The Industrial and Office Real Estate Brokers Association of the New York Metropolitan Area (IOREBA), recently hosted its 25th annual Developer’s Night event at the Marriott Glenpointe Hotel in Teaneck. Hundreds of professionals gathered to network and listen to a panel of distinguished commercial real estate experts discuss trends in the commercial real estate marketplace in New Jersey.
Regarding the office market, John Saraceno, Jr., Managing Principal, Onyx Equities, noted that there is a carnage of commercial office space, “and location, location, location is more important now more than ever. We are seeing the same process over and over of people tired of occupying 30 to 40-year-old office buildings.” There is not a lot of quality office space on the market and there are a lot of people fighting for the same space. He also noted that the parking density trend is not going away, as we see more tenants wanting more parking.
Panelists agreed the industrial sector will remain strong for the foreseeable future with the continued strength of e-commerce and the move away from brick and mortar retail stores. “There are no buildings available under 300,000 square feet in northern New Jersey—and the demand for industrial space is strong and consistent,” commented Ben Rosen, Vice President of Leasing, Duke Realty. The trend driving the industrial market is the supply side and the industry can’t keep up in New Jersey, Rosen says, it takes too long to develop, there is not enough land.
Jeff Milanaik, Principal, Bridge Development Partners, agrees with the strength of the industrial market noting that, “the capital markets’ appetite for industrial is phenomenal—there is an uptick of activity in the ports and the inherent need for warehouse space.” The sector will continue to do well because people are consuming goods at a rapid rate and the need for space in the ports will continue.
Kevin Welsh, Executive Managing Director, Newmark Grubb Knight Frank, noted that the “world is flush with cash” and he has never seen this amount of liquidity in the market.. Being in the ninth year of this low interest rate cycle, the belief is that we are in a good place with strong consumer confidence. “What could slow us down is a rise in interest rates, but liquidity will keep a lid on this in the short term, with capital spending driving the real estate market,” he added.
All in all, panelists remain optimistic about the state of New Jersey’s commercial real estate market over the next couple years with some of the driving factors including the repurposing of retail centers for industrial use; increased activity at the ports; redeveloping and upgrading office buildings to include amenity packages geared towards millennials and new technology; and federal tax reform.
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