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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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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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The Future of Office Work has Arrived

Effective 6 AM on June 4, 2021, employers had the green light to require their employees to return to the office. Gov. Phil Murphy’s Executive Order No. 243 rescinds the requirement that businesses and nonprofits must accommodate telework arrangements to the maximum extent practicable, and reduce on-site staff to the minimum needed for operations. The order also states that employers no longer need to require masks and social distancing in the workplace for those fully vaccinated.

The speed of the economic recovery has been stunning, as vaccinations and stimulus funds are driving consumer spending. The U.S. economy is expected to recover to pre-pandemic levels later this month. “Key sections of our region’s economy, however, are still reliant on the tourism and travel industries that may continue to be hobbled by slower vaccinations and travel restrictions abroad,” according to Duncan Kisia, a leading economist with Port Authority of New York & New Jersey, who spoke at a recent NAIOP New Jersey forum.

This economic rebound is fueling job growth in office-using sectors, although tenant safety concerns remain a drag on office leasing. According to NAIOP’s Q2 2021 Office Space Demand Forecast, negative net absorption will moderate over the next two quarters, with a return to positive absorption in the fourth quarter of 2021. National office space absorption is expected to stabilize by mid-2022, with quarterly figures expected to average 11.7 million square feet, in line with the 2015 to 2019 quarterly average of 11.6 million square feet. Most K-12 schools plan to resume full in-person instruction in the fall, and that should contribute to a more widespread return to the office. This trend will only strengthen if Congress passes a significant infrastructure package, which is likely.

Although tenants have begun to return to offices, it remains to be seen how widely employers will adopt long-term remote work policies. Surveys showed remote work was successful for many firms, and it is clear that many will partially incorporate this model into future plans. Remote work will likely limit net absorption for the next several quarters. Due to population and pricing shifts, experts expect suburban office space to be in relatively greater demand than central business district space in the near term. Tenant comfort may lead to less dense office layouts than before the pandemic, partially offsetting declines in demand due to remote work.

The NAIOP Forecast assumes a continued rebound in real GDP for the remainder of 2021, 2022 and 2023. Real GDP is expected to expand by 7.7 percent in the next two years, with average unemployment of approximately 4.5 percent. The forecast also assumes that Personal Consumption Expenditure (PCE) inflation will average 2 percent in the next two years. It generally takes several quarters for office net absorption rates to recover from the effects of an economic recession. Under three different scenarios, the office market would return to normal net absorption by the second half of 2022. The baseline forecast assumes that the recent recession will lead to a 15 percent reduction in net absorption (factoring in remote work arrangements), which is in line with what I am hearing.

“Employers planning for a transition to a post-pandemic workplace are faced with a host of novel issues — and addressing a disconnect with employees about what the future of work and the return to physical workspaces looks like it is at the top of the list,” according to The Littler Annual Employer Survey Report released last month. While 71 percent of employers surveyed believe that most of their employees who can work remotely prefer a hybrid model and only 4 percent prefer full-time in-person work, 28 percent of those employers plan to have most employees return full time and in person, and 55 percent will offer a hybrid model.

Questions about returning to the physical workplace and vaccinations are only part of the conundrum facing employers. COVID-19 accelerated the trend of technology displacing employees, and more workers than ever are suffering from “crisis fatigue” and burnout. Couple these ongoing pandemic-related workforce management issues with anticipated federal regulatory changes, and the challenges ahead are daunting. On the regulatory front, most employers (81 percent) are concerned about how changes to paid sick and family leave requirements — a promised Biden administration initiative — will impact business in the next year. Other top concerns: income equality measures (64 percent); inclusion, equity and diversity considerations (55 percent); and health care (51 percent). With more Washington gridlock expected, state and local regulations are high on executives’ radar, with 83 percent expressing moderate or significant concern over associated enforcement and compliance expectations.

More than half of respondents are either moderately or extremely concerned about maintaining company culture, collaboration and employee loyalty in a remote work environment (57 percent) and the impact of the pandemic on employee mental health and well-being (52 percent). Employers are making strides to address these issues (e.g., 84 percent are offering mental health services and/or Employee Assistance Programs) but some may have room for improvement in areas such as implementing new ways to reward employees for their hard work, and training managers to help respond to employees in need.

Now that the future has arrived, I am sure that all employers would agree that employees are the most critical resource for success. Striking the right balance for the new workplace will likely be case-sensitive, and will no doubt take some time and a great deal of patience.

*Article Courtesy of RE-NJ.com

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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Covid-19 is affecting CRE lease negotiations. Here’s what experts are seeing.

How will Covid-19 affect the future of commercial real estate? It’s a multibillion-dollar question that’s been debated since the start of the pandemic.

With many businesses still plotting their returns to the office, the answer remains to be determined. 

But experts say the effects of Covid-19 are likely to reverberate in the industry for years to come, and commercial lease negotiations — particularly those over the next year — are likely to provide some early clues about the pandemic’s effects.

Industry experts have a few ideas about what to expect. Especially in the short term, experts say it’s likely tenants will have more leverage to negotiate terms. That’s particularly true for larger tenants and those that draw other tenants or customers to a property.

One potential area of focus is specific clauses in leases that could provide protection in the event of a future pandemic.

Maria V. Bernstein, a real estate attorney at San Francisco-based SSL Law Firm LLP, expects more discussion around force majeure or unforeseen circumstances clauses in the wake of Covid-19. 

As shutdowns and shifts to remote work dominated the early days of the pandemic, Bernstein said many companies rushed to review their force majeure clauses, generally finding little to no relief. 

In the aftermath of the pandemic, Bernstein said it’s likely many tenants will be negotiating those clauses to create an avenue for relief in future situations like Covid-19.

She also expects companies to take a closer look at condemnation clauses and their potential role in a scenario where the government shuts down businesses or limits capacities. 

Bernstein said condemnation clauses often say that if there is a “taking” by a government, then the lease is automatically terminated. 

In a case where a government limits capacity to 25%, for instance, she said a good argument can be made that a government took 75% of the space, which could create leverage for potential relief. 

“Everybody looked at force majeure. People looked at the environmental clause. People even looked at casualty. Those clauses helped almost no one. I’ve looked at it,” she said. “But the condemnation takings clause has given me leverage.”

When using condemnation clauses to find leverage, Bernstein said the use clause is very important.

“The narrower the better for tenants, but in negotiating leases, the broader the better,” Bernstein said. “Since we don’t have crystal balls, this is something that probably won’t change in lease negotiations, but landlords can take comfort when granting broad use rights that this may ultimately benefit them should we face future catastrophes that lead to the type of government-mandated shutdowns we have just seen.” 

Tim Blair, president of Chicago-based CCIM Institute, a global commercial real estate investment education group, said he expects to see more interest in common-area-maintenance fee caps and lease structures that allow tenants to benefit from decreased maintenance costs. As we’ve noted, CAM charges are an area where landlords are seeing more scrutiny. 

Blair said Covid-19 will likely accelerate the trend of triple-net leases for office buildings — something that was already becoming more common in newer buildings in larger cities. 

Those arrangements allow landlords to allocate specific expenses to specific office suites. In a shutdown situation like Covid-19, that would allow tenants to benefit from an expense reduction — a benefit many tenants didn’t have during the pandemic. 

Blair said he also envisions more tenants will push for being able to opt-out of certain services, such as janitorial expenses, in a future scenario with offices being shut down for a long period of time. 

Evelyn Ward, Houston-based vice president of agency leasing at Transwestern, envisions health and wellness amenities will be a more prevalent discussion between tenants and landlords in lease negotiations. But she’s not referring to gyms or outdoor spaces.

She said more tenants will be asking about specialized air filters, touchless amenities and fixtures, and enhanced janitorial services, among other options. 

“It’s a constant conversation, and it’s not a one-time thing,” Ward said. “A lot of it is because of what’s being demanded by the employee.”

She said health and wellness considerations are likely to become an expected standard like a conference room. 

Ward said it will likely be a particularly heavy focus in the short term, as companies prioritize creating a safe and welcoming environment that makes it easier to bring workers back to the office. 

“HR has been a part of the leasing decision forever. I think (Covid-19) just ratchets it up to another degree,” Ward said.

*Article courtesy of Philadelphia Business Journal

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

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

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

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

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

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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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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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WCRE THIRD QUARTER 2020 REPORT

THE SOUTHERN NEW JERSEY & PHILLY CRE MARKETS HEAT UP QUICKER THAN EXPECTED AFTER PANDEMIC-FUELED CHALLENGES

Economic Recovery Lost Steam Through the Quarter, But Leasing Activity was Strong

WCRE THIRD QUARTER 2020 REPORTCommercial real estate brokerage WCRE reported in its analysis of the third quarter of 2020 that the Southern New Jersey and Southeastern Pennsylvania markets out-performed expectations tempered by the ongoing coronavirus pandemic. While the crisis reverberated through the economy and daily life, quarterly CRE indicators throughout the region showed resiliency and even some cause for muted optimism.

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“Uncertainty is high, of course, and will remain high unfortunately, but an economy that seemed to be recovering delivered some good news in our markets,” said Jason Wolf, founder and managing principal of WCRE. 

There were approximately 596,873 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was more than double the total for the previous quarter. The jump was driven by Lockheed Martin’s four renewals totaling approximately 320,000 square feet. Even without those transactions, Q3 leasing was about equal to the total for Q2. New tenant leases comprised approximately 93,544 square feet, or approximately 16% of all deals for the three counties surveyed.

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 12.95 percent, which is a jump from the previous quarter’s 11.5 percent.
  • 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 third quarter.
  • These averages have hovered near this range for more than a year.
  • Vacancy in Camden County increased to 14.9 percent for the quarter.
  • Burlington County’s vacancy increased to 11 percent after dropping more than a point during 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 third quarter in Pennsylvania include:

  • The vacancy rate in Philadelphia’s office market rose more than half a point, to 9.1 percent, after having hovered near a 20-year low and below the vacancy rates of comparable major cities at the onset of the pandemic.
  • The industrial sector in Philadelphia led the market, as it generally does. During Q3 vacancy rates ticked down to 5.3 percent, a slight drop from the previous quarter. Although net absorption turned negative for flex and specialized space, it increased by 167,035 square feet for logistics space.
  • As vulnerable as retail CRE may be due to unprecedented job loss and businesses temporarily shuttering and/or reducing capacity, the vacancy rate held steady at 5.1 percent, representing a very small increase over Q2. Net absorption returned to positive territory at 284,752 square feet for the quarter, but is at negative 1.2 million square feet over the last twelve months. 

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

  • Retail vacancy in Camden County jumped to 9.7 percent from 5.4 percent in Q2. While average rents fell by nearly a third to the range of $11.68/sf NNN.
  • Retail vacancy in Burlington County held steady at 7.6 percent, with average rents increasing to the range of $13.82/sf NNN.
  • Retail vacancy in Gloucester County ticked up half a point to 12.9 from after posting a major increase in Q1, with average rents down in the range of $13.13/sf NNN.

The full WCRE Q3 Market 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.comwww.southjerseyindustrialspace.comwww.southjerseymedicalspace.comwww.southjerseyretailspace.comwww.phillyofficespace.comwww.phillyindustrialspace.comwww.phillymedicalspace.com and www.phillyretailspace.com.

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WCRE SECOND QUARTER 2020 REPORT

UNDER SEVERE CORONAVIRUS RESTRICTIONS, THE SOUTHERN NEW JERSEY & PHILLY CRE MARKETS STILL OUTPERFORMED EXPECTATIONS

Despite Widespread Lockdowns, Closures, and Uncertainty, the Market Showed Strength

Commercial real estate brokerage WCRE reported in its analysis of the second quarter of 2020 that the Southern New Jersey and Southeastern Pennsylvania markets held their own amid the most uncertain quarter in recent history. The coronavirus pandemic has upended every aspect of life and deeply impacted the economy. Still, quarterly CRE performance indicators showed some positive news, even as the effects of the crisis began taking hold. Vacancy rates across every property type remained low, and the sales market stayed active.

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“In the face of global calamity, and under severe but necessary restrictions, the CRE market in our area showed strong fundamentals and resiliency,” said Jason Wolf, founder and managing principal of WCRE. “The performance was a mixed bag, but we saw sufficient reasons for optimism.” 

There were approximately 277,716 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was a drop of 26% from the previous quarter. New tenant leases comprised approximately 129,569 square feet, or approximately 46.7% of all deals for the three counties surveyed. To help compare Q2 2020 vs. Q2 2019, there were approximately 286,707 square feet of new leases and renewals executed during the same time period a year ago,

Other office market highlights from the report:

● Overall vacancy in the market is now approximately 11.5 percent, which is a slight uptick from the previous quarter, but still not far off from a 20-year low.

● 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.

● Vacancy in Camden County increased a full point to 12.6 percent for the quarter.

● Burlington County’s vacancy further dropped to 10.4 percent after dropping more than a point during 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:

● The vacancy rate in Philadelphia’s office market dropped slightly to 8.5 percent. The office vacancy rate is still near a 20-year low, and below that of comparable major cities. 

● The industrial sector in Philadelphia remains very strong. Q2 saw vacancy rates at 5.5 percent, only slightly higher than the previous quarter. Net absorption dropped about 20 percent, to 4.3 million SF, which was still strong. Rent growth jumped again, to 5.3 percent. Rent growth for the past few quarters has far exceeded the long-term average of 1.7 percent.

● Retail may be most at risk from the crisis. Rising wages and low unemployment had been fueling retail spending, buoying the CRE market. But with unprecedented job loss and many businesses temporarily shuttered by stay-home orders, retail will bear the brunt. The vacancy rate inched up to 5.0 percent, while net absorption was negative 546,300 square feet over the last twelve months. These figures may well become more dire in Q2, as the true economic effects of the pandemic take hold.

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 5.4 percent from 6.2 percent in Q1. While average rents fell slightly to the range of $17.20/sf NNN.

● Retail vacancy in Burlington County dropped to 7.6 percent, with average rents in the range of $12.14/sf NNN.

● Retail vacancy in Gloucester County ticked down to 12.4 from after posting a major increase in Q1, with average rents in the range of $14.21/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 FIRST QUARTER 2020 REPORT

THE YEAR STARTED OFF ON A HIGH NOTE IN THE SOUTHERN NEW JERSEY & PHILLY CRE MARKETS, THEN COVID-19 CREATED CHAOS

Predictions for 2020 Had Been Bullish, But are Now a Great Unknown

Commercial real estate brokerage WCRE reported in its analysis of the first quarter of 2020 that the Southern New Jersey and Southeastern Pennsylvania markets continued their years-long strong performance at the outset of the new decade. But by March it was clear that, just as every other area of life would be disrupted by the Covid-19 pandemic, the CRE market would not be immune. The quarterly performance still showed positive news, but the effects of the crisis began taking hold during the last weeks of Q1, so the true impact hadn’t become fully apparent. Vacancy rates across every property type remain low, and, while rent increases have cooled somewhat, growth remained positive for the quarter. Even before the pandemic struck many feared there were signs that the decade-long expansion was nearing its end. But even as growth slowed down, the economy appeared to be moving forward at a fairly solid pace before the crisis.

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“Initially the assumption was that the worst of the coronavirus outbreak would directly impact the regions in Asia where it first was identified, and that the impact to the U.S. would come in the form of disruption of supply chains and slower economic growth abroad,”
said Jason Wolf, founder and managing principal of WCRE.

“While those shocks have happened, the rapid spread of the virus within the US and around the world has impacted the global economy, and those effects are still becoming apparent throughout our local and regional CRE markets.”

There were approximately 374,429 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was up more than 80 percent over the previous quarter. The sales market stayed active, with about 1.02 million square feet on the market or under agreement. Completed sales were up about ten percent over the previous quarter, at approximately 866,444 square feet trading hands.

New leasing activity accounted for approximately 47 percent of all deals for the three counties surveyed. Overall, gross leasing absorption for Q1 was in the range of 110,000 square feet, up about 25 percent over the fourth quarter.

Other office market highlights from the report:

● Overall vacancy in the market is now approximately 11.2 percent, which is significantly improved from the previous quarter, and still near a 20-year low.

● 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 hovered near this range for more than a year.

● Vacancy in Camden County ticked down to 11.6 percent for the quarter, as prospecting activity improved.

● Burlington County’s vacancy dropped to 10.8 percent, more than a full point improvement over Q4.

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 dropped slightly to 8.5 percent. The office vacancy rate is still near a 20-year low, and below that of comparable major cities.

● The industrial sector in Philadelphia remains very strong. Q1 saw vacancy rates at 5.5 percent, only slightly higher than the previous quarter. Net absorption dropped about 20 percent, to 4.3 million SF, which was still strong. Rent growth jumped again, to 5.3 percent. Rent growth for the past few quarters has far exceeded the long-term average of 1.7 percent.

● Retail may be most at risk from the crisis. Rising wages and low unemployment had been fueling retail spending, buoying the CRE market. But with unprecedented job loss and many businesses temporarily shuttered by stay-home orders, retail will bear the brunt. The vacancy rate inched up to 5.0 percent, while net absorption was negative 546,300 square feet over the last twelve months. These figures may well become more dire in Q2, as the true economic effects of the pandemic take hold.

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

● Retail vacancy in Camden County rose very slightly to 6.2 percent from 6.0 percent in Q4. While average rents rose to the range of $17.27/sf NNN.

● Retail vacancy in Burlington County ticked up a second consecutive quarter to 8.0 percent, with average rents in the range of $12.23/sf NNN.

● Retail vacancy in Gloucester County jumped a full point to 12.7 from 11.7 percent, with average rents in the range of $13.71/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 FOURTH QUARTER 2019 REPORT

YEAR ENDS ON A HIGH NOTE IN SOUTHERN NEW JERSEY & PHILLY CRE MARKETS

Favorable Economic Conditions Expected to Continue into 2020

Commercial real estate brokerage WCRE reported in its analysis of the fourth quarter of 2019 that the Southern New Jersey and Southeastern Pennsylvania markets continued their years-long overall steady performance. Sales volume and prospecting activity held steady, and although leasing activity was down, vacancy rates remain low across the region for all property types. Gross leasing absorption was positive but trending lower quarter over quarter.

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“CRE performance was good by almost every measure as the year wound down,” said Jason Wolf, founder and managing principal of WCRE. “It seems like when one sector or part of the region underperforms, the rest of the market keeps moving in the right direction.”

There were approximately 204,077 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was down compared to the previous quarter. But the sales market stayed active, with about 1.5 million square feet on the market or under agreement. Completed sales more than doubled from the previous quarter, at approximately 781,130 square feet trading hands.

New leasing activity accounted for approximately 65 percent of all deals for the three counties surveyed. Overall, gross leasing absorption for the fourth quarter was in the range 85,000 square feet, up about 20 percent over the third quarter.

Other office market highlights from the report:

● Overall vacancy in the market is now approximately 12 percent, which is up half a point from the previous quarter. This is still near a 20-year low.

● 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 hovered near this range for more than a year.

● Vacancy in Camden County rose to 12 percent for the quarter, due in part to the return of a few large blocks of space to the market.

● Burlington County’s vacancy also stood at 12 percent. Burlington’s vacancy rate also jumped earlier in the year due to 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 fourth quarter in Pennsylvania include:

● The vacancy rate in Philadelphia’s office market rose slightly to 8.7 percent. The office vacancy rate is still near a 20-year low, and below that of comparable major cities.

● The industrial sector in Philadelphia remains very strong. Q4 saw vacancy rates at 5.4 percent, while net absorption was at 5.4 million SF. Rent growth of 4.8 percent has far exceeded the longterm average of 1.7 percent.

● Philadelphia retail is so far avoiding a major spike in vacancy due to the shift toward e-commerce. Rising wages and low unemployment are fueling retail spending, buoying the CRE market. The vacancy rate inched up to 4.8 percent, while net absorption was negative 98,300 square feet over the last twelve months. This represents a positive swing of more than 450,00 SF for Q4.

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

● Retail vacancy in Camden County fell to 6 percent from 6.9 percent in Q3. While average rents stayed in the range of $17.00/sf NNN.

● Retail vacancy in Burlington County ticked up very slightly, to 7.7 percent, with average rents in the range of $12.52/sf NNN.

● Retail vacancy in Gloucester County jumped to 11.7 from 7.4 percent, with average rents in the range of $13.27/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 THIRD QUARTER 2019 REPORT

SOLID FUNDAMENTALS WITH MODEST GAINS IN SOUTHERN NEW JERSEY & PHILLY CRE MARKETS

Favorable Economic Conditions Expected to Continue into 2020

SOLID FUNDAMENTALS, BUT MODEST GAINS IN SOUTHERN NEW JERSEY & PHILLY CRE MARKETS

Commercial real estate brokerage WCRE reported in its analysis of the third quarter of 2019 that the Southern New Jersey and Southeastern Pennsylvania markets continued to show modest gains, continued investments, and overall solid fundamentals. Sales volume and prospecting activity held steady, leasing was up in Camden County, and especially in Cherry Hill, but dipped for the region overall. Gross leasing absorption was positive but trending lower quarter over quarter.

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“We are in a continuing period of a strong economy with low unemployment. This has supported a long streak of slow, steady growth supported by strong fundamentals,” said Jason Wolf, founder and managing principal of WCRE. “Although a given indicator might fluctuate one quarter to the next, commercial real estate in this region remains strong, and there is reason to stay optimistic.”

There were approximately 266,867 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was a decrease of seven percent compared to the previous quarter. The sales market increased, with about 1.67 million square feet on the market or under agreement. However, completed sales slowed to approximately 329,769 square feet trading hands, less than half the previous quarter, which had been notably active.

New leasing activity accounted for approximately 36 percent of all deals for the three counties surveyed. Overall, gross leasing absorption for the third quarter was in the range 70,000 square feet, down from 150,000 in the second quarter.

Other office market highlights from the report:

Overall vacancy in the market is now approximately 11.50 percent, which is a slight uptick from the previous quarter. This is still near a 20-year low.

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 hovered near this range for more than a year.

Vacancy in Camden County dropped slightly to 11.1 percent for the quarter, back to where it stood in the first quarter.

Burlington County’s vacancy stood at 11.9 percent, increasing 40 basis points. Burlington’s vacancy rate jumped earlier in the year due to 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 third quarter in Pennsylvania include:

The vacancy rate in Philadelphia’s office market dropped slightly to 8.6 percent, the second consecutive quarter to post a decrease of two tenths of a percent. The office vacancy rate is still near a 20-year low, and below that of comparable major cities.

The industrial sector in Philadelphia remains very strong. The third quarter saw vacancy rates virtually unchanged, at 5.0 percent, while net absorption was constrained by a shrinking volume of available space. Rent growth of 6.0 percent has far exceeded long-term average of 1.7 percent.

Philadelphia retail is so far avoiding a major spike in vacancy due to the shift toward e-commerce. Rising wages and low unemployment are fueling retail spending, buoying the CRE market. The vacancy rate inched up to 4.7 percent, while net absorption was negative 562,000 square feet over the last twelve months.

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

  • Retail vacancy in Camden County jumped to 6.9 percent from 5.7 percent in Q2. While average rents increased in the range of $17.05/sf NNN.
  • Retail vacancy in Burlington County ticked up very slightly, to 7.6 percent, with average rents in the range of $12.68/sf NNN.
  • Retail vacancy in Gloucester County dropped to 7.4 percent, with average rents in the range of $13.41/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 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 SECOND QUARTER 2019 REPORT

SOLID FUNDAMENTALS, STEADY GAINS IN SOUTHERN NEW JERSEY & PHILLY CRE MARKETS

Quarterly Performance a Continuation of Success

WCRE SECOND QUARTER 2019 REPORTCommercial real estate brokerage WCRE reported in its analysis of the second quarter of 2019 that the Southern New Jersey and Southeastern Pennsylvania markets continued to show modest gains and overall solid fundamentals. Sales volume and prospecting activity were up over the first quarter totals, while leasing dipped for the overall region, but was up in Camden County, and Cherry Hill in particular. Gross leasing absorption was lower, but still positive.

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“For several years in a row we have seen mostly slow, steady growth supported by strong fundamentals,” said Jason Wolf, founder and managing principal of WCRE. “Commercial real estate has performed very reliably, and although leasing volumes were down this quarter, there is a pipeline of approximately 450,000 square feet of pending deals expected to close in the near term.”

There were approximately 286,707 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which was a decrease of 23 percent over the previous quarter. The sales market stayed active, with about 1.18 million square feet on the market or under agreement. Sales were busy, with approximately 739,714 square feet trading hands. This is nearly four times the square footage sold during the first quarter.

New leasing activity accounted for approximately 75 percent of all deals for the three counties surveyed. Overall, gross leasing absorption for the first quarter was in the range 150,000 square feet, compared to 411,000 in the first quarter.

Other office market highlights from the report:

  • The city of Camden welcomed TRIAD1828 Centre, a newly constructed 394,164 square foot office tower on the waterfront. The Michaels Organization, Conner Strong & Buckelew, and NFI are all relocating their headquarters to the tower.
  • Overall vacancy in the market is now approximately 11.40 percent, which is 20 basis points 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 hovered near this range for more than a year.
  • Vacancy in Camden County ticked up slightly to 11.3 percent for the quarter. It stood at 11.1 percent in the first quarter.
  • Burlington County’s vacancy dropped to 11.5 percent , improving 60 basis points. Burlington’s vacancy rate jumped earlier in the year due to 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 ticked down to 8.8 percent, from 9 percent in the previous quarter. The office vacancy rate is still near a 20-year low, and below that of comparable major cities.
  • The industrial sector in Philadelphia remains very strong. The second quarter saw a further decrease in vacancy rates, to 4.9 percent, while net absorption was constrained by a shrinking volume of available space. There are 25 industrial properties under construction which will bring an additional 5.27 million square feet to the market.
  • Philadelphia retail is treading water to avoid a major spike in vacancy. The vacancy rate inched down to 4.2 percent, while net absorption was positive at 1.4 million square feet over the last twelve months. This includes 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 5.7 percent, with average rents in the range of $16.32/sf NNN.
  • Retail vacancy in Burlington County dropped half a point, to 7.4 percent, with average rents in the range of $12.75/sf NNN.
  • Retail vacancy in Gloucester County dropped to 7.9 percent, with average rents in the range of $15.95/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 wolfcre.com, on Twitter & Instagram @WCRE1, and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog pages at southjerseyofficespace.com, southjerseyindustrialspace.com, southjerseymedicalspace.com, southjerseyretailspace.com, phillyofficespace.com, phillyindustrialspace.com, phillymedicalspace.com and phillyretailspace.com.

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