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Office Occupancy Hits New Pandemic-Era High

Despite the lingering effects of Thanksgiving dinners across the nation, more workers returned to office buildings in the first week of December than at any point in the last 18 months.

Average office building occupancy across the 10 largest office markets rose to 40.6% on Dec. 1, 8.1% higher than the post-holiday week last year, according to Kastle Systems, which tracks electronic keycard, fob and building access data.

Texas and California continue to be at the extremes in office return: Austin and Houston, at 59.3% and 54.9% of pre-pandemic levels, respectively, have the most heavily trafficked office buildings, while San Francisco saw occupancy hit a pandemic high-water mark of 28.3%.

While the coronavirus’s delta variant continues to spread and send cases rising nationally, fresh concerns have arisen over the omicron variant, with early reports suggesting the new variant is more contagious and less deterred by vaccines, although possibly less severeNineteen U.S. states have thus far reported cases of people affected by omicron.

The average office occupancy in Kastle’s 10-city barometer has been steadily increasing since September, when 33.6% of employees were back in the office. The legal industry has led the way in returning to the office, with law firms on average 56.3% occupied nationally.

While patrons have been filling up restaurants and fans have been crowding sports stadiums and concert halls, the return to the office has lagged, Kastle Chairman Mark Ein said. That dynamic has much to do with the C-suite, whose members feel a responsibility toward their employees and are reluctant to rush a return to the office.

*Article courtesy of Wall Street Journal

For more information about New Jersey or Philadelphia health care space, industrial space, retail space, office space, land 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 cannabis, healthcare space, office space, retail space, land 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.  

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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Electric-vehicle manufacturing may rev up already busy industrial market

Some of the most high-profile warehouse — and economic development — deals in the U.S. today are in the electric vehicle space.

Whether it’s Tesla Inc.’s (NASDAQ: TSLA) 4-million-square-foot manufacturing facility in Austin, Texas; Ford Motor Co.’s (NYSE: F) three planned battery factories totaling $11 billion in investment and an upcoming Toyota Motor Corp. (NYSE: TM) U.S. battery-production center, it’s clear the market is having a moment right now.

Although the billion-dollar investments churn the most headlines, there are plenty of smaller, younger players elbowing their way into the space, too. British EV manufacturer Arrival Ltd. is building electric-vehicle “microfactories” in the Charlotte, North Carolina, market, and Newark, California-based Lucid Group Inc. recently kicked off production at its first EV factory in Casa Grande, Arizona.

So what does the growth of electric-vehicle manufacturing in the United States mean for the industrial sector?

Doug Ressler, manager of business intelligence at commercial real estate research firm Yardi Matrix, said the sector remains in an embryonic state but expects it to grow significantly, especially in the next 12 to 18 months. Demand will likely start to stabilize after that, he added.

Automakers in the EV space are planting facilities around the country, but a few geographic areas stand out. Some companies are reinvesting in the Rust Belt while Arizona and Texas, popular state for such projects historically, continue to see a big share of investment. Areas in the Southeast are also benefitting, such as Memphis, Tennessee, where Dearborn, Michigan-based Ford and SK Innovation Co. Ltd. out of South Korea are investing $5.6 billion at 3,600-acre campus to produce Ford’s F-series all-electric trucks.

 

*Article courtesy of Philadelphia Business Journal

For more information about New Jersey or Philadelphia health care space, industrial space, retail space, office space, land 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 cannabis, healthcare space, office space, retail space, land 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.  

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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WCRE THIRD QUARTER 2021 REPORT

SOUTHERN NEW JERSEY & PHILLY MARKETS’ ANTICIPATED COMEBACK DELAYED BY DELTA VARIANT

Investment Activity & Large Transactions Regained Steam, While Industrial Continued To Lead The Way

Commercial real estate brokerage WCRE reported in its analysis of the third quarter that the Southern New Jersey and Southeastern Pennsylvania markets will have to wait a bit longer for the post-pandemic recovery. While CRE seemed to rebound along with the broader economy earlier this year, the Delta variant caused havoc in recent months.

Download Printable Report (PDF) >>>

At the beginning of 2021, with vaccines and optimism becoming widespread, many employers looked ahead to the week after Labor Day as the beginning of the official return to the office. The emergence of the Delta variant and breakthrough infections pushed the return date into 2022. The effects of this shift have reverberated throughout the economy, including the office and retail CRE markets.

“A few months ago, CRE performance was trending in a positive direction and seemed poised for a return to pre-pandemic levels,” said Jason Wolf, founder and managing principal of WCRE. “While we are in a very positive investment transaction market, the Delta variant has put the office and retail markets into a holding pattern, but a comeback should still be on the horizon.”

In the third quarter there were approximately 225,717 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), a bit below the previous quarter.
New tenant leases comprised approximately 119,213 square feet, or about 53% of all deals for the three counties.

Other office market highlights from the report:

● Overall vacancy in the market is now approximately 12.75 percent, an improvement of .85 of a point from the previous quarter.

● The sales market maintained momentum, with 1,200,393 square feet actively on the market or under agreement.

● There were $70,164,500 in completed sales comprising 709,032 square feet during Q3.

● Average rents for Class A & B product remain unchanged, as they 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 hovered near this range for more than a 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 third quarter in Pennsylvania include:

● The vacancy rate in Philadelphia’s office market remained unchanged in Q3, still at 10.3% after hovering near a 20-year low for months. For the past few months, nearly 15% of the total office space in Philadelphia has been listed for sale or lease.

● As in many recent reports, the industrial sector in Philadelphia continued its impressive run, buoyed by its integral role in e-commerce. The last year saw a remarkable 15.8 million SF of net absorption and 11.7% rent growth.

● Retail remains the sector most responsive to market conditions, but it has also proved to be the most adaptable. Average retail net absorption in Philadelphia went into a tailspin when the pandemic began, but for the 12 months just concluded, it is back in positive territory, at 273,000 square feet.

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

● The Consumer Confidence Index declined steadily throughout the third quarter after posting five consecutive months of increases.

● Retail vacancy in Camden County posted a huge improvement of more than three points to 10.7 percent, while average rents fell more than one dollar, in the range of $11.81/sf NNN.

● Burlington County retail vacancy improved more than a point to 8.3 percent. But it is still above 7.6 percent, where it stood a year ago. Average rents dropped to the range of $13.93/sf NNN.

● Gloucester County posted a decrease of two points, to 14.5 after increasing throughout last year, with average rents virtually unchanged in the range of $14.04/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.comwww.phillymedicalspace.com and www.phillyretailspace.com

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Cooling Off as the Delta Variant Strikes

Signs are mounting that economic conditions are softening, putting economic growth at risk of moderation. Several reports measuring consumer behavior, business activity, and the housing market released last week showed just that. Moreover, most of these reports reflect conditions in July, before COVID cases began to significantly rise and threaten households and businesses with new rounds of restrictions.

Consumers Pull Back

The highlight of the week came early with the release of July retail sales, which reported a 1.1% decline over the month, the third monthly decline this year. Consumers continue to shift spending away from durable goods that they stocked up on during the worst of the pandemic, such as cars, furniture, and home improvement products, to in-person services, many of which are not even included in retail sales numbers, such as spending at hotels, motels, travel agencies, entertainment venues, and salons. 

Sales at bars and restaurants, which are included in the report, rose for the fifth month in a row, climbing by 1.7% in July, and sales at gasoline stations were up by 2.4% as more people took to the road for summer travel. Spending at auto dealerships fell by 3.9% in July, at building materials stores by 1.2%, and at furniture and home furnishing stores by 0.6%. Clothing sales fell unexpectedly by 2.6% in July after ratcheting up in June in what was thought to be a sign of a return-to-office wardrobe refresh.

Later in the week, consumer sentiment figures in the University of Michigan’s Survey of Consumers declined to multi-year lows. Consumer confidence fell sharply to its lowest level since December 2011, mostly due to the spread of the delta variant and its potential to slow economic growth, while inflation fears were also growing. Consumers indicated weakening confidence in both current economic conditions and expectations.

*Article Courtesy of Costar 

For more information about New Jersey or Philadelphia health care space, 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 cannabis healthcare space, 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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WCRE SECOND QUARTER 2021 REPORT

WCRE SECOND QUARTER 2021 REPORT: SOUTHERN NEW JERSEY & PHILLY MARKETS FOCUS ON LIGHT AT THE END OF THE TUNNEL

As the COVID-19 Threat Recedes, Good Economic News Helps Shore Up CRE 

WCRE SECOND QUARTER 2021 REPORTCommercial real estate brokerage WCRE reported in its analysis of the second quarter that the Southern New Jersey and Southeastern Pennsylvania markets are cautiously entering the post-pandemic recovery. Although there are still lingering issues, CRE seems to be rebounding along with the broader economy.

“Fundamentals are tracking in a positive direction, and while various challenges remain, conditions are in place that point to a return to pre-pandemic CRE performance,”

said Jason Wolf, founder and managing principal of WCRE.  There were approximately 233,544 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), and while this figure is not indicative of a rebound, it marks the return of net positive absorption. New tenant leases comprised approximately 123,358 square feet, or about 53% of all deals for the three counties. During the previous quarter, this figure was only 8% of the total.

Download Printable Report (PDF) >>>

Other office market highlights from the report:
• Overall vacancy in the market is now approximately 13.6 percent, virtually unchanged from the previous quarter, and holding steady two points higher than at this point last year. 

• The sales market picked up momentum, with 1,257,385 square feet actively on the market or under agreement.

• Average rents for Class A & B product remain unchanged, as they 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 hovered near this range for more than a 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 second quarter in Pennsylvania include:

• The vacancy rate in Philadelphia’s office market ticked upward again in Q2, and now stands at 10.3%, after hovering near a 20-year low for months. Nearly 15% of the total office space in Philadelphia is listed for sale or lease.

• The industrial sector in Philadelphia remained the bright spot, buoyed by its integral role in the new types of commerce necessitated by the health and safety measures. The last year saw a staggering 9.9 million SF of net absorption and 10.1% rent growth.

• Retail remains the sector most responsive to market conditions, but it has also proved to be the most adaptable. Some essential categories of retail thrived by innovating at the point-of-sale. Average retail net absorption went into free fall during the pandemic, but for the 12 months just concluded, it is -991,000 square feet. While this is a large negative number, it indicates an improvement of several hundred square feet for Q2.

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

• The Consumer Confidence Index has been rising steadily since it turned around in February.

• Retail vacancy in Camden County jumped more than three points to 14.3 percent after posting a large increase in the middle of 2020. While average rents rose more than one dollar, in the range of $12.86/sf NNN.

• Burlington County retail vacancy dropped to 9.6 percent, an improvement of more than three quarters of a point. But it is still well above 7.6 percent, where it stood a year ago. Average rents increased slightly, to the range of $14.59/sf NNN.

• Gloucester County saw another quarterly increase, to 16.5 after increasing throughout last year, with average rents virtually unchanged in the range of $14.08/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 ww.southjerseyofficespace.com, www.southjerseyindustrialspace.comwww.southjerseymedicalspace.comwww.southjerseyretailspace.comwww.phillyofficespace.com,  www.phillyindustrialspace.comwww.phillymedicalspace.com and www.phillyretailspace.com

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Petco To Buy Full Veterinary Practices to Boost In-Store Hospital Business in Industry Property Shift

Petco now plans to acquire full veterinary practices with established customers and relocate them into its stores as the nation’s second-largest pet store chain expands its initial strategy of just hiring veterinarians, a move that could change the real estate patterns for the pet health industry at large.

Executives of the San Diego-based company told analysts the acquisition plan goes beyond recruiting individual veterinarians to its growing slate of in-store pet hospitals. The company expects by the end of August to complete the first in a series of purchases of veterinary practices nationwide, at terms expected to be “really attractive,” though the exact number of planned acquisitions is not yet determined.

“As we looked at the market, there are still many, many small one- and two-vet practices that typically don’t get consolidated,” Petco Chief Financial Officer Mike Nuzzo said during the company’s first-quarter earnings call.

“We like the idea of taking an existing vet practice and moving it into our pet care center hospital,” Nuzzo said. “You start with a mature vet hospital, and it gives you a way to accelerate the model.”

Petco and its competitors are seeking to capitalize on trends including rising pet adoptions and sales of pet care products, which accelerated during the pandemic lockdowns of the past year. U.S. consumers spent an estimated $99 billion on their pets in 2020, up from $95.7 billion in 2019 and $90.5 billion in 2018, according to the American Pet Products Association trade group.

Petco CEO Ron Coughlin said Petco this year plans to open 72 new in-store pet hospitals within its existing slate of more than 1,500 stores, up from its previous guidance of 70 for the year. Petco is ultimately looking to have the in-store care centers in at least 900 locations. They are currently established in 137 locations, including more than 40 that debuted during 2020.

Coughlin said the hospitals have been key to establishing customer loyalty, repeat visits and merchandise purchases made during clinic visits. Combined with other initiatives including growing use of third-party delivery services for some items, the hospitals helped Petco generate a company record $1.4 billion in sales during its first quarter ended May 1, up 27% from the year-earlier period.

The company posted net income of $7.6 million, compared with a net loss of $31.2 million in the year-earlier quarter.

Coughlin said another factor aiding sales is industry consolidation. For instance, the CEO said Petco probably gained sales from customers in U.S. regions previously served by Pennsylvania-based retailer Pet Valu, which announced in November that it was shutting down all of its 358 U.S. stores and warehouses.

On the flip side, Michigan-based retailer Pet Supplies Plus announced it plans to open 100 new locations this year, including 40 locations acquired from Pet Valu after its shutdown.

*Article Courtesy of CoStar

For more information about New Jersey or Philadelphia cannabis health care space, 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 cannabis healthcare space, 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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New York, New Jersey Marijuana Legalization May Spark Flurry of Commercial Real Estate Activity

New York and New Jersey passed laws legalizing recreational marijuana roughly within a month of each other this year, moves expected to spur demand for cultivation sites, processing centers and retail dispensaries. But the initial rules for each state creates different opportunities and challenges for commercial real estate.

New Jersey has the jump on its neighbor, with legislation passed by state lawmakers in February, nearly four months after voters overwhelmingly approved legalization, 67% to 33%, in a November referendum. New York followed suit with legalization in late March.

Industry insiders are predicting both states, which already have medical marijuana programs, have the potential to be big markets for cannabis, with some analysts anticipating New York could end up with a bigger marijuana industry than California, one of the earliest states to legalize the drug. Those businesses will need real estate, to lease or own.

While the cannabis market offers great rewards for recreational marijuana operators and potential landlords in New York and New Jersey, there are also risks and uncertainties looming over the business. Neither state has promulgated the final detailed regulations that will govern the industry, for example. The number of licenses that will be issued is uncertain. Municipalities can bar retail sales within their borders or impose their own restrictions. And because operators can only sell marijuana produced within their state’s borders, in some cases demand may outpace supply, stunting the industry’s growth.

Curaleaf Holdings, which already has several sites in New York and New Jersey for medical marijuana, is expecting growth in the region’s recreational market. The Massachusetts company operates dispensaries in other states. (Curaleaf Holdings)

Across the country, states that have legalized the recreational sale of cannabis, including Arizona, Montana and South Dakota, have run into various challenges. Similar to what’s expected in New York and New Jersey, community-level regulations and restrictions on where cannabis can be sold or cultivated vary widely, with companies often competing for a limited number of operating permits. 

And selling recreational cannabis in retail stores comes with a financial hurdle. Because cannabis remains illegal under federal law, transactions often cannot be conducted through bank-connected payment methods such as credit cards.

Still, many remain bullish. Curaleaf Holdings, the self-described biggest “seed-to-sale” cannabis company in the world, referenced the marijuana sales potential in its first-quarter earnings announcement.

“The recent approvals of adult-use cannabis in New Jersey and New York, which are states where Curaleaf has a leading market share, will unlock vast new markets, worth an estimated $2.1 billion and $5 billion in sales respectively,” Boris Jordan, the company’s billionaire executive chairman who has run businesses in Russia, said in a statement.

Bryan McLaren, CEO of Scottsdale, Arizona-based Zoned Properties, a cannabis real estate services firm, said he views New York as the most important state in terms of recreational marijuana because of its population and its status as an international hub for finance and culture.

“California holds the secrets of the past, but it is newly regulated powerhouse states such as New York and New Jersey that now hold the keys to the future,” he said, adding legalization may open the door for heavily populated states such as Texas to follow suit.

Cannabis businesses large and small are looking to open or expand in New York and New Jersey, according to a number of consultants, lawyers, landlords and contractors who are busy fielding their inquiries.

“We have equal interest in New York and New Jersey,” said Anthony Coniglio, president of NewLake Capital Partners, a real estate investment trust based in New Canaan, Connecticut, that owns 25 cannabis facilities in 10 states. “We think the tri-state area is going to be a significant part of the national cannabis industry with significant density. … We’re looking at deals.”

Licenses and Leases

There’s a good reason for that flurry of activity: In order to obtain cannabis licenses in both states, businesses must demonstrate they have a location lined up by providing a lease, deed or sale contract.

“Finding the right property can be your ticket to that license,” said Greg Huffaker III, director of client services for Boulder, Colorado-based Canna Advisors, a consulting firm.

So companies are jockeying to find industrial warehouses where they can cultivate or process cannabis or storefronts where they can sell marijuana on a retail basis or offer on-site consumption.

Because of that rush to find sites, at least during this initial stage, property owners and landlords in New York and New Jersey may have the edge when it comes to cutting deals with cannabis companies. The demand is there, based on a report released last month, in which the National Association of Realtors surveyed its members and found that in states where prescription and recreational marijuana use is legal, 35% to 36% had seen an increased demand in warehouses, 23% in storefronts and 18% to 28% in land.

“If I was owning land or I was owning buildings of a certain size I would be licking my chops because they’re certainly going to be the first ones to go,” Andy Poticha, a principal at Chicago-based Cannabis Facility Construction, said of New Jersey.

His design company recently remodeled a medical marijuana dispensary at 395 Bloomfield Ave. in Montclair, New Jersey, that Ascend Wellness Holdings, a Manhattan-based cannabis company, acquired. Ascend also said it will also be opening a new dispensary at 174 Route 17 N in Rochelle Park, New Jersey.

TerrAscend, a Toronto-based cannabis operator, is already expanding its New Jersey footprint in the wake of the new legislation. It just opened a 6,500-square-foot dispensary, part of its Apothecarium retail chain, at 1865 Springfield Ave. in Maplewood. The site features interactive product displays and a “bud bar” where customers can see and smell flower products before purchasing.

As for New York and New Jersey, it’s too early to predict which state winds up having the long-term advantage and success in drawing marijuana businesses. Neither state has drafted actual detailed regulations yet for their legislation, and those rules are months away from being promulgated, with New Jersey in the lead.

“Definitely, we need to see what the regulatory commissions come up with,” McLaren said. 

Limit on Growing Operations

But some short-term implications of the legalization laws are apparent. As it stands now, New Jersey potentially won’t be home to as many large cultivation sites, indoor growing facilities that typically run from 100,000 to 150,000 square feet, as New York. That’s because the Garden State has capped those licenses at 37, a limit that expires in February 2023. By contrast, New York hasn’t set a limit on its cultivation licenses, although it could at a later date when it issues regulations.

“We are actively talking to operators in both states,” Coniglio said. “I would say that the dialogue in New Jersey is more advanced because some of those are the applicants that think they may soon be getting their license approved. So they’ve identified properties. They’re getting ready to go. New York is definitely more of a wait-and-see approach. Some of the incumbents are certainly thinking about it, but until they truly understand if there will be caps placed on cultivation it’s really hard to understand what group of real estate you’ll need.”

Columbia Care is among NewLake Capital Partners’ tenants. The photo depicts one of the cannabis provider’s dispensaries. (NewLake Capital Partners)

A good portion of New Jersey’s licenses are already spoken for, for existing medical marijuana providers and those that had pending applications in that sector, leaving only about 16 available, according to attorney Jennifer Cabrera, a cannabis law expert at Vicente Sederberg.

“Getting a cultivation license in New Jersey will be incredibly competitive,” she said.

Unlike the early laws legalizing cannabis, such as the one in Colorado, the new batch in states such as New York and New Jersey have social-equity elements that try to compensate communities, particularly those with high percentages of minorities, that were disproportionately impacted by the so-called war on drugs and the historic enforcement of marijuana laws.

So New Jersey will be awarding cannabis licenses — in all categories, from cultivation to retail and processing — to micro businesses, companies that employ no more than 10 employees and have an operation no larger than 2,500 square feet.

In New York, the goal is for 50% of cannabis licenses to go to minority- or woman-owned businesses, distressed farmers or service-disabled veterans.

Large cannabis firms looking for big warehouse space for cultivation sites in New Jersey face a challenge. The Garden State’s industrial market, particularly in North Jersey, has soared and become pricey for tenants because of the demand created by the surge in e-commerce and the state’s central location in the densely populated tri-state region. As a result, some cannabis companies may be priced out of the market or unable to find space. They will most likely have to seek sites in central or south Jersey. 

“The industrial market in New Jersey has been on fire for a decade,” said Nate Brzozowski, a managing director of real estate firm Savills’ integrated consulting strategies group. “They [cannabis companies] will be competing with the Amazons of the world.” 

New York, much larger geographically and less densely populated than New Jersey, has more open and available land upstate for growing facilities, according to Jay Czarkowski, a Canna Advisors founding partner. He has been working with a brokerage in New Jersey for three years scouting sites for medical cannabis cultivation and dispensary sites.

“There is only so much land to go around, we all know,” Canna Advisors’ Huffaker said. “And in a competitive license application, when two competing companies are trying to get a limited number of licenses, that property part can be the differentiator. And not only do you need a great property to get the license, but all the great properties are going to go quicker and sooner for the people who are planning ahead.”

Time is of the essence for cannabis companies, Poticha agreed.

Land Rush

“It’s sort of a gold rush. … They’re searching for land or they’re searching for warehouse space in order to get facilities up and running as fast as they can,” he said. “The thing about the cultivation is that you could do a dispensary in anywhere from four to 12 weeks, depending on the size and the complexity of it. A cultivation or a processing center takes months. And there’s so much more infrastructure that goes into it. … It’s a manufacturing plant, and a very specialized manufacturing plant at that.”

Curaleaf, based in Wakefield, Massachusetts,already has several sites in New Jersey and New York for medical marijuana. And it plans to increase its capacity for adult-use recreational cannabis. 

Last July, citing the then-looming cannabis referendum in New Jersey, Curaleaf CEO Joseph Lusardi in a statement said, “We are actively investing in the expansion of our market-leading position to better serve the more than 9 million residents of the Garden State with the quality cannabis products they rely on.”

At that time, Curaleaf said it had secured a location for an additional cultivation and processing operation in Winslow, New Jersey. The company later told the Wall Street Journal that it is building a 120,000-square-foot indoor cultivation facility and plans to open a 500,000-square-foot outdoor operation in the Garden State.

Curaleaf declined a request from CoStar News to discuss its plans for New Jersey and New York. 

As for dispensaries, the pandemic’s devastating impact on stores and restaurants in the two states — and the vacancies COVID-19 created — may make it possible to strike a better deal for a lease at one of those retail sites, according to experts.

“All of a sudden we’ve got landlords who would not have considered cannabis two years ago looking to fill dark spaces. … The leverage here is much better for [retail] tenants today,” Steven Katkov, an attorney specializing in cannabis law and real estate at Cozen O’Connor.

He’s currently negotiating a lease for a 2,000-square-foot cannabis dispensary in the Union Square area of Manhattan. 

But not all retail landlords will benefit. That’s because the prohibitions on where cannabis dispensaries can be located will put a limit on permitted locations. New Jersey’s restrictions are more stringent than New York’s. For example, in New Jersey a retail cannabis site must be at least 1,000 feet from a school, whole in New York the required buffer is only 500 feet. 

“That certainly makes more property available, especially in an urban environment where you can throw a stone and hit a school, which makes it challenging to identify the viable properties,” Rob DiPisa, co-chairman of the cannabis law group at Cole Schotz.

Cannabis Cafes

The Empire State will also be issuing a license for on-site recreational marijuana consumption, which is expected to spark a crop of so-called cannabis cafes, the marijuana equivalent of a bar serving alcohol. Many such cafes are expected to pop up in New York City. There is no such separate license in New Jersey. But a license for a retail location in New Jersey will allow an area within that location to offer on-site consumption.

“That’s just an example of more opportunity [in New York],” said Rob Mejia, an adjunct professor in cannabis studies at Stockton University.

When it comes to regulation and cannabis, landlords in New York and New Jersey face not only state but federal and additional local restrictions, beyond zoning buffers. Because the U.S. government still characterizes cannabis as an illegal substance, a Schedule 1 drug, real estate properties with loans or mortgages from federally chartered banks are prohibited from leasing to marijuana dispensaries. That ban also means buildings with commercial mortgage-backed security loans can’t rent to cannabis businesses.

In addition, because of the federal law, commercial cannabis can’t be transported across state lines. It is an intrastate, not an interstate, industry at this point. In particular, that might slow the growth of New Jersey’s cannabis industry and therefore inhibit its need for real estate. That’s because the Garden State’s supply of marijuana may not be able to meet the demand within the state, the most densely populated in the nation, because of the cap on cultivation licenses, according to experts. And cannabis can’t be transported into the state from outside its borders to add to the supply.

“Current operators [in New Jersey] don’t have enough product to serve the medical market,” Cabrera said. “And the medical market is small.”

Senate Majority Leader Chuck Schumer of New York and Sen. Cory Booker of New Jersey, both Democrats, have drafted legislation to end the federal ban on cannabis, citing the wave of states that have legalized its recreational use by adults.

“The speculation is that the federal government gets in line with the states that have already legalized cannabis and says, ‘You know what it does not make sense, that making cannabis aSchedule 1 drug was a mistake that’s 80-something years old and we need to correct it,’” said Ed DeVeaux, president of the New Jersey CannaBusiness Association.

“In three to four years, they may correct this entire situation and say it is now legal, period,” he said. “So with real estate being a speculative market to begin with, people may say, ‘Well, you know what? I’ll buy the warehouse because I may be able to transport my product at some point interstate.’”

Equity, Not Debt

Because cannabis is illegal federally, and the constraints that puts on getting financing from a bank, some operators enter into sale-leaseback transactions for their facilities. NewLake, the REIT that is totally focused on cannabis tenants, typically does sale-leaseback deals with operators, acquires properties from third parties or funds build-to-suit transactions.

“We don’t utilize debt,” Coniglio said. “We purchase our properties using our equity capital. … We have a combination of individuals and investment firms [as investors].”

The federal issue, that cannabis is not legal, and the fact that neither New York nor New Jersey have regulations in place yet, aren’t the only uncertainties hanging over real estate development and the recreational marijuana industry in the mid-Atlantic. Municipalities in both states can “opt out” and ban adult-use recreational cannabis sales within their borders. That would put the kibosh on retail dispensaries in those towns.

Despite their initial and long-term challenges, New York and New Jersey are both going to be huge cannabis markets, according to Czarkowski.

“Ultimately, we advise our clients based on their passions and access to resources, and both markets will have enough variety of licensure to satisfy many different goals,” he said.

*Article courtesy of CoStar

For more information about New Jersey or Philadelphia cannabis health care space, 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 cannabis healthcare space, 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 Expects Return-to-Office Recovery To Take At Least Three Quarters

Brandywine Realty Trust is seeing a big comeback in leasing activity as more tenants contemplate returning to the office, but executives cautioned it could take several months until operations are back to normal.

More than a year into the pandemic, office landlords across the country are seeing more tenants start to return to their office space as the coronavirus vaccine rollout expands. However, as Brandywine’s portfolio shows, the return to office is likely to unfold in fits and starts over the coming months as companies evaluate their long-term real estate needs.

“We have to keep in mind that we are in the beginning phases of a transition in the return-to-work journey. … We believe it will take three quarters or so to fully play out,” said Jerry Sweeney, CEO of Philadelphia-based Brandywine, during an earnings call Thursday with investors.

Brandywine solely and jointly owns about 25 million square feet located mostly around Philadelphia and Washington, D.C., and is one of the largest office landlords in fast-growing Austin, Texas. It recently expanded into Maryland.

The office-focused real estate investment trust said physical tour activity from prospective tenants increased 40% in the first quarter and it had more than 1,500 virtual tours. The company’s overall pipeline of leasing activity jumped by 400,000 square feet in the first quarter, hitting about 1.2 million, with 165,000 square feet in advanced negotiations.

Most of the midsize to smaller tenants are leading the charge to get back to the office, Sweeney said. Many companies also are still determining how many employees may work from home permanently, he said.

“We are clearly seeing from the pipeline additions that the return-to-work movement will accelerate and the flight to higher-quality office buildings is increasingly clear,” Sweeney said. 

Among the tenants searching for space, there is a greater emphasis on health and safety. Tenants are increasingly favoring spaces with private offices, more air circulation, larger workstations, and smaller gathering areas versus one large central space, Sweeney said. Some tenants in Philadelphia even took more square footage to allow for a more spacious layout, he said. 

“Certainly more and more companies are seeing the value of having people together physically,” Sweeney said. In conversations with larger companies, he said some employees are pushing back on the idea of being remote-only workers and want some flexibility to switch between remote work and being in an office at a dedicated workstation.

Few Workers Want Full-Time Return

While data varies, a January survey of office workers from Slack found that only 17% of office-based workers want to return to the office full time, 20% want to work remotely full time and 63% want the flexibility of a hybrid model.

Overall in the first quarter, Brandywine signed 493,251 square feet of new leases and renewals, according to its earnings results. Its profits were down about 14% year over year to $6.77 million, while revenue dipped 16% to $120 million, according to its first-quarter earnings results. However, about 99% of its office tenants are paying rent despite mostly not being back at the office. Brandywine is expecting some deferred rent later this year.

Although there is still uncertainty about the timing of a full recovery, Brandywine is seeing noticeably more touring activity, with tenants in the Philadelphia market seeing the biggest jump and Austin ranking last in its portfolio for tour activity, Sweeney said.

Brandywine is moving forward with Block A and the first phase of Block F in its massive redevelopment of the IBM Broadmoor campus into a mixed-use district near The Domain in north Austin. (Brandywine)

In downtown Austin, Brandywine has substantially completed construction of the office tower at 405 Colorado St., Sweeney said. The 25-story tower has struggled with leasing in the pandemic, particularly after law firm DLA Piper abruptly dropped its lease commitment last year. 

The 206,000-square-foot tower has remained about 18% leased since at least October, according to Brandywine’s previous earnings and first-quarter supplemental earnings results. However, Sweeney said the firm has a letter of intent for a full floor that it hopes to finalize in the next 30 days.

“Activity is definitely picking up. We’ve had four new tours in the last week alone,” Sweeney said.

Elsewhere in Austin, at Brandywine’s proposed Broadmoor campus in north Austin across from The Domain, IBM has declined to renew its lease at Building 905, and Brandywine expects to demolish the structure as part of its redevelopment of the area into a 66-acre mixed-use development.

Brandywine plans to advance Block A and the first phase of Block F at the project, encompassing $360 million of development. That includes 613 apartments, with about 341 units to start at a cost of about $119 million by the third quarter, Sweeney said. Brandywine also wants to kick off Broadmoor with 350,000 square feet of office but plans to wait until a significant portion is preleased prior to starting construction. Brandywine is looking for a joint-venture partner to help develop the first phase of Broadmoor and expects to select one within the week, Sweeney said.

Philadelphia Life Science Space

In Philadelphia, Brandywine and its joint-venture partner started construction on the $287 million Schuylkill Yards West in March at 3025 JFK Blvd.That project is expected to include 326 apartment units, 100,000 square feet of life science space and 100,000 square feet of office and street retail.

Brandywine struck a deal last month with the Pennsylvania Biotechnology Center to create B.Labs, a life science incubator at Cira Centre directly adjacent to the Schuylkill Yards neighborhood in the University City section of Philadelphia. 

The initial 50,000-square-foot lab and research space is expected to open in the fourth quarter. Sweeney said Brandywine has a pipeline of leasing activity for 35% of the space in that project.

Discovery District in Maryland includes The Hotel at the University of Maryland on U.S. Route 1. (Robert Isacson/CoStar)

Last quarter, Brandywine expanded outside of its core markets into Maryland after it was selected by Terrapin Development Co. and the University of Maryland as the exclusive developer of a 5-acre mixed-use neighborhood within the University of Maryland’s Discovery District. 

Plans for the development include 550,000 square feet of research and life science space and about 200 to 250 multifamily units in several phases. Permitting and planning is underway with a target groundbreaking in the second half of 2022. 

Discovery District is a $2 billion, 150-acre research-focused campus located in College Park, Maryland.

*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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WCRE FIRST QUARTER 2021 REPORT

WCRE FIRST QUARTER 2021 REPORT: SOUTHERN NEW JERSEY & PHILLY MARKETS DOWN DUE TO THE PANDEMIC, BUT NOT OUT

Good News on Public Health and the Economy Holds the Promise of Better Days Ahead for CRE

Commercial real estate brokerage WCRE reported in its analysis of the first quarter of the new year that the Southern New Jersey and Southeastern Pennsylvania markets may be through the worst of the downturn brought on a year ago by the pandemic. The widespread availability of effective COVID-19 vaccinations, coupled with large-scale financial relief from the federal government, may bring an optimistic note back to the market. For the moment, market performance on several indicators remains off.

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“CRE performance in the first quarter seems to be tracking with our lived experience. As expected, office vacancy is quite high, while demand for industrial space is surging,” said Jason Wolf, founder and managing principal of WCRE. “Market fundamentals are shaky, but there are pockets of strength and resiliency.”

There were approximately 555,988 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was more than double the previous quarter. New tenant leases comprised approximately 44,952 square feet, or only about 8% of all deals for the three counties.

Other office market highlights from the report:
• Overall vacancy in the market is now approximately 13.55 percent, virtually unchanged from the previous quarter, and an increase of two full points since Q2 last year.

• Unsurprisingly, office vacancy rates have risen throughout the region. At 11.2%, the rate is the highest it’s been since 2014.

• On the other end of pandemic-induced usage shifts, the already strong industrial vacancy rate improved to 5.4%.

• Average rents for Class A & B product remain unchanged, as they 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 hovered near this range for more than a 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 rose another half a point, and now stands at 10.1 percent, after hovering near a 20-year low. Despite the pandemic fallout, the city is still seeing rent and occupancy levels ahead of other major markets.

• The industrial sector in Philadelphia remained the bright spot. The last year saw 4 million SF of net absorption and 7.8% rent growth.

• Retail remains the most responsive to market conditions and the most vulnerable sector. Infection prevention measures and other economic pressures have brought existing issues from before the pandemic into sharper relief. Average retail net absorption for 2020 was 1.8 million square feet, but for the 12 months just concluded, it is -1.4 million square feet. 

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

• The Consumer Confidence Index rose slightly in February, before rocketing to its highest level in a year in March.

• Retail vacancy in Camden County ticked up to 10.9 percent after posting a large increase in the middle of 2020. While average rents changed little, in the range of $11.76/sf NNN.

• Burlington County inched up to 10.4 percent, representing a small increase on top of the jump from 7.6 percent in Q3 2020. Average rents increased to the range of $14.39/sf NNN.

• Gloucester County saw the biggest jump, up to 15.9 after increasing throughout last year, with average rents up almost a full dollar per square foot in the range of $14.11/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 ww.southjerseyofficespace.com, www.southjerseyindustrialspace.comwww.southjerseymedicalspace.comwww.southjerseyretailspace.comwww.phillyofficespace.com,  www.phillyindustrialspace.comwww.phillymedicalspace.com and www.phillyretailspace.com

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Consumers Spent $900 Billion More Online in 2020. Here’s Who Will Keep the Biggest Gains

Consumers across the globe spent $900 billion more at online retailers in 2020 compared with the prior two-year trend, according to a report released Tuesday by the Mastercard Economics Institute. 

Shoppers are heading back to restaurants and returning to stores to buy clothes and shoes in person. Yet they will continue to stock their fridges and hunt for good deals online — a sticky habit developed during the Covid pandemic, according to the report.

Nearly every retailer’s online sales jumped as shoppers were stuck at home. As consumers picked up online purchases in the parking lot and got packages or takeout dropped at their doorsteps, e-commerce made up about $1 out of every $5 spent on retail globally. That’s an increase from about $1 out of every $7 spent in 2019, the report said.

In an interview on CNBC’s “Worldwide Exchange” with Frank Holland, Mastercard’s chief economist, Bricklin Dwyer, said about 20% to 30% of the $900 billion in additional digital spending will continue into 2021 and the next few years.

However, the long-term e-commerce gains will be uneven and will depend on what a retailer sells, how they adapted their business model and how consumers prefer to shop. For some merchandise, such as clothing, shoppers may prefer to go back to brick-and-mortar stores where they can try on an outfit before buying it. In certain retail categories, such as electronics, online purchases already drove a larger share of overall sales, so there was less room to grow.

Grocery and discount stores will see the most dramatic and lasting shift to e-commerce, according to the report. Discount stores include dollar stores, wholesale clubs, and other retailers that sell to customers at near-wholesale prices. Grocers will likely retain about 70% to 80% of the digital sales gains they saw during the peak of the pandemic and discount stores will hold onto about 40% to 50% of them, the report said.

For both sectors, online sales made up only a single-digit share of overall sales before the pandemic — creating an opportunity for more noticeable growth.

Clothing stores, restaurants, and sporting/toy stores saw the biggest initial spike during the pandemic, however, but only kept 10% to 20% of that peak in sales, according to the report.

Electronics and department stores had the highest penetration of online sales before the pandemic, with e-commerce making up about 55% to 60% and 40% to 50% of their total sales, respectively, according to Mastercard. For the two sectors, their expected permanent shift will be around 20% to 30% of their peak jumps.

Dwyer said grocers face unique hurdles — even as more consumers shop online for produce, meats, and other ingredients. Only about 10% of overall grocery spending is through e-commerce, he said.

“You have to trust someone else to pick your peaches,” he said. “You have to have trust for someone else to deliver your goods and still have them good when they arrive. So that really is some of those barriers that we’re crossing.”

 *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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WCRE APPOINTED EXCLUSIVE LEASING AGENT FOR COLWICK BUSINESS CENTER

LEASING AGENT FOR COLWICK BUSINESS CENTERWolf Commercial Real Estate (WCRE) is pleased to announce that it has been appointed exclusive leasing agent by Golden Gate Management for its recently acquired Cherry Hill office portfolio located at Colwick Business Center, 53-55-57 Haddonfield Road in Cherry Hill, New Jersey. Colwick Business Center consists of three office buildings comprising of approximately 173,000 square feet.

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Among many desirable attributes, Colwick Business Center features highly efficient suite layouts, private 24/7 access to each tenant suite, and ample parking. Available suites range in size from 2,500 to 29,475 square feet.

Current anchor tenants of this premier office complex include Virtua Health, Rutgers University and the State of New Jersey.  The new owner, Golden Gate Management, is committed the southern NJ marketplace with recent acquisitions of flex and office parks and their ability to enhance value with the lease-up of the available space in these buildings.  

“We are excited to be working with WCRE’s leasing team of John Mozzillo, and Bethany Brown, and I am confident they will be very successful in marketing this premier business center,”
– Fishel Schlesinger Principal, Golden Gate Management

All of the available buildings in Colwick Business Center are single story office properties with private entrances, offering all useable space with no loss factor. The efficient layouts not only provide cost savings but also help to ease the logistical and safety concerns Covid-19 has posed for tenants in multi-story properties that require elevators and common areas.

Colwick Business Center is located just west of the Cherry Hill Mall on a stretch of Haddonfield Road that has recently undergone a massive redevelopment renaissance. The area features affluent residential communities, retail centers, hotels, and other amenities attractive to office tenants. Additionally, The Garden State Towne Center, home to Wegman’s, Best Buy, Home Depot, Dick’s Sporting Goods and other high-end retailers, is conveniently located a short distance away on Haddonfield Road.

Colwick Business Center

 

A marketing brochure and tenant information package is available upon request and also in at this link

 

About Golden Gate Management

Golden Gate Management has led the development and repositioning of more than 1,500,000 million square feet of best-in-class commercial and residential properties. The company is highly experienced in managing all aspects of the development process, from site selection and
entitlements, through coordination of tenant move-in.

Golden Gate’s 10-year history as a preeminent management company is unmatched. Reflecting the company’s core competencies and start-to-finish execution capability, Golden Gate has served as a single-source solution for small and large tenants with its full breadth of its in-house capabilities of construction services thus building relationships with their tenants, Leveraging the strength of its experienced team, Golden Gate has emerged as a first-class project management firm.

 

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.comwww.southjerseyindustrialspace.comwww.southjerseymedicalspace.comwww.southjerseyretailspace.comwww.phillyofficespace.comwww.phillyindustrialspace.comwww.phillymedicalspace.com and www.phillyretailspace.com.

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WCRE FOURTH QUARTER 2020 REPORT

WCRE FOURTH QUARTER 2020 REPORT: SOUTHERN NEW JERSEY & PHILLY CRE MARKETS REMAIN ON SHAKY GROUND AS PANDEMIC WEARS ON

Industrial was Strong, While Other Sectors Felt the Brunt of COVID’s Worsening Spread

Commercial real estate brokerage WCRE reported in its analysis of the fourth quarter of 2020 that the Southern New Jersey and Southeastern Pennsylvania markets took an expected downturn in many sectors due to the ongoing coronavirus pandemic. At the same time, restrictions and infection control measures helped build strength in the industrial market, and there is sufficient momentum in the overall economy that the downturn is expected to be temporary. 

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“Commercial real estate is challenged by many of the conditions brought on by the pandemic, but the roll-out of the vaccines brings the hope of a return to normal activity sometime this year,” said Jason Wolf, founder and managing principal of WCRE. 

There were approximately 252,823 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was a drop of nearly 58% from the previous quarter. New tenant leases comprised approximately 64,450 square feet, or approximately 25.5% of all deals for the three counties surveyed.

Other office market highlights from the report:

• Overall vacancy in the market is now approximately 13.6 percent, which is a jump of about two-thirds of a point from the previous quarter, and an increase of two full points since Q2.

• Average rents for Class A & B product remain unchanged, as they 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 fourth quarter. These averages have hovered near this range for more than a year.

• Vacancy in Camden County increased to 15.2 percent for the quarter, but despite this slight increase, Camden County saw gradual improvement and prospect activity.

• Burlington County’s vacancy increased to 12 percent after dropping more than a point during the third 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 fourth quarter in Pennsylvania include:

• The vacancy rate in Philadelphia’s office market rose another half a point, to 9.6 percent, after having hovered near a 20-year low. The pandemic has caused a large volume of office space to hit the market.

• The industrial sector in Philadelphia led the market, as it generally does. During Q4 vacancy rates ticked down to 5.1 percent, a slight improvement from the previous quarter. Net absorption for the year was 6.1 square feet. As the pandemic has led to a massive shift toward e-commerce, the industrial sector should remain quite strong.

• Retail CRE remains the most responsive and most vulnerable sector to market conditions. Ongoing coronavirus prevention measures have led to increased vacancy as businesses shutter. Average retail net absorption for 2020 was 1.8 million square feet. The vacancy rate is not expected to improve in the near term. 

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

• Retail vacancy in Camden County ticked up to 10.5 percent after posting a large increase from Q2 to Q3. While average rents changed little, in the range of $11.78/sf NNN.

• Retail vacancy in Burlington County jumped to 10 percent, up from 7.6 percent, with average rents increasing to the range of $14.14/sf NNN.

• Retail vacancy in Gloucester County went up again, to 13.7 increasing throughout the year, with average rents unchanged in the range of $13.14/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 ww.southjerseyofficespace.com, www.southjerseyindustrialspace.com, www.southjerseymedicalspace.com, www.southjerseyretailspace.com, www.phillyofficespace.comwww.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com

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