Key Take Aways from Northern New Jersey’s February 2023 Meeting
- There has been a push for more environmental planning due to the infrastructure bill. (Charles Heydt – Dresdner Robin)
- Dresdner Robin has been very busy with lots of work. (Charles Heydt – Dresdner Robin, John Tregidgo – Dresdner Robin)
- Some towns are turning down master plans for industrial even though the buildings are in a permitted zone and fit the parameters that have been laid out. (Gregory James – NAI James E. Hanson Inc)
- Affordable housing in NJ used to be regulated by COAH, but that organization is now defunct. It is now determined by a special master. (Charles Heydt – Dresdner Robin)
- Towns have an obligation to provide affordable housing and in some cases the rules aren’t reasonable. Obligations for municipalities in New Jersey will be reassessed in 2025 and many towns are not prepared. (Charles Heydt – Dresdner Robin)
- New Jersey is one of the most racially segregated areas, and affordable housing plays an important role in giving families the chance to grow into communities. There is less impact on schools than most people expect. (Charles Heydt – Dresdner Robin)
- Cyber insurance has gone from 0% to 30% of the Axis Insurance business. They have been growing significantly over the past few years, nearly doubling in size over the last year. (Mike Smith – Axis Insurance Services)
- Not seeing insurance rates, which have been up over the past 3-5 years, soften much (though some softening due in part to higher interest rates on assets). Rates on riskier policies are going up and some companies are uninsurable. (Mike Smith – Axis Insurance Services)
- Lawsuits are seeing higher verdicts and attorney fees have gone up. (Mike Smith – Axis Insurance Services)
- Cyber insurance rates are down, in part because clients are getting better at managing their own security. But insurers do require companies to have certain safeguards in place or they won’t insure them at all. (Mike Smith – Axis Insurance Services)
- Cannabis companies are a new segment of the insurance company that has taken off, though some properties are uninsurable. (Mike Smith – Axis Insurance Services)
- Axis Insurance is looking for summer interns. They hired several previous interns and offer good training programs. (Mike Smith – Axis Insurance Services)
- There is still plenty of liquidity, but some deals are harder to do, especially because of uncertainty about interest rates. (John Cree – G.S. Wilcox & Co.)
- Treasury is still at an all time low. (John Cree – G.S. Wilcox & Co.)
- There are still deals happening in retail, especially with grocery anchored retail. Retail is doing well in New Jersey and Long Island. (John Cree – G.S. Wilcox & Co.)
- Year over year, a third of the industrial has been traded, but expects it to shift back. Too much money wants to be here and invested. (Bill Hanson – NAI James E. Hanson Inc)
- A 3 building portfolio that would likely have sold for over $100 million a year ago is now difficult to get a deal done. (Bill Hanson – NAI James E. Hanson Inc)
- From a historical perspective, interest rates aren’t as high as they’ve been in the past. Market has to readjust risk returns. (Gregory James – NAI James E. Hanson Inc)
- Most energy still comes from fossil fuels, coal, etc. Green energy is not providing enough and the grid is not set up for it. Potential for oil to increase. (Gregory James – NAI James E. Hanson Inc)
- A few retailers have filed for bankruptcy, but overall the retail market is stable. People like going to the store to get out of the house. Big boxes have gotten hit the hardest. (Gregory James – NAI James E. Hanson Inc)
- Industrial market has been strong, with all time low vacancies and sky high rents. Model is showing that vacancies will ease up slightly. (Mateusz Wnek – CoStar Group)
- Port activity is high. New Jersey eclipsed Los Angeles for a few months. Importers want to diversify their shipments so they’re not all in California. (Mateusz Wnek – CoStar Group)
- There are also good cold storage options in NNJ. (Mateusz Wnek – CoStar Group)
- Seeing traffic come back to retail locations. (Gregg Manzione – Nationwide Consulting Company, Inc.)
- Oil demand may increase over time and not seeing any new tanks being built for petroleum fossil fuels. All new tanks being built are bio / green. (Gregg Manzione – Nationwide Consulting Company, Inc.)
- Anecdotally, a residential mortgage broker saw business up last month and residential rates came down a little. (Gregg Manzione – Nationwide Consulting Company, Inc.)
- There are a lot of old legacy projects where responsible parties have dropped off. If remediation isn’t completed, it could go under direct oversight by the state due to the Site Remediation Reform Act. (Gregg Manzione – Nationwide Consulting Company, Inc.)
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