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Tag Archives: New Jersey Commercial Real Estate Brokerage Firm


Retail Rent Collections Climb to 90% for the First Time in a Year

Retail rent collections are steadily improving. In February, rent collections surpassed 90% among national retailers for the first time since March 2020, when the pandemic began, according to research from Datex Property Solutions. In the same month last year, national retailers paid more than 93% of rents, showing that retailers in this category are inching closer to pre-pandemic performance.

Mark Sigal of Datex says that a few factors are driving rent collections. “For one, there is a commitment to a lease, so it’s part of the basic give and take, he tells GlobeSt.com. “At the same time, most tenants have had some form of coordinated efforts with the landlord, which is the embodiment of ‘we are in this together,’ so that is no small driving force. Plus, for those who have weathered the storm unbroken, there’s an enduring commitment to and belief in their craft. Underlying all of this is an expectation that there is pent up demand from the consumer, which seems logical. The light at the end of tunnel is real based on all of the data we have.”

Rent collections among non-national tenants however, fell nominally in February to 80.76%, down from 80.79% in January. However, this signals stability in the sector. Overall, retail rent collections totaled 85.6% in February. “February collections data shows that we are holding steady at 85% and some change, with collections for nationals hitting the 90% range for the first time in about a year,” says Sigal. “Plus, we have the stimulus kicking in, and the slow thaw of the pandemic, which will feel to the economy and retail operators in general like a volume control gradually turned up in the next few months. I am bullish on the overall direction of things.”

Retail collections have steadily improved as COVID-19 restrictions are lifted, which is happening across the country in accordance with vaccine distribution. The stability of rent collection signals to a retail recovery once pandemic eases. “I believe that there is pent up demand,” says Sigal. “People have foregone travel and the usual bloated holiday spend, to some degree, so there is consumer spend waiting to be deployed, which is further bolstered by the stimulus.”

 *Article courtesy of Globest

For more information about New Jersey or Philadelphia industrial space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia office space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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13M Square Feet and Growing: Mapping Amazon’s Rapidly Expanding Real Estate Footprint Across the Philadelphia Region

From Northeast Philadelphia to King of Prussia, Amazon.com Inc.’s real estate footprint continues to grow throughout the tri-state area and the company now occupies a tad more than 13 million square feet between expansive fulfillment centers and last-mile distribution facilities. 

That figure doesn’t include the large warehouses or other properties the company leases in Central and North Jersey or out in the western part of Pennsylvania. For example, Amazon (NASDAQ: AMZN) operates a 1-million-square-foot fulfillment center in Findlay in Allegheny County and occupies several smaller buildings for last-mile distribution.

The Philadelphia Business Journal mapped Amazon’s expansive footprint across the region using internal research. 

The map doesn’t include Whole Foods locations or new Amazon grocery stores the company plans to open in the region. For example, the company has signed a lease on 40,000 square feet for one of its new grocery stores at a planned mixed-use project at 5th and Spring Garden streets the Northern Liberties neighborhood of Philadelphia. It has plans for several other stores in Bucks County.

The data does include a new 1-million-square-foot distribution center in Berks County that Amazon opened last November, adding to the 14 large fulfillment centers it operates across the state and bringing to more than 10,000 the number of people it employs in Pennsylvania, according to the state’s Department of Community and Economic Development. At the new facility in Berks, the company expected to hire 1,000 full-time employees. 

Zoom in on the map below and click on the points for details on each of Amazon’s 29 leased properties in the tri-state area. The brown points indicate fulfillment centers, which are larger in size than the last-mile distribution centers identified on the map using blue points. 

Since 2010, Amazon has invested more than $8.5 billion in Pennsylvania, including customer fulfillment and cloud infrastructure, research facilities, and compensation to its employees, according to DCED.

More recently, Amazon has been leasing smaller buildings as it creates a network of last-mile distribution centers across the region to fill and deliver online orders in an even faster time. 

Expect Amazon to lease more of these buildings as it continues to expand its reach throughout the tri-state area and dominate retailing. These smaller buildings are located in office and industrial parks close to densely populated areas as well as right in the heart of several Philadelphia neighborhoods. 

By leasing space in an office park or neighborhood around the block, Amazon has become not only a force in retailing but as an occupier of space and an employer throughout Pennsylvania, New Jersey, and Delaware. It is one of the fastest-growing companies throughout the tri-state area. 

Across the Delaware River In New Jersey, Amazon has more than 13,000 employees working in distribution centers as well as its Audible.com subsidiary. It’s also growing in the Garden State. Amazon plans to open late this year a 1.25-million-square-foot distribution center at 742 Courses Landing Road in Carney’s Point in Salem County. The site, which will be Amazon’s 15th in New Jersey, will employ 800 people.

It’s growing in Delaware as well. In addition, it plans to also open later this year an 820,000-square-foot distribution center at a former General Motors plant on Boxwood Road in Wilmington. Delaware’s Council on Development Finance approved a $4.5 million grant from the state’s Strategic Fund for the project. 

 *Article courtesy of Philadelphia Business Journal

For more information about New Jersey or Philadelphia industrial space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia office space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Office Sublet Space May Pose More of a Competitive Threat Than Initially Thought

Office sublet space may pose more of a competitive threat than initial estimates indicated. 

Initially, it looked to some that, while the amount of sublet space in the U.S. office market reached record highs, it wasn’t a major threat because not all of it competes with direct space offered by the landlord. For example, spaces with lease terms expiring next year probably aren’t attractive to a wide audience. 

According to that line of thinking, as most of the country’s office employees are still working remotely, even the least expensive sublet with 12 or even 18 months of term remaining would be likely to sit unoccupied for the majority of the sublease. The short duration makes it unappealing as the subtenant risks being forced back into the market for different space if it’s unable to come to terms with the building owner to remain after its sublease expires.

However, only about 15% of the 200 million-plus square feet of office space available for sublease has terms expiring in 18 months or less. Arguably, subleases that have more than three years remaining on the lease term become far more competitive with direct space. Right now, nearly 45% of the square footage available for sublease has 37-plus months of term remaining.

Even in New York, which at nearly 30 million square feet has the highest nominal amount of available sublet space, only 9% of that space offers terms expiring within the next 18 months. Conversely, 55% of the sublet square footage has more than three years of term remaining. 

An example of a more competitive sublet option is a full-floor availability at 192 Lexington Ave. in New York. The asking rent is $48 per square foot with a term of anywhere between three and 10 years. A similar lower-floor direct space is listed with a $64 per-square-foot asking rent, and upper-floor direct space has asking rents of $75 per square foot. This is just one example of a situation where an office tenant could achieve possible cost savings of between 25% and 36% for up to 10 years compared to a direct lease.

The San Francisco office market bucks this trend a bit, although both office tenants and residents had been looking for more cost-favorable alternatives even prior to the pandemic. Only 38% of the available sublet space in that market has more competitive term lengths.

Assuming the build-out of the office sublet is functional for a prospective subtenant, as build-out allowances to customize sublet space are not the norm, the cost savings could be rather appealing. Amid this challenging leasing climate, landlords competing with sublet space carrying longer terms may be willing to offer an early direct extension at favorable rates, with a full build-out allowance following the expiration of the sublease for those tenants seeking greater lease length while realizing significant cost savings on the front end.

With additional sublet availabilities continuing to come on the market, we may see downward pressure on direct rents grow over the next several months.

 *Article courtesy of CoStar

For more information about New Jersey or Philadelphia industrial space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia office space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Empty Office Buildings Squeeze City Budgets as Property Values Fall

WASHINGTON — At a meeting with Treasury Secretary Janet Yellen last month, Jeff Williams, the mayor of Arlington, Texas, laid out his grim economic predicament: Heavy spending on coronavirus testing and vaccine distribution had dwarfed dwindling tax revenue, forcing the city to consider painful cuts to services and jobs. While sluggish sales and tourism were partly to blame, the big worry, Williams said, is the empty buildings.

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As Store Owners Sign More Short-Term Leases, Landlords are Taking a Risky Bet on the Future of Retail

Retailers and their landlords are engaged in a high-stakes game of risk right now. And it will be a few years until we find out which party is on the winning side.

As thousands of retail leases come up for renewal, their duration is increasingly shrinking, as businesses grapple with an unpredictable future and look for ways to slash costs, stay flexible and maintain leverage over their landlords, even after the health crisis abates.

The risk is a two-way street, though. Because on one hand, in two or three years, mall and shopping center owners could have the chance to turn the tables back in their favor, by hiking rents or booting retailers out for another tenant. But more short-term deals could also leave landlords with even greater vacancies down the line.

Best Buy Chief Executive Corie Barry said Thursday that the big-box retailer’s average lease term is definitively dwindling.

She said the company has about 450 leases coming up for renewal in the next three years, or an average of 150 annually. The electronics retailer has closed about 20 of its larger-format locations each of the past two years, but expects to shut even more in 2021, she said.

“As we look to the near-term, there will be higher thresholds on renewing leases, as we evaluate the role each store plays in its market, the investments required to meet our customer needs, and the expected return based on a new retail landscape,” Barry said during a conference call with analysts.

The trend spreads far across the retail landscape and into malls. Apparel companies are increasingly rethinking whether it makes sense to be in an enclosed shopping center anchored by department stores that are struggling to lure shoppers and grow sales.

 

Vans and Timberland owner VF Corp. said leases for its stores have been trending shorter for years. But they’ll be even briefer coming out of the pandemic, according to the company’s chief financial officer, thanks to recent and ongoing negotiations. VF Corp. is making the shift to allow it the freedom to close stores more quickly.

“The way we structure our leases now allows us to be quite nimble, quite agile, and … we can pivot as consumer behavior changes,” CFO Scott Roe said in a recent phone interview.

The retailer’s average lease term is about four years, Roe said, and will soon be even shorter as new agreements are signed.

“The landlords have been cooperative and working with us,” VF Corp. CEO Steven Rendle added. “We both have the same objective, which is to be viable and to be productive.”

Vacant space abounds

While it has traditionally been in a landlord’s best interest to sign a long-term lease — lasting 10 or 20 years — to limit risk and keep a space filled as long as possible, many are succumbing to the pressures brought on over the past 12 months.

With vacant space abounding in many markets across the country, tenants such as retailers and restaurateurs are finding themselves in a greater position of power. It’s a trend that many real estate experts expect will only proliferate, and become the norm, from here.

Leases on roughly 1.5 billion square feet of retail space in the United States are set to expire this year, according to a tracking by the real estate services firm CoStar Group. That’s about 14% of the retail market. So either those leases won’t be renewed, and more retail stores will close, or those contracts will be renegotiated.

‘We’re OK with that’

To be sure, while short-term leases can pose a greater risk for landlords, which then have to deal with unpredictable waves of tenants moving in and out, it goes both ways. Retailers could sign a short-term lease and rents could trend higher in the future if the market strengthens.

David Simon, CEO of mall owner Simon Property Group, told analysts during a conference call in early February that there has been an interest among tenants to go “a little bit shorter term.” Simon is signing more three-year leases these days, he said.

“We’re OK with that, because I’d rather negotiate two or three years from now” than not have a store filled at all, he explained. “I think actually that could be in our best interest, too, because … we don’t quite have the ability to point to sales as a way to increase rent,” he said.

“It’s actually a two-way street, and it’s working out fine with a vast majority of our retailers,” Simon said.

Beth Azor, CEO of retail real estate management and development firm Azor Advisory Services, said she has worked on a number of super short-term deals during the pandemic. Azor, often referred to as the “Canvassing Queen” on social media by her peers, helps leasing agents fill vacant space across the country, working with a number of publicly traded real estate investment trusts, or REITs.

She recently took her service to the up-and-coming social network Clubhouse, where she has been hosting rooms for entrepreneurs to pitch their businesses, and landlords with vacant spaces can listen in. The leases are for anywhere from three months to a year, and sometimes that’s rent-free. She calls it “Space Tank,” a play off ABC’s “Shark Tank.”

Occupancy pays

According to Azor, landlords shouldn’t view the shorter-term leases as a negative, especially given the state of the retail industry. Having a tenant — period — boosts occupancy, she said, which can be helpful when other companies come knocking on the door asking for rent relief.

Businesses on the national and local level have been coming to mall and shopping center owners during the health crisis to try to renegotiate their rents down, Azor explained. And if a property is fuller, albeit with some short-term leases, it is harder for a business to argue that their rent should come down. So occupancy can, quite literally, pay off.

Outlet owner Tanger Factory Outlets has also been doing more short-term deals. Currently, about 7% of its tenants’ leases are classified as temporary, when it has normally been between 4.5% and 5.5%, CEO Stephen Yalof told analysts during a conference call earlier this month.

“A number of deals that actually started out as pop-up or short-term leases … we’ve extended the terms of those leases,” he explained. “So that seems to be a trend.”

He went on to explain that the REIT has favored maintaining high occupancy, with more shorter-term deals, over rent collection in 2020.

“We will see a lot more local and [temporary] leasing probably in the first half of the year,” he said. “But we’re very proactive with our long-term leasing to replace that tenancy and grow our permanent leasing base.”

Not all real estate seems to be prime for pop-ups, though.

New York City’s glitzy Fifth Avenue district, for example, is still largely populated by tenants with long-term leases, according to Fifth Avenue Association President Jerome Barth.

“These are going to be premium leases, no matter what … because this is still the No. 1 market in the world,” said Barth. “I think leases will evolve, and that’s going to be a constant. But people know the Avenue is going to be an exciting place to be for years to come.”

*Article courtesy of CNBC

For more information about New Jersey or Philadelphia industrial space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia office space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Amazon is Now America’s Most Popular Grocery Store as Online Food Shopping Soars

As the coronavirus pandemic has led to a surge in online orders, Amazon is now the country’s most popular grocery store, according to a recent study by the Dunnhumby Retailer Preference Index.

The online retail giant is ahead of big-box retailers such as Walmart and Costco, and fan-favorite Trader Joe’s. This is Amazon’s first year to claim the study’s top spot (finished third in 2020), with the company’s speed and digital performance being its main driving factors, according to the study.

Dunnhumby used a “COVID Momentum Metric system” to get results, which considers preference drivers, emotional connection and financial performance to get a RPI (Retailer Preference Index) score.

“COVID-19 created a perfect storm that played right into the unique strengths of Amazon’s customer value proposition,” Dunnhumby said in the study. “In Q2 of 2020, Amazon reportedly tripled their online grocery sales.”

When the coronavirus pandemic began in March, Amazon experienced an extreme surge in online orders. Amazon Fresh and Prime Now experienced delivery delays and unavailable inventory due to increased demand, while Prime Pantry temporarily ceased operations as a result of too many orders. Prime Pantry’s operations have since been permanently ceased.

Timely delivery from Amazon has since resumed, and Amazon Fresh is constantly offering daily deals on groceries.

The service is exclusive to Amazon Prime members, which costs $119 per year or $12.99 per month, and offers free shipping and fast delivery as two of the biggest membership perks.

*Article courtesy of NJ.com

For more information about New Jersey or Philadelphia industrial space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia office space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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A Weed Legalization Bill Inches Closer to Approval in N.J. After a Long Wait

New Jersey voters approved a measure in November to legalize recreational marijuana. More than three months later, Gov. Phil Murphy still hasn’t signed a bill to make it happen. And, in the interim, thousands of people have been arrested on cannabis possession charges.

The purported holdup has been Murphy’s concern that the proposed law hasn’t specified uniform penalties for underage users.

This week, state Sen. Nilsa Cruz-Perez, (D., Camden) and state Sen. Nick Scutari (D., Linden) introduced a “cleanup” bill to address Murphy’s concerns.

It provides for light penalties for underage use. It discourages police from making arrests by making the process onerously time-consuming. It also creates a 26-person task force to review underage marijuana consumption in the Garden State and police encounters with users.

The cleanup bill is slated to be heard in committee in Trenton on Monday. It must pass both the Assembly and the Senate — and there is no guarantee it will — before Thursday for it to proceed to the governor’s desk, as per the agreement between Murphy and the Legislature.

“It’s my understanding we have broad agreement, “ Scutari said. “It may not be unanimous, but we have majority. I think the governor will sign this simultaneously along with the other two bills that will create the cannabis industry and stop arrests.”

That could happen by the end of next week.

State Sen. Troy Singleton (D., Moorestown) said the governor’s delay had caused a “level of frustration for many of us.”

“My colleagues in the Black and Hispanic caucus have been working with the leadership that is respectful of the process but also make sure that our children don’t become political casualties,” Singleton said. “It didn’t need to be held hostage while we were working on a cleanup bill to effectively stop the thousands of arrests for a product that the voters of New Jersey said was no longer illegal.”

The cleanup bill makes possession of any cannabis a civil penalty of up to $50 for people ages 18 to 21.

It forbids police from using the scent of marijuana as probable cause to conduct a search. It requires police officers to activate their body cameras before investigating a suspected cannabis violation. A minor who is caught with cannabis items may not be photographed or fingerprinted. Any records generated by a police encounter over a minor’s use of weed must be destroyed within two years.

It would also grant immunity from prosecution for any underage person who reports a cannabis medical emergency or is in need of medical assistance due to an unlikely cannabis-caused emergency.

“I’m happy we’re ending our reliance on the criminal justice system to prevent use by minors. That’s because it simply doesn’t work,” said David Nathan, a psychiatrist and founder of Doctors for Cannabis Regulation. “The preponderance of evidence shows cannabis can indeed be harmful to the developing brain. The younger you are and the more you use, the worse the outcomes appear to be. The best way to prevent underage use is telling kids what the real dangers are.”

Bill Caruso, a lobbyist and head of the cannabis practice at Archer Law in Haddonfield, said the new legislation “attempts to bridge the divide between the question of what penalties should exist for minors. It appears to strike the right balance.”

The bill does not mandate drug treatment for any minor offender.

As for the task force with over two dozen appointed members? No one had directly asked for that.

“Essentially the task force’s mission is to figure out all the problems the legislators can’t figure out right now,” said Chris Goldstein, an activist and regional organizer for NORML, the National Organization for the Reform of Marijuana Laws. “Maybe that’s the default Jersey solution.”

*Article courtesy of Philadelphia Inquirer

For more information about New Jersey or Philadelphia industrial space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia office space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Retail Vacancies Spike in South Jersey as Prospective Tenants Remain Skittish on New Leases

Retail vacancies are rising across South Jersey as ripple effects of Covid-19 continue to grow nearly a year after the pandemic first hit the region. 

A new report from Wolf Commercial Real Estate on the South Jersey market found that Burlington County’s retail vacancy rate jumped to 10% in the fourth quarter, up from 7.6% in the prior three-month period. The increase marks the largest consecutive quarter-to-quarter jump in the past three years. 

At the same time, Camden County hit 10.5% retail vacancy, up from 9.7% in the third quarter. It started 2020 at about a 6% retail vacancy rate. 

In Gloucester County, the rate is up to 13.7%, from 11.7% at the start of last year. 

The rising number of vacancies in the region reflect the financial hardships many businesses, especially independently owned restaurants, faced earlier in 2020, said Jason Wolf, managing principal of Wolf Commercial in Marlton. 

“We’re finally starting to see the true numbers come to light,” he said. 

While South Jersey saw an impact from big-name retail store closures, Wolf said it’s the closure of small “mom and pop” operators driving the vacancy increase. 

Throughout 2020, South Jersey lost independent restaurants like Collingswood staple El Sitio Grill & Cafe, Haddonfield’s Villa Rosa pizzeria and Vitarelli’s Italian restaurant in Cherry Hill. The Smith restaurant group, which operates five concepts across New Jersey and Pennsylvania, permanently closed its Brickwall Tavern in Burlington City. Charlie Brown’s last two South Jersey locations also shut down in Woodbury and Westampton.

“My heart bleeds right now for these restaurant operators,” Wolf said, adding the ones still holding on are struggling to survive. “These people all had thriving business and they’re all on the verge of going out of business, battling revenues being down 50%, 60%.” 

Clothing stores have also suffered. One operator of a men’s clothing store told Wolf that “suits are the new tuxedo,” as demand for professional attire sank during Covid-19.

When retail vacancies are filled, Wolf said it’s often with an alternative usage like a health care office. Empty big-box stores are being used for warehouse and distribution space. While not filling a vacancy, the Moorestown Mall’s owner, Pennsylvania Real Estate Investment Trust, also recently secured approvals to build more than 1,000 apartments and a hotel at the shopping center.

“I think you’re going to see these retailers evolve into a more diverse strategy,” he said. 

Wolf is cautiously optimistic about what 2021 has in store for the South Jersey commercial real estate market, especially later in the year when there’s more clarity into the future of the pandemic. People are calling, he said, but they’re just not ready to make a move just yet. 

“The demand is there, we just have to get people through making decisions,” he said. “There’s a lot of tire-kicking going on.” 

On the retail side, he said quality retail locations in high-visibility areas will come out fine on the other side. Mom and pop retail fronts in peripheral areas Wolf believes may face more of a challenge. 

“I worry, yes,” he said. 

*Article courtesy of Philadelphia Business Journal

For more information about New Jersey or Philadelphia office space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia industrial space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Exeter Property Group to be Acquired by EQT AB in $1.9B Deal

Exeter Property Group, a global industrial property behemoth started by Ward Fitzgerald in 2006, has entered into a deal to be acquired for $1.9 billion. 

EQT AB, a Stockholm private equity firm, will buy Conshohocken-based Exeter in a transaction that involves $1.07 billion in cash including $300 million to refinance existing debt and $800 million in EQT shares. 

Exeter has $10 billion in assets under management and, for 2020, it is expected to generate $135 million in revenue and $80 million in earnings. While the bulk of Exeter’s portfolio consists of industrial properties, the company has expanded into life science, suburban office and other real estate throughout the United States and Europe. 

Under terms of the agreement: 

    • EQT will acquire 100% of Exeter’s management company;
    • Fitzgerald and other Exeter management shareholders will receive 65% of their consideration in newly issued EQT shares and 35 percent in cash;
    • Fitzgerald and other Exeter management shareholders to join EQT and enter into lock-up agreements; and
    • Funds managed by TA Associates, which own roughly 40% of Exeter, will receive 25% in newly issued EQT shares and 75% cash. 

Fitzgerald had been with Liberty Property Trust prior to forming Exeter 15 years ago with Tim Weber. The focus for Exeter was industrial real estate. The two figured a confluence of variables including technology, e-commerce, bar codes that allowed a faster and more efficient movement of goods and a rise in disposable income would eventually lead to an evolution in modern big box warehouses. Industrial properties constructed three decades ago were functionally obsolete, providing an opening for companies such as Exeter to swoop in, build new ones, lease them up and make their mark by accumulating a portfolio of modern warehouse-distribution centers.

The gamble paid off as e-commerce began to dominate retail, logistics continued to expand and demand for industrial real estate grew globally. Exeter continued to evolve as a company.

In 2010, Exeter went out to raise its second fund and closed in 2011 on $615 million. That money was spent building up its core investment properties. A third fund totaling $400 million was raised in 2014 and deployed to help secure long-term leases and modernize the portfolio.

 

By 2015, Exeter had built up its portfolio to 209 properties totaling 58 million square feet in 25 markets. In its first big transaction, Exeter sold the properties for $3.1 billion to a joint venture of Henley Holding Co., a subsidiary of the Abu Dhabi Investment Authority, and the Public Sector Pension Investment Board, a Canadian pension investment manager.

The deal didn’t stop Exeter from continuing execute on its original strategy. The company deployed a value-add fund totaling $832 million that was focused on big box warehouses and multi-tenant logistics facilities throughout the U.S. Exeter used another $600 million fund to acquire core assets as well as a fund totaling 300 million euros to buy warehouses throughout Europe.

Exeter eventually became not only one of the leading players in industrial real estate in the U.S. and Europe but one of the largest private equity firms in Philadelphia. By the end of 2017, it had $6 billion in assets under management and grew that to $10 billion in 2020. 

Exeter is vertically integrated and controls every aspect of its work whether it’s constructing, leasing or managing a property. It has 37 offices. 

The deal is expected to close in the second quarter of the year. Upon completion, Exeter will be rebranded as EQT Exeter and operate independently.

“The transaction is part of EQT AB’s strategic growth ambitions within real estate and creates a scaled thematic investment platform across North America and Europe,” EQT said in a statement. “It also provides Exeter management with the ability to continue their track-record as a top performing real estate investment manager.”

*Article courtesy of Philadelphia Business Journal

For more information about New Jersey or Philadelphia industrial space, New Jersey or Philadelphia retail space, and New Jersey or Philadelphia office space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Brandywine CEO Jerry Sweeney Sees Signs of a Big Year for Owners of High-End Commercial Real Estate

Covid-19 sent shockwaves through the commercial real estate market in 2020. Jerry Sweeney now sees opportunity. 

“I think everybody who’s in our business should be incredibly enthusiastic about what could happen in 2021,” said the CEO of Brandywine Realty Trust, the largest landlord of Class A office space in the Philadelphia region. “The greatest economy in the history of the world was on hold for 10 months. We’re beginning to creep our way back. I think there will be a lot of pent-up demand. I think the standards will be even higher. So if you’re a very high-quality landlord, I think you’re going to benefit from the emerging trend lines.” 

Brandywine’s (NYSE: BDN) footprint totals more than 24 million square feet of space across the Philadelphia, Washington, D.C., and Austin, Texas, markets. Local properties include Cira Centre, 1900 Market St. and the Radnor Financial Center. The company is also spearheading the proposed $3.5 billion Schuylkill Yards development in University City. 

Sweeney, who describes real estate as a business “where you’re always focused forward,” recently sat down for an interview with Philadelphia Business Journal Reporter Natalie Kostelni as part of the 2021 Economic Forecast series. 

Below are Sweeney’s views on the future of offices, shifting tenant needs, demand for space and what a new White House administration could mean for real estate. The interview has been edited and condensed for clarity.

On Brandywine’s 500,000 square feet of early renewals

A lot of those renewals were essentially two- to three-year deals. Our approach was really, with a lot of things happening in everybody’s business, not everybody thinks about real estate every day like we do. They’re actually running businesses. Our approach was to make sure that they knew that we were willing to do short-term accommodations to help them really think through the impact of the pandemic, not just on their physical platform but also on their business. And we had a lot of tenants respond very favorably to that. They all renewed in the same amount of square footage at very good economic terms for us and for the tenant. And again, that’s part of that granting and earning of trust that basically we weren’t going to wait until the last minute to jam somebody on a renewal. We were proactive in getting out there and talking to them. 

On the future of the workplace

I think what the pandemic really did was accelerate this trend line that’s been going on for 20 years about the impact of technology on the workplace. Companies really start to recognize that the office isn’t a finished product. It’s a work in progress. It’s where things happen. And I think it’s where you celebrate, where you collaborate, where you learn, where you grow, you celebrate birthdays, you plan. A lot of the feedback I’ve gotten from kind of the C-level executives from many of our larger tenants is 2020, and going into the early part of 2021, has really been a year of business triage. They’re jumping back and forth. The Zoom calls – they’re walking around with the dress shirts on, but pajama bottoms. They’re kind of managing projects, but I think there’s a real growing expectation with the economic recovery underway and hopefully accelerating. It’s really a time to get back to business, and the ability of a physical platform to be a springboard for business growth I think is really going to come home as a point of focus for a lot of our tenants as 2021 progresses. 

On the state of the downtown office market vs. the suburbs

It’s not a big difference at this point. You know the public policy guidelines are different in the city than out in the suburban counties in terms of return to work. As you would expect, activity levels are lower than they would historically be. Although I will tell you our pipeline of deals is still north of 1.5 million square feet. So while it’s been slow, there have been a lot of tenants in the market and their decision timelines have become more protracted. But we’ve certainly seen an uptick in activity even within the last couple of weeks. But we haven’t really seen a big divergence of the main drivers between the city and the suburbs. I think that was part of the national pundit view: The urban areas will suffer. The suburban areas will prosper. And honestly, I don’t know if they will or not. But I think from what we’re seeing, it’s simply too early to tell. We’ve not had any tenant in our portfolio say, ‘Hey, I want to leave the city.’ We haven’t had any tenants in the suburbs saying, ‘Hey, I want to move into the city.’ I think people are just really focused more on their short-term horizons. 

On if tenants are seeking to sublease portions of their space

We’ve always seen that throughout the different cycles. And each market is different. In Philly where it’s more of a slower growth, moderate paced, financial service, law firm, consulting service-type of environment — a lot of those companies really haven’t been high-growth in terms of dramatically expanding their square footage requirements. As a result, I think the subleased inventory really is tracking still below 3% in the Greater Philadelphia area. And we really haven’t seen a big push to put space back on the market. Where we actually have seen that, they’re not even sure the tenure in which they want to sublease. So I have a lease that goes out through 2025, I don’t think I need 10,000 square feet, let me put that on the market, but I’m not sure where that will be, I’m not sure what deal I want for that. 

Conversely in Austin, Texas, where we have a lot of inventory, that market’s dominated by high-growth tech companies. And a lot of those companies have tremendous expansion plans, both near-term and longer-term. So a lot of those companies did take down a lot of space that they were anticipating to grow in very quickly. And with the pandemic, some of those growth expectations have been a bit tempered. In Austin we have seen a larger uptick in sublease space, particularly in the Central Business District market. But again, a lot of that space is available for a year or two; not sure what the tenant improvement allowances will be. So whether it’s actually translatable into executed subleases I think remains to be seen. 

On the demand for office space going forward

There’s a general expectation that at least short term there’ll be lower demand for office space. Those numbers range from anywhere from 10% to 15%. I think it’s going to be geographically unevenly distributed, and I think it’s going to be a function of individual market conditions. But that being said, we’ve seen a couple of trend lines that I think are very positive. One, there is no question that there’s going to be a push toward higher quality office buildings. I think Brandywine is really well positioned for that. We’ve invested a lot of money in our buildings. We have great HVAC, fresh air — all the things that used to be on page 27 of a brokerage RFP are now page one. I think we fare very well in that. We’ve certainly pivoted our marketing platform to amplify that competitive advantage we have. So I think to some degree whatever demand decline we may see market-wide, the owners of higher quality space will be able to have a move up addition to their inventory.

On planning out space for tenants 

We’re definitely seeing a reversal of the densification of previous years — many more requesting for partition walls, higher profile workstations, reducing density of conference rooms, reconfiguring the stairwells to provide for easier access between floors. I think it really is a mixed bag. What’s going to be interesting as we think about it is as the work-from-home dynamic continues, what will be the overall demand impact there? 

We’re really going through a lot of post-Covid design issues, which I think generally could have the impact of requiring more space per employee, greater circulation areas, maybe instead of one kitchen, a couple of satellite kitchens, more conference rooms, more private work areas. But honestly I think that’s all kind of to be determined. You’re going to see larger companies deal with it differently than smaller companies. And until the next couple of months go by, I think it’s still going to be a question more for all of us in this business. 

On the biggest difference between Austin and Philadelphia

Well, I don’t think it’s just necessarily the weather because I will tell you having been in Austin it gets awfully hot down there in July and August as well. So they tend to be more temperate. Look, I think a lot of it relates to the the tax structure, the political leadership. I think that’s one of the great reasons why Austin, Texas, is now known as Silicon Valley East. They had a very dynamic group of business leaders working hand-in-glove with the local political leaders to create Opportunity Austin, which is a business development arm that has done an amazingly effective job of attracting businesses. So I think that’s one of the macro trend lines you’re seeing nationally where you’re seeing projected higher growth rates in the Sunbelt markets, primarily driven by affordability, job growth, political climate. More jobs will be migrating from kind of the Northeast and the West Coast to some of these Sunbelt markets.

On what the Biden administration may mean for the Philadelphia real estate market

I think it’s too early to tell. One of the brokerage firms did a great report, and this is out of Washington, showing that at a time when the executive and the legislative branches are aligned with one party, that tends to be good for real estate. So the fact that everyone’s aligned right now, I hope is good for real estate and I don’t know what the political dynamics will be. I certainly think the new administration is going to be much more amenable to providing federal financial support to Northeast cities and states who tend to have the highest level of budget disequilibrium. One of the things I’m really hopeful for is from a mass transit standpoint. Leslie Richardson and her team at SEPTA are doing an absolutely amazing job of maintaining the health and safety of that system under very difficult challenges. Their revenue stream has disappeared. They need help. And my hope is that the Biden administration will be much more responsive to addressing the needs of mass transit systems around the country. If that’s the case, I think that could be a big catalyst for the reopening of the city of Philadelphia, which certainly should be a near-term objective of everybody.

On the long-term impact to Class B and C properties

I think it’s going to be a challenge, I really do. Not that I think some of those buildings aren’t beautiful architecturally, they just don’t have the superstructure capability on a cost-effective basis to retool to meet the demands of today’s tenants — at least from what we’re seeing at this stage. I think the impact you’ll see, as Philadelphia has always seen, is a number of those buildings will get converted to residential. They’re talking about doing a lot of that up in Midtown Manhattan for a lot of buildings. I think that trend line will continue, so I hope the residential market remains fairly strong. And I think that there will probably be a cost imbalance in some of those buildings that may create opportunities for repricing. We don’t really own any B-quality space. It’s a market segment we moved dramatically out of in the last 10 years. I do think they’ll face more margin squeeze than the Class A trophy office buildings.

*Article courtesy of Philadelphia Business Journal

For more information about New Jersey or Philadelphia office space, New Jersey or Philadelphia retail space, and New Jersey or Philadephia industrial space or other New Jersey and Philadelphia commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey and Philadelphia commercial real estate broker that specializes in both New Jersey and Philadelphia office space, New Jersey and Philadelphia retail space, and New Jersey and Philadelphia industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage, and advisory firm, is a premier New Jersey and Philadelphia commercial real estate brokerage firm that provides a full range of New Jersey and Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey and Philadelphia commercial properties for buyers, tenants, investors, and sellers.

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

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

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Air Cargo Construction is Booming, Thanks to Amazon

Since the pandemic started nearly a year ago, 15,000 fewer people arrive and depart daily from the Cincinnati/Northern Kentucky International Airport, known as CVG. Yet the 60% drop in passenger traffic is not so apparent on the airport’s four runways, which are handling a record amount of air cargo — nearly 4,000 tons a day.

Ranked by the Federal Aviation Administration as the nation’s sixth-largest cargo airport, CVG’s standing is about to climb higher.

Amazon Air, the e-commerce giant’s 5-year-old cargo airline, is completing a 798,000-square-foot sorting center, seven-level parking structure and acres of freshly poured concrete to accommodate 20 aircraft. The new facility, under construction on a 640-acre site along the airport’s southern boundary, is scheduled to open in the fall. It represents about a third of the $1.5 billion, 3-million-square-foot air cargo hub Amazon is committed to building at CVG.

“This hub is going to let us to get packages to customers faster,” Jeff Bezos, the Amazon founder and chief executive, said during the groundbreaking ceremony at CVG in May 2019. “That’s a big deal.”

By far the largest air cargo construction project in the airport’s 74-year history, the mile-long facility will be the center of Amazon Air’s national air transport network, which now has more than 70 aircraft and hundreds of daily flights to 35 other cities in the United States. Last week, Amazon announced the purchase of 11 Boeing 767-300 aircraft as part of an effort to expand its fleet.

The new building is a signal measure of Amazon’s influence as the largest online retailer and its dedication to fast delivery. Both have helped generate a wave of air cargo construction at airports across the United States.

FedEx, the world’s largest air cargo carrier, handled an average of 6.2 million air packages a day last year, a 48% increase over 2016. The company just opened a $290 million, 51-acre project at the Ontario International Airport in Southern California. It features a 251,000-square-foot sorting facility, spacious concrete ramps, nine gates, 18 truck loading docks and the capacity to handle 12,000 packages an hour.

UPS and Amazon also operate out of older buildings at the airport, which is handling 30% more cargo than it did in 2019. “There is a lot of consumer behavior that permanently changed in 2020,” said Mark A. Thorpe, the airport’s chief executive. “We’re seeing levels of cargo today that were expected in 2028.”

Ted Stevens Anchorage International Airport, the second-largest air cargo airport in the United States after Memphis International Airport, is planning for $500 million in new freight and package handling and sorting facilities. The demand for more space by the airport’s cargo companies — among them Alaska Cargo & Cold Storage, 6A Aviation, FedEx, UPS and Amazon — is soaring. As of the end of September 2020, the airport reported that 2.3 million tons of cargo had touched down in Alaska, a 9% increase over the same nine-month period in 2019.

At Chicago Rockford International, plans are underway to build a 90,000-square-foot cargo facility. As soon as it opens in the spring, the airport will start another 100,000-square-foot cargo project for DB Schenker, Emery Air and Senator International. Last year, Rockford completed a $22.3 million, 192,000-square-foot facility for Amazon, along with $14 million in concrete aprons sturdy enough for Boeing 747 aircraft.

“The traffic in cargo is responsible for all the new demand at airports now,” said Rex J. Edwards, an industry analyst and vice president of the Campbell-Hill Aviation Group, a Northern Virginia consulting firm. “The cargo carriers want more airport space. They need room to park planes and facilities that meet next-day delivery requirements. That is the evolution of the business now.”

Before the pandemic, e-commerce sales were growing more than 10% annually, pushing total air cargo to 12 million tons last year, according to the Bureau of Transportation Statistics, a unit of the Transportation Department. Federal analysts project that air cargo will reach 45 million tons annually by midcentury. But executives at big air shippers, airports and airplane manufacturers say that the pandemic altered online commerce so substantially that the industry will hit that mark a decade sooner.

Three years ago, Philadelphia International Airport paid $54.5 million for 135 undeveloped acres next to the airfield. The airport is now developing a master plan for the ground that includes 1.5 million square feet of cargo handling facilities. “We knew, prepandemic, that cargo was only going to increase,” said Stephanie Wear, the airport’s director of air service development and cargo services.

For the time being, Amazon is the largest influence in new airport cargo construction.

To serve the 14 immense fulfillment centers it built in California near San Bernardino and Riverside, Amazon established a western hub at San Bernardino International Airport. This month, it is finishing a 658,000-square-foot handling and sorting center and two smaller 25,000-square-foot buildings at the 79-year-old airport, which started as a World War II military airfield. The $300 million project includes parking and gates to handle 14 aircraft and 26 flights daily, said Mark Gibbs, the airport’s director of aviation.

No airport is receiving more attention from Amazon Air than Cincinnati/Northern Kentucky. The company liked what it heard from airport executives, who spent the last decade diversifying CVG’s revenue and recovering from a fiscal catastrophe by recruiting air carriers and related companies to its 7,700-acre airport.

In 2008, in the midst of a deep recession, Delta Air Lines unexpectedly shut its regional hub at CVG, halting more than 500 flights a day, closing terminals and throwing the airport into a panic. Executives countered by marketing CVG’s location, a half-day drive or a short flight from most of the major metropolitan regions in the East, Midwest and South. CVG had plenty of space for development, and it is close to important interstate highways and to Cincinnati’s renovated Ohio River shoreline and city center.

The German carrier DHL became interested straightaway and arrived in 2009. Four years later, it completed its 1-million-square-foot North American hub. Amazon arrived in 2017 and contracts for loading and sorting at the DHL facility. FedEx also operates out of the airport.

The air cargo activity generates its own momentum. Five years ago, Wayfair, the online décor and home furnishing company, completed a 900,000-square-foot logistics center at the airport. Last year, FEAM Aero, an aircraft maintenance company, opened a $19 million, 103,000-square-foot aircraft service hangar on an 8-acre site.

Amazon Air’s strategy for cargo routes and ground facilities differs substantially from that of other carriers. Its cargo is composed of goods sold on its own online market. Its airport facilities are close to Amazon’s network of fulfillment centers.

That formula fits Amazon’s decision to settle at CVG, on the Kentucky side of the Ohio River across from Cincinnati. Since 2010, according to the company’s data, Amazon has spent more than $15 billion in Kentucky, much of it on 10 fulfillment and sorting centers, two delivery stations, a customer service center and two Whole Foods Markets. The company says it employs 14,500 people in the state. Its air cargo hub will add 2,000 jobs.

The cargo strategy was essential to keeping CVG operating since March 2020, when the pandemic took hold, said Candace S. McGraw, CVG’s chief executive, who led the work to recruit Amazon and the other carriers.

Air cargo grew 14% in 2020 at CVG and is expected to grow at least 10% more in 2021 and 2022, when Amazon’s new facility is fully operational. Cargo now accounts for 75% of the more than $25 million in annual revenue from landing fees, the second-largest source of CVG’s income after parking.

“We learned the lesson to diversity from Delta,” McGraw said. “We’re grateful for the cargo business.”

*Article courtesy of Philadelphia Business Journal 

For more information about New Jersey office space, New Jersey retail space, and New Jersey industrial space or other New Jersey commercial properties, please call 856-857-6300 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading New Jersey commercial real estate broker that specializes in New Jersey office space, New Jersey retail space, and New Jersey industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier New Jersey commercial real estate brokerage firm that provides a full range of New Jersey commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other New Jersey commercial properties for buyers, tenants, investors, and sellers.

A New Jersey commercial real estate broker with expertise in New Jersey commercial real estate listings, Wolf Commercial Real Estate provides unparalleled expertise in matching companies and individuals seeking new New Jersey office space, New Jersey retail space, or New Jersey industrial space with the New Jersey commercial properties that best meets their needs.

As experts in New Jersey commercial real estate listings and services, the team at our New Jersey 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 New Jersey office space, New Jersey retail space, or New Jersey industrial space for sale or lease, Wolf Commercial Real Estate is the New Jersey commercial real estate broker you need – a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey, Philadelphia, and New Jersey commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Governor Murphy Signs the NJ Economic Recovery Act of 2020

Effective today, January 7, 2020, Governor Phil Murphy signed the NJ Economic Recovery Act of 2020. The NJERA bill creates a 7-year, $14 Billion Dollar bundle of tax incentives geared to allure and preserve New Jersey based real estate development and businesses.

The 249-page NJEDA outlines new tax incentives to replace the expired NJ GROW and ERG programs and expands or creates new subsidies for film and television production, revitalizing brownfields and assisting so-called food deserts, among other areas, all while creating financial caps and oversight for the programs and the state agency that manages them.

Under the NJERA, most of the new tax credit programs are subject to a collective $11.5 Billion Dollar cap over 6 years, while allowing for a 7th year of allocations under those programs for uncommitted credits. The NJERA also provides for $2.6 Billion in tax credits over 13 years for projects related to film and television production.

A new office, the Office of Economic Development Inspector General will be created along with a chief compliance officer to manage a Division of Portfolio Management and Compliance to oversee the awards.

Under the new Emerge program, tax credits are available to encourage economic development, job creation and the retention of significant numbers of jobs in imminent danger of leaving the state.

Eligibility is subject to various provisions, including a requirement that the award of tax credits, the resulting capital investment and the resulting job creation or retention will yield a “net positive benefit” to NJ ranging from at least 200 to 400% of the award, depending on the location. Emerge also has minimum requirements and adjustments for the necessary capital investment based on the type of project, the size of the business, the types of jobs at stake and other factors.

Tax credits under both Emerge and a separate program, Aspire, are subject to a combined $1.1 Billion annual cap for 6 years. The NJERA also calls for the $1.1 Billion annual cap to be split so that up to $715 million of tax credits will be for projects located in 14 northern counties and $385 million for projects in 7 southern counties.

Aspire, the successor to the Economic Redevelopment & Growth program, or ERG, will provide gap financing to development projects that are intended to serve a public policy goal but which would otherwise generate a below-market rate of return. Additionally, the proposal outlines different provisions for commercial and residential projects, providing bonuses for those that serve distressed or targeted communities, along with transit-oriented development and affordable housing.

The NJERA would also allow the Economic Development Authority, which oversees tax incentives, to review each project’s performance and reduce the amount of the subsidy if it determines that the financing gap is smaller than determined at board approval. If there is no project financing gap, then the developer would forfeit the incentive award.

  • Historic property reinvestment — providing tax credits for part of the cost of rehabilitating historic properties in the state, with a cap of $50 million annually for 6 years;
  • Film tax credits — amending existing programs to include provisions for so-called New Jersey film partners and New Jersey film-lease partners and allowing an additional $200 million of tax credits annually over 13 years;
  • Brownfields redevelopment — providing tax credits to compensate developers of redevelopment projects located on polluted sites for remediation costs, with a cap of $50 million annually for 6 years;
  • Food desert relief — providing tax credits in order to incentivize businesses to establish and retain new supermarkets and grocery stores in underserved communities, with a cap of $40 million annually for 6 years;
  • The New Jersey Innovation Evergreen program — auctioning tax credits for cash, which will be used to invest in startups and other innovation-focused businesses, with a cap of $60 million annually for 6 years;
  • Community-anchored development — providing tax credits to anchor institutions to incentivize the expansion of targeted industries in and the continued development of certain areas of the state, with a cap of $200 million annually for 6 years; and
  • Main Street recovery — providing grants, loans and loan guarantees to small businesses, with an appropriation of $50 million under the bill.                                                                        

Brad A. Molotsky, Partner

Duane Morris, LLP 

1940 Route 70 East, Suite 100

Cherry Hill, NJ 08003

bamolotsky@duanemorris.com

856-874-4243 O

 

Brad A. Molotsky practices in real estate law and serves as a team leader for the Duane Morris Project Development group and co-head of the firm’s Opportunity Zones practice group. Duane Morris, LLP is a law firm with over 800 attorneys across the United States along with being international. Duane Morris began as a partnership of four attorneys developed in 1904. The firm since then has grown to be one of the largest firms in the world. Through the growth of the firm, the same principle has remained and 

guided them through the years: an agreement to work together in striving to meet and exceed their clients’ goals. For additional information about Duane Morris, LLP, please visit the firm’s website Welcome to Duane Morris LLP.                                                                      

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