Northern New Jersey January 2021 – Key Takeaways
• Dresdner Robin reported a phenomenal December in multifamily and mixed use. A 2-year-long multi-site search for an Eliot Spitzer project culminated in a 27-story, 349-unit building (with 51 parking spaces) in Journal Square, Jersey City now in development.
• Downstate, Dresdner Robin’s Charles Heydt is representing the owner of the BL England plant site in Upper Township, Cape May County – one of the last two coal-generated electric stations in NJ for potential conversion to wind power.
• According to NAI James E. Hanson’s Gregory James, vacancies are beginning to occur in high rise apartments along NJ’s waterfront Gold Coast. Properties with 90% occupancy last year are now down to 70%. Some landlords are offering 17-month leases with 5 months free rent.
• Bill Hanson noted that industrial remains the #1 segment, with multifamily still very active; however, office and retail activity in NNJ continue to lag.
• One focus at Nationwide Consulting has been tax appeals at town and county levels, appraisals for industrial land, and landlord concessions in retail. Gregg Manzione summarized the demand for industrial land as through the roof, whether stabilized or Brownfield; there’s a glut of space in Port Newark, Perth Amboy and Carteret where legacy 50 to 100 years old terminals command $200/SF with taxes at $20/SF.
• Yardi Systems’ Paul Fiorilla reported NJ submarket office vacancies were up 17.5% statewide with little or no change in rents. NNJ multifamily rents were down slightly (1.5 to 2%) with vacancy rates down 1%; higher-end properties offer larger concessions to counter a drop in occupancy. Anticipated aid packages from the new Administration will likely benefit renters.
• Due to a 3 to 4-month backlog at the NJDEP during the pandemic, Eric Grille of Davis Environmental Law advises clients with Brownfield or contaminated properties to file for public records as soon as possible.
• Ten-X’s commercial volume increased to meet its 3-year projections with 650 properties sold over the last 9 months (an average of 70 per month). Ian Grusd reported NJ assets sold on this platform exceeded the national average. Q4 wins included a 2,700 SF Bank of America in Allandale selling for $875K after a 45-day bidding war and a semi-distressed office building in Roseland selling for $4.8M ($53/SF) with 18 approved bidders.
• Paul Hacker of Axis Insurance Services reported that cyber security is up front and center after the recent Solar Winds hack by bad actors (potentially China and/or Russia). Data from hundreds of private companies as well as government agencies was stolen.
• Guest Debra Gerstenfeld from ICP (Innovative Chemical Products) works closely in the A&D community in NYC on projects requiring high performance paint; current work includes a mixed-use project on Staten Island as well as K-12 and higher education projects. She noted that NYC has been hit really hard by the pandemic, projecting the city will take longer to bounce back compared with areas like Ohio, Michigan and Florida.
• NJ COVID update from Gregory James: Essex County is very aggressive in its COVID vaccination program. Five vaccination centers are being set up, notably the former K-Mart in West Orange and the Sears store in the Livingston Mall. Registration for people in Group 1A is currently underway.
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