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Monthly Archives: October 2012


NATIONAL FIRM HENDERSON ENGINEERS, INC. EXPANDS INTO SOUTHERN NJ WITH EXCLUSIVE LEASING REPRESENTATION FROM WCRE

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NATIONAL FIRM HENDERSON ENGINEERS, INC. EXPANDS INTO SOUTHERN NJ WITH EXCLUSIVE LEASING REPRESENTATION FROM WCRE

October 15, 2012 – Voorhees, NJ – WCRE is proud to have successfully represented Henderson Engineers, Inc. (HEI) in its leasing of approximately 3,500 square feet of Class A office space at 5 Greentree Centre in Marlton, New Jersey. HEI is headquartered in Kansas City, with eight branch offices and 450 employees nationwide. This is the company’s initial entry into the Southern New Jersey market.

As a firm establishing a presence in a new geographic location, HEI had very specific needs. The company presented WCRE with a specific set of building criteria and a detailed space plan to be accomplished in a very short time frame. HEI sought a “Class A” image and convenient access to all points in Southern New Jersey and Philadelphia as well as easy north/south access.

WCRE quickly identified, toured, and short-listed the most suitable available office buildings within HEI’s criteria. Proposals were requested and 5 Greentree Centre was identified as the best location. WCRE led negotiations to get the best lease terms and deal on behalf of HEI.

Five Greentree Centre is a 165,956 square foot multi-tenanted office building that has been described as the centerpiece of the business community of Southern New Jersey. The four-story building is located at the intersection of Route 73 and Lincoln Drive West, making HEI’s new home easily accessible from Routes 73, 70, and 38, as well as I-295 and the New Jersey Turnpike.

HEI is leasing the space from Tequesta Properties, Inc. which owns approximately 500,000 square feet in Southern New Jersey, and has invested significantly this year in upgrades and improvements to its many properties in Marlton, NJ. 

About WCRE

WCRE is a full-service commercial real estate advisory firm specializing in office, retail, industrial and investment properties. We provide a complete range of real estate services to commercial property owners, companies, 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 @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC.  Visit our blog pages at www.southjerseyofficespace.com and www.southjerseyretailspace.com

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WCRE APPOINTED EXCLUSIVE LEASING AGENT FOR ROTHMAN INSTITUTE’s CLASS A OFFICE BUILDING @ 999 Route 73, MARLTON, NJ

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WCRE APPOINTED EXCLUSIVE LEASING AGENT FOR ROTHMAN INSTITUTE’s CLASS A OFFICE BUILDING @ 999 Route 73, MARLTON, NJ

October 10, 2012 – Voorhees, NJ – Wolf Commercial Real Estate is pleased to announce that RI Greentree Associates, LLC, a subsidiary of Rothman Institute has appointed WCRE as exclusive leasing agent for this “Class A” office building located at 999 Route 73 a/k/a 3 Greentree Centre in Marlton, NJ.

This 69,300 square foot three story multi-tenanted office building is located at the intersection of Route 73 and Greentree Road. 999 Route 73 is located directly across from The Greentree Shopping Center at a highly visible corner property and landmark location providing for immediate access to Routes 73, 70, I-295 & New Jersey Turnpike.

The Rothman Institute acquired this trophy building from Brandywine Realty Trust in 2011 and recently completed significant property renovations to the interior and exterior of the premises.

WCRE’s Jason Wolf & Leor Hemo were retained to market the remaining vacant space and has space ranging in size from 2,000-15,000 square feet.

A marketing brochure is available upon request.

About WCRE

WCRE is a full-service commercial real estate advisory firm specializing in office, retail, industrial and investment properties. We provide a complete range of real estate services to commercial property owners, companies, 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 @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC.  Visit our blog pages at www.southjerseyofficespace.com and www.southjerseyretailspace.com

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WCRE: MIX OF POSITIVE INDICATORS, UNPREDICTABLE HEADLINES LEAD SOUTH JERSEY OFFICE MARKET TO SLOWER THIRD QUARTER

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WCRE REPORT: MIX OF POSITIVE INDICATORS, UNPREDICTABLE HEADLINES LEAD SOUTH JERSEY OFFICE MARKET TO SLOWER THIRD QUARTER
Despite Several Corporate Relocation Deals and a “Flight to Quality,” WCRE Finds Overall Cautiousness and Slower Growth

October 3, 2012 – Voorhees, NJ – While cautious optimism was the tone of the second quarter in the local commercial real estate market, the third quarter was more about caution than optimism, Wolf Commercial Real Estate said in its latest quarterly analysis of Southern New Jersey, published this week. But those expecting better news can take solace in the fact that the firm found many positive trends, and even some of the bad news was either cyclical or expected.

WCRE’s research, which includes snapshots of the office and retail markets, finds several positive indicators that kept the Southern New Jersey market active in the third quarter, just not with the same velocity it had in the second quarter. These include increased deal activity among large corporations – several of which were seeking new headquarters in the region, interest rates remaining near historic lows, and all REITs in the market performing better than in the previous quarter. This good news was tempered by factors that are causing some businesses and investors to stay on the sidelines a while longer.

“This extended period of very low interest rates coupled with low rental rates continues to encourage activity, but world events such as the slow recovery of the U.S. economy, the ongoing European financial crisis, and fears about what some are calling a “fiscal cliff” of tax increases and government spending cuts set for early next year will continue to influence the timing of real estate decisions,” said Jason Wolf, founder and principal of WCRE.

“A slower summer period is the norm in commercial real estate, as is the practice of businesses holding off on major investments and other decisions shortly before a presidential election,” Wolf said. “I believe we will see the market improve due to pent-up demand once we move past these cyclical events.”

According to the WCRE office report, there were about 300,000sf in renewals and new lease transactions in Southern New Jersey during the quarter, with renewals comprising most of the transactions. This is down from more than 450,000sf in the second quarter. Other office market highlights from the report:

  • Average rents for Class A & B product remained at the improved level they reached in the second quarter, continuing to show strong support in the range of $10-$14.00/sf NNN with an overall market average of $11.00/sf NNN for the deals completed during the third quarter.  Positive absorption for the third quarter was in the range of 106,000+/-sf of new deals and/or expansions. This represents a 15 percent decrease from the volume of positive absorption in the second quarter.
  • Moorestown, Marlton and Mount Laurel continue to show strength, while a large share of the region’s vacancies remain in Voorhees, Pennsauken, and the west side of Cherry Hill.
  • There are several large office buildings and portfolio sales, along with other large transactions pending that are expected to close during the fourth quarter.
  • Tenants continue to take advantage of low rental rates and are securing long-term lease commitments. The pattern of this flight to quality – upgrading to better locations and spaces – is expected to continue.
  • Retail market highlights from the report include:
  • Overall retail space vacancy is still hovering in the 17-18% range, but the market has stabilized, and prime retail locations have very little vacancy.
  • Average rents for Class A retail product continue to show strong support in the range of $30-$40.00/sf NNN. Class B product shows support in the range of $15-$23/sf NNN.
  • Just as office tenants are doing, retailers are continuing to make the most of low interest rates and low rental rates to focus on quality and prime location.

About WCRE

WCRE is a full-service commercial real estate advisory firm specializing in office, retail, industrial and investment properties. We provide a complete range of real estate services to commercial property owners, companies, 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 @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC.  Visit our blog pages at www.southjerseyofficespace.com and www.southjerseyretailspace.com

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OCTOBER 2012 MARKET AND ECONOMIC CONDITIONS

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October  2012 Market and Economic Conditions
By Adam B. Landau Permit Capital Advisors, LLC

There is an axiom in investing, specific to the two largest emerging economies, that “businesses in China succeed because of the government, businesses in India succeed despite of it”. Clearly we’re in the midst of a period in which recognizing the likely impact of government intervention is critical to understanding the risks that are littering the investment landscape. Identifying where and when a government will step in is one part of the equation, the other is identifying the outcome it is trying to infl uence. The answer is not always obvious, and the impact on an investment outcome isn’t always consistent with the impact on societal conditions. While considerations such as these are an aspect of determining the appropriate allocation to emerging markets in a portfolio, developed markets are certainly not immune to the infl uence of sovereign considerations on their long-term fate.

In Europe, we lay witness to the efforts of ECB president Mario Draghi as he goes into the lions’ den and tries to explain to German industrialists about the essential nature of potentially ‘unlimited’ (which along with ‘indefi nitely’ seems to be the preferred vernacular in central banking circles at this stage in crisis management) bond-buying in the secondary market by the ECB. In the US we have the dysfunction of our political system, and the fi scal cliff fears that has borne. By some measures we appear to be regressing. One such metric is the Economic Freedom Index, calculated by the British Columbia-based Frasier Institute. The index is an equal weighting of fi ve components: size of government, legal system and security of property rights, sound money, freedom to trade internationally, and the level of regulation of credit, labor and business. This is not a partisan issue, as we were ranked number 2 in the world in 1995, saw our absolute peak score in 2000, and have steadily slid from that point to number 19. It is, however, an issue we would be well served to rectify, as academic studies (and recent empirical observations in the US) have shown the relationship between a country’s increase in economic freedom and its rate of growth.

While most informed observers believe the ultimate fi scal cliff will be avoided, the impact that both the arbitration process and its result will have on the country going forward is less apparent. The potential scope of the fi scal cliff (otherwise known as consequences of the Budget Control Act of 2011) is enormous. The budget deficit would be forcibly cut from roughly 7.6% of GDP this fi scal year to 3.8% of GDP next year. Getting there would involve rolling back Bush-era tax cuts and making deep cuts in the defense budget as well as more than 1,000 other government programs, including Medicare. Plans we’ve seen to bring the budget defi cit down by a magnitude of 1% of GDP per year for several years seem like a more responsible way to spread the pain while providing a path towards responsibility. Unfortunately, such plans depend upon an element of legislative compromise, which is essentially an oxymoron.

While fiscal authorities fiddle, monetary policy burns – with the latest spark coming in the form of QE3. QE versions 1 and 2 have seemingly had little positive impact on generating global growth and bringing down the level of unemployment. The disappointing August employment report sealed the deal on that assessment. To wit, in the month of August there were more people who went on the food-stamp program (173,000) than those who found jobs (96,000). Beyond the appropriateness of specifi c policy steps taken, it is clear and proven that monetary policy becomes increasingly impotent when private sectors are deleveraging to repair balance sheet damage. What is also clear is that the goal of the quantitative easing strategy has not been focused primarily on either employment or growth, but rather on the infl ation component of the Fed’s mandate. Chairman Bernanke will not accept deflation without a fight, and the 2% infl ation target appears to be squarely in the Fed’s crosshairs. A quick glance at the chart below will crystallize the relationship, as each QE announcement occurred as CPI was trending below 2%. To this point, infl ation has been subdued in large part because $1.4 trillion of the $2.5 trillion that the Fed has sent out into the financial system through asset purchases is being held by banks, on deposit with the central bank in the form of excess reserves. How long this period of latency will continue is the great unknown.

All of this is not meant to imply that QE has been toothless, only that the impact might be seen as collateral (though not necessarily unintended), as opposed to direct. Where benefi t has accrued from the liquidity that has made it out of the banks and into the system, it has come in the form of risk asset price appreciation. There has been one direct benefi ciary of quantitative easing, and that has been agency mortgagebacked securities (MBS). They were the target of QE1 and are now the target of QE3, with the ubiquitous ‘indefi nitely’ tag applied to the plan to purchase $40 billion of these securities per month, to indicate the Fed’s determination to own this market if need be. They already own 12% of all agency MBS, to go along with their cache of 16% of the Treasury market, and analyst projections have them headed to 20% with the advent of QE3. For better or for worse, the level of market manipulation marches on. Perhaps the die regarding the exact nature of QE3 was cast on August 17th, when the Treasury announced a set of modifi cations to the Preferred Stock Purchase Agreements that defi ne the terms under which the Treasury provides capital support to Fannie Mae and Freddie Mac. Under the changes the GSEs will no longer be required to make a fl at 10% dividend payment, but instead will sweep all future net income generated by the GSEs directly into the Treasury. This ends the circular practice of advancing funds to the GSEs simply to pay dividends back to the Treasury. The modifi cation improves the fi nancial strength of the agencies as they are closer than ever to the government. In essence the GSEs have taken one big step towards nationalization, as Fannie and Freddie are basically off-balance sheet businesses of the government.

One thing we have learned during this period of historic interventionism is that every action has a reaction, and every reaction has a follow-on reaction. In this case one of the immediate spillover benefactors may be commercial real estate. With improving cash fl ows, rising demand, a scarcity of new projects, improving credit conditions, and historically low interest rates, we could be in the early innings of a generational opportunity. These tailwinds on the investor side are supported by fundamental improvements in occupancy, rental rates, and property pricing, the combination of which makes this a particularly attractive proposition on a risk-adjusted basis.

About Adam Landau

Adam Landau is Chief Executive Officer and Chief Investment Officer of Permit Capital Advisors, LLC.

He has 15 years of experience evaluating investment managers, developing asset allocation strategies, and coordinating the process by which the two disciplines are merged.

Visit http://www.permitcapital.com to see how Adam and Permit Capital Advisors, LLC can grow your wealth.

 

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Certain statements in this document may include forward looking statements and forecasts that involve known and unknown risks and uncertainties.
The views expressed above should not be construed as recommendations, an offer to sell, or a solicitation of an offer to acquire any security,
investment product or service. There is no guarantee that historical risk, rates of return, or scenarios discussed will persist in the future. All
investments are subject to risk.

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