Real Estate Journal — Industrial / Distribution Centers — May 27 - June 9, 2016 — 11C
www.marejournal.com
M id A tlantic
NAI D i L eo -B ram & C o . By Greg Brown, NAI DiLeo-Bram & Co. Non-institutional market stays hot
C
entral New Jersey has seen a significant in- crease in demand for
rent growth in Northern New Jersey and is now migrat- ing south. Overall consumer
estate development reacts to demand - it does not predict it. This is particularly true of the
ligible spec development in all of New Jersey targeting small to mid-size tenants. Owner/User competition. Unlike institutional level own- ers, investors of smaller sized properties have to compete with the tenants themselves. Long standing small to mid-size busi- nesses who understand their long term space needs, are tak- ing advantage of the low inter- est rate environment for owner occupied properties and are looking to create value in own- ing their real estate. Typically buyers looking to purchase real estate for their own account (as opposed to pure investors) can
pay higher prices for property. As long as interest rates remain low, this will continue. Inves- tors in the institutional sized asset class are not as likely to compete with business owners looking to buy real estate for their own use. In summary, demand is high, debt is cheap and we believe we are at or near the peak of this cycle. Owners of industrial real estate in New Jersey should se- riously evaluate their positions and consider selling and taking advantage of this market. Greg Brown is Managing Director at NAI Dileo-Bram & Co. n
i n d u s t r i a l assets under 100,000 s/f. Coming out of the last e c o n o m i c r e c e s s i o n , i n d u s t r i a l real estate values have
“On the supply side, speculative development has been slow to catch up to demand. This is normal in real estate cycles as real estate development reacts to demand - it does not predict it.”
spending increases the de- mand for warehouse space as well. There is a need to store and distribute all goods- not just the ones purchased on Amazon or Boxed.com. On the supply side, speculative development has been slow to catch up to demand. This is nor- mal in real estate cycles as real
non-institutional assets (those we will arbitrarily describe as under 100,000 s/f for this arti- cle). The spec development that has occurred ranges between several hundred thousand s/f up to one million s/f each, and is specifically targeting large distribution clients, principally e-retailers. There has been neg-
Greg Brown
returned to pre-recession val- ues or even exceeded them. Industrial real estate, particu- larly the well located assets in New Jersey, are some of the most sought after real estate in today’s market. Let’s cover 2 reasons why: Lack of inventory . When you talk about a lack of inven- tory, demand outpaces supply. The increase to the demand side has largely been driven by 2 factors- increases in consum- er spending and specifically the increase in e-commerce. New Jersey has long benefited from its close proximity to ma- jor ports, New York City and a road network enabling quick access to the major popula- tion centers in the Northeast. When e-commerce consumers demand products in hours, not days or weeks, those e-retail- ers need to be close to the city. This has produced tremendous and individual storefronts. Rents are expected to gener- ally remain within normal retail market parameters. The number and ownership of the dispensary licenses is tightly legislated and controlled. Ac- cordingly, just as with the growing/processing operations, the number of retail locations will be limited. As Pennsylvania engages in this new industry, there are many new opportunities for both licensees and supporting service industries. Without a doubt, our legal professionals will create new language for leases and craft new permitted use definitions. As always, com- mercial real estate will evolve and adapt to absorb and accom- modate this new industry. Robin Zellers, SIOR is the President of NAI CIR in Harrisburg, PA He is a past Chairman and con- tinues to serve on the NAI Global Members Leader- ship Board. n continued from page 6C Medical Marijuana & Pennsylvania...
Experience Matters
Since 1937
Where can we help you next ?
INDUSTRIAL - 4 Timber Lane, Marlboro 14,060 SF with 2,500 SF office component, heavy power, two oversize drive-in doors at grade and one interior lift-gate dock
OFFICE - 1 Metroplex Drive, Edison Entire building with signage rights and reserved parking. Located across from the Edison Train Station
Site
RETAIL - 580 North Avenue, Union Fully-equipped, former University Diner for sale or lease. Seating for 130 customers, ample parking. Adjacent to Kean University.
LAND - Andria Avenue, Hillsborough 5 Acres – Gateway A Zone. Zoning permits retail, office, medical, childcare, adult daycare and recreational uses
For Further Information Please Contact Exclusive Broker: tel 732 985 3000 1315 Stelton Road Piscataway, NJ 08854 naidb.com 5,000 local commercial real estate market leaders. 55 countries. 400 local offices.
The information contained herein has been given to us by the owner of the property or other sources we deem reliable. We have no reason to doubt its accuracy, but we do not guarantee it. All information should be verified prior to purchase or lease.
Made with FlippingBook HTML5