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WCRE FIRST QUARTER 2019 REPORT

MODEST GAINS CONTINUE IN SOUTHERN NEW JERSEY & PHILLY CRE MARKETS

Another Solid Quarterly Performance Despite Ongoing Political Uncertainty

Commercial real estate brokerage WCRE reported in its analysis of the first quarter of 2019 that the Southern New Jersey and Southeastern Pennsylvania markets continued to show overall solid fundamentals, buoyed by new investments from outside the region and economic inflows to support local expansions. Leasing, net absorption, and prospecting activity all were up in the first quarter, while sales dipped slightly.

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“We’ve been in this cycle for several years at this point, with steady growth supported by strong fundamentals,” said Jason Wolf, founder and managing principal of WCRE. “The financial markets and political climate have been somewhat less predictable, but commercial real estate has performed very reliably, and we believe will continue to do so.”

There were approximately 373,362 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was an increase of 10 percent over the previous quarter. The sales market stayed active, too, with about 1.59 million square feet on the market or under agreement. Sales were active, with $24.7 million totaling approximately 186,000 square feet.

New leasing activity accounted for approximately 50 percent of all deals for the three counties surveyed. Overall, gross leasing absorption for the first quarter was in the range 411,000 square feet, an increase of 30 percent over the fourth quarter.

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 11.60 percent, which is 65 basis points higher the previous quarter.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$15.00/sf NNN or $20.00-$25.00/sf gross for the deals completed during the quarter. These averages stayed near this range throughout 2018 and have remained there into 2019.
  • Vacancy in Camden County dropped to 11.1 percent for the quarter, which is an improvement of 40 basis points compared to the fourth quarter.
  • Burlington County’s vacancy jumped to 12.1 percent after two straight quarters at 10.4 percent. Burlington was impacted by several large blocks of space returning to the market.

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

  • The vacancy rate in Philadelphia’s office market moved to 9 percent, up from 7.8 percent at the end of the year. The market’s vacancy rate is at a 17-year low and below that of other major market. Despite this cooling off, demand for office space remains strong, and vacancy in Philadelphia is still below other major cities.
  • Net office space absorption in Philadelphia was 1.1 square feet for the quarter.
  • The industrial sector in Philadelphia remains very strong, though there may be signs of slowing down a bit. The first quarter saw a further decrease in vacancy rates, to 5.1 percent, but net absorption was off, at 4.7 million square feet.
  • Philadelphia retail is treading water to avoid a major spike in vacancy. The vacancy rate ticked down two tenths of a point, to 4.3 percent, while net absorption was positive at 161,406 square feet after two straight quarters in negative territory.

WCRE also reports on the Southern New Jersey retail market. Highlights from the retail section of the report include:

  • Retail vacancy in Camden County dropped to 5.8 percent, with average rents in the range of $16.25/sf NNN.
  • Retail vacancy in Burlington County increased to 7.9 percent, with average rents in the range of $13.10/sf NNN.
  • Retail vacancy in Gloucester County stood at 8.1 percent, with average rents in the range of $13.75/sf NNN.

The full report is available upon request.

About WCRE

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

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

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WCRE 2018 FOURTH QUARTER REPORT

MODERATE GROWTH CONTINUES IN SOUTHERN NEW JERSEY & PHILLY CRE MARKETS

Another Solid Quarterly Performance Amid Political and Financial Uncertainty

WCRE 2019 FOURTH QUARTER REPORTCommercial real estate brokerage WCRE reported in its analysis of the fourth quarter of 2018 that the Southern New Jersey and Southeastern Pennsylvania markets continued to show overall solid fundamentals, buoyed by new investments from outside the region and economic inflows to support local expansions. Leasing, sales, net absorption, and prospecting activity all were up in the fourth quarter.

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“Although the financial markets were highly unpredictable, commercial real estate performed the way it has for most of the past several years – with steady growth supported by strong fundamentals,”

– Jason Wolf, founder and managing principal of WCRE.

There were approximately 336,466 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was an increase of 18.3 percent over the previous quarter. The sales market stayed active, too, with about 1.4 million square feet on the market or under agreement. Sales were active, with $28.5 million totaling approximately 316,476 square feet.

New leasing activity accounted for approximately 36 percent of all deals for the three counties surveyed. Overall, gross leasing absorption for the fourth quarter was in the range 286,215 square feet.

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 10.95 percent, which is an improvement of 35 basis points over the previous quarter.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$15.00/sf NNN or $20.00-$25.00/sf gross for the deals completed during the quarter. These averages stayed near this range throughout 2018.
  • Vacancy in Camden County increased to 11.5 percent for the quarter, which is an improvement of nearly a point compared to the third quarter.
  • Burlington County vacancy stayed at 10.4 percent, unchanged.

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

  • The vacancy rate in Philadelphia’s office market was 7.8 percent. This is a slight improvement over the previous quarter. Demand for office space continues to be strong.
  • Net office space absorption in Philadelphia was 1,224,697 square feet for the quarter.
  • The industrial sector is as strong as ever in Philadelphia. The fourth quarter saw a small decrease in vacancy rates, to 5.3 percent, but a jump of about 1 million square feet in net absorption quarter over quarter, to 7.1 million square feet.
  • Philadelphia retail was the lone true weak spot in Q4. The vacancy rate ticked up two tenths of a point, to 4.5 percent, while net absorption was negative for the second straight quarter, at -611,261 square feet.

WCRE also reports on the Southern New Jersey retail market. The fourth quarter saw the contrast of a spending surge that propelled holiday sales to their best season in six years and at the same time, consumer confidence inching downward as the year drew to a close. The job market has stayed remarkably strong, with low unemployment supporting consumer spending and reverberating through other indicators. Other highlights from the retail section of the report include:

  • Retail vacancy in Camden County stood at 7.0 percent, with average rents in the range of $16.19/sf NNN.
  • Retail vacancy in Burlington County stood at 6.7 percent, with average rents in the range of $13.11/sf NNN.
  • Retail vacancy in Gloucester County stood at 8.6 percent, with average rents in the range of $13.76/sf NNN.

The full report is available upon request.

About WCRE

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

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

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WCRE ADDS EXPERIENCED POLITICAL CONSULTANT, FORMER COUNCILMAN

David Spector to Enhance Engagement with Local Communities and Leadership

David SpectorWolf Commercial Real Estate (WCRE) is pleased to announce the hiring of David Spector as Director of Community Relations. Spector brings nearly a decade of community engagement and public service to expand the reach and strengthen the bonds with municipalities and businesses throughout New Jersey.

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As Director of Community Relations, David will work closely with elected officials, economic development offices and community leaders to strengthen WCRE’s connections within the various regions where the firm does business.

An experienced community relations professional, Spector has served as a Town Councilman in Bellmawr, NJ and was an Eagleton Fellow at Rutgers University. David started his career in politics working on a number of different campaigns at all levels of government on behalf of Chairmen Donald Norcross and James Beach. He was also an aide for Senator Fred Madden, Assemblyman Paul Moriarty and Assemblywoman Gabriela Mosquera, where he spearheaded communications, social media and constituent relations. Additionally, Spector has built close relationships with a variety of community organizations throughout Southern New Jersey including the Jewish Community Relations Council, Community Planning & Advocacy Council, American Red Cross and much more.

“As a firm that works closely with a wide variety of communities and businesses, we are excited to be partnering with someone like David who can help our clients to build stronger relationships with their neighbors throughout the Garden State,” said Jason Wolf, Founder and Managing Principal of WCRE. “David brings WCRE strong relationships with leaders throughout the region as well as the ability to establish new ones. We are very excited to bring our clients these new possibilities.”

About WCRE

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

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

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WCRE 2018 THIRD QUARTER REPORT

SUMMER SLOWDOWN SLIGHTLY COOLS SOUTHERN NEW JERSEY & PHILLY COMMERCIAL REAL ESTATE MARKETS

Activity and Prospecting Both Take a Dip

October 11, 2018 – Marlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the Southern New Jersey market took an expected pause in the third quarter of 2018. Leasing and sales dropped off somewhat from their earlier pace, but the market still shows overall solid fundamentals, continued new investments from outside of the region, and economic inflows to support local expansion.

“A lot of the positive trends we’ve been tracking for several quarters are still in place, so there are reasons to stay bullish,” said Jason Wolf, founder and managing principal of WCRE. “But activity did cool off noticeably, at least in part due to summer.”

There were approximately 274,931 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was down about 10.5 percent compared to the previous quarter. The sales market stayed active, with about 1.43 million square feet on the market or under agreement. This metric was essentially unchanged.

New leasing activity accounted for approximately 32 percent of all deals. Overall, gross leasing absorption for the quarter was in the range of approximately 194,282 square feet.

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Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 11.3 percent, which is nearly one point higher than the previous quarter.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$15.00/sf NNN or $20.00-$25.00/sf gross for the deals completed during the quarter. These averages have stayed near this range for most of 2018.
  • Vacancy in Camden County increased to 12.3 percent for the quarter.
  • Burlington County vacancy was up more than a full point to 10.4 percent, after falling during the first half of the year.

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

Highlights from the first quarter in Pennsylvania include:

  • The vacancy rate in Philadelphia’s office market inched up to 8.1 percent in the third quarter. It stood at 7.9 percent in Q2 2018. Demand for office space continues to be strong, and the office vacancy rate is a full point below the national average.
  • Net office space absorption in Philadelphia was down compared to Q2, but still positive, at 443,032 square feet for the quarter.
  • The industrial sector is as strong as ever in Philadelphia. The third quarter saw a further decrease in vacancy rates, to 5.4 percent, net absorption in the range of 6.1 million square feet, and average rents at $5.36 per square foot. All of these figures were improvements over the previous quarter.
  • Philadelphia retail was largely flat in Q3. The vacancy rate ticked up a tenth of a point, to 4.4 percent, while net absorption was negative after three consecutive quarters of very positive absorption. Net absorption was -273,875 square feet. This number was impacted by large stores such as Sears and Bon-Ton shuttering locations.

WCRE also reports on the Southern New Jersey retail market. The third quarter saw consumer confidence inch upward in September after dramatic improvement in August. It is in the range of 18-year highs. The job market is remarkably strong, supporting consumer spending and reverberating through other indicators.

Other highlights from the retail section of the report include:

  • Retail vacancy in Camden County stood at 7.4 percent, with average rents in the range of $15.38/sf NNN.
  • Retail vacancy in Burlington County stood at 8.2 percent, with average rents in the range of $13.84/sf NNN.
  • Retail vacancy in Gloucester County stood at 7.6 percent, with average rents in the range of $14.77/sf NNN.

The full report is available upon request.

About WCRE

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

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

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WCRE APPOINTED EXCLUSIVE AGENT TO MARKET KINGSWAY LEARNING CENTER’S MOORESTOWN AND HADDONFIELD CAMPUS PROPERTIES

Wolf Commercial Real Estate (WCRE) is pleased to announce that it has been retained by Kingsway Learning Center as exclusive agent for the sale and marketing of 144 Kings Highway West, Haddonfield, New Jersey and 244 West Route 38 Moorestown, New Jersey. This high-profile institutional disposition assignment also includes advisory duties for the properties, which are located in the affluent towns of Haddonfield and Moorestown.

The Haddonfield location consists of approximately 50,000 square feet and is situated on 2+ acres. The property is positioned in the downtown business district along Kings Highway. Surrounded by residential homes and an exuberant amount of retail, restaurants and amenities, this property is ideally positioned to be utilized as another school, office headquarter or redeveloped into alternative uses within a prestigious town within Camden County.

The Moorestown location is positioned on Route 38 and consists of 33,000 square feet and is situated on 4 acres of property. This single-story office building offers tremendous visibility with convenient proximity to The New Jersey Turnpike, Route I-295 and front along Route 38 providing for outstanding curb appeal and visibility.

Kingsway Learning Center will be working closely with WCRE to make sure they are considering all options. “For us, this is about community. We will work to ensure that the entity that lands on this site will be a great addition to these high-profile neighborhoods,” said Jason Wolf, founding principal of WCRE.

This assignment adds to WCRE’s growing number of partnerships with institutional and healthcare clients in Philadelphia and Southern New Jersey. It is the firm’s second engagement with Kingsway Learning Center. Earlier this year, WCRE helped facilitate their consolidation of Kingsway’s Moorestown and Haddonfield campuses into a new site in Voorhees, New Jersey. The school leased a 73,000 square foot building at 1000 Voorhees Drive with plans to relocate its pre-school, elementary, and secondary programs for its 175 students to a single site starting with the 2018-2019 school year.

“We look forward to working with an organization whose values align so closely with ours,” said Phil Rodriguez, COO of Kingsway Learning Center.

WCRE’s Chris Henderson, vice president and principal said, “WCRE is proud to partner with Kingsway as our latest institutional relationship in Southern New Jersey. We look forward to applying our WCRE 360 marketing approach to find the right users for these highly-desirable properties.”

WCRE’s institutional specialist team of Chris Henderson and Jason Wolf will be working closely together with Kingsway Learning Center on this disposition initiative.

A marketing brochure is available upon request.

Learn more about Wolf Commercial Real Estate at www.wolfcre.com and Kingsway Learning Center at www.kingswaylearningcenter.org.

About WCRE

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

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

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Understanding New Jersey Liquor Licenses

New Jersey Liquor Licenses

New Jersey Liquor Licenses

Let’s examine the changing landscape of New Jersey liquor licenses. There is no denying the restaurant industry and retail sectors of commercial real estate are undergoing major shifts brought on by changing consumer shopping patterns and tastes. With the rise of e-commerce, the need to visit physical locations has diminished and retailers increasingly need to offer a unique experience or destination in order to attract customers. This, combined with changing dining habits and palates that desire more convenient and varied food and alcohol options, has expanded the alcoholic beverage industry through the country, including in New Jersey.

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With this increased interest and its impact on retail spaces, it is important for landlords, property owners, brokers and other real estate professionals to have a basic understanding of New Jersey liquor licenses.

Restaurants, bars and liquor stores cannot sell, buy or serve alcoholic beverages in New Jersey without the applicable legally required license or permit. There are different categories of New Jersey liquor licenses, but the most relevant for retail purposes are (i) plenary retail consumption licenses, which are used at bars and restaurants to permit the sale of alcoholic beverages for on-site consumption, often referred to as “33” or “32” licenses; and (ii) plenary retail distribution licenses that allow for the sale of alcoholic beverages in original containers for off premises consumption, known generally as package good stores or “44” licenses. In New Jersey, licenses are generally issued and regulated at the municipal level, subject to further approval, oversight and enforcement by the State’s Division of Alcoholic Beverage Control.

The number of retail consumption and distribution licenses available in a municipality is dictated by the size of the population. New licenses can only be issued where updated Federal Census data warrants the creation of a new license, and the local issuing authority must follow specific methods established by New Jersey statute and regulations for awarding a new license. Consequentially, the pool of available licenses in a municipality is limited and the overwhelming majority of New Jersey liquor licenses must be purchased through private transactions. The price for a license is determined by supply and demand, with licenses in highly sought after municipalities being quite expensive. The limited supply and high price of liquor licenses in our State is somewhat unique, with many other jurisdictions having separate beer and wine only licenses widely available for restaurants or quick food concepts. Indeed, because of the way the liquor license industry works in New Jersey, some restaurant concepts that include wine and beer sales in their operating model in other jurisdictions find they are not able to similarly operate in New Jersey because either a license is not available or it is cost prohibitive. Landlords and brokers should be cognizant of this when considering attracting out of state restaurants or other alcoholic beverage businesses to a property.

Existing New Jersey liquor licenses are purchased through a transfer process by which the purchaser files a personto-person transfer application (and a place-to-place application when locating a license at a new premises) with the municipality or other local issuing authority. The local issuing authority then reviews the transfer application and performs due diligence on the purchaser, including investigations and criminal background checks on any individuals holding an interest in the license. Local issuing authorities must confirm that a purchaser is not disqualified from holding an interest in a liquor license, that the transfer does not violate applicable laws, and that the source of the funds used to purchase the license is legitimate. In addition to evaluating a purchaser, notice of the transfer must be published in local newspapers, and the transfer must be scheduled for public hearing and approved by the local issuing authority at the public hearing. A purchaser cannot utilize a liquor
license until its transfer is formally approved by the local issuing authority. Moreover, a transfer cannot be conditionally approved or approved subject to the satisfaction of certain contingencies.

Once a liquor license transfer is approved it cannot be undone except by accomplishing another transfer. Given this process, real estate owners and other professionals must be mindful of timing and should include adequate approval time periods and extension rights in contracts and leases involving liquor licenses. Closings on New Jersey liquor licenses are typically completed in escrow since (1) the purchaser cannot make use of the license until it is approved and thus does not want to pay the purchase price over to the seller until it has received formal approval, and (2) the seller cannot undo a transfer once approved and therefore usually requires that funds be deposited in escrow prior to the hearing to ensure that the purchaser pays for the license. As such, parties should carefully address specific escrow and closing instructions in their agreements. Where a landlord
holds the license and expects it to run with the shopping center, special attention must be paid to the arrangement between landlord and tenant concerning the license at lease expiration or termination.

Besides the more traditional New Jersey liquor licenses discussed above, property owners are increasingly encountering local winery and craft brewery establishments as tenants. These licenses are issued by the State directly and are subject to their own separate regulations. Similar to plenary retail licenses, property owners and others need to be aware of the unique issues present in the alcoholic beverage industry.

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WCRE 2018 SECOND QUARTER REPORT

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

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

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

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

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

Other office market highlights from the report:

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

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

Highlights from the second quarter in Pennsylvania include:

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

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

Other highlights from the retail section of the report include:

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

The full report is available upon request.

About WCRE

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

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

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WCRE 2018 FIRST QUARTER REPORT

SOUTHERN NEW JERSEY & PHILLY CRE MARKETS SEE MODERATE GAINS AMID TAX REFORM OPTIMISM AND FINANCIAL MARKET SHAKINESS

April 10, 2018 – Marlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the Southern New Jersey market is in largely good shape, with moderate gains in leasing activity and strong fundamentals. The firm believes the market may be poised to take off as benefits of the new tax law begin to reverberate in personal and corporate checkbooks.

Download Printable Report (PDF)

“Our market appears to have picked up steam, with a healthy pace of business growth and continuing new investment,” said Jason Wolf, founder and managing principal of WCRE. “Despite corrections ending a long winning streak in the financial markets, the benefits of the new tax law should shore up commercial real estate, especially industrial and office demand.”

There were approximately 272,550 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was a gain of 23 percent over the previous quarter. Leasing picked up, and the sales market stayed active, with about 1.63 million square feet on the market or under agreement and an additional 320,691 square feet trading hands. The sales figure is a 36 percent increase over the previous quarter.

New leasing activity accounted for approximately 77.2% percent of all deals. Overall, net absorption for the quarter was in the range of approximately 105,250 square feet. Both of these figures represent large increases over the fourth quarter.

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 11.2 percent, which is more than a full point higher than the previous quarter. This may be attributed to large blocks of space returning to the market.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.50/sf NNN or $20.00-$24.50/sf gross for the deals completed during the quarter. These averages have stayed within this range for most of this year.
  • Vacancy in Camden County improved steadily last year, but jumped nearly a point to 12.5 percent for the quarter.
    Burlington County vacancy was at 9.9 percent, which was also higher than the fourth quarter.

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

Highlights from the first quarter in Pennsylvania include:

  • Philadelphia’s office market saw a decrease in vacancy in the Central Business District during 2017 and Q1 2018, as demand for office space continues to be strong. Still, we see increasing employment and new construction, both of which bode well for continued strength.
  • Comcast’s second office tower, the Comcast Innovation and Technology Center, is a 59-story (1,121 feet), LEED Platinum certified skyscraper developed by Liberty Property Trust. The development, positioned in the heart of the CBD, will also include a Four Seasons Hotel. The project is estimated to cost $1.2 billion, is expected to be the tallest building in the United States outside of New York and Chicago, and will be the largest private development project in the history of Pennsylvania. Net of the hotel, the property is planned for 1,336,682 SF of office space. Comcast has signed a 20-year lease for 98% of the building, with the remainder available for lease. However, Comcast may fill the remaining space themselves.
  • The project is estimated to cost $1.2 billion, is expected to be the tallest building in the United States outside of New York and Chicago and will be the largest private development project in the history of Pennsylvania. Net of the hotel, the property is planned for 1,336,682 SF of office space. Comcast has signed a 20-year lease for 98% of the building, with the remaining available for lease. However, like with the Comcast Center original headquarters, they potentially may fill the remaining space themselves.
  • At 2400 Market Street, the new Aramark Headquarters is utilizing the former Philadelphia Market Design Center and will comprise the entirety of floors 5-9 on a long-term lease. Thus, the expansion (new inventory) is effectively 100% pre-leased. Estimated delivery is early 2018.
  • The Philadelphia Planning Commission has approved zoning changes to an area west of 30th Street Station, where Brandywine Realty Trust and Drexel University plan their Schuylkill Yards redevelopment project, a 14-acre district of labs, offices, residences and shopping. There is not a definitive timeline for the project. According to Brandywine, the master plan will comprise a total buildout of 2.8 million square feet of office, 1.6 million SF of residential, 247,000 SF hotel, 1 million SF of lab, and 132,000 SF of retail space. This reflects the bulk of proposed inventory in the Center City submarket.
  • Developer Oliver Tyrone Pulver Corp. is proposing a 38-story office tower on a long-empty lot east of City Hall at 1301 Market Street. It will comprise 841,750 SF upon completion if developed once a lead tenant is secured. The tower would tentatively open in 2020.
  • Demand for multi-family product is demonstrating significant growth, with nearly 2,800 units recently completed, 1,250 units under construction, and 3,200 units proposed in the PA suburbs. Within the Center City market, there are 2,200 units under construction with an additional 6,300 units proposed. Market participants are questioning whether these units will continue to be absorbed. Many high-end apartment complexes are facing concessions and compression in rental rates.
  • Quarter-over-quarter, industrial vacancy in Southeastern Pennsylvania was flat at 6.8%. The market’s largest yearly occupancy gains were recorded in Bucks County, where positive absorption totaled 709,530 square feet, and Delaware County, where 233,633 square feet was absorbed. The year’s largest moves were Almo and Amazon occupying 300,000 and 104,000 square feet of warehouse space along Cabot Boulevard in Bucks County in the second quarter.
  • Philadelphia County recorded 169,134 square feet in negative yearly absorption. The increased demand for warehouse and distribution space from e-commerce firms has focused on larger scale properties and newer buildings, both of which are in low supply. E-commerce and logistics warehouses may require anywhere between a few hundred thousand square feet to over 1 million square feet, but the tightness of Philadelphia’s industrial market means that many companies are starting to look outside the city to fulfill their space needs.

WCRE also reports on the Southern New Jersey and Philadelphia retail market.

The first quarter saw a continuation of the unfortunate trend of legacy brands such as Toys R Us and Sears closing stores and/or filing for bankruptcy protection. However, there was good development news in the region, with several healthcare, entertainment, and retail projects receiving approval. Other highlights from the retail section of the report include:

  • Retail vacancy in Camden County stood at 8.4 percent, with average rents in the range of $13.75/sf NNN.
  • Retail vacancy in Burlington County stood at 10.4 percent, with average rents in the range of $14.24/sf NNN.
  • Retail vacancy in Gloucester County stood at 7.0 percent, with average rents in the range of $14.83/sf NNN.

The full report is available upon request.

About WCRE

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

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

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The Future of Solar in New Jersey

The Future of Solar in New JerseyThe future of solar in New Jersey is looking very bright. The state solar program has been generating investments. We’re taking a look at the future of solar in New Jersey.

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By: Keith Peltzman, President of Independence Solar

The New Jersey state solar program stimulates approximately $1 billion of investment annually. This level of investment is supported by the trading of SRECs (Solar Renewable Energy Certificates) mandated by the state RPS (Renewable Portfolio Standard). Although this mechanism has driven a stable level of investment over the last 10 years, there is always an underpinning of a potential crash in SREC prices due to oversupply – as occurred briefly in 2012.

In order to protect against future volatility in the SREC market, the solar industry in NJ is working on two new state programs to ensure the stability of the solar markets for the next 15 years:

1. Transition Program (2018-2021)
2. Long-Term Successor Program (2021-2033)

The Future of Solar in New Jersey

1. TRANSITION PROGRAM (2018-2021)

The transition program is structured to ensure that the SREC remains stable over the next three years while a longer-term successor program is enacted. This transitional program (Senate Bill S-592) has not yet passed, but key provisions include:

  • Increasing the solar requirement from 3.5% to 5.3% (2021) to ensure stable SREC values
  • Reducing the lifetime of an SREC from 15 years to 10 years
  • Phasing-out SRECs for projects after June 2021
  • Reducing the maximum ceiling price of SRECs
  • Requiring a deposit of $40/kW upon SREC application to help the state maintain market balance

2. LONG-TERM SUCCESSOR PROGRAM (2021-2033)

Solar stakeholders in NJ are exploring options for a long-term successor program to replace the existing RPS/SREC mechanism. The goal would be to continue to stimulate long-term investment in solar energy with a stable incentive, while minimizing the impact to NJ residents and businesses. Most of these options are already being implemented by other states – such as MA, NY, CA, CT. Over the next two years, NJ can observe how these state programs perform and can adopt successful aspects of each program. Some options that are currently being considered include:

  • SREC II (5-year SREC with segment factoring/adders)
  • Tariff (fixed payment by segments for 20 years)
  • Block Grant (capacity based payments)
  • Reverse-Auctions (project bids on their incentive)

The long-term successor program will have a significant impact on the viability of a solar energy economy in the state of NJ. The niches for solar energy development may differ significantly from today. For example, there may be greater opportunity for larger utility-scale projects on farmland and landfills, for shared community solar projects on ancillary land or for pairing solar with battery storage. If you are considering solar in New Jersey, please connect with an experienced solar partner like Independence Solar who can help navigate the future of solar energy in New Jersey.

Keith Peltzman

Keith Peltzman
President & Founder
1008 Astoria Boulevard
Suite E
Cherry Hill, NJ 08003
856.393.1250

 

About Us

Independence SolarKeith Peltzman is president and founder of Independence Solar with offices in Cherry Hill, NJ and Boston, MA.

Independence Solar is a turnkey installer of commercial solar energy. Since 2007, the team has developed and built over $200 million of solar projects, including the largest rooftop solar array (9 MW) in North America at the Gloucester Marine Terminal in NJ. Independence Solar forges long-term partnerships to maximize returns on our customers’ solar energy investments.

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New Jersey Marijuana Reform Presents Commercial Real Estate Opportunities

New Jersey Marijuana Reform

New Jersey Marijuana Reform

Let’s look at New Jersey Marijuana Reform and Commercial Real Estate. Governor Phil Murphy campaigned on a pledge to fully legalize marijuana in New Jersey. On January 23, 2018 he signed an Executive Order directing a complete review of New Jersey’s existing medical marijuana program within 60 days, which sets the stage for legalizing recreational marijuana. Presently, only medical marijuana is legal under a New Jersey law enacted in January 2010. Likely marijuana reform presents unique real estate investment opportunities and will probably increase the demand for commercial and industrial real estate. However, there are significant risks that must be carefully considered before making any investment decisions, including criminal and civil liability (including property seizure) if federal laws are enforced, and a limited number of potential lenders and buyers.

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Opportunities Associated with New Jersey Marijuana Reform

New Jersey Marijuana Reform presents a unique opportunity to be capitalized upon by risk tolerant investors willing to invest in real estate and benefit from the cannabis trend. Vacancy rates may decline based on the experience in other states following marijuana legalization and expansion, where cannabis suitable commercial real estate became hot commodities.

For example, in four states with legalized recreational cannabis (i.e. California, Colorado, Oregon and Washington), industrial real estate prices surged. In some Denver neighborhoods, the average asking lease price for warehouse space reportedly jumped by more than 50 percent from 2010 to 2015. Industrial space has been in high demand due to both marijuana growers and manufacturers seeking industrial warehouses to cultivate and process their product. Commercial real estate prices have also experienced double digit annual increases in some markets.

Risks Associated with New Jersey Marijuana Reform

The federal government does not recognize a legitimate medical use of cannabis and can impose criminal or civil liability under the Controlled Substances Act. Marijuana is currently classified as a Schedule I drug, which puts it
under the same category as heroin, cocaine, peyote, meth and fentanyl. It is currently illegal under federal law
to lease or rent real estate for the purpose of manufacturing or distributing any controlled substance. However,
the Department of Justice can direct the enforcement of these laws differently between administrations, as the
Obama Administration issued guidance discouraging the enforcement of federal marijuana laws in states where it had been legalized. United States Attorney General Jeff Sessions has long been strongly opposed to the legalization of marijuana and there is a fear of federal enforcement among owners, developers and lenders as long as the federal and state positions remain at odds. It is tough to make long term real estate investments without clarity predicated on the assumption that the federal government will not enforce its own laws.

Banks traditionally answer to federal regulators and risk losing their licenses by dealing with marijuana businesses. Federal banking laws also prevent banks from lending to or accepting deposits from illegal businesses. The federal government is also allowed to seize property. Thus, obtaining financing from traditional sources and collecting rents is difficult. Borrowing costs will therefore likely be higher than a typical real estate transaction, and tenants may be limited to properties that are owned free and clear of traditional financing.

Therefore, many companies that get into the marijuana business try to buy and control their own real estate. If the state approves expansion, it will probably issue licenses allowing business to legally sell recreational marijuana in designated places, and businesses must find a local jurisdiction that will allow them to operate.

Towns will need to change their zoning ordinances to allow for such uses.

What Does This Means for Commercial Real Estate Investors?

Higher risks will likely translate into higher rents for commercial and industrial landlords based on anecdotal evidence seen in California, Colorado, Oregon, Washington and other states that have permissible marijuana laws. Developers, landlords and investors with a suitable risk tolerance should closely follow the state’s progress in introducing and passing legislation to accomplish Governor Murphy’s goals and evaluate potential opportunities and risks. They should also monitor subsequent municipal efforts to accommodate such uses by amending their zoning ordinances, and work to identify potential opportunities in suitable locations.

The contents of this article are for informational purposes only and none of these materials offered are, nor should be construed as, investment advice, legal advice or a legal opinion based on any specific facts or circumstances.

kenneth-morgan

 

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New Jersey Construction Lien Law

New Jersey Construction Lien LawLet’s take a look at New Jersey Construction Lien Law. For builders and contractors alike, the words “construction lien” can be anxiety inducing. Contractors, on the one hand, know that a lien can be a valuable tool for recovering outstanding money; however, the requirements of a New Jersey Construction Lien Law claim are not intuitive, and failure to strictly comply with statutory requirements may result in a waiver of lien rights. Owners, on the other hand, know that encumbrances, even wrongfully filed ones, may threaten the timing of a transaction and cause unforeseen expenses.

The New Jersey Construction Lien Law, N.J.S.A. § 2A:44A:1 et. seq. (“Lien Law”), contains many specific provisions and must be carefully followed. A few essential pointers are highlighted below.

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New Jersey Construction Lien Law for Claimants:

1. The filing requirements for lien claims in commercial and residential projects are very different. For commercial construction projects, a lien claim must be filed in the county where the project is located within 90 days of the last date that work, services or material were provided to the project. For residential construction projects, a Notice of Unpaid Balance (“NUB”) is a prerequisite to the filing of a lien claim and must be filed within 60 days of the last date that work, services, or material were provided. There are numerous additional requirements that flow from these preliminary deadlines. Claimants must be cognizant of the type of job they are performing in order to ensure that they do not violate filing deadlines.

2. Be aware of the “last date” of work. Under the Lien Law, the “last date” on which work, services or materials were provided marks the date on which the clock starts ticking on a contractor’s right to file a lien. For practical purposes, contractors should interpret the “last date” as the date on which they achieve substantial completion. Contractors often mistakenly assume that because they were still “on the job,” that the clock did not start to run on their lien rights. This is an incorrect assumption. “Punch list,” warranty, or other corrective work will not extend the deadline for the filing of a lien claim or notice of unpaid balance.

3. Be sure that the contract and all change orders are accepted in writing. Contractors have no right to file a lien claim in connection with work that was not performed pursuant to an executed contract or change order. Handshakes and verbal directives in the field will not pass muster, regardless of whether the work was accepted and approved. Contractors that do not have written agreements may be able to recover payment through a separate lawsuit for breach of contract, however, they will not have lien rights.

4. Do not forget to actually file suit on the lien claim, and to do so on time. A lien claim is a pre-requisite to a lawsuit, but it is not an actual lawsuit. Short of settlement, in order to obtain payment after the filing of a lien claim, the claimant must file a legal action based upon the lien claim. This must be done, not within 1 year of the filing of the lien claim, but within 1 year of the last date of work. It is critical that a claimant understand this distinction and meet the deadline for filing.

New Jersey Construction Lien Law for Owners:

1. Obtain a lien release and waiver with each payment. Owners should not make payments for work, services
or material without simultaneously receiving corresponding progressive, written lien releases and waivers
from their contractors and suppliers. Contractors should, in turn, should be required to obtain releases and waivers from their own subcontractors and suppliers.

2. Consider using joint checks. Making payment by joint check can help ensure that funds reach their intended destination and prevent claims for non-payment by lower tier subcontractors and suppliers.

3. Consult with counsel to scrutinize the filing. Experienced counsel will be able to determine whether any number of substantive or technical requirements have been violated by a given lien claim, including but not limited to: filing deadline errors, service errors, improper identification of the property or project, whether a balance is overstated, whether a claimed balance is based upon a sufficient writing, and whether the claimant is a proper claimant given its tier. Claimants who file improper or overstated lien claims may be forced to pay costs associated with discharging the wrongfully filed lien, such as attorney’s fees.

4. Post a bond. Particularly in instances in which a property is pending sale or transfer, the owner or its contractor (if the lien is filed by a lower tier subcontractor) may post a bond with the clerk of the county where the lien was filed in an amount equal to 110% of the lien claim. The county clerk will then mark the lien as discharged. The claimant’s rights will be unaffected, but the property will be free of the lien, and the pending transaction should be able to proceed. There are carrying costs associated with the posting of a bond; however, use of a bond can be a valuable tool in many instances. If a bond is posted, consider the option of demanding that the claimant file suit within 30 days in order to accelerate resolution of the matter.

The Lien Law is a highly technical statute with numerous requirements; however, when used correctly, it can be a tremendous vehicle for recovery. Claimants and owners should always confer with counsel in order to ensure that their rights and interests are effectively guarded.

Want More Information on New Jersey Construction Lien Law?

The contents of this article are for informational purposes only and none of these materials is offered, nor should be construed, as legal advice or a legal opinion based on any specific facts or circumstances.

Contact Us

Daniella Gordon

 

Daniella Gordon, Esquire
Hyland Levin LLP
6000 Sagemore Drive, Suite 6301
Marlton, NJ 08053-3900

(p) 856.355.2915
(f) 856.355.2901

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2018 New Jersey Property Tax Appeal Reminder

2018 Property Tax Appeal ReminderNew Jersey Property Tax Appeal Reminder – During the next several weeks, New Jersey real property taxpayers will receive their annual (property tax) green postcards indicating 2018 assessments. The period to file a challenge to a 2018 assessment runs from February 1 to April 1, 2018. The April 1 deadline may, however, be adjusted to the later date of 45 days from the bulk mailing of the green postcards and in municipalities where there is a revaluation, the deadline may be May 1, 2018. It is the amount of the assessment – not the property tax amount – that can be challenged. A taxpayer may be entitled to a reduction if the assessment (after applying the municipality’s equalization ratio) is more than 15 percent higher than the fair-market value as of the valuation date: October 1, 2017. A prerequisite to filing an appeal is the payment of all property taxes and other municipal charges through the first quarter of 2018. Failure to respond to a property tax assessor’s prior request for income and expense information (known as Chapter 91 requests) makes a property tax appeal subject to dismissal, regardless of the appeal’s merits. Assessments greater than $1,000,000 may be challenged directly with the Tax Court of New Jersey or filed with the applicable County Board of Taxation.

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We are available to review the assessments and property tax exemptions of New Jersey retail, office, industrial and commercial properties.

WCRE is a full-service commercial real estate brokerage and advisory firm specializing in office, retail, medical, industrial, and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial landlords, tenants, investors, developers, banks, commercial loan servicers and companies, guided by our total commitment to our clients and our community. Our team is devoted to building successful relationships, and we provide each client the highest levels of responsiveness, attention to detail, and communication even after the transaction is complete.

In 2014, 2015 and 2016, WCRE was selected by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, to receive a CoStar Power Broker TM Award. This annual award recognizes the “best of the best” in commercial real estate brokerage by highlighting the firms and individual brokers who closed the highest transaction volumes in commercial property sales or leases within their respective markets. WCRE received the Top Brokerage Firm award for their region.

Our rapid growth is proof that our approach works. We now oversee more than 175 properties comprising 3.9 million square feet under our exclusive representation and management. But while these numbers are impressive, we know that numbers are only part of our story. We are even more proud to have built a company that has become an indispensable part of our community and earned the trust of many of the most influential players in our region.

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