Northeast Market Reports

Northeast Mall Owners Recognize Importance of Communication in Redevelopments

by Taylor Williams May 24, 2024

By Taylor Williams If the whole mall redevelopment thing doesn’t work out, you can always become a marriage counselor. Perhaps some additional training and education would be needed for such a career transition to actually take place. But mall and shopping center owners who undertake high-risk redevelopments undoubtedly have firsthand appreciation of the importance of providing clear and courteous communication to the many different groups they deal with, from municipal leaders to longstanding tenants to onsite contract workers. That’s not to say that poor communication will necessarily kill a mall redevelopment. The inability to secure zoning overlay districts, civic partnerships for infrastructural improvements or feasibly priced construction loans in 2024 — these are variables over which mall owners have limited control and can actually sink these projects in their infancy. And those factors only come into play once the development team has done its due diligence and determined what uses and levels of density the project will feature. “After you’ve considered the macro-level needs of the market and the asset itself, you enter a phase that we call ‘the minefield map,’” says Steve Plenge, CEO of Pacific Retail Capital Partners. “Reciprocal easement agreements [that regulate design or tenancy issues] by …

May 24, 2024

Industrial Market Reports Northeast Northeast Market Reports

Industrial Development, Leasing Trend Smaller Throughout Northeast Markets

by Taylor Williams April 23, 2024

Sometimes smaller is better. “Sometimes” is of course the operative term in that controversial and wholly non-salacious statement. But in the context of industrial real estate, it’s becoming increasingly clear that at this point in the cycle, smaller buildings make more sense for developers to deliver as e-commerce and distribution users actively consolidate their footprints. “Most leases in New Jersey and Pennsylvania over the last 12 months were for less than 500,000 square feet, with 50,000 to 200,000 square feet being the ‘sweet spot,’ for leasing,” says Anthony Amadeo, executive vice president at New Jersey-based developer Woodmont Industrial Partners. “There is strong demand [for that product type], but other developers are now building it too, so we’re going to see some elevated competition in that space.” This activity is occurring across the country in varying degrees. But in markets like New Jersey and Eastern Pennsylvania, where sites that can support large-scale developments are extremely scarce and entitlement and permitting processes tend to be long and arduous, the trend is perhaps even more pronounced. Yet those longstanding characteristics of the Garden State and Lehigh Valley industrial markets are only partial reasons as to why new developments and deals are effectively downsizing. …

April 23, 2024

Market Reports New York Northeast Northeast Market Reports Retail

Stability Returns to New York City Retail Market

by Taylor Williams December 7, 2023

By Taylor Williams Across Manhattan’s major retail corridors and pockets, leasing agents, operators and owners are all gaining greater clarity on what levels of rent various submarkets can bear and, by extension, how much spaces are truly worth. After three years of disruptions of the public health and financial variety — each devastating in its own right — a reset of sorts is a major windfall for the country’s largest and arguably most dynamic retail market. Closing deals is challenging enough when all parties are on the same page and the economy is stable. When markets are going through tumultuous phases of discovery in which perceived valuations of spaces fluctuate wildly, negotiations tend to flame out even more quickly — if they even get going at all. “A year ago in Manhattan, you could have two adjacent stores, and one might have been asking for $120 per square foot while the other wanted $220 per square foot,” says Chase Welles, partner at TSCG, an Atlanta-based brokerage and consulting firm that is active in New York City. “There’s certainly more definition relative to last year, and the range of asking rents in each submarket has narrowed.” “The market has become more …

December 7, 2023

Market Reports New York Northeast Northeast Market Reports

New York’s Small Business Lodging Crackdown — Another Ripple from a Big Wave

by Taylor Williams November 29, 2023

By Pam Knudsen, senior director of tax compliance services, Avalara While the dust has scarcely settled from a landmark ruling in New York City resulting in a massive crackdown on short-term rentals (STRs), the full extent of the fallout from the decision has yet to be fully grasped by many — and perhaps even by the city itself. Under the terms of Local Law 18, a resolution that passed earlier this year, hosts and owners of short-term rentals, including Airbnb, are now subject to tighter and stricter regulations. These include limits on numbers of guests, requirements to register with the city and obligations to more closely monitor guest behavior, among other regulations. The effective ban on short-term rentals will have considerable consequences on local economies, and more than anyone, it’s small lodging businesses that stand to be impacted by the resulting wave. But to fully understand the major impact this ban has on small businesses, we must first acknowledge that STRs should rightly be considered small businesses themselves. Much like any other small business, STRs are required by most communities to be licensed, registered and compliant with tax collection and remittance. Furthermore, the hosts and managers behind STRs operate in …

November 29, 2023

Industrial Market Reports Northeast Northeast Market Reports

Northeast Industrial Markets Enter New Age of Design

by Taylor Williams November 14, 2023

By Taylor Williams Architects and general contractors are shaking up the ways in which they design and construct industrial projects in response to financial pressures faced by their clients, an elevated emphasis on sustainability and shifts in how tenants utilize spaces. The nuts and bolts of designing and developing commercial properties are fickle by nature, as they are beholden to consumer preferences, which are in a perpetual state of flux. Yet the current shifts in industrial design and construction practices should not be viewed as indicators of the sector’s waning popularity among investors. “Despite a difficult rate environment that is causing challenges for all sectors of the economy, we have deep optimism about the near- and long-term future for the industrial market in New Jersey and Pennsylvania,” says David Greek, managing partner at regional firm Greek Real Estate Partners. “This region sits amid the most densely populated area in the nation and continues to grow. At the same time, the consumer shift to e-commerce is not nearly complete, creating a dramatic long-term need for logistics facilities to accommodate this historic change.” In other words, industrial is still hot. And the most visible and basic change occurring within the property type — …

November 14, 2023

Market Reports Northeast Northeast Market Reports Pennsylvania Retail

Philadelphia Retail Market Establishes Its Resilience

by Taylor Williams September 28, 2023

By Taylor Williams No matter your size, market and scope of operation, for retail owners and operators, there is no such thing as total immunity from the likes of e-commerce, COVID-19, inflation and interest rate hikes. But there is such a thing as absorbing those socioeconomic hits in stride, learning and evolving from them and re-emerging on significantly more solid ground. And that is largely the path that the Philadelphia retail market has traversed over the past few years. The timing of the pandemic dismantled the launch of Fashion District, the redevelopment of the former Gallery at Market East Mall that should have ushered in a new scene of experience-based, locally merchandised retail in Philadelphia. Retailers and restaurants along Center City District’s main shopping corridors quickly devised solutions to the global healthcare crisis and were returning to normalcy when bad timing once again intervened. This time, it took the form of the Delta variant, which delayed plans to reopen existing stores or launch new ones and erased some of the positive momentum that landlords and tenants had recouped. For their part, suburban retail properties, many of whose performances were bolstered in the short run by pandemic- driven population influxes, are …

September 28, 2023

Market Reports Massachusetts Northeast Northeast Market Reports Retail

Pace of Growth Slows Throughout Boston Retail Market

by Taylor Williams August 2, 2023

By Taylor Williams For the past several years, including during the height of the pandemic, the Boston retail market has performed well, if unspectacularly. Defined and driven by stable fundamentals in terms of job growth and tenant demand, the state capital’s retail sector has proven itself a reliable environment in which to expand store counts and park long-term money. But few, if any commercial markets and asset classes are wholly immune to the effects of sluggish and disruptive macroeconomic activity. Through no fault of its own, the Boston retail market is seeing its paces of growth slow across the key verticals that are development, leasing and investment sales. That said, seasoned players in this space know better than to panic. Boston remains a dynamic market, despite data from the U.S. Census Bureau showing that the city’s total population shrunk by about 25,000 people, or 3.7 percent, between April 2020 and April 2022. In addition, even in an inflationary economy, Boston consumers tend to retain healthy disposable income levels. A burgeoning life sciences sector that is bringing thousands of well-paying jobs to the city and a steady flow of students and young professionals across its 25-plus colleges and universities lie at …

August 2, 2023

Crossroads-Commerce-Center-North-Brunswick

Industrial Market Reports New Jersey Northeast Northeast Market Reports Pennsylvania

Industrial Developers in Northeast Reckon with New Underwriting Parameters

by Taylor Williams April 18, 2023

By Taylor Williams “Numbers never lie; they simply tell different stories depending on the math of the tellers.” Mexican-American poet Luis Alberto Urrea may not have been talking about commercial real estate development and investment when he wrote that line, but the implications of that statement are undeniably applicable to those fields. The use of numerical projections in commercial development and investment is different from employing sabermetrics in sports or using predictive analytics to diagnose illnesses in medicine. Hard costs are what they are, and the formulas that developers and investors rely on to make critical decisions tend to be well-established in their rigidity, even if their inputs can and do change. Respecting the time-tested veracity of these formulas can make the difference between coasting through a down cycle or being crushed by it. Yet this is a world in which complex equations, algorithms and computations increasingly influence key business decisions. And so the ability to accurately forecast, control and manipulate numerical inputs is beyond valuable. Underwriting represents the piece of the real estate development or acquisition process in which these numerical details are shoved under the microscope and relentlessly finagled in hopes of keeping a development or deal alive. …

April 18, 2023

Connecticut Market Reports Northeast Northeast Market Reports

Can Connecticut’s Proposed Regulatory Changes Protect Human Health, Environmental Safeguards While Promoting Economic Development?

by Taylor Williams April 11, 2023

By Samuel Haydock, business development and client care – environmental services, BL Companies. Connecticut’s industrial past and subsequent decline has left the state dotted by abandoned factories and associated pollution — contaminated soil, groundwater, abandoned buildings and neighborhood blight. The impact can be seen across the state, from urban centers like Waterbury and Bridgeport that have block after block of brownfields to rural communities such as Plainfield and New Milford, where the town was developed around mills or factories that now sit vacant and dilapidated. While Connecticut has led the way in recent years with significant funding for assessment and remediation of brownfields to jumpstart redevelopment, the state still suffers from a reputation as having environmental regulations that thwart investment and growth. How We Got Here The main culprit is an environmental statute known as the Connecticut Transfer Act. Passed in 1985 as a “buyer beware” law to disclose the presence of pollution and protect buyers from unwittingly purchasing cleanup liability, the law has — whether fairly or unfairly — been blamed for the creation of brownfields and the lack of investment needed to revitalize them. Ask any commercial real estate broker about the Transfer Act, and he or she …

April 11, 2023

Connecticut Market Reports Northeast Northeast Market Reports

Outsourcing of Property Tax Assessment, Collection Functions Raises Problems in Northeast

by Taylor Williams March 29, 2023

By Elliott Pollack, Esq., Pullman & Comley LLC Although COVID-19 resulted in the pumping of significant dollars from the federal government into municipal and county budgets, generally speaking, property tax assessment offices remain understaffed and undertrained. Many assessors recognize these realities and are successful in convincing local leaders to appropriate funds to retain independent contractors to perform various assessment and collection functions. The theory is that these expenditures are non-recurring and are preferable to staffing assessment offices on a full-time permanent basis. As an example, Connecticut assessors almost always contract with certified revaluation companies to perform statutorily required, community-wide revaluations every five years. They contract with these companies because they simply lack the personnel to do the work themselves. In addition, reliance on outside contractors can, to some degree, insulate municipal staff from angry property owners who are unhappy with their new assessments. Another perhaps unplanned benefit to retaining outside contractors is that unless communications with the contractors can be made promptly after new assessments are published, at least in Connecticut, property owners are compelled to resort to judicial remedies to challenge their values. Since court proceedings tend not to conclude for a year or even more, localities obtain the …

March 29, 2023

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