Key Take Aways from Northern New Jersey’s December 2023 Meeting
• Seeing a lot of public sector opportunities but slow on the private side. Not a lot of due diligence work on the environmental side, which can suggest things slowing down. (John Tregidgo – Dresdner Robin)
• New site remediation rules were released in regards to the Environmental Justice Law that require more robust perimeter air monitoring. Generally only applies once the site is being disturbed, but adds substantial costs to projects. (John Tregidgo – Dresdner Robin)
• Environmental Justice Law came out about a year ago and is designed to protect communities near industrial areas. (John Tregidgo – Dresdner Robin)
• Deadlines are coming up for many sites that will go into direct oversight, which translates into fines. But the state can’t handle the level of sites going into direct oversight, so extension requests are getting approved as long as issues are being addressed and things are moving forward. (John Tregidgo – Dresdner Robin)
• There have been long delays in getting a permit from the state for remediation and the process has been taking 2+ years. They are considering allowing LSRPs to sign those permits, which would be a major win for property owners, and for the state as projects will be able to move forward more easily. (John Tregidgo – Dresdner Robin)
• There are DOT projects that have large issues with the Environmental Justice Law. (Charles Heydt – Dresdner Robin)
• Some projects now require an Environmental Justice Impact Statement with a public reporting period. (John Tregidgo – Dresdner Robin)
• The Environmental Justice Law is more impactful in urban areas like the Brownfield sites due to the density of the population. (John Tregidgo – Dresdner Robin)
• Cyber security companies can do a penetration test to find the holes in your system. Many people think they’re covered, but 99% of the time the firewalls don’t work and they’re able to successfully download malware without setting off alarms. (Bob Michie – MetroMSP, llc)
• Cyber insurance policies have requirements for compliance with cyber security policies. In many cases, you can’t get a policy at all without certain guidelines being met and there are lawsuits coming up where carriers claim companies fraudulently claimed to have met requirements that they hadn’t actually met. (Paul Hacker – Axis Insurance Systems, Bob Michie – MetroMSP, llc)
• Any size business can be helped with assessing their vulnerabilities and third parties can work with internal teams. (Bob Michie – MetroMSP, llc)
• AI can help hackers create better phishing emails. (Bob Michie – MetroMSP, llc)
• There was an FTC law that was updated in March that has a classification called a non-banking financial institution, which covers anyone that touches a tax return, all the way down to a real estate appraiser, and requires them to comply with FTC safeguards, and must have an identified individual as a cyber expert. (Bob Michie – MetroMSP, llc)
• It’s possible to get hacked by just receiving an email without clicking on a link. (Bob Michie – MetroMSP, llc)
• This year has been a transition year, due to interest rates and uncertainty. (Bill Hanson – NAI James E. Hanson Inc)
• Industrial market remains strong but not what it was a year ago. Most activity is under 100K sq ft. and some larger buildings are still sitting and wouldn’t have been a year ago. (Bill Hanson – NAI James E. Hanson Inc)
• Some industrial landlords hadn’t been willing to subdivide due to the cost, but now some are doing that. (Gregory James – NAI James E. Hanson Inc)
• The stock market was up in November and many think the Fed will be cutting interest rates in 2024. (Gregory James – NAI James E. Hanson Inc)
• The real estate industry is rate sensitive. When rates were low, everything looked attractive. (Gregory James – NAI James E. Hanson Inc)
• It’s not just the cost of funds, but banks have to function as a competitive business. They’re working more with immersive relationships. (Jeffrey Schneider – First Commerce Bank)
• Banks are asking for 20-30% in compensating balances and don’t want you to use multiple banks. When rates were lower, things were different. (Gregory James – NAI James E. Hanson Inc, Jeffrey Schneider – First Commerce Bank)
• With an election coming, signs are for rate reductions in the new year. (Jeffrey Schneider – First Commerce Bank)
• Retail is pretty healthy in Northern New Jersey with vacancies around 4%. (Mateusz Wnek – CoStar Group)
• The big story is chronic underdevelopment in retail, both nationally and in New Jersey. (Mateusz Wnek – CoStar Group)
• Rent growth was still solid, but has taken a dive over the past month and is looking flat. Oxford Economics dialed down consumer spending for the next year. (Mateusz Wnek – CoStar Group)
• Construction starts nationally are at record lows in the retail market. (Mateusz Wnek – CoStar Group)
• NNJ has a low amount of construction starts in the market compared to the Sun Belt market. (Mateusz Wnek – CoStar Group)
• Robust demand and limited construction pushed retail rents to new highs in NNJ, but it has flattened out. Expecting moderately positive growth or potentially flat, but not expecting declines. (Mateusz Wnek – CoStar Group)
• Investors have been spending more time on the sidelines in 2023. Transaction prices held up but the volumes are down. (Mateusz Wnek – CoStar Group)
• Retail includes spaces converted into various entertainment uses, which is very popular now. (Mateusz Wnek – CoStar Group)
• Forecast from Oxford Economics is they expect small stagnation or contraction. Base case is still for a recession next year, but pushed back a bit. Expecting the first rate cut in September. (Mateusz Wnek – CoStar Group)
• Elevated inflation is expected to continue suppressing consumer spending for the first half of the year. A lot of people suspect that the consumer is just about tapped out. (Mateusz Wnek – CoStar Group, Gregory James – NAI James E. Hanson Inc)
• The labor market in NNJ is expected to cool further in 2024. It’s flat but not declining. (Mateusz Wnek – CoStar Group)
• Credit card delinquencies have been edging up. (Mateusz Wnek – CoStar Group)
• The EDA just approved a $20 million pilot for entry level developers (2-5 deals) for some soft cost grants up to $200K. It is a straightforward program with an effort to support local business. (Patrice Lavanture – Oak Environmental Consulting & Services, Jeffrey Schneider – First Commerce Bank)
• There are a lot of opportunities with resiliency funding. (Charles Heydt – Dresdner Robin)
• The Big U is a project under the Obama administration after Hurricane Sandy and covered the southern boundary of Manhattan. They were evaluating how to design projects to fortify urban areas. (Charles Heydt – Dresdner Robin)
• Some of those federally funded resiliency projects are going in on the East River now. Rebuild by Design was one of those initiatives, New Jersey had a project called The New Meadowlands and Hoboken has a sea wall project. (Charles Heydt – Dresdner Robin)
• Resiliency projects are looking to address future sea level rise. (Charles Heydt – Dresdner Robin)
• Jersey City is looking into going after federal dollars for resiliency. (Charles Heydt – Dresdner Robin)
• Some cities are facing issues with tidally influenced water, increase in higher severity storms, and water surges that are flooding neighborhoods. (Charles Heydt – Dresdner Robin)
• The key to design is context and raising buildings and even roads to adjust. (Charles Heydt – Dresdner Robin)
• New project in Jersey City just released an RFP to develop the parking lots and are raising the roads 8 feet. (Charles Heydt – Dresdner Robin)
• There is money to be made in designing and addressing the issues that are coming online. (Charles Heydt – Dresdner Robin)
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