Key Take Aways from Northern New Jersey’s September 2023 Meeting
• Retail theft has become a larger problem and companies are reducing the number of self checkouts as a result. (Gregory James – NAI James E. Hanson Inc)
• Amazon requires you to use your app to enter the store. We are moving towards a cashless society. (Gregory James – NAI James E. Hanson Inc, Leslie Cook – IMC Construction)
• It’s a tough market from a banking perspective. Construction money is between 8.5-9.5% right now, which is quite the sticker shock. (Gregory James – NAI James E. Hanson Inc)
• Banks are saving money for existing clients and not offering favorable rates or leverage. (Gregory James – NAI James E. Hanson Inc)
• The economy seems good in terms of growth and unemployment, but the deficit has doubled and tax receipts are down 10%. (Gregory James – NAI James E. Hanson Inc)
• CPI was higher than expected and the expectation is that the Fed will raise rates either this term or next and that rates may stay higher longer than expected. (Gregory James – NAI James E. Hanson Inc)
• There is a lot of sublease space available. People got scared during the pandemic and gobbled up more space than they needed. (Gregory James – NAI James E. Hanson Inc)
• Rent growth in the industrial space probably doubled between 2010 and 2022. (Gregory James – NAI James E. Hanson Inc)
• There will possibly be another round of REO in 2024 and 2025 with loans that are maturing. Lenders may try to grant extensions and work with borrowers in hopes rates ease. (Gregory James – NAI James E. Hanson Inc)
• Through Treasury Direct, you can buy treasury bills and CDs from banks are trending toward 5%. (Gregory James – NAI James E. Hanson Inc)
• AI is useful but sometimes uses fake sources and must be proofread. (Leslie Cook – IMC Construction, Gregory James – NAI James E. Hanson Inc, Adam Faiella – Sills Cummis & Gross, P.C., John Tregidgo – Dresdner Robin)
• AI can duplicate a voice which is a new threat to cyber security. They’re using it to scam seniors. (Paul Hacker – Axis Insurance Systems)
• Have had a lot of proposals over the past 6-9 months, especially with a lot of public sector work, but things have slowed down a bit. (John Tregidgo – Dresdner Robin)
• Some of the money from the infrastructure bill has been allocated. Available on a White House link, which provides info on allocations throughout the US. (John Tregidgo – Dresdner Robin)
• They are seeing a lot of renovations to older existing sites. (Leslie Cook – IMC
• Construction)Inflation has come down, but Russia and OPEC have cut back on gas production so they are expecting a possible uptick later this year. (John Tregidgo – Dresdner Robin)
• 50% of homeowners in New Jersey have a mortgage rate under 5%, so they are reluctant to sell. Some people are keeping their home instead of selling it. Fannie loans are at 80% nationally. (John Tregidgo – Dresdner Robin, Mateusz Wnek – CoStar Group)
• It’s difficult working with lenders if you don’t already have a good relationship. E&O rates are increasing dramatically. (Paul Hacker – Axis Insurance Systems)
• Cyber insurance has come down across the board. (Paul Hacker – Axis Insurance Systems)
• There are many delays in working with the DEP for site remediation. There are a lot of sites that haven’t been done for decades, and they’re likely very contaminated or have other problems. State will have to take over with direct oversight, which is a slow process. (John Tregidgo – Dresdner Robin)
• There is a tab on the DEP website with known contaminated sites, which may include info on superfund sites. (John Tregidgo – Dresdner Robin)
• Senior living projects have slowed down, and they’ve had to look for new revenue sources. (Leslie Cook – IMC Construction)
• The trend had been moving towards artificial turf for athletic fields, but due to expenses and other issues the trend seems to be going the other way. (Paul Hacker – Axis Insurance Systems, John Tregidgo – Dresdner Robin)
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