Market Watch

Trends and Activity Impacting the CRE Market in the Tri-State Area.


Industrial Market:

Robust demand continues to devour supply in all submarkets, while bulk distribution space remains sought after. Compared to 2016, annual deliveries are down, but more construction starts during the second half will help correct the current shortfall. Both occupiers and developers are increasingly active in more locations due to increased costs and a lengthening entitlement process near traditional hubs. Time will tell how emerging technologies such as driverless trucks and underwater warehousing technology will impact vacancies.

Closed Deals & Recent Assignments

  • SOLD: 160,000 SF, 300 Executive Drive, Newark DE to Del Monte Fresh Produce for $6.5M
  • SOLD: 88.01 acres, LogistiCenter at Logan, Logan Township, NJ to Chelten House Products
  • LEASED: 413,750 SF, West Hill Business Center, Kutztown, PA, NFI Industries
  • LEASED: 363,000 SF, 400 Boulder Drive, Breinigsville, PA, Coca-Cola North America
  • AWARDED: 335,800 SF, Rockline Commerce Center, Allentown, PA, DCT Industrial

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Office Market:

Square footage requirements are shrinking as working remotely – originally a C-suite privilege – becomes more accessible to the masses via virtual desktops and coworking spaces such as WeWork and Benjamin’s Desk. Tenants are demanding premium common area amenities such as gyms and meeting rooms that can be utilized by all. As demand for electric vehicle charging stations expands, developers must consider how this will affect parking lot configuration and maintenance.

Closed Deals & Recent Assignments

  • SOLD: 1 N. Whitehorse Pike, Hammonton, NJ, Interstate Commercial Real Estate, Inc., $6.1M
  • SOLD: 630 Dresher Road, $3.5M Horsham, PA, Pliner Properties
  • LEASED: 10,894 SF, Germantown Friends, The Curtis, Philadelphia, PA
  • LEASED: 23,437 SF, Versum Materials, 7350-7450 Tilghman Street, Allentown, PA
  • AWARDED: Stockton Aviation Research & Technology Park, 60,000 SF, Egg Harbor Twp., NJ

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Retail Market:

Customers can now order through Instacart’s mobile apps from Wegman’s, Whole Foods, Petco, Costco, Giant, and CVS, and have groceries delivered in as little as one hour. These services may become so popular that the need to stock non-perishable items may fall, resulting in grocery stores carrying only produce, fresh foods, and seafood. Could similar services cause a shift in the size of leased retail space? Or will the need to interact with products provide the counter to this trend?

    Closed Deals & Recent Assignments

  • LEASED: Burlington Stores, six new locations totaling more than 245,000 SF in Burlington, Mount Laurel, Langhorne, Lancaster, Trexlertown, and Lower Nazareth
  • LEASED: 14,400 SF to RetroFitness, Doubletree Shopping Center, Glassboro, NJ
  • AWARDED: Macy’s Neshaminy Mall, 237,032 SF
  • AWARDED: Cocalico Commons land, Denver, PA, approved for 500,576 SF, Benderson Development

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Capital Markets:

Prudent lending has ruled the current real estate cycle, and with CRE prices at peak levels in most markets, the sentiment is that now is not the time to loosen lending standards to win business. Hurricanes, fear of conflict with North Korea and investors seeking safety have affected the Treasuries with the 10-year Treasury Yield marking a low for the year of 2.05%. There are no known items that will upset current lending standards, although lending volume may decline as deal volume declines.

Closed Deals & Recent Assignments

  • ARRANGED: $13.7M loan – Refinance of a 152-unit, garden style apartment complex. Non-recourse, 5-year fixed rate loan with 5-year reset, Vernon, CT
  • ARRANGED: $7.3 M loan – Refinance of a 93,423 SF mixed-use property (industrial flex space). 5-year fixed rate loan, rate locked at term sheet, Wyncote, PA
  • ARRANGED: $3.6M loan – Refinance of a 91,033 SF mixed-use property. Non-recourse, 7-year fixed rate loan with 3-year reset, full-term interest only, Westminster, MD

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Investment Sales:

Industrial has emerged the clear winner as innovation has spurred phenomenal growth in the investment markets – firstly in massive regional distribution centers, and secondly in the infill wave of smaller “last mile” fulfillment facilities. Conversely, physical retail, tenanted by stores vulnerable to this e-commerce wave, suffered soaring vacancies and plummeting values. The design and level of support services in office, multifamily, and hospitality properties continues to grow in response to internet savvy, socially attuned customers who want their tech needs satisfied at home, work, and play.

Closed Deals & Recent Assignments

  • SOLD: 1 Keystone Dr., Lebanon, PA: STAG Industrial 221,000 SF, $9M
  • SOLD: 400 & 406 Lippincott Drive, Marlton, NJ: Villa Chapman Apartments LLC; 80,000 SF, $7.5M
  • AWARDED: Shawnee Ridge Senior Living Community: 52-unit independent living complex and 35-acre development opportunity, East Stroudsburg, PA
  • AWARDED: The Townhomes at Quaker development site; 9th and Poplar Streets, Philadelphia

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Property Management:

The advent of artificial intelligence has been at the forefront of property management recently. The onslaught of mobile applications which allow for fine-tuned remote control of water and heating management has revolutionized the experience, with settings available to monitor and predict extreme temperatures and preemptively plan facility conditions accordingly. Outside of the offices themselves, these innovations allow for parking garages and their amenities to be manipulated as well, including the refilling of ticket machines and the adjustment of lighting settings.

Closed Deals & Recent Assignments

  • AWARDED: One Summit Square, 67,000 SF, Client: Country Financial. Property management and leasing assignment, Langhorne, PA
  • AWARDED: 3 Beaver Valley Road, 263,503 SF, Client: Medistar Corporation, Property management assignment, Wilmington, DE
  • AWARDED: Bucks Town Centre, 142,000 SF, Client: C-III. Property management and leasing assignment, Langhorne, PA

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