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Tag Archives: retail


ICSC Sees Holiday Retail Spending Rising Nearly 9% This Year

A major trade group for the U.S. retail real estate industry is projecting a roughly 9% rise in holiday spending this year as shoppers return to brick-and-mortar stores and buy gifts earlier, a development that would support retail property values in the pandemic.

ICSC released on Tuesday the results of its annual Holiday Shopping Intentions Survey, which found that the average American shopper is planning to spend $637 on gifts and other holiday-related items this year. That would mark an 8.9% increase in November through December sales versus a year earlier to $923 billion, boosting retailers “as consumers make use of multiple shopping channels,” according to the organization.

“Strong retail spending has driven a significant economic recovery this year despite the ongoing COVID-19 pandemic, and consumers continue to return to pre-pandemic behaviors in the face of uncertainty,” Tom McGee, ICSC’s president and CEO, said in a statement. “Consumers have remained resilient throughout 2021, which I am confident will continue during and after the holiday shopping season.” 

*Article courtesy of Costar

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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Resilient Consumers Keep Spending

Rising COVID cases stemming from the virulent delta variant have driven governments and businesses to reimpose social distancing measures and delay return-to-office policies, putting a damper on some economic activity. But consumers continue to power through the end of the summer.

Retail and food services sales unexpectedly grew by 0.7% in August, following a downwardly revised 1.8% fall in July. The month-over-month changes to the headline figure this year have alternated between positive and negative, but at 15.1% year-over-year growth, and at an 9.3% annualized growth since August 2019, it’s evident that retail and food services sales remain elevated, even as COVID cases rise sharply in many parts of the nation.

Clothing sales remained high in August, the prime month for back-to-school shopping. Children and teens outgrew their clothing over the pandemic, and many workers being called back to the office are updating their wardrobes — although athleisure is still experiencing strong gains in sales. Clothing retailers overall are seeing sales at an annualized 7.5% higher than in August 2019.

However, capacity limits and closures deeply affected sales at restaurants and bars, which were flat in August after five consecutive months of growth. The year-over-year increase of 31.9% serves as a reminder of the depth of last year’s pullback when many restrictions were in place. Food services and drinking establishment sales are up an annualized 5.1% since August 2019. Despite these gains, the sector largely underperformed analyst expectations during the summer, as pent-up demand for dining out and travel was thwarted by the ongoing pandemic.

In contrast, sales from nonstore retailers grew by 5.3% in August — leading all major sectors, much like they did regularly in pre-pandemic times. Compared to two years ago, nonstore retailer sales have grown by an annualized 18%, also leading all major sectors.

*Article Courtesy of Costar

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 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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Cannabis Sales Go Suburban as Large, Open Air Shopping Centers Become Fertile Retail Ground

A Grupo Flor store that just opened in Union City, California, is billed as the nation’s first cannabis business in a type of regional, open-air shopping center that’s normally home to big-box retailers and chain restaurants.

The move shows how commercial real estate is changing as cannabis retailing goes mainstream with more states legalizing recreational marijuana sales. Retail landlords are also seeking out different types of tenants to fill spots vacated by national store chains losing sales to online shopping.

With 18 states now allowing legal retail sales of marijuana for recreational use, cannabis companies are actively seeking out real estate for sales and distribution, moving from cities to suburbs.

“Cannabis is emerging out of being taboo for many people, so we really strive to bring that hospitality ethic that is welcoming for people of all walks of life,” said Mike Bitar, Grupo Flor co-founder and vice president of retail.

After navigating a still-complex regulatory process, Salinas, California-based Grupo Flor said this week it opened the 2,500-square-foot store in a space vacated by Sprint at Union Landing, a million-square-foot regional shopping center in the East Bay community of Union City near Oakland where a large number of tenants are big-box retailers.

This is Grupo Flor’s fifth California store and its second to open this year, and company executives liken the new location’s design to a “high-end designer fashion boutique.”

In most cities where cannabis sales have been legalized, even the largest retailers, such as Los Angeles-based MedMen, have opened stores mainly in older neighborhood shopping centers and strip malls or other spaces in established urban hubs. Now that’s changing, analysts said.

“Given the confluence of less demand from traditional retailers, greater demand from cannabis retailers and less stigma from local communities, it is likely we will see cannabis retailers continue to expand into more retail settings,” said Brandon Svec, director of market analytics for CoStar Group in Chicago.

Open Air Pioneer

Representatives of Grupo Flor and its Union City landlord, developer The Austin Group, said there are some U.S. examples of cannabis retailers setting up shop in enclosed malls, but their research indicates this is the first to open in what’s known as a power center, defined in the industry as a regional shopping center, usually open-air, where at least three tenants are considered big-box retailers.

More owners of power centers and other suburban retail properties could become interested in cannabis retailers as that industry matures, and as retail centers look to rebound from the pandemic. Svec said that could especially apply to shopping center operators in secondary retail corridors or in areas with declining buying power where the prospect of backfilling vacant space with traditional retail tenants is minimal.

Svec noted that the power center segment has been significantly affected by store closings and reorientation of property toward smaller, more efficient spaces. CoStar data shows that power centers have been the second-worst performing segment nationally, after enclosed malls, losing about 4 million square feet of demand since the onset of the pandemic in March 2020, as the power center vacancy rate rose 70 basis points to 6%.

“However, footprint size will still be important and while cannabis retailers may have the sales revenue to operate out of larger boxes from a sales-per-square-foot perspective, the practical sales advantage of doing so will likely be limited beyond a certain size,” he added. “Thus, they are not a probable tenant for larger vacant boxes — 10,000 square feet and higher — in most markets and their overall potential impact on the market will likely be limited.”

Because they are real estate-intensive, sometimes designed to house up to a dozen tenants that each take more than 25,000 square feet, power centers tend to be developed in suburban rather than urban settings.

The growth of legal cannabis sales, combined with the continued downsizing in the retail industry that began well before the pandemic, could provide more places for cannabis retailers to set up shop in suburban locations.

“We received eight offers from leading cannabis retail operators, but Grupo Flor was a clear choice after visiting competitor stores,” Bill Schrader, owner of The Austin Group, said in a statement. “We expect Flor to drive a lot of fresh shopping traffic into Union Landing — it’s a win-win from a property development standpoint.”

Cannabis Sales Jump

According to cannabis industry research firm BDSA, legal U.S. cannabis sales topped $17.5 billion in 2020, an increase of 46% over 2019. The biggest dollar gains in sales were seen in Illinois, California, Florida, Colorado and Oklahoma.

Global sales of legal cannabis reached $21.3 billion in 2020, up 48% from the prior year, and BDSA projects global sales will reach $55.9 billion in 2026. Much of the U.S. demand is expected to come from the continued addition of new states legalizing cannabis sales.

Five states did so in the 2020 elections — Arizona, Mississippi, New Jersey, Montana and South Dakota — and were joined in March by New York, bringing the total to 18 states with some form of retail legalization.

To meet demand, Oakland-based cannabis distributor Nabis said this month it was tripling its logistics capabilities with a new, large fulfillment center in Los Angeles. In New York and New Jersey, real estate consultants are now busy finding sales and distribution sites for clients.

U.S. retailers during 2020 announced that a record 162 million square feet was set to be vacated, according to CoStar data, representing 12,000 store locations. The pace of retail space pullbacks has slowed so far in 2021 but still totaled 23 million square feet at 2,200 locations in the first quarter.

Big closings were announced during the past year by chains including Fry’s Electronics, Burlington Coat Factory and J.C. Penney. Closings have been countered in part by rising space demand among retailers such as dollar stores, specialty grocers, home improvement shops and sporting goods stores.

“On one hand, the sector faces formidable headwinds from pandemic-induced capacity restraints and secular e-commerce shifts,” said Abby Corbett, managing director and senior economist in CoStar’s Chicago office, in an April webinar. “Yet, on the other, the sector exhibits signs of resilience and evolution.”

*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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Target To Accelerate Real Estate Expansion Plans Amid Sales Growth

Target Corp. said it is planning to keep its strong sales momentum going by upping the ante on building out its logistics network over the next 24 months.

The retailer, based in Minneapolis, reported another stellar quarter of sales Thursday, suggesting that the past year of growth could continue as pandemic fears ebb. Executives announced plans to accommodate increasing demand by adding more properties than they anticipated just months ago, including at least five experimental sortation centers, four distribution centers and 30 new stores.

“Our performance in the first quarter was outstanding on every measure, and showcased the power of putting our stores at the center of our strategy,” said CEO Brian Cornell during a Wednesday earnings call.

Like Walmart and Amazon, Target is one of the few retailers that has flourished through the coronavirus pandemic, which brought down many less nimble and less diversified competitors. Target was one of a limited number of essential retailers, which were largely purveyors of food and household goods, that were allowed to stay open by many communities during quarantining. Consequently, its sales soared over 2020, buoyed first by a spate of survivalist-style shopping sprees by panicked consumers followed by an explosion in online ordering — facilitated by in-store and curbside pick-up services — as the illness lingered and social distancing became the norm. 

Target’s first-quarter results suggest that its gains in sales and customer base could outlive the health crisis, but executives said the company needs to act quickly and expand physically in industrial and retail real estate if it is to keep up with higher baseline demand. 

Target’s comparable in-store sales grew 18% in its first quarter of 2021, which ended May 1, over the first quarter of 2020, when the arrival of the coronavirus pandemic spurred consumers into a survivalist-style shopping spree and hyper-charged the retailer’s sales. Comparable digital sales over the first quarter of 2021 increased 50% over the year-earlier period. Cornell said that Target captured another $1 billion in market share over the first quarter of 2021 as well, further underlining his contention that Target’s performance over 2020 was not a fluke of circumstance. 

Chief Operating Officer John Mulligan said Target intends to add four new regional distribution centers by the end of 2022, an expanded and more specific plan than the one Target executives outlined in March. At the time, Target disclosed plans for the first two: a 1 million-square-foot facility at 3501 S. Pulaski Road in Chicago and a 1.11 million-square-foot building at 2858 U.S. Route 322 in Logan, New Jersey.

These are expected to open over the next few months, Mulligan said on Wednesday. He did not provide information about the locations of the two additional facilities but said they are expected to be in high-volume, high-growth regions. 

“Once these buildings are operating at scale, they’ll meaningfully shorten lead times to nearby stores, improving in-stock levels while reducing the need for safety stock in those locations,” Mulligan explained.

‘Opportunity in Front of Us’

On the other end of the size spectrum, Target executives said the company was pleased with the performance of a pilot project, a new sortation center at a 399,000-square-foot building at 2600-2800 NE Winter St. in Minneapolis. 

The facility is far smaller than a traditional retail warehouse and was intended to work as a rapid-fire throughput, rather than a storage space.

The sortation center model is “designed to receive and sort packages from a large group of surrounding stores multiple times a day, which allows for more optimized, granular sortation,” Mulligan said on the Wednesday call. “This precision reduces cost for our delivery partners, meaningfully reducing what we pay for delivery. In addition, these facilities eliminate the need for sortation at the stores they serve, while freeing up packing capacity at those same locations.”

Given the success of the Minneapolis location, Target said it intends to build up to five more sortation centers this year, with more to come in 2022. Those new sortation centers are designed to be smaller than the pilot location, and smaller than even a typical Target store, Mulligan said. For reference, Target stores are about 130,000 square feet on average, according to statistics provided by the company.

Mulligan did not provide specifics as to the locations in play, but did say Target would focus on “markets with a high concentration of local package delivery.”

He added that Target is still taking a conservative approach to the expansion of sortation centers, and still had a lot of runway for the rollout of the model. 

“It’s early days for us still. We always talk about crawl, walk, run [at Target],” Mulligan said. “I’d say we’re still firmly in crawl here in Minneapolis. And so we see a lot of opportunity in front of us.”

On an even smaller scale, Target executives said the company is investing in updated fixtures inside its existing facilities to create additional capacity. The new equipment is not expensive, but is expected to free up “a substantial amount” of capacity in Target’s existing logistics network, Mulligan said. He estimated it was enough to equal about 1.5 new distribution centers.

Target is also ramping up its building program on the consumer-facing side, its fleet of about 1,900 stores. Over the second quarter, Target intends to remodel about 30 stores, with 100 more planned for the second half of the year, Mulligan said. 

The company plans to open about 30 additional stores across the country this year. Most are meant to be small locations in densely populated areas, with footprints of 50,000 square feet or less, Target’s format of choice over the last five years. 

However, Mulligan said that some of these would be reminiscent of the big box stores of the late 1990s and early 2000s. 

“Given the local real estate conditions in dense suburban markets, we’re also finding compelling opportunities to open somewhat bigger stores between 50,000 square feet and 100,000 square feet, which weren’t available in the past,” Mulligan said.

In terms of total investment, Chief Financial Officer Mike Fiddelke said during a Wednesday earnings call that Target had put about $500 million in capital expenditures over the quarter that just closed. Target plans to put about $4 billion into capital expenses by the end of the current fiscal year, Fiddelke said. 

Overall, Target’s total quarterly revenue hit $24.2 billion, a 23.4% increase year-over-year. Its earnings skyrocketed as well, clocking in at $3.69 per share on an adjusted basis, up 525% compared with $0.59 in first quarter of 2020.

*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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Retail Sales Explode in March as Consumers Use Stimulus Checks to Spend Heavily

A fresh batch of stimulus checks sent consumer purchases surging in March as the U.S. economy continued to get juice from aggressive congressional spending.

Advance retail sales rose 9.8% for the month, the Commerce Department reported Thursday. That compared to the Dow Jones estimate of a 6.1% gain and a decline of 2.7% in February.

Sporting goods, clothing and food and beverage led the gains in spending and contributed to the best month for retail since the May 2020 gain of 18.3%, which came after the first round of stimulus checks.

A separate report showed first-time filings for unemployment insurance plunged, with the Labor Department reporting 576,000 new jobless claims for the week ended April 10. That was easily the lowest total since the early days of the Covid-19 pandemic and represented a sharp decline from the previous week’s total of 769,000.

The Dow Jones claims estimate was 710,000.

As the jobs picture brightened, consumers took their $1,400 stimulus checks and spent aggressively. The money came courtesy of the nearly $1.9 trillion American Rescue Plan Act that Congress passed in March.

The legislation took total stimulus and rescue payments approved in the year since the pandemic began to about $5 trillion, fueled by red ink that fiscal authorities say is necessary to keep the economy running.

Spending for the month was broad-based, boosting sales by nearly 28% from March 2020 as pandemic-related business closings began.

The critical bar and restaurant industry saw a 13.4% surge, thanks to the increasing relaxing of restrictions as Covid vaccines accelerate to a pace of more than 3 million a day. Sporting goods spending was the highest percentage gainer at 23.5%, followed by clothing and accessories at 18.3% and motor vehicle parts and dealers at 15.1%.

March’s retail sales report was another sign that consumers overall are willing to spend, even though increasing amounts of stimulus checks are going towards savings rather than spending.

“Spending will almost certainly drop back in April as some of the stimulus boost wears off, but with the vaccination rollout proceeding at a rapid pace and households finances in strong shape, we expect overall consumption growth to continue rebounding rapidly in the second quarter too,” wrote Michael Pearce, senior U.S. economist at Capital Economics.

A recent report from the New York Federal Reserve indicated that stimulus recipients expect to save 41.6% of their checks and spend 24.7%. Following the first round of checks in the spring of 2020, consumers saved 34.5% and spent 29.2%.

As the recovery has gained speed, consumers have had to deal with the strongest signs yet of inflationary pressures building. The consumer price index rose 2.6% in March from a year ago, thanks in part to a surge in gasoline prices. The year-over-year gain was the largest since August 2018.

Thursday’s economic data also showed more signs of a thawing in the labor market.

The plunge in jobless claims generated the lowest weekly number since March 14, 2020, just after the official pandemic declaration. Nearly two weeks later, weekly claims filings would top out at a staggering 6.15 million, easily the worst week in U.S. history.

Since then, the jobs market has improved dramatically, with the unemployment rate falling from a pandemic peak of 14.7% to its current 6%. The nonfarm payroll addition of 916,000 in March brought more hope that the healing is accelerating.

Despite the big decline in weekly claims, continuing claims were little changed at 3.73 million.

The four-week moving average for weekly claims declined to 683,000, also the lowest since March 14.

The total for those receiving benefits under all government programs tumbled by more than 1.2 million to 16.9 million for the week ended March 27. That decline came mostly due to drops in those filing under pandemic-related programs.

About half the weekly decline in filings came from California, which dropped by 75,645, according to unadjusted data. Virginia fell by 23,110, Ohio was down 22,731, and Texas reported a drop of 18,883.

A pair of other economic indicators also turned in much stronger readings than expected.

The Philadelphia Fed’s manufacturing survey registered a reading of 50.2, representing the difference between firms reporting expansion vs. those seeing contraction. That was well ahead of the Dow Jones estimate of 42 and the highest reading since March 1973.

At the same time, the Empire State Manufacturing survey came in at 26.3, its highest since October 2017 and better than the Dow Jones estimate of 20.

*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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Nearly 10,000 Apartments Under Construction in Philadelphia, With More on the Way

The Durst Organization’s proposed 26-story, 360-unit apartment project along the Delaware River is among a series of multifamily developments going through the approval process in Philadelphia, underscoring the optimism residential developers have for the city in spite of the pandemic.

A new housing report by Center City District reveals that an area defined as Greater Center City had 9,400 residential units under construction as of the end of last year, which is a 39% increase compared with the 6,762 units under construction at the end of 2019. 

Post Brothers is tackling one of the largest multifamily projects currently under development as it continues to transform the Piazza in Philadelphia’s Northern Liberties neighborhood. When it bought the Piazza in 2017, the community had 500 apartments. Another 700 units is in development at a project called Piazza Terminal. 

Post Brothers also developed 280 units at the Poplar at Ninth and Poplar streets that is 25% leased. 

“Absorption has been incredible,” said Matt Pestronk of Post Brothers. “During the early part of Covid, the market was dead but, across the whole portfolio, we are more leased than we were and at higher rents.”

Post Brothers owns 3,000 units in Philadelphia, excluding apartments under development. Of those apartments, 95% are occupied. 

The strong absorption last year was likely helped by a reduction in the number of newly constructed apartments that hit the market. A total of just 1,126 new housing units were built in 2020, which was half of what was completed in 2019, according to CCD. The reduction incompletions last year can be attributed to a halt in construction activity from March through June as a result of state mandates early in the pandemic. 

Despite that lull, developers did not stop planning for the future, banking that any population declines driven by the pandemic will be temporary and may even increase as flexible working arrangements have led people to move to Philadelphia, which is more affordable compared with other cities. 

The sale last year of development parcels throughout the region, and particularly in Philadelphia, was the highest it has been in at least five years, according to Real Capital Analytics data. By the end of the third quarter, $417.7 million of these properties had traded throughout the region with more than half of that transacted amount — $282.4 million — coming in Philadelphia.

In 2020, even with the pandemic, the 3,842 permits issued stood as the third-highest over the last 30 years, according to CCD.

The surge in permitting activity was driven by a pending expiration of the 10-year tax abatement on new construction, which was scheduled to sunset at the end of December 2020 but was extended for another year. Historically low-interest rates were also a contributing factor. 

Proposed projects in the pipeline that have gone or will go before the Philadelphia’s Civic Design Review Committee this month alone involve 1,612 new units. Including the Durst project, the number swells to nearly 2,000 apartments in the works at the early part of this year. The proposals include: 

    • Newtrack Development Corp. seeking to build 200 residential units in a 185,266-square-foot building at 2300 Market St. The project is proposed to have 12,048 square feet of commercial space. 
    • Atapco Properties proposing 185 apartments in a 178,837-square-foot building at 4401 Ridge Ave. that will have 4,400 square feet of commercial space.
    • 801 Girard LLC planning 80 units in a 61,291-square-foot building at 801 E. Girard Ave.
    • Riverwards Group envisions two projects on East Somerset Street. The developer envisioned 145 units in a 148,936-square-foot building at 2151-58 Somerset and 390 units in a 380,959-square-foot building at 220-50 Somerset. 
    • Glen Mills Associates has plans for 139 units and 12,991 square feet of commercial space in a 133,897-square-foot building at 1810-34 E. Hagert St., which is also referred to as 1825 E. Boston St. 
    • Mosaic Development Partners proposes 83 units in a 79,040-square-foot building at 6134-46 Wayne Ave.
    • Ampere Capital Group plans 110 units in a 106,374-square-foot building at 1640-48 Hancock St.
    • Another 280 units in a 272,111-square-foot project at 119 S. 31 St., which is a property owned by Horizon Housing Inc.

The Durst Organization’s development will be its first along the Delaware River, where it has assembled a series of properties and was last year named developer of Penn’s Landing. The new building will rise on a 1.6-acre parcel located between Vine and Callowhill streets. As planned, it will include 10,000 square feet of retail and a third of the property will be dedicated as open space. 

*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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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 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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