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Monthly Archives: August 2015


Net Operating Income Remains Strong among Commercial Mortgage-Backed Securities

new Jason stats graphic - June 2015Net operating income (NOI) for performing securitized loans were up 2.7% in 2014 from their original underwritten levels, signaling strong but uneven growth in the performance of U.S. commercial properties and Philadelphia commercial properties, according to the latest analysis from a leading commercial mortgage-backed securities (CMBS) bond rating agency.

Overall, Nomura Securities International noted a “healthy dynamic” of performance currently is in place for U.S. commercial real estate and for Philadelphia commercial real estate. This report recently was shared with Philadelphia commercial real estate broker Wolf Commercial Real Estate, a leading Philadelphia commercial real estate brokerage firm that represents a number of Philadelphia commercial real estate listings.

Across securitized assets involving U.S. commercial real estate and Philadelphia commercial real estate, NOI growth at lodging properties outpaced other property types, while multifamily-backed CMBS NOIs underperformed.

“Given the diversity of properties securing CMBS loans, we would expect that changes in NOI should reflect national trends,” Nomura analysts said, including both Philadelphia commercial properties and U.S. commercial properties in their analysis. “While employment levels across the U.S. have improved, building remains subdued (outside of the multifamily and lodging sectors), creating a healthy dynamic for commercial real estate performance.”

In contrast, the multifamily and hotel sectors have benefited from several years of strong growth due to dislocation in the housing market and increased corporate and leisure travel, respectively.

According to CoStar Group Portfolio Strategies, office and retail NOI is currently 1% and 6% below values seen in 2010, respectively. However, CoStar is projecting that both sectors will show improvement over the next few quarters. This is seen as welcome news for Philadelphia commercial real estate listings, according to the Philadelphia commercial real estate brokerage firm of Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker.

Office NOI has likely stabilized and should regain 2010 levels very shortly as new construction remains subdued in most markets and employment growth (especially in white collar sectors) has resulted in positive absorption, allowing owners to begin pushing rents, Nomura noted, citing CoStar data.

While retail vacancy among U.S. commercial properties and Philadelphia commercial properties is low in prime shopping locations, overall retail vacancy remains elevated, which has dampened demand for new construction, according to Nomura.

However, in spite of these headwinds, the sector is starting to see positive absorption as discounters expand into empty big-box stores and neighborhood centers are benefiting from a more positive economic outlook, as well as the growth in the single family housing market, Nomura analysts added. Such expansion is welcome news for U.S. commercial real estate and Philadelphia commercial real estate.

Across the four major property types, lodging properties showed the largest NOI improvement. The lodging sector saw an increase of 12% from underwritten levels, with 71% of loans reporting improvement in NOI. Growth in lodging, a key sector among current Philadelphia commercial real estate listings, is seen as positive by Philadelphia commercial real estate broker Wolf Commercial Real Estate, a leading Philadelphia commercial real estate brokerage firm.

Based on national trends, Nomura said it would expect the multifamily sector as a whole to perform more strongly as well. On average, these properties report a 3% decrease from underwritten NOI, versus a 3% increase across all property types, and almost a quarter report a decline in most recent NOI of more than 10% from underwritten levels.

For more information about Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com), Leor Hemo (leor.hemo@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate.

Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, industrial buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with expertise in Philadelphia commercial real estate listings and services, provides unparalleled expertise in matching companies and individuals seeking Philadelphia commercial properties that best meet their needs.

As experts in Philadelphia commercial real estate and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philadelphia commercial real estate for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

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The Due Diligence Window Shrinks in Commercial Real Estate Purchases

THE DUE DILIGENCE WINDOW SHRINKS IN COMMERCIAL REAL ESTATE PURCHASES (PDF)

Arnon Wiener, Esq., CEO, Real Diligence August 21, 2015

The revival of the real estate market is presenting new opportunities for commercial real estate owners and investors across the U.S.. Improved lending conditions and the increase of capital availability are driving market growth on its forward momentum. After hunkering down to wait out the storm of the recession, the commercial real estate market is resurging with an influx of deals.

This is good news for real estate owners and investors. However there is a consequence to the increasing demand for properties: fierce competition. While competition is beneficial to the marketplace, investors should be aware of a secondary effect which may have a negative repercussion on the decision making process; namely the shrinking due diligence window.

Due diligence is the research conducted ahead of purchasing a property. In real estate, the due diligence process should include a thorough review of the financial history and cash flow projection for the property. The buyer should analyze all the financial information which is pertinent to the property, including historical financial statements, projected budget income, reimbursable income and methodology, operating expenses, taxes, insurance and more.

Conducting a comprehensive due diligence review takes time. The perspective buyer needs to carry out a thorough and accurate assessment in order to determine the financial and physical state of the property.

The due diligence period usually begins when the prospective purchaser has made an offer that the seller has accepted. The buyer then places a down payment in an escrow account to be applied towards the purchase. Once the due diligence deadline has passed, the deal goes hard.

Both parties in the transaction want it to move along at a reasonable pace. It used to be that typical due diligence periods ranged from 40 to 45 to 60 days. This was considered a practical amount of time to make an informed decision.

However, because of the increasing competition, due diligence time periods are shrinking significantly. Buyers are now being offered a due diligence window as small as 28 or even 21 days. Tighter due diligence windows of three or four weeks can pose a risk to investors.

With the pressure of a tight deadline, investors may be tempted to rush through the due diligence process in order to snap up a property. There is no denying the importance of speedy and assertive decision making when purchasing real estate. At the same time, it is as essential to have the knowledge to make a decision that is not just quick- but correct as well.

Buyers are now positioned between a rock and hard place, in which they are pressured to meet the impeding due diligence deadline, while still conducting thorough research of the potential property. The increased strain on the buyer may put him or her at risk to make hasty decisions, and then repent at leisure.

Despite the shrinking window of stipulated due diligence periods, real estate owners and investors should still remain conscious of the need to make informed and measured decisions.

About the Author

Arnon Wiener, Esq. is Chief Executive Officer for LeaseProbe, LLC and Real Diligence, LLC., which specialize in commercial real estate lease abstracting and sophisticated real estate financial due diligence reviews and valuation modeling. Mr. Wiener earned his JD from Georgetown University Law Center in 1999, where he was a recipient of the Nordlinger Behrend Scholarship Award for academic achievement. In 1999, Mr. Wiener was admitted to the Maryland State Bar, as well as the United States District Court for the District of Maryland Bar. He also served as a judicial law clerk for the 5th District, Circuit Court of Maryland. After clerking, Mr. Wiener worked as an attorney at the law firms Venable, LLP, and Blades and Rosenfeld, P.A. His areas of practice included complex construction, real estate and commercial litigation.

LeaseProbe and Real Diligence are divisions of Madison Commercial Real Estate Services, specializing in transactional, financial and management services for real estate investors. www.lprd.com

For more information, contact:

Carlos Alvarez

Regional Business Director

Madison Commercial Real Estate Services

calvarez@madisoncres.com

(646) 765-7741

www.madisoncres.com

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Construction Not Keeping Up with Demand in Light Industrial Market

new Jason stats graphic - June 2015While huge warehouse and distribution mega-boxes get most of the attention from analysts and institutional capital, the unassuming light-industrial market in U.S. commercial properties has quietly emerged as the sleeper in today’s red-hot U.S. industrial market.

At midyear, the overall industrial sector, including industrial space in Philadelphia, led all major commercial property types in growth of investment sales and rental rate appreciation. The light industrial and manufacturing subtype between 100,000 to 300,000 square feet in the U.S. commercial real estate market boasted the highest year-over-year rent growth of any property type at 5.7%, compared to 5.4% for logistics buildings, 4% for office and 3.9% for apartments.

In fact, U.S. light industrial and Philadelphia industrial space are so hot that even older, lower-functioning buildings — many located on infill properties in supply-constrained markets — posted annual rent growth of 6.1%, the strongest rent growth within the entire industrial spectrum, according to a report from The CoStar Group that is being shared by Wolf Commercial Real Estate, a leading Philadelphia commercial real estate brokerage firm.

Another reason for the spiking rents is that the both the U.S. light industrial and the industrial space in Philadelphia sectors have seen little growth in new supply in the current cycle. Most big-name capital sources remain focused on acquiring and developing mega-logistics properties when searching U.S. commercial real estate listings. These properties are capturing the bulk of industrial net absorption, fueled by the so-called “Amazon effect” of e-commerce as retailers reconfigure their supply chains around same-day or next-day shipping.

Investors may finally be ready to take another look at light industrial development in U.S. commercial properties. As rents for these smaller buildings have ticked up, replacement rents now appear to be high enough in many markets to justify new construction.

“Finally, light industrial development is starting to pencil out,” said Rene Circ, CoStar Director of Research, Industrial Property who prepared the report that was shared with Wolf Commercial Real Estate, a top Philadelphia commercial real estate brokerage firm. “The tenants are there, the economy is fine, but the space is not.”

Replacement rents for both national industrial space and industrial space in Philadelphia have been high enough to support construction of larger warehouse and distribution properties in U.S. commercial properties for several quarters, and developers have heeded the call. While maintaining a measured pace of development in most markets, logistics construction last year finally passed the average of 120 million square feet under construction annually during the previous expansion cycle between 2002 through 2007.

That said, light industrial construction involving U.S. commercial real estate listings has remained stubbornly below its previous cycle average of 40 million square feet under construction annually.

“It’s very unusual for industrial to post this kind of rent growth and beat out the office and multifamily sectors,” Circ said in his report on national and Philadelphia industrial space that echoes the beliefs of the local market experts at Wolf Commercial Real Estate, a highly respected Philadelphia commercial real estate brokerage firm.

For more information about Philadelphia industrial space or any Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Leor Hemo (leor.hemo@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker that specializes in industrial space in Philadelphia.

Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, industrial buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with expertise in Philadelphia commercial real estate listings and services, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia industrial space with the Philadelphia commercial properties that best meets their needs.

As experts in Philadelphia commercial real estate and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for industrial space Philadelphia for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

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The 6 Best CCTV Locations To Protect Your Business

The 6 Best CCTV Locations To Protect Your Business (PDF)

By Joe Allen, Vice President/Owner Sonitrol August 14, 2015

No matter what type of business you’re in, an integrated CCTV surveillance security system is one of the best ways to protect your property, building, compound, construction site, office, warehouse, school, retail store or church. Investing in a modern closed-circuit television (CCTV) system that is integrated with security technologies such as audio detection, managed access and 24/7 verified video monitoring can save you money and time, while reducing insurance premiums and potential losses. Using CCTV cameras is also one of the best ways to help keep your employees and customers honest and safe, providing a watchful eye to deter crime and keep you informed. But where are the best places to position your CCTV system to make sure you minimize your risks?

Here are the 6 best CCTV camera locations to protect your business:

1. The Front Door CCTV

All businesses should have a camera located at the front entrance to make sure every visitor can be monitored and that the business visibly demonstrates that it is serious about security.

High-end retail and art, jewelry, coin and antique sellers who deal in rare and valuable merchandise often keep their doors locked to buzz in customers upon arrival. CCTV and a voice intercom system is a convenient way to verify who is at the door, and whether or not they may be a security risk to you or your business.

2. Stock Room CCTV

If you’re a retail store or have a valuable inventory of goods attractive to criminals, installing a security camera to monitor comings, goings and product removal can greatly cut down on your losses. In some cases we also recommend a managed access system as well as video surveillance. With CCTV you can quickly clue into employees who make pilfering merchandise a habit when they think no one is looking.

CCTV surveillance cameras are also excellent for use in, and just outside of, remote stock rooms, not only do they allow you to monitor access to the stock rooms, but can also increase employees’ safety when they need to make stock runs through isolated, otherwise unseen areas.

3. CCTV Cameras Around Loading Docks, Back Alleys And Rear Entrances

Loading dock areas are notorious as they not only provide a way for unauthorized items to leave your business, but also become a less-obvious entry point for clever thieves. Installing CCTV security cameras in these areas give you an unobtrusive way to monitor what and who goes into and out of your shipping and receiving areas.

Many restaurants and strip mall retail stores have back doors that open onto alleys or parking areas and these areas have to be watched and monitored as they are prime targets for criminals looking to gain access to safes and back-office money-handling areas.

Installing CCTV video monitoring systems near back entrances not only allows you to record any attempt at forced entry, but also lets employees make sure that no unauthorized goods are leaving through the back door while accepting a delivery, taking out trash or stepping out on a smoking break. We have seen a tag team of employees and their friends perform major criminal activities this way, and if they know they’re being watched in CCTV the thieving mostly stops.

4. Use CCTV To Watch Cash Registers, POS Transactions and Back Offices Where Money Is Counted

Concerned that money is being skimmed from the cash register, bank deposits? Do you have cashiers who ring in unauthorized discounts, or do you have a bartender who gives away a few too many free drinks? Installing CCTV with a bird’s eye view of cash registers, employees using them, POS terminals and other cash handling areas will let you clearly see when business is being conducted as expected, and when you’re losing money and action needs to be taken.

5. Workspace and Office CCTV

CCTV can be an easy and effective way to monitor on-the-job employee conduct. Placing CCTV cameras in common work areas and near workspaces lets you see what’s going on throughout your office or facility, and can help to curb excessive on-the-clock socializing which can lead to low productivity.

Don’t forget the afterhours cleaning and maintenance crews. If you’re unsure of whether or not after-hours crews are completing all the work you’re paying them for, check up on them on CCTV from time to time, you might be surprised.

6. Perimeter Surveillance CCTV

Making sure your customers and employees and their vehicles are safe when they’re on your property is important, especially if they’re required to walk to and from their vehicles in the dark at extremely early or late hours. CCTV of parking areas and around the perimeter of buildings and property can greatly curb break-ins, vandalism and increase the personal safety of customers and employees as they enter and exit their cars.

Visible CCTV surveillance cameras located around a building can deter and prevent acts of theft, vandalism and other illegal activities.

Don’t forget to ask your insurance company for discount premiums for implementing a CCTV camera-protected business, they should provide you with much lower payout risk than camera-free properties.

However in conclusion, not all CCTV cameras are equal. Some CCTV security systems just record what they’re watching, but the best and most effective CCTV cameras are hooked up to a live monitoring station where trained security professionals are watching the CCTV live, and they will notify the Police immediately they see an illegal act happening. For example, the Sonitrol verified CCTV video surveillance system is not only the best on the market, but also has a proven record of catching more than 172,000 criminals caught in the act of committing a crime.

 

joe-allenJoe Allen, Vice-President, Owner
Sonitrol Security of Delaware Valley
(877) 652-3060
www.sonitrolde.com

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Low Level of Retail Construction Starting to Crimp Net Absorption

new Jason stats graphic - June 2015With shopping center vacancies, including those involving Philadelphia commercial properties, continuing to tighten as retailers with retail space in Philadelphia and other areas across the country slowly fill the remaining excess space, with both nationwide and Philadelphia commercial real estate listings are facing a dwindling number of high-quality locations.

The U.S. retail real estate vacancy rate, which includes Philadelphia retail space, drifted down another 10 basis points to 6.1% in the second quarter — the 12th consecutive quarter of vacancy decline. The retail vacancy rate – according to a report released by The CoStar Group and disseminated by Wolf Commercial Real Estate, one of the leading Philadelphia commercial real estate brokerage firm – has already dropped below pre-recession lows in major metros like Boston, New York, and Denver, and demand remains solid despite continued store closings by Sears, Kmart, The Gap, Office Depot, Staples, Macy’s and even grocer A&P.

As tight as the market feels with the vacancy rate of U.S. commercial property and Philadelphia retail space just 10 basis points shy of its previous cyclical low in 2007, CoStar senior real estate economist Ryan McCullough argues it’s even tighter today with both U.S. commercial property and Philadelphia commercial real estate listings than it was at the height of the boom eight years ago.

Today, only 60 million square feet of new retail space in Philadelphia and U.S. commercial real estate is under construction, compared with 150 million square feet that was under construction in 2007 when developers working with U.S. commercial real estate and Philadelphia commercial properties were building or expanding power centers, malls and shopping centers in pursuit of population growth in the suburban fringes.

“You really have far fewer options if you’re a retail tenant in today’s market, and that’s really starting to wear on the demand numbers,” said McCullough, who prepared the report that was shared with Wolf Commercial Real Estate, a top Philadelphia commercial real estate brokerage firm. “What’s holding back a lot of tenants today is the scarcity of available supply in good locations with strong demographics.”

Tenants looking for retail space in Philadelphia and across the country absorbed about 32 million square feet at mid-year 2015, compared to 37 million square feet in first half of 2014. The declining absorption numbers in recent quarters are a logical consequence of the lack of available space for U.S. commercial real estate and Philadelphia commercial properties, rather than declining tenant demand, McCullough said. Until more U.S. commercial property and Philadelphia retail space enters the market, demand is likely to be reflected in terms of higher rent growth rates, he added.

Despite the limited supply of available space, the market for Philadelphia commercial real estate listings as well as those from coast to coast is still experiencing a bit of opportunistic leasing and store openings by retailers like Wal-Mart, Dollar General and Dick’s Sporting Goods, which can be productive in somewhat less attractive locations. McCullough expects such activity will likely dominate retail expansion until new shopping center supply ramps up. This perspective was supported on the local level by Wolf Commercial Real Estate, a highly respected Philadelphia commercial real estate brokerage firm.

For more information about Philadelphia retail space or any Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Leor Hemo (leor.hemo@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker that specializes in retail space in Philadelphia.

Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with expertise in Philadelphia commercial real estate listings and services, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia retail space with the Philadelphia commercial properties that best meets their needs.  As experts in Philadelphia commercial real estate services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for retail space Philadelphia for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

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BUSINESS CONTINUITY PLANNING: MITIGATE UNEXPECTED RISKS

Business Continuity Planning: Mitigate Unexpected Risks (PDF)

By Brian Blaston, Hardenbergh Insurance Group August 6, 2015
Risk management often means expecting and planning for the unexpected. In order to maintain the safety of the employees and customers and ensure the viability of your business, you need to prepare for unforeseen disasters. These risks may include criminal activity, natural disasters or terrorist acts. Any one of these threats could be serious enough to devastate your business, but if you have readiness plans in place you can work to minimize their impact.

Without prior planning, you leave your company open to financial disaster, especially if you are forced to close operations for a period of time. In addition, without a proper plan to cope with a disaster situation, your company may face lawsuits from customers, vendors or employees claiming negligence.

SECURE YOUR FACILITY
One of your main security risks is criminal activity, including vandalism, theft and violence. Though not all security threats can be avoided, some situations can be prevented with appropriate preparation:

• Advise management and employees to report any suspicious persons or activity in or around the facility.

• Limit the number of unlocked entrances that customers may access. Consider locking any employee-only rooms, and keep any cash on hand in a safe.

• Survey locks, fences, exterior lights and other physical security devices to ensure that they are in place where needed and in proper operating condition. Establish a monthly inspection of your security perimeter and key protective features of your facility.

MANY UNFORESEEN THREATS COULD BE SERIOUS ENOUGH TO DEVASTATE YOUR BUSINESS, BUT IF YOU HAVE READINESS PLANS IN PLACE YOU CAN WORK TO MINIMIZE THEIR IMPACT.

• Conduct regular inventories of the warehouse and products on the shelf.

• Pay special attention to areas where you are storing explosive, flammable or toxic chemicals. These areas should be properly secured and inventoried, with limited hands-on contact of these materials when possible.

• Evaluate critical locations in your facility for proper security, including the electric, telephone and gas units, building entrances, transformers and outside storage units.

• If your facility has a security/fire alarm system, be sure it is operating properly and that key personnel know how to arm/disarm it.

• Make sure that fire suppression systems are regularly inspected and maintained. Also be sure that a sufficient number of trusted personnel know how to activate, operate and shut them down.

• Closed-circuit television can serve as an excellent crime deterrent, and when the system is equipped with a recorder it can help solve crimes. You should monitor all areas inside your facility, including areas where money or records are kept, along with the parking lot and area outside your building.

• Review your procedures for issuing facility keys. At a minimum, keep lists of who has been issued keys and have a procedure for handling a situation when a troubled employee is terminated without returning them.

• Discuss security with your local police department. Police departments are often very willing to provide information and support to local businesses.

• Have your local fire department conduct a pre-planned visit to your building. While there, they can identify potential hazards and plan fire suppression priorities.

PREPARE FOR A POTENTIAL DISASTER
It’s equally important that your business takes steps to protect against disasters:

• Keep copies of insurance policies and other critical documents in a safe and accessible location (e.g. a fireproof safe).

• Evaluate which disasters are most likely to occur in your area, remembering to include the possibility for terrorist activity. Be sure you are prepared for all of the risks you identify.

• Develop a Disaster Recovery or Business Continuity Plan. If you already have one make sure that it is up-to-date.
This entails preparing for anything that disrupts your business operations and planning for a backup option. You may consider identifying backups for essential operations, supply chains, personnel, business functions, data processes, distribution channels and communication methods.

• Have telephone call lists available (include cell phone and pager numbers) for all key personnel so staff members can be contacted during non-working hours from any location. Review procedures for notifying employees that your facility is closed. Remind employees that they should never attempt to enter areas that are closed by police or other emergency responders.

• Consider establishing an alternate method for your phone service if the switchboard becomes unusable (e.g. forwarding incoming calls to a cell phone or remote number).

• Check available emergency supplies such as flashlights, batteries, emergency generators/fuel, patching materials such as plastic sheeting, wood 2x4s, duct tape, spare fire extinguishers, first aid kits, etc.

Use these tips to help mitigate unexpected risk, and call your Hardenbergh Insurance Group representative today for

brian-blastonBrian Blaston
Commercial Lines – Manager
Hardenbergh Insurance Group
phone: 856.489.9100 x 139
fax: 856.673.5955
www.hig.net

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Office Supply Growth Remains Strong Despite Absorption

new Jason stats graphic - June 2015The demand for U.S. commercial property and U.S. commercial real estate – including Philadelphia commercial real estate listings – rebounded in the second quarter of 2015 following slower-than-expected net absorption in the first three months of the year as businesses continued to add office jobs and to lease space.

Net absorption – both nationally and for the key segments of Philadelphia office space, Philadelphia retail space and Philadelphia industrial space – roared to 25 million square feet in the second quarter, according to a report from the Co-Star Group provided by Philadelphia commercial real estate brokerage firm Wolf Commercial Real estate, a leading Philadelphia commercial real estate broker.  This growth was the second-highest jump in quarterly demand since 2006 and was more than double the 12 million square feet absorbed during the first quarter.

After years of slow and steady increases in office supply, the level of office space under construction on the office space portions of both the U.S. commercial property and the U.S. commercial real estate markets reached 124 million square feet in the second quarter, the highest total since 2009 and slightly eclipsing the 15-year average of 122 million square feet. This total included a number of Philadelphia commercial real estate listings.

Rent growth reached a 4% annual rate in the first half of 2015, while the national office vacancy rate declined 20 basis points to 11.2%. This decline was reflected as well in surveys of Philadelphia office space, Philadelphia retail space and Philadelphia industrial space as reported by Philadelphia commercial real estate brokerage firm Wolf Commercial Real estate, a leading Philadelphia commercial real estate broker.  Nationwide, the 27 million square feet of new office space deliveries in the first half of 2015 exceeded the historical first-half average of 21 million square feet, reflecting a relatively healthy office market and broader economy.

“We’re at a supply/demand balance, which is a real sweet spot in the market cycle for the office market,” said, Co-Star Group, Inc. Director of U.S. Research Walter Page. An all-time high of 63% of the 2,000 office submarkets that make up the U.S. commercial property and the U.S. commercial real estate markets, and which includes a number of Philadelphia commercial real estate listings, now show improving vacancies, with 48% of the metro markets now reporting lower vacancies than they did at the peak of the market during 2006-07.

Vacancies across the nation and for Philadelphia office space, Philadelphia retail space and Philadelphia industrial space now are dropping, even among 3-Star office properties, a sign that recovery is accelerating in the lower end of the office quality spectrum.

That said, tenants continue to demand higher-quality space, a trend that also has been noted by Philadelphia commercial real estate brokerage firm Wolf Commercial Real estate, a leading Philadelphia commercial real estate broker.  Year-over-year demand growth remains weak at 0.6% for 3-Star buildings, according to the Co-Star report, as compared to 2.4% for 4- and 5-Star buildings, with tenants willing to pay a 41% rent premium for newer, higher-end buildings over lesser 3-Star assets.

For more information about Philadelphia office space, Philadelphia industrial space, Philadelphia retail space or other Philadelphia commercial or investment properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Leor Hemo(leor.hemo@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker that specializes in Philadelphia office space.

Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with extensive expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia office space or new Philadelphia retail space with the Philadelphia commercial properties that best meets their needs.  As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philadelphia office space or Philadelphia retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

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WCRE and Somerset Properties Report Active First Half of 2015, with Approximately 140,000 Square Feet of Completed Lease Transactions

WCRE and Somerset Properties Report Active First Half of 2015 (PDF)

August 3, 2015 – Marlton, NJ – WCRE and Somerset Properties have been making a noticeable dent in the amount of vacant commercial space in Southern New Jersey. The companies announced multiple lease transactions totaling approximately 140,000 sf so far this year. WCRE participated in six total leases within Somerset’s portfolio: three transactions at Greentree North Corporate Center in Mount Laurel, NJ, two at Marlton Crossing Office Park, 303 Lippincott Drive in Marlton, NJ, and one lease at Horizon Corporate Center, 3000 Atrium Way in Mount Laurel, NJ.

Jeff Arnold, regional manager at Somerset struck a positive tone last week speaking at Bisnow’s Future of South Jersey event. “The regional CRE market has been gaining strength for a while now, and I am optimistic we will continue to see growth,” he said.

WCRE’s leasing team of Christina Del Duca, Leor Hemo, Chris Henderson, and Jason Wolf exclusively represented Somerset Properties in the marketing and leasing of these spaces, working collaboratively with ownership and the entire brokerage community to successfully lease the following spaces.

  • New 61,612 square foot lease at 303 Lippincott Drive, Marlton, NJ to a major healthcare company.
  • 42,022 square foot lease renewal and expansion of 22,718 square feet at 3000 Atrium Way, Mount Laurel, NJ to a large bank.
  • New 13,998 square foot lease at 303 Lippincott Drive, Marlton, NJ to a financial services firm.
  • New 9,100 square foot lease and expansion at 16000 Commerce Parkway for corporate offices.
  • Renewal of 7,500 square foot lease at 16000 Commerce Parkway, Mount Laurel, NJ to an engineering firm.
  • New 6,000 square foot lease at 6000 Commerce Parkway, Mount Laurel, NJ for a fitness center.

Somerset entered the Southern New Jersey market in 2013 by acquiring Liberty Property Trust’s entire office/flex portfolio comprising approximately 1,500,000 square feet. Overall, the portfolio is approximately 89 percent occupied. Notably, 3000 Atrium Way is now fully occupied, and 303 Lippincott Drive is 97 percent leased, with one remaining vacancy of 2,700 SF that can accommodate a small corporate office user.

“Somerset Properties is a very community-focused and entrepreneurial operator, and their recent success has set a bullish tone for our market,” said Christina Del Duca, vice president at WCRE. “We have several pending deals heading into the third quarter, and we’re optimistic about the prospect pipeline for the properties Somerset has entrusted to our WCRE team.”

With many of the larger blocks of space in Burlington County being absorbed over the past few years, Somerset has put a strong focus on several large blocks of space that are available for lease. Greentree North has available spaces up to 31,000 square feet. Marlton Crossing Office Park’s single story office properties have available spaces from 2,700 to 12,000 square feet. 2000 Crawford Place has available spaces from 3000 to 9390 square feet.

The Greentree North Corporate Center properties are well located on Commerce Parkway, providing direct access to Route 73 and convenient access to I-295, the New Jersey Turnpike, and Route 70. Amenities within the Greentree North Corporate Center include an on-site daycare center, and there are several restaurants, retail stores, banks, and hotels in the immediate area, including Greentree Square Shopping Center, East Gate Square, and the Moorestown Mall.

The Marlton Crossing Office Park single story properties are located on Lippincott Drive, which is directly off of Route 73, with convenient access to I-295, the New Jersey Turnpike, and Route 70. These properties are also surrounded by an abundance of retail centers, including restaurants and The Promenade at Sagemore. Amenities include a walking/jogging path within the office park.

The Horizon Corporate Center, home to 2000 Crawford Place, is positioned in a beautifully landscaped corporate park with space available for immediate occupancy. The property has a new exterior façade and is easily accessible to Routes 73, 70, 38, I-295 & NJ Turnpike.

A marketing brochure for each of these properties is available upon request or can be viewed at www.WolfCRE.com.

About WCRE

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, medical, retail, 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, 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 and Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC.

Visit our blog pages at www.marltonofficespace.com, www.mountlaurelofficespace.com, www.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyland.com, and www.southjerseyretailspace.com.

About Somerset Properties

Somerset Properties is a full-service commercial real estate company that owns and operates five million square feet of space in five states. Since 1996 Somerset has been creating value for investors with its entrepreneurial approach to acquiring, managing, leasing, and developing commercial properties. Learn more about Somerset Properties at www.somprop.com

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