www.marej.com M id A tlantic Real Estate Journal — Maryland —May 2023 — 5A C annabis I ndustry : R eshaping R eal E state M arkets By Daniel Tropp, AEBOV Industrial Real Estate Brokerage Commercial Real Estate becomes key element in NJ cannabis industry growth and success
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s more landlords warm to the idea of leasing commercial real estate
generally available, demand among operators was greater for existing warehouse space as the time horizon to complete construction is shorter. Exist- ing buildings that were both adaptable to the use and zoned appropriately, came at a pre- mium initially but leveled off over time and we expect that to continue as new industrial supply hits the market. Atop the list of demands for cultiva- tion sites - high ceiling heights and ample power. In addition to bolstering demand for select commercial properties, the cannabis in-
dustry’s growth is expected to provide a boon to other service providers in the commercial real estate ecosystem; notably architects, HVAC/odor mitiga- tion professionals, renewable energy companies, lighting providers, retail and design consultants, security profes- sionals, attorneys, and insur- ance providers, to name a few. If you would like to discuss the market in greater detail, please do not hesitate to give us a call or send your feedback. Daniel Tropp is president of AEBOV Industrial Real Estate Brokerage. MAREJ
their conversions to annual licenses and eventually, open their businesses. As a result commercial real estate has become a key piece to the cannabis operator’s plan. After tracking the emerging NJ cannabis real estate market throughout 2022, a number of rising trends were noted. Based on 2022 cannabis real estate transactions throughout the state, the average size of a recreational dispensary was 4,175 s/f. In townships that al- lowed several retail locations or had no limit on local approvals altogether, deals were signed
at or slightly above market rents. However in townships that only issued one (1) retail resolution - thereby ensuring that the license recipient will operate the only dispensary in the town - deals were inked at notable premiums, ranging as high as 235% of market rent. Parking also factored into pric- ing as many townships have minimum parking require- ments in their ordinances. Similarly on the industrial side, where New Jersey has experienced historically low vacancy rates, demand ex- ceeded supply. While land was
to cannabis operators, the cannabis industry’s impact on the commer- cial real es- tate market is becoming increasingly clear. For
Daniel Tropp
instance, 2022 was an ac- tive year for the New Jersey cannabis real estate market. The state approved 910 adult personal-use conditional can- nabis licenses. Approximately 58% of these were class 5 retail licenses - as it pertains to real estate, retail awardees sought storefronts, shopping plazas, or other properties suitable for retail use. 26% of the li- censes were for cultivation - cultivation licensees pursued farm land or warehouses to accommodate indoor growing. Finally, 16% of the conditional licenses issued were for manu- facturing - manufacturing awardees looked to acquire industrial properties or other properties suitable for manu- facturing use. Theoretically, all of the license awardees are required to have site con- trol and municipal approval in order to move ahead with Item 9 Labs Corp.’s Weinberger appointed to NCIA’s Retail Committee WASHINGTON, DC — Item 9 Labs Corp. announced that its CEO Mike Wein- berger has been appointed to serve on the National Canna- bis Industry Association’s (NCIA) Retail Committee as a new member for the 2023- 2025 term. “It is such an honor to be cho- sen to serve as a member on the NCIA’s Retail Committee this term and aid the organization in its mission to ensure small cannabis businesses are always at the helm of the evolving in- dustry,” said Weinberger. “Our Company was created to fuel entrepreneurs’ dreams of enter- ing cannabis and is proactively leading the charge alongside industry advocates like NCIA who continuously believe and instill confidence in the benefits of cannabis for all.” MAREJ
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