Northeast Market Reports

Looming Infrastructure Investments in New York City Offer Hope for Job Creation, Middle Class

by Taylor Williams November 1, 2022

By Lou Coletti, president & CEO, Building Trades Employers Association In the 1930s, the United States was in the throes of the Great Depression. Millions of people lost their jobs, and savings were obliterated overnight. President Franklin Delano Roosevelt seized the opportunity to bring the country back from the brink of economic collapse, creating the Works Progress Administration to put 8.5 million Americans to work building new schools, roads, bridges and water systems. In 2020, the country faced a similar shock to the system as COVID-19 locked down our cities, shuttered businesses and sent entire populations into isolation for months on end, only to contend with a maze of rules and restrictions as the economy reopened. Almost three years later, major metropolises like New York City have an unprecedented opportunity to rebuild both the physical infrastructure and social fabric of their respective regions. Much like in the days of the Great Depression, the construction industry has a key role to play in rebuilding our physical and social infrastructure. This time, however, it’s imperative that we prioritize equity, not only within individual projects but also within the industry at large. The combination of economic upheaval caused by COVID-19 and the …

November 1, 2022

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Industrial Market Reports Northeast Northeast Market Reports

Industrial Buyers in Northeast Markets Can Work With Negative Leverage

by Taylor Williams October 24, 2022

By Taylor Williams “Negative leverage.” At face value, the term has an undeniably ominous connotation. The first half is an umbrella word for all things adverse and pessimistic, while the second evokes a sense of financial helplessness and dependency, of being permanently hamstrung by creditors. Yet in the context of industrial investment in major markets throughout the Northeast, the term is more synonymous with flexibility and acceptance, as it represents a framework through which deals continue to get done despite the very dicey conditions of the U.S. capital markets. Since the Federal Reserve began aggressively raising the federal funds rates this spring to combat severe inflation, all commercial property types have been hit with softening buyer demand and, consequently, price declines. At the time of this writing, the nation’s central bank had a target range of 3 to 3.25 percent for short-term interest rates, nearly 300 basis points above its stated goal at the beginning of the year. Increases of that magnitude in the cost of debt adversely impact demand across all asset classes, as there are only so many buyers that can pay entirely in cash. Investors that can pay all cash expect — and usually receive — discounted …

October 24, 2022

Development Market Reports Northeast Northeast Market Reports Pennsylvania Retail

New 76ers Arena Has Game-Changing Potential

by Taylor Williams October 10, 2022

By Taylor Williams Though very much in its infancy, the Philadelphia 76ers’ recent decision to assemble a development team and file a formal proposal for a new arena at the current site of Fashion District Philadelphia has drawn the city’s retail market into speculation on how buildings, operators and streetscapes will be impacted. Known as 76 Place, the $1.3 billion venue would theoretically anchor the Market East corridor that connects Center City to Chinatown and Old City via its location atop the city’s largest public transit hub. The ability to centralize the arrival of fans, shoppers and diners from all cardinal directions, as well as multiple states, automatically sparks excitement for growth opportunities in the world of retail real estate. This project would immediately check that box. “The announcement of the new 76ers arena has generated a lot of discussion in the retail world,” says Steve Gartner, executive vice president at CBRE. “Bringing an arena to downtown Center City, especially one that’s adjacent to a convention center, will allow Philadelphia to hold more concerts and global events, like political conventions, that impact retailers and restaurants. These positive impacts will permeate the fabric of all of downtown.” “The retail community is …

October 10, 2022

Market Reports New York Northeast Northeast Market Reports

Net-Lease Tenants in New York Can Appeal Property Tax Assessments

by Taylor Williams September 26, 2022

By Jason Penighetti, attorney, Koeppel Martone & Leistman LLC In a far-reaching decision, New York’s highest court has affirmed the rights of tenants under a commercial net lease to protest assessments and reduce their real property tax burden. The ruling reversed a State Supreme Court dismissal of a petition on the grounds that only a property’s owner can file an administrative grievance with the Board of Assessment Review. In a net lease, the tenant is responsible for paying real estate taxes and other expenses stated in the lease. In the matter of DCH Auto vs. Town of Mamaroneck, the Court of Appeals in June 2022 published a unanimous decision stating that tenants contractually obligated to pay real estate taxes and authorized to protest assessments may file tax appeals even when they do not hold title to the underlying real estate. Restoring a Precedent DCH Auto operated a car dealership in a net leased property in Mamaroneck, New York. Its lease with the owner required DCH to pay the property’s real estate taxes in addition to rent. Commercial tenants with this type of lease commonly file tax appeals to correct excessive tax bills and mitigate operating costs. These occupiers include retailers …

September 26, 2022

Market Reports Northeast Northeast Market Reports Office Pennsylvania

Amenities Rise in Importance as Greater Philadelphia Users Return to Offices

by Taylor Williams September 19, 2022

By Marc DeLuca, CEO and eastern regional president, KBS Refreshing office properties with updated amenities is a time-tested strategy for infusing buildings with new life and appealing to future and existing tenants. While an asset’s location is a fixed element and a region’s fundamentals tend to change slowly, amenities are more flexible and can usually be implemented quickly if necessary for immediate impact. A recent report by flexible workspace provider TCC Canada found that many companies and their team members increasingly recognize the benefits of gathering teams in a central workplace. But after more than two years of varying degrees of remote work, it makes sense for property owners to invest in amenities that actually meet the needs and wants of office users — which have recently shifted. So which amenities are the best ones to include in today’s office buildings? As an owner and operator of premier office assets for the last 30 years, KBS has witnessed amenity preferences come and go. We know how to spot a passing fad versus a trend with legs. Based on our expertise in this area, here are a few amenities we see attracting office tenants in the current and emerging environment. Scalable …

September 19, 2022

Market Reports Northeast Northeast Market Reports Pennsylvania Retail

Philadelphia Shopping Centers Present Opportunities to Revamp, Unlock Value

by Taylor Williams September 12, 2022

By Kari Glinski, vice president of asset management, Federal Realty Investment Trust Philadelphia is known for many things, from being the City of Brotherly Love to a city rich in history, art, culture and food. As a result, the region is desirable for many residents and visitors and has been recognized in real estate circles for its housing and retail development opportunities. Throughout the pandemic, greater Philadelphia has lent itself to commuters, residents, tourists and hybrid employers by providing convenient access to other East Coast cities, vast amenities and outdoor recreation spaces, as well as unique dining, entertainment and shopping experiences. Recognizing the need to continue catering to the remote employees, shopping center owners and developers see ample opportunity across the region, specifically within the inner suburbs. In these locations, there is a great mix of diversity, mature employment bases and irreplaceable real estate where developers can continually create long-term value through blended opportunities. Federal Realty has been reinvesting in the greater Philadelphia and Southern New Jersey region for the past decade, strategically transforming our portfolio. Our company focuses on the ownership, operation and redevelopment of high-quality, retail-focused properties, with a mission to deliver long-term, sustainable growth through investing in …

September 12, 2022

Market Reports New York Northeast Northeast Market Reports Retail

New York City’s Retail Investment Market is Poised for Greater Activity

by Taylor Williams August 1, 2022

By Brent Glodowski, director, capital markets group, Avison Young Conditions are looking up for retail real estate investment in New York City. In one sense, “up” is the only way to go for a sector that has been bumping along the bottom of a trough. But with inflation tempering investors’ recent fascination with multifamily and industrial properties, retail also offers opportunities to acquire price-corrected assets when those other property types hover near cyclical peaks. Retail’s Head Start New York’s retail real estate market was already suffering from changing consumer tendencies when COVID-19 arrived and thrust many retailers and their landlords into a full-blown crisis. Even when government-ordered shutdowns eased, remote work policies drained office buildings of the customer bases that had supported swaths of restaurants, shops and entertainment businesses. Home-bound workers became a redistributed daytime population, shifting demand for meal delivery and other retail to new areas. Hundreds of small businesses went under, leaving vacant storefronts in their wake. Some retailers altered business plans to serve shifting customer bases that had developed new, pandemic-influenced consumption practices. Landlords with vacancies to fill turned to traditional strategies, such as relocating tenants from out-of-the-way spaces to fill their most visible storefronts. Property owners …

August 1, 2022

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Market Reports Multifamily New Jersey Northeast Northeast Market Reports

Fundamentals Remain Strong in Northern New Jersey Multifamily Market

by Taylor Williams July 25, 2022

By Mike Oliver, managing director, JLL Capital Markets Fundamentals remain strong within the multifamily markets of Northern New Jersey and the greater metro New York City area, though the dynamics have continued to shift since the onset of the pandemic. During COVID-19, there was movement away from urban areas toward the suburbs, creating a “tale of two cities” market dynamic. The suburban multifamily market became red-hot while urban markets cooled. Vacancies dipped below 80 percent in some instances, with heavy concessions being offered and flat to negative gross rent growth. Today, while the suburban markets remain very strong, urban markets are also now red-hot. This is attributable to more and more people heading back to urban centers in anticipation of returning to the office or simply wanting to be back in the excitement of downtown living and its dining, shopping and entertainment options. Additionally, many renters are being priced out of and fleeing Manhattan, Brooklyn and other New York City neighborhoods. Jersey City and the Hudson Waterfront provide attractive rental options with incredible access into Manhattan. Jersey City, for example, is demonstrating healthy fundamentals, as occupancy rates are back over 95 percent with strong growth on lease trade-outs. There …

July 25, 2022

Seymour-Street-Redevelopment-Montclair-New-Jersey

Market Reports New Jersey Northeast Northeast Market Reports Retail

Healthy Leasing Activity, Absorption Prevail in Northern New Jersey Retail Market

by Taylor Williams July 8, 2022

By Brian Katz (CEO), Amy Staats (vice president), Jonathan Greenberg (director), Adam Caplan (director) and Hugh Scullin (vice president) of Katz & Associates The Northern New Jersey retail real estate market has been flourishing in the post-COVID-19 era. Inventory continues to shrink across the board, with exceptional demand for drive-thru locations and mid-size boxes. Furthermore, the modern, well-anchored neighborhood and power centers seldom have more than one or two small shop vacancies. Some categories in high demand include discount apparel, grocery, food, health and beauty, fitness and medical. Northern New Jersey specifically benefits from its critical mass and its ease of access to main roads and points of entry. Tenants that have been able to refocus and adapt have thrived in a market that already has a lot going for it. Simply put, the post-COVID bounce has been better than we could have imagined, and from a company standpoint, the pipeline of deals that are in the works or have closed has been among the strongest in our history. Leasing Activity Leasing activity is up. Market adjustments aside, leasing activity has pretty much returned to pre-pandemic levels. In some instances, it’s even easier to get deals across the finish line …

July 8, 2022

Market Reports New York Northeast Northeast Market Reports Retail

Luxury Retail Along Manhattan’s Madison Avenue Shifts from Rebounding to Thriving

by Taylor Williams July 1, 2022

By Joe Aquino, president, JAACRES When Barneys New York department store closed in 2020, we saw a dramatic relocation of luxury retail on Madison Avenue to the south, apparently with a common goal of establishing better proximity to East 57th Street. Prior to that event, many luxury brands enjoyed a shop within a shop at Barneys, plus another store on the corridor, usually further uptown. Prior to the COVID-19 pandemic, this stretch of Madison Avenue was so tight for space that we saw East 59th Street, a major side street, securing tenants like Dior, Bathing Ape and Balmain. During the pandemic’s lockdown phases, retail vacancy rose dramatically, even in the most desirable areas. Now, post-pandemic, we see spaces along Madison Avenue getting filled by new and established luxury retailers ready to make a statement. Here are some of the key transactions that have either been recently completed or are in progress: Givenchy just left its cozy quarters at 749 Madison Ave. at the southeast corner of 65th Street to take the southeast corner at 625 Madison Ave. Versace will open in Givenchy’s place this fall. Wolford, a maker of luxury seamless tights, took the Lalique store at 607 Madison Ave. …

July 1, 2022

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