Key Take Aways from Northern New Jersey’s March 2023 Meeting
• New to Dresdner Robin, Jim brings contract coordination and has worked with in-ground remediation, vacant properties and demolition. (Jim Blaney – Dresdner Robin)
• First quarter has been busy. Still seeing a lot of multi-family, mixed use in-fill, as well as industrial space in ex-urban areas. (Charles Heydt – Dresdner Robin)
• Have seen a lot more resistance from public neighborhoods this year. May be due in part to planning meetings done virtually, requiring less effort for the public to “attend”. (Charles Heydt – Dresdner Robin, John Tregidgo – Dresdner Robin)
• Most board members don’t understand the process and the right way to structure arguments and will often say things that hurt their own argument, which can be beneficial in the appeals process. (Charles Heydt – Dresdner Robin)
• Even if the board denies an application, there’s an appeal process and that process is expensive for both the town and the developer. (Charles Heydt – Dresdner Robin, Bill Hanson – NAI James E. Hanson Inc)
• Sometimes delaying a project through objections can bring it to an end, even if the argument is invalid. There are rare instances where developers have pursued damages. (Mark Semeraro – Decotiis)
• Would have expected the first half of this year to be slow, but it’s not as slow as predicted. There is still lots of indecision, but not as much as predicted. (Bill Hanson – NAI James E. Hanson Inc)
• Some companies have underestimated how much space they would need. (Bill Hanson – NAI James E. Hanson Inc)
• Office market is doing okay. Some companies are taking less space. Class A is doing better, but Class B & C are struggling. (Bill Hanson – NAI James E. Hanson Inc)
• Many towns are resisting warehouses right now. (Bill Hanson – NAI James E. Hanson Inc)
• Just listed the former Kessler building in East Orange which is 90K sq ft, delivering vacant. Ideal for medical office, or could be a regular office building. Lots of parking. (Bill Hanson – NAI James E. Hanson Inc)
• Working on a development site and the prep costs supplied by the client were extremely high. Along with storm water costs, developers are noticing the high costs. (Gregg Manzione – Nationwide Consulting Company, Inc.)
• Lots of deals ended up dying because buyer and seller couldn’t get together. (Gregg Manzione – Nationwide Consulting Company, Inc.)
• There is demand for tractor trailer parking, but some towns don’t allow it. Parking isn’t always a permitted use for a vacant lot. (Mark Vizzini – Dresdner Robin)
• Mixed-use and multi-family are busier than ever. (Mark Vizzini – Dresdner Robin)
• There are new building codes with increased handicapped requirements, due to the use of scooters, and this has created a mad rush for applications. (Mark Vizzini – Dresdner Robin)
• Seeing a little bit of a slow down, as clients are being cautious. Focused on healthcare, repositioning clients assets and senior living. (Leslie Cook – IMC Construction)
• Senior living companies often work together to identify which markets make sense for which company models. (Leslie Cook – IMC Construction)
• Lakeland Bank is in the midst of a merger with Provident Bank. Expected to happen in the next few months. (Doug Cosgrove – Lakeland Bank)
• Smaller banks are more relationship driven and are more flexible with clients where there are established relationships. (Doug Cosgrove – Lakeland Bank)
• There are a lot of unknowns, which is a challenge for lenders. They are staying away from long term rates that are locked in and trying to stick to 5 year rates. Expect rates to tick up a bit in the short term. (Doug Cosgrove – Lakeland Bank)
• Foreclosure moratorium was lifted, but it’s been a slow rollout to actually go forward with foreclosures. (Sue Moccaro – Fortune Title Agency, Inc.)
• They are a law firm in Newark and work mostly in land use development or redevelopment. Assist municipalities all the way through development also do work with tax advantages. (Adam Faiella – Sills Cummis & Gross, P.C.)
• Seeing a lot of uncertainty as people don’t know where things are headed. Those who need to sell are selling, and those who don’t aren’t. (Evan Koransky – Ten-X Commercial Real Estate)
• People like retail now. Lots of investors are looking at grocery retail in the 7-8 cap range. Multi-family is in the 5-6 range. Surprising to find retail as a hot sector. (Evan Koransky – Ten-X Commercial Real Estate)
• People are also looking for well-located suburban office. (Evan Koransky – Ten-X Commercial Real Estate)
• There is more foot traffic in malls, but less spending per person. (Justin Korinis – SABRE)
• Strong malls in good locations are doing well, but malls in areas that are less safe are struggling.(Christian Mazzie – Ten-X Commercial Real Estate)
• Assisted living is really strong. Being challenged on a project on inherently beneficial use and market demand, but demand is growing nationally for the foreseeable future. (Mark Semeraro – Decotiis)
• Market has expanded beyond traditional retail uses, including medical, cannabis, wellness, etc. (Justin Korinis – SABRE)
• Firm is actively looking for a younger mechanical or electrical engineer. Also looking for a small engineering group that’s for sale. (Constantine Siversky – Emtec Engineering)
• Working on a project in Charlotte for a bunch of data centers. (Constantine Siversky – Emtec Engineering)
• Industrial market has been strong for the past 5-7 years in Northern New Jersey, with companies looking for last mile delivery and logistics. (Mateusz Wnek – CoStar Group)
• Demand pushed up rents and pushed down vacancies. (Mateusz Wnek – CoStar Group)
• In the last two years there has been more cargo coming into East Coast ports, in part due to issues with West Coast ports. (Mateusz Wnek – CoStar Group)
• 3.7 million sq ft net deliveries expected this year, which is an all time high. (Mateusz Wnek – CoStar Group)
• Port of Newark eclipsed Port of LA in August and stayed #1 until December. Many importers are making permanent changes to their supply chain (Mateusz Wnek – CoStar Group)
• Confident in forecast for next 2-3 years. Tremendous amount of demand and absorption, which will change with a huge amount of new supply coming online. Vacancies will be ticking up a little, but still one of the healthiest markets in the country. (Mateusz Wnek – CoStar Group)
• Like industrial, multi-family is a super hot market, with rent growth at all time highs and low vacancies. (Mateusz Wnek – CoStar Group)
• Looking at where future demand might be coming from and household formation, as well as people leaving NYC. (Mateusz Wnek – CoStar Group)
• Expecting some people in their late 50s and early 60s may be looking to downsize and become renters. (Mateusz Wnek – CoStar Group)
• The Halo in Newark will deliver almost 1000 luxury units. (Mateusz Wnek – CoStar Group)
• Vacancy is below the national average. With new supply may jump from 4% to 6&, but expected to stabilize. (Mateusz Wnek – CoStar Group)
• Demand for office is down, and not just because of the pandemic. Due to technology and remote work, much of that is not coming back. Previous office space may need to be repurposed. (Mateusz Wnek – CoStar Group)
• Early retirement and the gig economy have also impacted the workforce. (Mateusz Wnek – CoStar Group)
• There has been 1.4 million in negative absorption in the office market in 2023, which is better than 2022. (Mateusz Wnek – CoStar Group)
• Companies that want employees back are adding more space through amenities. (Justin Korinis – SABRE)
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