2D —September 23 - October, 20, 2022 — Fall Preview — M id A tlantic Real Estate Journal
www.marej.com
N ew J ersey B roker
By Matt Leonelli, Sheldon Gross Realty Industrial Real Estate in New Jersey: Staying Hot
A
what we’re witnessing is nothing less than a per- manent behavioral shift among consumers. With ev- ery brick-and-mortar retail location that closes, part of its square footage must be made up for in a “last mile” distribution facility, thus furthering increasing de- mand for industrial space. Combined with an ongoing trend of companies relocat- ing from New York City to New Jersey, the strength of e-commerce sales is further exacerbating industrial sup - ply issues. And while the
construction and delivery of larger distribution facili- ties continues, little is being done to increase the supply of smaller and mid-sized facilities, for which demand seems nearly insatiable. As historic price increases and scarcity impact not only existing buildings, but also industrially zoned land, de- velopers and users alike are increasingly turning to unorthodox solutions. These include repurposing under- performing retail and office assets to meet the demands of modern distribution com-
panies. However, such re- purposing creates multiple new challenges, including demands to change zoning in locations where local resi- dents staunchly oppose new industrial development. Given such unprecedented market conditions, now is a fantastic time to own indus- trial real estate. Sellers and landlords find themselves firmly in the driver’s seat when it comes to negotia- tions, and they can dictate the terms of most deals. In such a climate, sellers are squarely focused on rigor - ous screening of potential purchasers, to ensure the se- lected party has the financial resources and wherewithal to close on the sale. Similar- ly, 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 stron- ger than ever, it appears the industrial sector of New Jersey’s commercial real es- tate market will continue its historic run at least into 2023. Matt Leonelli is assistant vice president, commer - cial sales & leasing at Shel- don Gross Realty. MAREJ
s we progress throughout 2022, New Jersey’s indus-
below 1 percent, unprec- edented month-over-month rental rate hikes, and aver- age sale prices far exceeding $200 psf. So while the resi- dential market may be show- ing signs of cooling, we can expect the industrial market to continue its upward tra- jectory for the remainder of 2022, and likely beyond. Pandemic lockdowns cer - tainly provide an easy expla - nation for why e-commerce sales soared during 2020, but the continuation of this growth through 2021 and now most of 2022 indicates
trial real estate mar- ket contin- ues to face the supply and demand imbalances that have been en- demic since
Matt Leonelli
the Covid 19 pandemic be- gan. In many of the state’s submarkets, tenants and prospective purchasers must contend with vacancy rates
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Fall Preview
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S ection P ublishers Linda Christman lchristman@marejournal.com
SHELDON GROSS REALTY, INC. REALTORS ● Corporate Real Estate Services 80 Main Street, West Orange, NJ 07052 Tel. 973-325-6200 - Fax. 973-325-9090 www.sheldongrossrealty.com
Lea Christman lea@marejournal.com
S ection E ditor Karen Vachon editor@marejournal.com
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