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Tag Archives: Wolf Commercial Real Estate


Commercial Real-Estate Sales and Values Surge to Records

Investors purchased a record amount of commercial real estate in the third quarter, defying warnings that the Covid-19 pandemic would erode these property values and starve the industry of cash.

Instead, purchases of apartment buildings, life-science labs and industrial properties, which serve as e-commerce distribution centers, rocketed commercial sales to more than $193 billion in the quarter. That is up 19% compared with the same three months in 2019, before the pandemic, and the biggest quarter for commercial property…

*Article courtesy of Wall Street Journal

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

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

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

As experts in both Philadelphia and New Jersey commercial real estate listings and services, the team at our commercial real estate brokerage firm provides ongoing detailed information about Philadelphia and New Jersey commercial properties to our clients and prospects to help them achieve their real estate goals.  

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

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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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Many employees want to work remotely forever. Some business owners will fire those who try.

Many small business owners want their employees to return to the office full-time as the pandemic wanes — and 39% said they would fire workers who refuse.

That is from a July 6 survey of 1,500 small business owners by Digital.com, which shows the potential disconnect between employers and employees over what the future of the workplace should look like as many workers hold out for remote jobs and other expect work-from-home flexibility as part of the job search.

During the pandemic, about 30% of business owners said their employees worked remotely, while another 36% worked some combination of onsite and remote. But once the pandemic is over, only 10% plan to continue remote work, while about 37% plan on either a hybrid office or allowing employees to choose to work in the office or remotely and 39% expect employees to return to the office full time.

But that resistance to some kind of remote work offering may hurt businesses in the future, said Digital’s small business expert, Dennis Consorte, in a blog post.

“COVID-19 lockdowns didn’t create the move towards a remote workforce — it just accelerated the inevitable,” Consorte said. “Companies that focus on physical location and hours worked will be behind the curve. They should focus instead on the value produced by their extended teams. Otherwise, their most valued employees may seek out remote opportunities elsewhere.”

While 39% of business owners said they would fire employees who refused to return to work full time, about 39% said they would not, while the remainder said they were not sure. But about 47% of business owners who say they will fire employees for not returning are in white-collar industries such as computer and information technology, business, finance and advertising and marketing. 

*Article Courtesy of Philadelphia Business Journal 

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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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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The Future of Office Work has Arrived

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

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

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

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

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

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

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

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

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

*Article Courtesy of RE-NJ.com

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

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

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

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

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

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Residential Developers Get Go-Ahead To Apply for New Jersey Tax Incentives

After a two-year halt, residential real estate developers in New Jersey can now apply for state tax incentives from $50 million set aside as part of legislation Gov. Phil Murphy signed earlier this year. 

The New Jersey Economic Development Authority, based in Trenton, on Tuesday said it was looking for applicants for the residential component of the Economic Redevelopment and Growth, or ERG, program. That program, originally created to address project-financing gaps in development projects, had stopped accepting new applications in June 2019 because its enabling legislation ended.

The EDA and the state’s tax incentive programs at that time had come under criticism and were the subject of several probes, and the governor refused to extend the ERG legislation amid the controversy.

In March, the EDA officially announced it was reopening the ERG program as a result of the $50 million designated for it in the state’s Economic Recovery Act of 2020. That was a few months after Murphy signed the sweeping act, which set forth an overall $14.5 billion package of tax incentive programs. 

Under the legislation, residential projects can receive tax credits of up to 30% of total eligible project costs. And projects in Atlantic City, Camden, Paterson, Passaic and Trenton can receive tax credits of up to 40% of eligible project costs. 

Those ERG tax credits aren’t meant to be a substitute for conventional debt and equity financing, and applicants should have their primary debt financing in place before applying, according to the EDA.

“Thanks to the foresight of Gov. Murphy and the Legislature in reopening the ERG program, essential housing projects throughout New Jersey that have been on hold will be able to move forward while the new programs created by the Economic Recovery Act are under development,” Tim Sullivan, the EDA’s CEO, said in a statement. 

“This will not only provide much-needed new housing in our state, but it will also drive economic growth by creating construction jobs and attracting more workers to New Jersey,” Sullivan said. “This is always important, but it is especially crucial now as we begin recovering from the economic impacts of COVID-19.”

*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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Sheetz Becomes First Convenience Store Chain to Accept Cryptocurrency

Sheetz, the Pennsylvania-based convenience store chain, has announced it will enable digital currency payments to provide customers with the ability to pay for items inside the store and at the pump. 

Sheetz will begin accepting digital currencies at select Sheetz Cafe stores later this summer with a planned rollout later in the year for acceptance at Sheetz’s fuel pumps as well. 

Sheetz has locations across Pennsylvania, including stores in Morgantown and Reading. The chain also has locations in Maryland, Virginia, West Virginia, Ohio, and North Carolina.

Digital currency payments will be enabled via Flexa, an instant, scalable, climate-neutral, and pure-digital payment network that supports bitcoin, etherm litecoin, dogecoin, and other cryptocurrencies. Sheetz rewards members will have the option to link their loyalty accounts when paying with Flexa-enabled apps. 

Linda Smith, payments manager for Sheetz, said the addition of these capabilities is in line with the company’s mission to meet all needs of its customers. 

*Article Courtesy of Philadelphia Business Journal

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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The Path to Recovery for Hotels Is Paved With Luxury

In the first quarter of 2021, luxury chain-affiliated hotels in the U.S. reported average daily rate growth of 3.4% compared to the first quarter of 2020. In other words, those types of rooms were a little more expensive than they were a year ago. 

This is noteworthy since room rates declined for all other chain scales in the first three months of the year. It is also worth noting that the first two months of 2020 were not affected by the pandemic, so room rate performance during those months was still strong. Being able to increase the average daily rate, or ADR, on top of the “normal” performance from a year ago speaks to the pricing power that high-end hotel operators can summon.

Granted, only a third of luxury rooms were occupied, the lowest occupancy of all scales. But it seems that hoteliers and revenue managers on the very high end are once again able to command premium rates for premium rooms.

During the summer of 2020, room rates declined across all classes and most markets in the U.S. as corporate transient and group travelers stayed home and leisure travelers were the only group consistently traveling. But for luxury hotels, the lack of corporate, pre-negotiated rates meant that the mix of room rates shifted up since leisure travelers often pay for higher-end rooms.

One word of caution when estimating luxury-scale ADRs going forward: If corporate demand increases as expected in late 2021 and beyond, the ADR increases will likely soften since the customer mix, and hence the ADR mix, will revert to prior averages and we can expect the luxury ADR will not grow as quickly.

The weekly data including spring break weeks in late April shows similar results.

Lower-end room rates, which in absolute dollar terms did not fall as severely in 2020, are also well on their way to recovery compared to 2019. But for the week of May 8, luxury-class ADR has fully recovered.

Luxury Hotel Deals Pick Back Up

The healthy leisure demand, coupled with the return of pricing power for luxury hotels, has led to at least some deals in which buyers and sellers seem to agree that the “annus horribilis” of 2020 is firmly in the rearview mirror and the asset values of luxury hotels are not depressed. Two recent transactions point at this reality.

In April, the 130-room Montage Healdburg north of San Francisco sold in an off-market transaction to Sunstone Hotel Investors for over $2 million per key. The property is fairly new, having opened in December.

On the other side of the country, the 444-room Four Seasons Resort Orlando at Walt Disney World sold to Host Hotels & Resorts for $610 million in early May. Host Hotels stated in a press release that the purchase price equated to a 4.7% capitalization rate on 2019 results. This can be interpreted as a sign that buyers and sellers agreed on the positive outlook for a high-end property that can attract a mix of luxury, leisure and corporate group demand.

Taken together, the ongoing pricing trends plus the availability of capital for high-end assets bodes well for the luxury end of the hotel industry.

*Article courtesy of CoStar

For more information about New Jersey or Philadelphia hotel property, 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, New Jersey or Philadelphia hotel property, and New Jersey and Philadelphia industrial space.

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

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

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

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

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New York, New Jersey Marijuana Legalization May Spark Flurry of Commercial Real Estate Activity

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

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

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

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

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

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

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

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

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

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

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

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

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

Licenses and Leases

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

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

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

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

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

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

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

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

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

Limit on Growing Operations

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

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

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

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

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

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

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

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

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

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

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

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

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

Land Rush

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

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

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

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

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

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

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

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

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

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

Cannabis Cafes

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

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

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

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

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

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

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

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

Equity, Not Debt

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

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

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

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

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

*Article courtesy of CoStar

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

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

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

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

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

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Understanding Section 45L & Section 179D Tax Credits

Section 45L & Section 179D Tax CreditsThe recently enacted Covid-19 relief package titled “Consolidated Appropriations Act, 2021” has extended the Federal Energy Tax Credit (Section 45L) through December 31, 2021 and made the Energy Efficient Commercial Building Deduction (Section 179D) permanent. While both tax incentives offer significant value and the qualification process is simple, they are often overlooked by developers and homebuilders.

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Section 45L Federal Energy Tax Credit 

Section 45L is a tax credit of up to $2,000 for each new or rehabilitated energy-efficient dwelling unit that is first leased or sold by the end of 2021. If you qualified for the credit but did not take advantage of it in previous years, your tax returns can be amended for up to three past years—2017, 2018 and 2019—to get you the credits you are entitled to.

Qualifying dwellings include newly constructed or rehabbed single-family homes, low-rise apartments, and other complexes of three stories or less, including condominiums, townhouses, senior living facilities, and student housing.

The projected annual heating and cooling cost of the dwelling or residential unit must be at least 50% below the annual energy consumption level based on 2006 standards. Most new developments today exceed these standards simply through energy-efficient features, such as high-R value insulation and roofing, windows, doors, and/or HVAC systems.
To capitalize on the 45L credits, you must engage a licensed professional to certify energy improvement standards have been met.

The cost of certification is typically much less than the financial rewards gained from the tax credit. For example, consider a three-story apartment complex with 60 qualifying units that were fully leased or sold in 2020:

• Tax credit = $2,000/unit x 60 units = $120,000
• Project Certification Fees (estimated) = $400/unit x 60 units = $24,000
• Net benefit of the 45L credits = $96,000

Section 17D Energy Efficient Commercial Building Deduction

The 179D Energy Efficient Commercial Building Deduction of a maximum of $1.80 per sq. ft. per qualifying property is available to those who have built or renovated properties they own with energy-efficient commercial building property (EECBP). EECBP includes interior lighting, materials used on the building structure, and mechanical systems. The 179D deduction is also available to those who have designed or built government-owned buildings, such as engineers, architects, and contractors. In certain situations, more than one of the companies designing and building a property will qualify for the credit, so it is important to address the issue up front in the building contracts.

Both the Section 45L and 179D tax incentives have been available for years, but few developers and builders who qualify take advantage of them. If you think you might qualify for either one, call your tax advisor. It could mean a significant financial benefit to you and your company.

ABOUT THE AUTHORS

Michael Wolf, CPA, Principal

Michael Wolf is a Principal of HBK CPAs & Consultants and works primarily out of the Blue Bell, PA. office. He leads HBK’s Construction Industry Group in the Mid-Atlantic Region. He can be contacted at 215-628-8080 or by email at mrwolf@hbkcpa.com.

Patrick Higgins, CPA, Manager

Patrick is a Manager at HBK CPAs & Consultants and works out of the Blue Bell, PA office. He has many years of experience working with construction contractors to help them achieve their goals. Patrick is a member of the Construction Accounting Network (CAN) and an associate member of Associated Builders and Contractors (ABC) – Eastern Pennsylvania Chapter. He can be contacted at 215-628-8080 or by email at phiggins@hbkcpa.com.

About HBK Construction Solutions Group

At HBK, our Construction Solutions is comprised of dedicated team members devoted to keeping pace with industry changes impacting your business and in turn providing you and your company with strategies and solutions customized to fit your unique needs.

Our specialized group serves a broad range of clients throughout the region who include general contractors, heavy construction, home builders, bridge painters and other specialty trades.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*Article courtesy of Philadelphia Business Journal

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