Key Take Aways from Philadelphia November 2021
- Shopping Center Law Conference took place in San Francisco. Owners are seeing an uptick and some overall optimism for retail, with a lot of focus on grocery store centers. Not a lot of development work. (Bart Mellits – Ballard Spahr)
- Landlords and tenants are working together to create a fair structure of risk management for potential future restrictions. (Bart Mellits – Ballard Spahr, Sara McCormick – Ballard Spahr)
- With interest rates ticking up, it’s made different hedging costs more expensive. (Matt Hoffman – Chatham Financial)
- LIBOR transition continues to be an evolving topic. Expectation is to stop seeking new LIBOR products by the end of the year. (Matt Hoffman – Chatham Financial)
- Multi-family has been busy once again with more momentum than it’s had over the past few months and a huge increase in rental rates. (Christian Dalzell – Counter Management, Allan Nappen – Nappen & Associates)
- Supply chain issues are a major problem and create problems with delivering tenant fitouts. (Christina Lutz – Counter Management, Allan Nappen – Nappen & Associates)
- Tax changes remain uncertain but preparers are braced for new tax legislation and expect issues such as a potential wealth tax to be complex. (Ed Opall – EisnerAmper)
- Economy is not so much in recovery from a recession but just counting the shocks. Offices are still waiting to fill back up, evictions are ticking back up and survivor bias offers optimism that may not be warranted. (Paul Flora – Federal Reserve Bank of Philadelphia, Ed Opall – EisnerAmper)
- Labor demand remains a huge issue, with delivery times being increased which makes deals more difficult to complete. One potential factor is the ability of workers close to retirement to utilize the benefits of robust retirement accounts. There are also more workers who only want to work remotely or are only interested in part time. The number of job openings has recently surpassed the number of unemployed people. (Paul Flora – Federal Reserve Bank of Philadelphia, Jim Karmalinski – Kelly Maiello Architects, Matt Shanahan – Colliers, Itay Ron – Faropoint, Allan Nappen – Nappen & Associates, Vern Burling – Sandy Bay Partners)
- There is more interest from developers out of New York. (Jim Karmalinski – Kelly Maiello Architects)
- The office market is very slow. Class A will likely continue to do well as well as small office spaces. Overall, optimism may be overly rosy. (Paul Flora – Federal Reserve Bank of Philadelphia, Matt Shanahan – Colliers)
- Industrial market is strong and is likely to remain strong moving forward. (Adrian Ponsen – CoStar Group, Ed Opall – EisnerAmper, Itay Ron – Faropoint)
- Substantial tax benefits can be gained from including land for conservation as a part of a package. (Vern Burling – Sandy Bay Partners)
- Large developers have opportunities to benefit from insurance packages for their projects. (Matt Musilli – Johnson, Kendall & Johnson)
- While supply chain issues are a struggle, many ports are up 17% on TEUs (Tonnage Equivalent Units) as there has been an unprecedented demand for consumer goods. It’s not likely that demand is going to subside in the near future. (Adrian Ponsen – CoStar Group)
- Some industrial units remain unleased because landlords are expecting rental rates to rise and waiting to get better rates. (Adrian Ponsen – CoStar Group)
- Properties with rates of $200+ sq ft have been rising steadily. (Adrian Ponsen – CoStar Group)
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