2C —April 24 - May 14, 2020 — Spring Preview — M id A tlantic Real Estate Journal


C ommercial R eal E state B roker Predictions for 2020 had been bullish, but are now a great unknown The year started off on a high note in the Southern NJ & Philly CRE markets, then COVID-19 created chaos


ommercial real estate brokerage WCRE re- ported in its analysis

disrupted by the Covid-19 pan- demic, the CRE market would not be immune. The quarterly performance still showed posi- tive news, but the effects of the crisis began taking hold during the last weeks of Q1, so the true impact hadn’t be- come fully apparent. Vacancy rates across every property type remain low, and, while rent increases have cooled somewhat, growth remained positive for the quarter. Even before the pandemic struck many feared there were signs that the decade-long expan- sion was nearing its end. But

even as growth slowed down, the economy appeared to be moving forward at a fairly solid pace before the crisis. “Initially the assumption was that the worst of the coronavirus outbreak would directly impact the regions in Asia where it first was identi - fied, and that the impact to the U.S. would come in the form of disruption of supply chains and slower economic growth abroad,” said Jason Wolf, founder and managing principal of WCRE. “While those shocks have happened, the rapid spread of

the virus within the US and around the world has impact- ed the global economy, and those effects are still becoming apparent throughout our local and regional CRE markets.” There were approximately 374,429 s/f of new leases and renewals executed in the three counties surveyed (Burling- ton, Camden and Gloucester), which was up more than 80% over the previous quarter. The sales market stayed active, with about 1.02 million s/f on the market or under agree- ment. Completed sales were up about ten percent over the

previous quarter, at approxi- mately 866,444 s/f trading hands. New leasing activity ac- counted for approximately 47% of all deals for the three counties surveyed. Overall, gross leasing absorption for Q1 was in the range of 110,000 s/f , up about 25% over the fourth quarter. Other office market high - lights from the report: ● Overall vacancy in the market is now approximately 11.2%, which is significantly improved from the previous quarter, and still near a 20- year low. ● Average rents for Class A & B product continue to show strong support in the range of $10.00-$15.00/sf NNN or $20.00-$25.00/sf gross for the deals completed during the quarter. These averages have hovered near this range for more than a year. ● Vacancy in Camden Coun - ty ticked down to 11.6% for the quarter, as prospecting activ- ity improved. ● Burlington County’s va - cancy dropped to 10.8%, more than a full point improvement over Q4. WCRE has expanded into southeastern Pennsylva- nia, and the firm’s quar- terly reports now include a section on transactions, rates, and news fromPhila- delphia and the suburbs. Highlights from the first quarter in Pennsylvania include: ● The vacancy rate in Philadelphia’s office market dropped slightly to 8.5%. The office vacancy rate is still near a 20-year low, and below that continued on page 16C

of the first qua r t e r o f 2 0 2 0 t h a t the Southern New Jersey and South- e a s t e r n Pennsylva- nia markets c o n t i nu e d

Jason Wolf

their years-long strong per- formance at the outset of the new decade. But by March it was clear that, just as every other area of life would be



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