Tag Archives: industrial


WCRE 2018 SECOND QUARTER REPORT

SOUTHERN NEW JERSEY & PHILLY CRE MARKETS SEE MODERATE GAINS WHILE WAITING FOR ANTICIPATED BENEFITS FROM TAX REFORM LAW

July 11, 2018 – Marlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the Southern New Jersey market remains in good shape, making moderate gains and showing strong fundamentals. The firm believes the market may be poised for strong growth as benefits of the new tax law begin to materialize.

“Our market continues to show quiet strength and may take off as consumers and businesses feel the effects of lower tax rates,” said Jason Wolf, founder and managing principal of WCRE. “We expect the new law to be a net positive for overall economic growth in 2018 and be especially beneficial to the commercial real estate industry.”

There were approximately 303,656 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was a gain of about 10 percent over the previous quarter. Leasing picked up, and the sales market stayed active, with about 1.46 million square feet on the market or under agreement and an additional 317,961 square feet trading hands.

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New leasing activity accounted for approximately 61.4 percent of all deals. Overall, net absorption for the quarter was in the range of approximately 253,000 square feet.

Other office market highlights from the report:

● Overall vacancy in the market is now approximately 10.4 percent, which is nearly one point better than the previous quarter.
● Average rents for Class A & B product continue to show strong support in the range of $10.00- $15.00/sf NNN or $20.00-$25.00/sf gross for the deals completed during the quarter. These averages have stayed near this range for most of 2018, though they are trending a bit higher.
● Vacancy in Camden County improved dramatically, to 11.6 percent for the quarter.
● Burlington County vacancy was at 9.2 percent, which was also lower than the first quarter.

WCRE has expanded into southeastern Pennsylvania, and the firm’s quarterly reports now include a section on transactions, rates, and news from Philadelphia and the suburbs.

Highlights from the second quarter in Pennsylvania include:

● Philadelphia’s office market vacancy rate was unchanged during Q2 2018. Though positive absorption was 547,339 square feet, a 20 percent improvement over the first quarter. Vacancy rates for Class A properties stood at 10.5 percent, while Class C properties had vacancy of 5.5 percent.
● Average asking rent across all office property classes in the Philadelphia market was $22.72/SF in the second quarter. Within the CBD it was $29.64/SF.
● There are about 3.8 million square feet of office space currently under construction in Philadelphia. During the second quarter 590,632 new square feet became available via completed new construction.
● Philadelphia’s retail market is moving in the right direction. Average asking rents have jumped the past few quarters, net positive absorption was 909,884 square feet, and retail vacancy rates ticked down to 4.4 percent.
● Industrial vacancy in Southeastern Pennsylvania was down to 5.6 percent. The market saw positive net absorption of more than 6.6 million square feet.

WCRE also reports on the Southern New Jersey and Philadelphia retail market. The second quarter saw a drop in consumer confidence as well as a generally positive outlook for consumer spending, buoyed by a strong job market.

Other highlights from the retail section of the report include:

● Retail vacancy in Camden County stood at 7.7 percent, with average rents in the range of $13.75/sf NNN.
● Retail vacancy in Burlington County stood at 9.8 percent, with average rents in the range of $14.59/sf NNN.
● Retail vacancy in Gloucester County stood at 7.4 percent, with average rents in the range of $14.74/sf NNN.

The full report is available upon request.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE online at www.wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

What Port Development Means for Industrial Real Estate

Gateway Port Development

There was a special focus on how port-related issues are driving real estate development at last week’s Bisnow National Industrial and Logistics Summit Northeast held in New York. Bisnow’s Miriam Hall did a great report on the experts’ view of commercial real estate market trends. Beyond the supply and demand of the current market, there were a few longer-term trends and issues that recurred throughout the day.

It’s all about the trucks

Trucking is the key mode of transport for moving goods in and out of ports, and it is increasingly the link in the supply chain driving the nature of industrial real estate development. Depending on who you ask, there’s either a shortage or truckers or a terribly inefficient allocation of existing resources. Either way, it’s creating a growing burden on logistics: the average age of truck drivers is now is 57, costs are up as much as 35%, and the American Trucking Association ATA estimates there is a shortage of nearly 69,000 truckers.

ELDs

Another hot topic of discussion throughout the day was the state of the trucking industry and the effect of mandated Electronic Logging Devices (ELDs). ELDs bring the traditional DOT-required driver logs into the 21st century by automatically tracking hours of service. While the system could lead to greater safety, there are significant costs for initial investment, especially for smaller owner/operators. The new system also means that a few minutes delay here and there cannot be fudged as many acknowledge has been done in the past, making efficiency even more important.

Gateway Ports

Going forward, experts see the maritime industry coalescing around a limited number of “gateway” ports capable of providing the infrastructure and service needed to compete for container traffic. With an expanded Panama Canal and larger ships, channel depth and air draft are two of the most obvious attributes that will define gateway ports.

Equally important is what you do with cargo once it’s offloaded. Larger ships and fewer steamship lines create the risk that gateway ports will become choke points unless they can achieve the velocity needed to move goods quickly through the port. Many ports have established truck appointment systems, and ELD requirements are only putting greater pressure on scheduling. Facilities need to be configured to handle this volume, and having a sufficient number of Customs agents on hand when cargo is moving through is vital.

Site Selection

Low supply and high demand means that warehousing properties situated near ports are commanding a premium right now. Long-term, experts expect distribution points to move closer to markets as land become more scare at ports.

That need in part prompted the Port of Virginia to create inland intermodal facilities to which containers are transported by rail and barge for distribution. Not only does this solve the landside storage problem, it avoids the need for added truck traffic at the port. The future will likely bring strategic alliances between private developers and public ports (especially landlord ports) to solve these warehousing and transportation issues.

Site Design

The changing nature of logistics activity is driving changes in the physical configurations and attributes of warehousing as well:

  • E-commerce fulfillment centers require more parking (and more land) than traditional distribution facilities.
  • The configuration of dropyards will need to be more efficient to minimize ingating and outgating times.
  • Next-day delivery will drive more multistory warehouse/industrial uses in urban areas. These are expensive build, and older building stock may not have required clearances and engineering.
  • Expect to see vacant big box start to fill last-mile needs.

Technology

As with many industries, technology is affecting logistics in the present and not-too-distant-future:

  • Electric trucks: Can save 25 cents/mile, helping to offset ELD compliance costs and dampen effect of low supply.
  • Load-Matching Apps: Sometimes called Uber for trucks, linking truckers with loads to improve utilization of trucking resources. Two of the most prominent are Convoy and Transfix.
  • Blockchain: Encrypted transactions of products more attractive.\
  • Drone delivery: FAA clearance could one day be a factor in site selection.

 

Anthony V. Mannino

Chief Operating Officer, Wolf Commercial Real Estate (WCRE)

Sr. Consultant, Triad Strategies
Board Member, PhilaPort

Greater Philadelphia Area Commercial Real Estate

Anthony V. Mannino, Esq. Promoted to COO of WCRE

Wolf Commercial Real Estate (WCRE) is pleased to announce that Anthony V. Mannino, Esq., has been named Chief Operating Officer. Mannino has served as Vice President, Corporate Strategies since joining WCRE in October, 2015. As COO, Mannino will have a broader focus on the operations and growth strategies of the firm.

Mannino’s new role comes as WCRE has an expanding presence in the region, adding four new brokers and increasing its activity in southeastern Pennsylvania. Earlier this year, WCRE became a regional affiliate of CORFAC International, a network of independently-owned, commercial real estate brokerage firms in 47 U.S. markets and world wide.

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“Tony’s guidance within the firm will play a key role in managing our growth, especially as our CORFAC alliance opens up new business opportunities,” said Jason Wolf, Managing Principal of WCRE. “His efforts will ensure that our team continues to deliver class-leading real estate services to our clients.”

Mannino came to WCRE after nearly ten years serving as chief of staff to two members of Pennsylvania’s General Assembly. Prior to his years of public service, he was a litigation attorney in the private sector for more than a decade, practicing in Pennsylvania and New Jersey.

Like his colleagues at WCRE, Mannino has been an active supporter of many civic institutions in Philadelphia, from community associations to advocacy non-profits. He is currently a board member of the Philadelphia Regional Port Authority and the Preservation Alliance for Greater Philadelphia.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan servicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. Through our intensive focus on our clients’ business goals, our commitment to the community, and our highly personal approach to client service, WCRE is creating a new culture and a higher standard. We go well beyond helping with property transactions and serve as a strategic partner invested in your long term growth and success.

Learn more about WCRE on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.com, www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.