Northeast Market Reports

Northeast Developers Push for Local Retail in Mixed-Use Projects

by Taylor Williams July 6, 2021

By Taylor Williams As consumers throughout the Northeast move closer to returning to their pre-pandemic lifestyles, unleashing pent-up demand on the retail, restaurant and entertainment sectors, owners of mixed-use properties are gaining a renewed appreciation for local concepts that create a special sense of identity. Of course, the inclusion of local uses and concepts in the larger overall retail tenant base is nothing new in the world of mixed-use development. And sources agree that having some marquee, national brands is also a critical ingredient in the recipe for a successful retail roster and experience. “High-quality retail creates places where people want to live and work, but unless you’re committed to doing a couple hundred thousand square feet, most of your retail component is going to be food and beverage (F&B),” says George Banks, founder of Revel, an Atlanta-based firm that provides food hall consulting services. “Everybody loves Shake Shack and Jeni’s [Splendid Ice Creams], but we advise our mixed-use clients to go as hyper-local as possible when it comes to F&B.” But in general, the COVID-19 pandemic hit local mom-and-pop operators, which often lacked the cash and credit to cover their revenue losses, much harder than their national counterparts. More …

July 6, 2021

Market Reports New York Northeast Northeast Market Reports

New York City’s Pandemic-Related Property Tax Problems Persist

by Taylor Williams June 29, 2021

By Joel Marcus, partner, Marcus & Pollack LLP What happens when an irresistible force meets an immovable object? The longstanding physics conundrum encapsulates the situation in which New York City property owners currently find themselves, and for better or worse, they’re about to discover the answer to the age-old question. City government has squeezed increasing sums of property taxes from its real estate stock in each of the past 25 years, but the pandemic is changing everything. The basic fact is that 53 percent of New York City revenues come from real estate taxes. Fueled by rising rents that are tied to high costs of new construction, the city property tax base has grown and enjoyed record tax revenues in recent years. Total real property tax revenue was almost $30 billion in 2020, according to the city’s annual property tax report. Historically speaking, no major event in recent memory has been responsible for a pause in the year-over-year tax increases — not the Financial Crisis of 2018, nor Hurricane Sandy, nor even the events of September 11. It seems as though only a global pandemic has this particular power. COVID-19 has affected every element of New York City’s economy, but …

June 29, 2021

Market Reports Multifamily New York Northeast Northeast Market Reports

Opportunities Abound for Buyers and Sellers in New York City’s Multifamily Market

by Taylor Williams June 22, 2021

By Lev Mavashev, founder and principal, Alpha Realty Last year in 2020 and even now well into 2021, the COVID-19 pandemic has many New York City property owners feeling like deer in headlights. Should I push forward? Take a step back? Or should I just freeze and brace for impact from the worst disaster to strike the world in living memory? While little is certain in these uncertain times, for New York’s multifamily owners considering their future beyond 2021, values might drastically be impacted by the following factors. Rising Property Taxes New York will never move forward unless its real estate industry moves forward. Next to finance and, increasingly, big tech, the industry is the biggest driver of the state economy, and its 12-month enforced hiatus has cost the state $1.6 billion in lost tax revenue. The state can’t just print money to make up that shortfall, so it is doing one of the only things that is certain in life: issuing taxes. From hikes in property taxes to capital gains, personal income to corporate tax, both the city and state are creating a clear roadmap to recouping what’s been lost. Property taxes will definitely be going up for the …

June 22, 2021

Market Reports New York Northeast Northeast Market Reports Retail

New York City Must Be A Leader in Reimagining Retail in the Post-Pandemic World

by Taylor Williams June 15, 2021

By James Nelson, principal, head of Tri-State investment sales, Avison Young It probably won’t be a shock to learn that in the aftermath of COVID-19, we are going to need to reimagine retail. Even before the pandemic hit, retail vacancy was becoming more prevalent throughout New York City. Now more than ever, landlords and retailers are going to need to think outside the box to fill vacancies and allow retailers to survive. A recent survey among members of the International Council of Shopping Centers (ICSC), which consists of landlords, tenants and service providers, found that 57 percent of retail professionals believe that the economy will improve over the course of the next year. That being said, 73 percent wanted to see businesses open again in their state. A key question involves when we could expect to return to the in-person conventions and events that our industry is known for. ICSC is famous for its annual conference in Las Vegas that draws over 30,000 people. It’s a chance to catch up with friends and business contacts in a fun setting while also being able to accomplish dozens of meetings over a few days, as everyone is in the same place. Industry …

June 15, 2021

Industrial Market Reports New York Northeast Northeast Market Reports

New York City Industrial Market Held Strong in 2020, Has Promising 2021 Ahead

by Taylor Williams June 8, 2021

By Jakub Nowak, senior vice president investments, Marcus & Millichap Last year’s COVID-19 lockdown took a major toll on parts of New York City’s real estate market. The city’s industrial sector, however, fared relatively well compared with other asset classes. Although dollar volume for outright industrial sales transactions over $1 million fell by almost 25 percent from $1.75 billion in 2019 to $1.35 billion in 2020, the average price per square foot over the same period held flat at about $445 per square foot. Meanwhile, capitalization rates for industrial properties in 2020 continued their steady downward trajectory, compressing further from 4.7 to 4.4 percent on a year-over-year basis. Importantly, these 2020 sales numbers do not account for the $800 million-plus of institutional capital that poured into local industrial real estate by way of partial interest sales. Notable transactions included a joint venture between Hackman Capital and Square Mile Capital deploying just under $375 million for a majority interest in Queen’s Silver Cup Studios; GIC obtaining a 25 percent stake in Sunset Park’s Industry City for $330 million; and a joint venture between Madison Realty Capital, Meadow Partners and Acadia Realty acquiring a share of Sunset Park’s Liberty View Plaza for …

June 8, 2021

Market Reports New Jersey Northeast Northeast Market Reports Office

Tenant-Focused Approaches Fuel Leasing Growth Within New Jersey’s Suburban Office Markets

by Taylor Williams June 4, 2021

By Mark Meisner, president and founder, The Birch Group For many years, corporations have been rethinking their office space utilization, both in terms of square footage per employee and various configurations that allow employees to collaborate and thrive within office settings. As we look ahead to the return to the office, we are already hearing that corporate culture, the sharing of ideas and training of new hires have become driving forces in getting people back into the workplace. At the same time, an increasing number of companies are also considering the hub-and-spoke model as part of their overarching corporate strategic planning. The openings of these satellite offices allow companies to tap into larger talent pools, reduce employee commute times and in some cases, avoid mass transit altogether. Over the past several years, we’ve seen companies like Ross Dress for Less take space on both sides of “The River,” opening offices on Long Island and in The Meadowlands to supplement its New York City headquarters. Now more than ever, with the suburban office market showing signs of a resurgence, there is an onus to go back to the basics and leverage a tenant-focused approach to bolster leasing and differentiate properties. At …

June 4, 2021

Market Reports New York Northeast Northeast Market Reports Retail

Retail Inventory Ticks Upward in New York City, But Low Rents Should Draw Tenants Back

by Taylor Williams May 25, 2021

By Pierre Debbas, Esq., partner at Romer Debbas LLP While headlines have primarily focused on impacts to small businesses, contrary to popular belief, large retailers and national chains have not been immune to the COVID-19 pandemic. Restaurant and hotel chains, movie theaters, gyms and other experiential retailers have shuttered locations across the country. Just this past July, legacy retailer Neiman Marcus closed its Hudson Yards location due to heavy COVID-19 impacts. The big box retailer also faced store closures in other locations, such as Florida and Washington, due to a high loss of revenue. These large, vacant retail spaces have created problems, especially in markets ike Manhattan. While there are some moves in play, such as Home Depot taking over the Bed Bath & Beyond’s midtown location, or Target setting sights on the former 86th Street outpost of Barnes & Noble, the reality of vacant spaces – large and small – is apparent throughout the city’s prime retail hubs. When looking forward, landlords will have to consider subdivisions and repurposing of big box spaces to make leasing viable, potentially making way for smaller-concept retailers and the return of mom-and-pop shops. Essentially, the question remains: What is the true absorption rate …

May 25, 2021

Industrial Market Reports New Jersey Northeast Northeast Market Reports Pennsylvania

Demand Floods Mid-Atlantic Industrial Market

by Taylor Williams May 18, 2021

By Taylor Williams Demand for industrial space continues to surge throughout New Jersey and eastern Pennsylvania, prompting developers to undertake more projects on a speculative basis and avail themselves to the classic mantra of “If you build it, they will come.” E-commerce users, spanning every industry from building materials to electronics to food, continue to spearhead the demand side of the equation. According to the U.S. Census Bureau, in 2020, a year in which a global health crisis spurred furious increases in online shopping, e-commerce sales accounted for 14.4 percent of all retail sales, up from 7.3 percent in 2015. That figure is expected to grow to nearly 20 percent by 2024. Lenders are eager to finance speculative industrial projects, and developers are scouring the Mid-Atlantic for viable sites as spec projects increasingly account for bigger portions of their portfolios. “Pre-COVID, and even dating back several years, you might see 20 percent of the Mid-Atlantic industrial projects being done as build-to-suits,” says Rob Borny, senior vice president of capital deployment and head of the East Region for Nevada-based Dermody Properties. “It’s now moving toward being significantly less [build-to-suit activity] due to robust tenant demand, as well as the shorter lead …

May 18, 2021

Industrial Market Reports New Jersey Northeast Northeast Market Reports

Investment Demand Heats Up for Multi-Use Logistics Assets in New Jersey

by Taylor Williams May 14, 2021

By Alex Kachris, research manager — Northeast industrial region, JLL Industrial commercial real estate had its second-best year on record in 2020, with U.S. transaction volume nearing $96 billion. As competition among investors for industrial product remains strong in 2021, JLL Capital Markets Research isolated one sub-class that is gaining investor interest: multi-use logistics. The multi-use logistics profile includes older, multi-tenant assets ranging from 20,000 to 100,000 square feet that have solid footprints within infill urban logistics markets. These assets, which often have diversified, local tenant bases, usually house a mix of distribution, flex showroom, industrial showroom, R&D, warehouse and/or manufacturing space. Multi-use logistics assets boast compelling rent growth profiles and strong long-term outlooks. With new, yield-focused investors jumping into the industrial space, multi-use logistics product is desirable as an alternative to the bulk industrial market, which is getting tighter. Given that multi-use logistics facilities are generally older properties, population centers have exploded around these assets, making not only almost impossible to replace but highly sought-after as last-mile logistics locations close to end users. Compounded by industry fundamentals that are driven by macroeconomic factors, including reshoring and acceleration of e-commerce adoption, the increased demand for these smaller, multi-tenant industrial assets …

May 14, 2021

Market Reports Multifamily Northeast Northeast Market Reports Pennsylvania

Pittsburgh Development Landscape Favors More Multifamily, Adaptive Reuse Projects

by Taylor Williams May 11, 2021

By Mark Fogel, president and CEO, ACRES Capital As the state’s second-most populous metro, the Pittsburgh MSA is the anchor of western Pennsylvania. Over the last 20 years, Pittsburgh has pivoted and evolved into a hub for the healthcare, education and technology industries, thus attracting an influx of young, high-earning millennials. Over the last 10 years, Pittsburgh has undergone an economic resurgence. Firms such as Google and Uber have opened regional headquarters in the city, lured by the strong base of talent graduating from Carnegie Mellon University’s (CMU) computer science and robotics programs. In fact, Pittsburgh has been the epicenter for autonomous vehicles (AVs) since the mid-1980s, when CMU’s Robotics Department developed the world’s first self-driving car. AV research, development and testing are expected to be catalysts of growth for the city in the coming years. In addition, the cutting-edge research at the University of Pittsburgh School of Medicine and the associated University of Pittsburgh Medical Center, which operates eight hospitals within the MSA and plans to build three more over the next several years, is attracting medical professionals from around the world. These factors, combined with a low cost of living and proximity to high-end amenities, have helped Pittsburgh …

May 11, 2021

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