sf gross for the deals completed during the first quarter. This is es- sentially unchanged from the previous two quarters.
FULL SERVICE COMMERCIAL REAL ESTATE BROKERAGE & ADVISORY FIRM
PERFECTING THE ART OF THE DEAL.
Changing the way commercial real estate gets done.
Landlord Representation Tenant Representation
Investments
l
l
Property Management
l
l
Research & Marketing Information Corporate Real Estate Representation
Appraisal & Advisory Services
l
l
Construction Services
l
l
For more information, visit WolfCRE.com or call 856-857-6300 .
Building Successful Relationships TM
Marlton, NJ l King of Prussia, PA
Made with FlippingBook HTML5