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WCRE Second Quarter Report: Southern New Jersey Market Shows Strong Fundamentals

WCRE Second Quarter Report: Southern New Jersey Market Shows Strong Fundamentals, Appears Poised For Growth

July 7, 2017 – Marlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the Southern New Jersey market, which started off 2017 on a cautiously optimistic note, continued picking up steam through the second quarter.

“The overall mood of the market seems to be positive, riding a wave of steady moderate growth in the national economy, increasing expansion locally, and investor interest from outside the region” said Jason Wolf, founder and managing principal of WCRE. “Office occupancy needs increased during the quarter, and we have been seeing increased capital spending and construction hiring this year for the first time in years.”

There were approximately 395,155 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents an increase of approximately 24 percent compared with the previous quarter, and a remarkable 58 percent increase over the second quarter last year. While leasing showed this notable rise, the sales market had a dip in volume during the second quarter, with some 554,590 square feet worth more than $46.1 million trading hands.

New leasing activity accounted for approximately 43.4 percent of all deals. Overall, gross leasing absorption for the quarter was in the range of approximately 85,000 square feet.

Download the Report (PDF) >>>

Other office market highlights from the report:

Overall vacancy in the market is now approximately 10.4 percent, which is a solid improvement over the previous quarter’s 11.05 percent.

Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.50/sf NNN or $20.00-$24.50/sf gross for the deals completed during the quarter. This is essentially unchanged from the previous two quarters.

Vacancy in Camden County improved dramatically, standing at 11.7 percent for the second quarter, down from 13.3 percent in 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 Philadelphia industrial market remains very healthy, and the outlook is positive. Vacancy rates for flex and industrial properties in Philadelphia are well below the regional and national averages, and the expectation is that supply will continue to meet demand.

Philadelphia’s office market continues to gain strength across the board, with far lower vacancy rates than regional and national averages for both Class A and Class B properties in the Central Business Districts and around the suburbs. Conditions are in place that seem to bode well for continued growth, including increasing employment and new construction.

The Philadelphia retail sector has not been immune to the systemic challenges facing retail businesses everywhere. Namely, the massive shift to online retailing and away from brick-and-mortar. Still, there were some positive signs amid the spate of announced store closings. Community shopping centers remain an area of strength in the market, with vacancy rates nearly half the national average. 

WCRE also reported on the Southern New Jersey retail market, noting that e-commerce sales were high and moving higher still, while brick-and-mortar retail sales were growing at a modest two percent. Overall retail sales were 3.9 percent higher this year compared to 2016. Highlights from the retail section of the report include:

Retail vacancy in Camden County stood at 9.4 percent, with average rents in the range of $11.33/sf NNN.

Retail vacancy in Burlington County stood at 10.5 percent, with average rents in the range of $13.35/sf NNN.

Retail vacancy in Gloucester County stood at 7.1 percent, with average rents in the range of $13.78/sf NNN.

The full report is available upon request.

About WCRE/CORFAC International

WCRE/CORFAC International 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 Report: Southern New Jersey Market Is Weathering Global Uncertainties

WCRE FIRST QUARTER REPORT: Southern New Jersey Market Is Weathering Global Uncertainties with Characteristic Strength

April 6, 2017 – Marlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that despite political uncertainty at home and around the world, the Southern New Jersey market has started off 2017 on a cautiously optimistic footing.

“Even with an expected winter slowdown affecting office leasing activity, and added anxiety with the transfer of political power in Washington, the overall mood of the market seems to be positive,” said Jason Wolf, founder and managing principal of WCRE. “As we’ve seen the past couple of years, several business sectors increased their occupancy needs during the first quarter, and we continue to see increased capital spending, construction hiring, and expansions.”

There were approximately 317,886 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents a decrease of approximately 18 percent compared with the previous quarter, but is essentially unchanged from the first quarter last year. While leasing slowed a bit, the sales market doubled in volume during the first quarter, with some 767,988 square feet worth more than $133.5 million trading hands. New leasing activity accounted for approximately half of all deals – a big increase over the fourth quarter. Overall, net absorption for the quarter was in the range of approximately 122,572 square feet.

Download The Report PDF>>>

Other office market highlights from the report:

Overall vacancy in the market is now approximately 11.05 percent, which is a nominal increase from the previous quarter.

Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.50/sf NNN or $20.00-$24.50/sf gross for the deals completed during the quarter. This is essentially unchanged from the previous two quarters.

New Jersey’s unemployment rate moved down to 4.4 percent, putting it below the national rate of 4.7 percent.

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:

Office demand in Center City is still exceptionally strong, as rental rates continue on an upswing and vacancy levels are compressing to all-time lows.

There is a significant amount of inventory of multi-family, including recently developed, under construction, and proposed, in both the City of Philadelphia and Philadelphia suburbs. Rental rates have either remained relatively stable or decreased slightly. Concessions are becoming commonplace at many apartment communities.

While much of the pricing for commercial real estate accounts for increasing interest rates, many purchasers are showing signs of hesitation and fears of potential decreases in market fundamentals.

The industrial market in the City of Philadelphia and its suburbs is fetching price points never experienced in the marketplace. The lack of available product coupled with significant demand is putting further upward pressure on overall pricing.

WCRE also reported on the Southern New Jersey retail market, noting an incongruous mix of consumers earning more and showing a willingness to spend, and a high number of retailers declaring bankruptcy. The report attributes this to a growing shift to online shopping and other changes in spending habits. Highlights from the retail section of the report include:

The Conference Board reports that consumer confidence is at its highest level since 2000.

Nine retailers filed bankruptcy in the first quarter, which is the same as the total for all of 2016.

Retail vacancy in Camden County stood at 6.4 percent, with average rents in the range of $12.92/sf NNN.

Retail vacancy in Burlington County stood at 11.1 percent, with average rents in the range of $12.31/sf NNN.

Retail vacancy in Gloucester County stood at 5 percent, with average rents in the range of $12.01sf 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 Report: Southern New Jersey Gathers Strength but Pauses

WCRE FOURTH QUARTER REPORT: Southern New Jersey Gathers Strength, But Pauses Due To Uncertainties

Fundamentals Continue to be Strong, and the Elements are in Place for a Period of Sustained Growth

January 10, 2017 – Marlton, NJ – Commercial real estate brokerage Wolf Commercial Real Estate (WCRE) reported in its latest quarterly analysis that although the Southern New Jersey market has proven resilient, key players seem to be in wait-and-see mode in the wake of the Brexit vote and the US presidential election.
“We see the potential for tremendous performance by the market, and good economic news has been easy to find this quarter. But still, we didn’t see many bold, decisive transactions as 2016 gave way to 2017,” said Jason Wolf, founder and managing principal of WCRE.

There were approximately 388,987 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents an increase of 6.5 percent compared with the third quarter. Prospecting activity was unchanged compared to the previous quarter, with about 250,000 SF of lease deals in the pipeline and expected to close in the near term. Still, the trend of positive absorption continued, making up approximately 127,149 square feet of total activity. Vacancy rates posted slight increases, and one major REIT put its entire area portfolio up for sale as the year wound down.

Download the Report in PDF>>>

Other office market highlights from the report:

Overall vacancy in the market is now approximately 10.85%.

Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.50/sf NNN or $20.00-$24.50/sf gross for the deals completed during the quarter. This is essentially unchanged from the previous two quarters.

All of the major private owners and REITS showed moderate leasing and prospect activity for the quarter – with Burlington County vacancies tightening up, many larger vacancy opportunities are also shifting towards Camden County, which is not controlled by these ownership entities.

New Jersey’s unemployment rate moved down to 4.9 percent, and the national rate is now at 4.6 percent.

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:

Although the presidential election threw the market into a holding pattern, Philadelphia and the surrounding suburbs continue to demonstrate favorable demand in both leasing and sales activity throughout all asset classes.

Most investors appear positive with regard to real estate in the months ahead. Despite the most recent increase in interest rates and anticipated increases over the next 12 months, capitalization rates are forecasted to increase, but at a much slower pace.

The appetite for core center city office inventory is significantly strong, while suburban office space is still lagging behind in both rental growth and occupancy.

There is significant multi-family inventory under construction or proposed for Center City, but some financial institutions are second guessing the depth of the market for additional units, and have demonstrated less involvement on several high profile development projects. In addition, although many apartment projects have indicated limited increases in rental growth, rental rates still remain extremely strong and occupancy levels, while decreasing 1%-2% over the last 12 months, are anticipated to remain flat for the coming months.

WCRE also reported on the Southern New Jersey retail market, noting an especially solid holiday shopping season. Highlights from the retail section of the report include:

Overall retail sales and spending were up significantly over last year, and consumer confidence is up, as well.

Retail vacancy in Camden County stood at 11.4 percent, with average rents in the range of $12.20/sf NNN.

Retail vacancy in Burlington County stood at 10.4 percent, with average rents in the range of $13.15/sf NNN.

Retail vacancy in Gloucester County stood at 6.4 percent, with average rents in the range of $12.01sf NNN.

The full report is available upon request.

About Wolf Commercial Real Estate (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 Report: Southern New Jersey Office Leasing Rebounds

WCRE Third Quarter Report: Southern New Jersey Office Leasing Rebounds, Still Lags Behind 2015 Levels

Office Leasing Posts Strongest Quarter of the Year, Investments, Sales, and Philadelphia Remain Areas Of Strength

wcre_3qtr2016_reportMarlton, NJ – Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the Southern New Jersey office market has bounced back nicely from the slow-down in commercial leasing activity that began late last year. Office leasing totals for the third quarter were the strongest they have been all year, though they are still off from the same time last year. The investment and sales market continued its hot streak, and the city of Camden is seeing progress from the Grow New Jersey program.

“The Brexit vote was something of a shock to the system during the second quarter, but this region showed its resilience and the strength of its fundamentals,” said Jason Wolf, founder and managing principal of WCRE. “The upcoming election means more uncertainty in the near term, but the overall tone is one of cautious optimism.”

There were approximately 365,224 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents an incredible improvement of 44 percent compared with the second quarter of the year. The quarter saw a slight decrease in prospecting, with about 225,000 SF of lease deals in the pipeline and expected to close in the near term. Still, the trend of positive absorption continued, making up approximately 195,000 square feet of total activity.

Overall market vacancy dropped as well, with Camden County leading the way.

Download the Report>>>

Other office market highlights from the report:

Overall vacancy in the market is now approximately 10.65%.

Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.00/sf NNN or $20.00-$24.00/sf gross for the deals completed during the quarter. This is essentially unchanged from the previous several quarters.

All of the major private owners and REITS showed moderate leasing and prospect activity for the quarter – with Burlington County vacancies tightening up, many larger vacancy opportunities are also shifting towards Camden County, which is not controlled by these ownership entities.
On the sales and investment side, about 416,050 square feet of properties worth a total of more than $52 million were traded.

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

Philadelphia and the surrounding suburbs continue on an upward trajectory in terms of construction for multi-family and repositioning of older Class B/C assets to core Class A properties. Despite these trends, we are witnessing some hesitation from the banking community regarding the viability of these extraordinarily high pricing levels. With thousands of units either under construction or slated for development in the Philadelphia region, the question regarding rental rates and vacancy levels is coming to the forefront of many deals.

Aramark signed a lease at 2400 Market Street in Philadelphia for a new headquarters. The 280,000+/- square foot space will be state-of-the-art with unparalleled views of the Schuylkill River. This international entity looked elsewhere in the region for space but chose to remain in Center City, which bodes well for the future of the market.

Five Below chose the Lits Building for its new Center City headquarters. The company also plans on leasing 180,000 square feet of office space and 15,000 square feet of retail space at 701 Market Street.

Strong demand continues in the industrial market, as evidenced by increasing prices and rental rates. Though much of the institutional activity appears to be in central Pennsylvania and the Lehigh Valley, pricing for non-institutional assets, especially in Philadelphia and the surrounding counties, is stronger than ever.

WCRE also reported on the Southern New Jersey retail market, noting mixed results there. Highlights from the retail section of the report include:

Overall retail sales and spending dropped again, although restaurants, grocery stores, and clothing stores did post modest gains for the third quarter. Interestingly, consumer confidence grew at the same time, hitting a post-recession high.

Retail vacancy in Camden County stood at 11 percent, with average rents in the range of $12.20/sf NNN. This is a slight increase in both vacancy rates and average rents.

Retail vacancy in Burlington County stood at 10.2 percent, with average rents in the range of $13.15/sf NNN. This is a notable drop in vacancy, while rents stayed essentially unchanged.

Retail vacancy in Gloucester County stood at 6.9 percent, with average rents in the range of $12.01/sf NNN. This represented an uptick in vacancy with rents unchanged.

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 SECOND QUARTER REPORT: SOUTHERN NEW JERSEY OFFICE LEASING TAKES A NOTICEABLE DIP, BUT INVESTMENT AND SALES REMAIN STRONG

Retailers Lose Ground to Online Stores while the Industrial market has stayed strong

DOWNLOAD Q2 2016 COMMENTARY PRESS RELEASE AS PDF

July 11, 2016 – Marlton, NJ –  Commercial real estate brokerage WCRE reported in its latest quarterly analysis that the slow-down in commercial leasing activity in Southern New Jersey that began late last year may have been the beginning of a trend. Office leasing totals were down significantly compared to the same period last year, and were lower than the already slower first quarter. Mixed with this bad news were positive signs in the continued high level of activity in the investment and sales market, and an uptick in leasing in Cherry Hill and Voorhees. Overall, caution and uncertainty seem to be guiding factors.

“Several unknowns began influencing the markets during the second quarter – from the possible impact of the Brexit vote to the coming U.S. presidential election,” said Jason Wolf, founder and managing principal of WCRE. “Businesses are trying to figure out how their plans may be impacted by the uncertainties, but we still believe the overall outlook is still strong.”

There were approximately 252,121 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester), which represents a drop of +/- 23 percent compared with the first quarter of the year. The quarter saw an increase in prospecting, with about 250,000 SF of lease deals in the pipeline and expected to close in the near term. Still, the trend of positive absorption continued – and improved over the previous quarter – making up approximately 206,000 square feet of total activity. Vacancy rates posted slight increases, but several large assets changed hands as owners repositioned and new investors entered our market.

Other office market highlights from the report:

  • Overall vacancy in the market is now approximately 11.85%.
  • Average rents for Class A & B product continue to show strong support in the range of $10.00-$14.00/sf NNN or $20.00-$24.00/sf gross for the deals completed during the quarter. This is essentially unchanged from the previous two quarters.
  • All of the major private owners and REITS showed moderate leasing and prospect activity for the quarter – with Burlington County vacancies tightening up, many larger vacancy opportunities are also shifting towards Camden County, which is not controlled by these ownership entities.
  • New Jersey’s unemployment rate moved higher for the first time in more than a year, coming in at 4.9 percent. Like the national economic recovery, the New Jersey recovery appears to be experiencing a slight pause.

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:

  • Although not as pronounced as other “gateway markets”, the Philadelphia CBD office market is attracting attention from international institutional investors. Notable investments include the Korean Investment Fund’s acquisition of Cira Square at 2970 Market Street for $354 million from Brandywine Realty Trust  and 1700 Market Street from Shorenstein Properties for $195 million. Other transactions in progress are commanding all-time-low capitalization rates from some Middle East equity investors.
  • Beyond the CBD, the suburban market has been extremely active, including Saint Gobain’s Headquarters facility, which sold for $123 million at a sub-6% capitalization rate. Additionally, Liberty Property Trust announced a plan to redevelop in the City of Camden, which includes a master plan involving 1.75 million SF of office, parking garages, hotel, and apartments.
  • There has been a flurry of favorable retail activity in the regional market in 2016. Some major projects include PREIT’s sale of three core CBD retail properties to Post Brothers for $45 million at a sub-4% capitalization rate, RIOCan REIT’s announcement to sell 49 retail properties located throughout the Northeast, with many in the Philadelphia region, for $1.9 billion. In addition to these core assets, there is significant development of net leased properties, including Wawa/Sheetz/Royal Farms convenience stores, as well as a variety of other retailers. Finally, retail is filling in many of the ground floor spaces of multi-use properties and commanding some of the all-time highest rental rates seen thus far.
  • The industrial market is still experiencing strong activity, with increases in pricing and rental rates. One of the most significant transactions of the second quarter was the Target E-Commerce Distribution Center in York, PA, which fetched $60 million or $76/SF. While the appetite for core Class A assets continues to be strong, pricing for multi-tenanted flex assets is demonstrating great appeal and marketability.

WCRE also reported on the Southern New Jersey retail market, noting mixed results there, as well. Highlights from the retail section of the report include:

  • Overall retail sales and spending dropped during the second quarter, after an already underwhelming performance in the first quarter.
  • Retail vacancy in Camden County stood at 10.5 percent, with average rents in the range of $11.89/sf NNN.
  • Retail vacancy in Burlington County stood at 14.8 percent, with average rents in the range of $12.21/sf NNN.
  • Retail vacancy in Gloucester County stood at 6.4 percent, with average rents in the range of $12.00/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.com,  www.phillyindustrialspace.com, www.phillymedicalspace.com and www.phillyretailspace.com.

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