M id A tlantic Real Estate Journal — New Jersey — October 21 - November 17, 2022 — 5B N ew J ersey
By Matt Leonelli, Sheldon Gross Realty Industrial Real Estate in New Jersey: Staying Hot
s we progress through- out 2022, New Jersey’s industrial real estate
e-commerce sales is further exacerbating industrial supply issues. And while the construc- tion and delivery of larger dis- tribution facilities continues, little is being done to increase the supply of smaller and mid- sized facilities, for which de- mand seems nearly insatiable. As historic price increases and scarcity impact not only existing buildings, but also industrially zoned land, devel- opers and users alike are in- creasingly turning to unortho- dox solutions. These include repurposing underperforming retail and office assets to
meet the demands of modern distribution companies. How- ever, such repurposing cre- ates multiple new challenges, including demands to change zoning in locations where local residents staunchly oppose new industrial development. Given such unprecedented market conditions, now is a fantastic time to own industri- al real estate. Sellers and land- lords find themselves firmly in the driver’s seat when it comes to negotiations, and they can dictate the terms of most deals. In such a climate, sellers are squarely focused on
rigorous screening of potential purchasers, to ensure the se- lected party has the financial resources and wherewithal to close on the sale. Similarly, the primary focus of most landlords who are choosing a new tenant is ensuring that whoever they select has the capacity to weather future economic storms. With both demand and ap- petite for investment stronger than ever, it appears the in- dustrial sector of New Jersey’s commercial real estate market will continue its historic run at least into 2023.
Matt Leonelli is assistant vice president, commercial sales & leasing at Sheldon Gross Realty. MAREJ In the article “Industrial Real Estate in New Jersey: Stay- ing Hot?" By Matt Leonelli, Sheldon Gross Realty (Mid Atlantic Real Estate Journal Volume 34, Issue 9, Sept. 23 - Oct. 20, 2022, pp 2D) there was an error in the first paragraph. The editorial ran with the let- ter D. The following: “A s we progress throughout 2022" ran incorrectly. All versions of this article have been corrected.
market con- tinues to face the supply and demand imbalances that have been endemic since the Co- vid 19 pan- demic began.
In many of the state’s submar- kets, tenants and prospective purchasers must contend with vacancy rates below 1 per- cent, unprecedented month- over-month rental rate hikes, and average sale prices far exceeding $200 psf. So while the residential market may be showing signs of cooling, we can expect the industrial market to continue its upward trajectory for the remainder of 2022, and likely beyond. Pandemic lockdowns cer- tainly provide an easy explana- tion for why e-commerce sales soared during 2020, but the continuation of this growth through 2021 and now most of 2022 indicates what we’re witnessing is nothing less than a permanent behavioral shift among consumers. With every brick-and-mortar retail location that closes, part of its square footage must be made up for in a “last mile” distribu- tion facility, thus furthering increasing demand for indus- trial space. Combined with an ongoing trend of companies relocating from New York City to New Jersey, the strength of Sheldon Gross Realty brokers Newark CRE sale NEWARK, NJ — A New- ark commercial property has been sold for $750,000, in a deal brokered by Sheldon Gross Realty vice president Eric Weston . Located along Verona Ave., on the block between Mt. Pros- pect Ave. and Summer Ave., the location will continue to be used as an auto body shop. The property features various equipment required for confor- mation with environmental safety protocols, including a spray paint booth, a vehicle frame rack, and a lift. “Newark’s a busy, thriving community, with a lot of motor- ists,” Weston observes. MAREJ
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