Northeast Market Reports

Three Key Trends to Watch in the Philadelphia Multifamily Market in 2022

by Taylor Williams December 9, 2021

By Gary Holloway Jr, president, GMH Communities The COVID-19 pandemic served as an accelerator for transforming the Philadelphia multifamily market. Overnight, property owners and managers had to quickly adapt and find new ways to serve their residents while prioritizing their safety and following all of the guidelines from the Centers for Disease Control and Prevention (CDC). As we head into 2022, the pandemic will continue to influence what prospective tenants expect from their apartment communities. Here are three opportunities that multifamily owners should consider as the industry continues to grow and evolve in Philadelphia. WFH is Here to Stay Working from home is not a new trend. However, the pandemic thrust countless residents into remote work situations without warning. This sudden shift in work routines has prompted multifamily developers to rethink which amenities they need to provide now that remote and hybrid work is the norm. At GMH Communities, we are actively growing our amenity offerings to enhance the work-from-home experience. At The Yards at Malvern, one of our newest properties that is located in the suburb of Malvern, residents have access to a robust business center with multiple small and large conference rooms with a Zoom conference room, …

December 9, 2021

Affordable Housing Market Reports Multifamily New York Northeast Northeast Market Reports

Affordable Housing Lenders, Investors in New York City Face Underwriting Challenges

by Taylor Williams November 2, 2021

By Taylor Williams For lenders and investors in New York City’s affordable housing market, accurately underwriting rent growth, operating costs and long-term asset appreciation can be a tricky proposition in today’s economic environment. To be fair, buyers and financiers of affordable housing properties in many U.S. markets are being forced to adjust and recalculate their metrics due to forces they can’t control. Yet macroeconomic factors like rising inflation, which puts heavy pressure on construction and operating costs, can often seem more acute in the Big Apple, where the cost of living and doing business is already higher than virtually anywhere else in the country. Economic Drivers The labor and materials costs for the renovations and rehabilitations that many affordable housing communities need are rising. According to Producer Price Index data supplied by the U.S. Bureau of Labor Statistics, for the month of August, the latest report available at the time of this writing, the aggregate cost of construction materials had risen by 19 percent from August 2019. Much of this rise in materials costs is due to disruption of the global supply chain via COVID-19, causing developers of much-needed housing stock to incur heftier budgets and longer construction timelines on …

November 2, 2021

Industrial Market Reports Northeast Northeast Market Reports Pennsylvania

Philadelphia’s Growing Demand for Industrial Space: Is There an End in Sight?

by Taylor Williams October 15, 2021

By Richard Gorodesky, SIOR, senior managing director, Colliers International; and Adam Gorodesky, associate, Colliers International Commercial real estate is historically a cyclical business. There is a fairly predictable pattern of oversupply, recession, recovery and finally expansion before starting all over again. While the cycle isn’t always this cleanly defined, it generally follows this pattern, and has done so for decades. While this formula can be very useful for understanding the cycles and what occurs during them, it lacks one key ingredient: timing. There’s no way to accurately predict when one stage is ending or how long each phase will last. On a basic level, like in all markets, the commercial real estate market cycle responds to the balance, imbalance and rebalancing of supply and demand. The factors that influence the market and determine the length of each cycle are and will continue to be moving targets. Demand Overview While e-commerce represents about 18 percent of retail sales today, and it is widely believed in commercial real estate circles that that number could grow to 30 percent by 2025. Amazon, online retailers and other e-commerce companies have not only fueled demand for last-mile distribution facilities, which are necessary to reach as …

October 15, 2021

Market Reports Northeast Northeast Market Reports Pennsylvania Restaurant Retail

Downtown Philly Retailers, Restaurants Wait Out Delta Variant

by Taylor Williams October 8, 2021

By Taylor Williams Relative to a year ago, life is much better right now for many retailers and restaurants in Philadelphia’s Center City district, but the recent surge of transmission of the Delta variant is keeping a key ingredient of the demand recipe at bay: office users. According to CBRE’s second-quarter report on the Philadelphia office market, the most current data available at the time of this writing, the marketwide vacancy rate was 18.9 percent at the end of that period. Specifically with regard to the downtown area, the largest office submarket by far in terms of inventory, vacancy stood at 14.7 percent at the end of the second quarter. Office metrics aside, as Philadelphia grappled with the novelty of COVID-19 in 2020, its merchants and food purveyors adapted, adjusting inventory levels, rolling out improvised outdoor seating areas and expanding takeout and curbside pick-up options. The colder months saw the introduction of igloos — enclosed, heated nooks for private dining — as well as larger, city-led efforts to clear major retail corridors for street-side experiences, known locally as “streateries.” The innovations saved many-a-retailer and restaurant and are likely here to continue through 2021 and beyond. Yet within the city’s most …

October 8, 2021

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Market Reports Northeast Northeast Market Reports Retail

The Open-Air Advantage: Flexibility, Diversity and Adaptability Drive Sustained Appeal

by Taylor Williams September 13, 2021

By Matthew Harding, CEO, Levin Management Corp. Serving as one-stop destinations to meet consumers’ daily needs, open-air shopping centers — especially those with grocery anchors — have long been a fan favorite of shoppers, tenants and investors. Over the past 18 months, this asset class has again proven its ability to adapt and serve in any market climate — and under the most challenging of circumstances. Operational Flexibility Is Key By their nature, neighborhood, community and power centers provide a higher level of operational flexibility than other commercial product types. For example, during pandemic-fueled business interruptions, open-air environments enabled tenants to be more creative and accommodate new or expanded uses. This included increasing outdoor space for dining or fitness classes and expanding fulfillment options by setting up curbside pick up. Levin Management’s own mid-year survey of store managers within our leased and managed portfolio, which is comprised largely of open-air product, showed that many of the changes that were made out of necessity last year are now being kept as best practices. For the most part, tenants are responding to stepped-up prioritization of customer convenience. We have seen how quickly shoppers came back out once they could. Ultimately, people like …

September 13, 2021

Market Reports Northeast Northeast Market Reports

How New York City Construction Firms Can Position Themselves for Leadership Transitions

by Taylor Williams August 25, 2021

By Phil Ross, CPA, accounting & audit partner, Anchin, Block & Anchin LLP After nearly 15 months of shutdowns and restrictions, New York City has taken a major step forward. Seventy percent of the city’s residents are now vaccinated, and restrictions significantly reduced across the area’s commercial spaces, from offices and retail to dining and hospitality. Mask mandates have been lifted and the hum of the metro area’s business districts is growing loud again. With an expected increase in demand for building upgrades and repositioning services to meet new market needs, as well as new projects across housing, infrastructure and healthcare, the construction sector is poised to see a more robust pipeline. During the pandemic slowdown, construction firms were understandably more focused on the short term. But with the market back on the upswing, now is the time to refocus on long-term goals and strategies. A major part of this is ensuring you have an internal organizational pipeline to continue growth well into the future and maintain your firm’s legacy of success. This is just as important as creating a business development strategy and building up a backlog of projects. Transitioning a construction business for the next generation and beyond …

August 25, 2021

Healthcare Life Sciences Market Reports Multifamily Northeast Northeast Market Reports Office

How Multifamily Owners Can Cater to the Northeast’s Growing Base of Life Sciences Renters

by Taylor Williams August 17, 2021

By Justin Wybenga, vice president of asset services, GMH Communities Every day, we see the world constantly changing. Whether it’s advancements in technology, culture, arts or sciences, there are many things to look forward to as life and business return to normal. One sector of commercial real estate that continues to experience breakthroughs is life sciences. Case in point: Mayor Bill de Blasio and the NYC Economic Development Corp. announced that the organization would double its investment to $1 billion to establish New York City as the global leader in life sciences. With the increasing demand for research and lab space comes an emerging need for innovative housing that supports the rapidly growing population of researchers, professors, graduate students and third-shift workers. Historically, amenities and services for this group have been an afterthought. We saw a void in this space and recently launched a completely new vertical called “Innovative Living.” Innovative Living takes best practices from conventional multifamily and student housing, including cutting-edge technology and best-in-class amenities and services, and tailors those features to accommodate the specific needs of professionals and graduate and postgraduate students working or learning in major innovation hubs. Understand Residents’ Needs Fostering a collaborative living environment …

August 17, 2021

Market Reports Northeast Northeast Market Reports

Commercial Borrowers in the Northeast Benefit from Elevated Liquidity

by Taylor Williams August 13, 2021

By Taylor Williams After months of disruption and uncertainty, commercial lenders throughout the country and the Northeast are eager to deploy funds, creating an environment in which borrowers are somewhat insulated from economic and geopolitical forces that threaten to derail the recovery. With interest rates still at historic lows and investors of all types looking to recoup returns unexpectedly lost to COVID-19, there is tremendous liquidity in the market. There’s also the simple fact that lenders are for-profit companies with expenses to cover. As the saying goes, if “they’re not lending money, they’re not making money,” and they’re losing market share. As a result, sources say, lenders are competing among themselves to finance deals. When lenders compete, borrowers win. “The overall level of capital flowing into the U.S. commercial real estate market is equal to or greater than where it was pre-pandemic,” says Matt Swerdlow, director of capital services at New York City-based intermediary Ariel Property Advisors. “Right now, there’s more capital than deals, so borrowers can get better spreads, higher proceeds or less structure just because the availability of capital is so broad.” “Despite the fact that we’re in a post-pandemic market, it’s heavy competition for deals, which has …

August 13, 2021

Life Sciences Market Reports Massachusetts Northeast Northeast Market Reports Retail

Low Interest Rates Spearhead Uptick in Retail Investment Throughout Boston

by Taylor Williams August 6, 2021

By Taylor Williams The business of trading retail properties is booming across the greater Boston area, and the combination of cheap capital, a desire to recoup lost business and potential changes in tax law are prompting buyers and sellers alike to transact at a frenetic pace. As is often the case in times of robust investment sales activity, low interest rates are the straw that stirs the drink. At its latest meeting in June, the Federal Reserve opted to hold the federal funds rate — the short-term rate by which lending between financial institutions is priced — at a target range of 0 to 0.25 percent. The Fed cut rates by 100 basis points to this target range in March 2020 in response to the COVID-19 outbreak and has kept them there ever since. A fiscal policy defined by record-low rates is persisting even in the face of inflation, which hit its highest mark in 13 years when the U.S. Consumer Price Index rose by 5.4 percent in June 2021 relative to June 2020. Economists have cited sustained injections of federal stimulus and relief money and elevated government spending in response to the pandemic as the key drivers of this …

August 6, 2021

Hospitality Life Sciences Market Reports Massachusetts Northeast Northeast Market Reports Office

Qualified Labor, Healthy Tenant Demand Drive Life Sciences Development in Boston

by Taylor Williams July 28, 2021

By Brendan Carroll, director of research, Cushman & Wakefield The rapid emergence of greater Boston in the first two decades of the 21st century as a global center of advanced, technology-assisted biology has been followed by an even faster rate of growth since the start of the new decade. We have reached a critical mass in the greater Boston market, where we have developed a combination of skills, institutions and collaboration between companies that is supported and financed by an investor base that is qualified to evaluate the potential efficacy of new innovations. This landscape has created a self-propagating ecosystem for development and absorption of life sciences properties. The region’s large inventory of lab space has also evolved as a driver of new users into the market as biotechnology groups increasingly focus on speed to market for promising scientific breakthroughs. In response to these drivers, the inventory of biotechnology-focused laboratory space in greater Boston, which eclipsed 20 million square feet in 2016, is now on pace to reach 30.7 million square feet by 2023. Furthermore, the current inventory levels will likely approach and surpass 40 million square feet this decade, as a sizable set of projects are expected to move …

July 28, 2021

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