The commercial real estate market is expected to continue to grow modestly this year, both in the region and nationally.
Area brokers and agents said 2014 looks positive overall for office, retail and warehouse properties, with particular strength in areas including the Route 9 corridor on the mainland of Atlantic County, where demand is outstripping supply.
Rich Baehrle, a broker-salesman with Berkshire Hathaway HomeServices Fox & Roach, Realtors, in Northfield, said he's optimistic there will be substantial commercial activity this year on Absecon Island as well.
"I feel confident that Mayor (Don) Guardian will help create an environment in Atlantic City that will provide the confidence to enable development there and eventually in the region," said Baehrle, who completed the sale of the Monaco Motel in Ventnor last year, which was razed to make way for the Waves luxury townhouse project.
Frank Sortino and Samantha Zerafa Roessler, of ForeSite Commercial Realty in Northfield, said the modest pickup in market activity in 2013 is continuing into this year.
Roessler said there's significant interest in properties on the Black Horse and White Horse pikes, the latter the location of four of her deals last year.
ForeSite also has sold a landmark property that sat vacant for many years, the former Brownie's Lodge (and then Chuck's Hideaway), where Bargaintown, Steelmanville and Blackman roads meet in Egg Harbor Township.
The 7-acre site had approvals to be redeveloped into 14 single-family homes, Roessler said, but "it will be renovated and turned back into what it was, a restaurant and tavern."
Along Route 9 in Linwood and Northfield, properties continue to be converted to office space to satisfy strong demand.
"If you're looking for 3,000-plus square feet of Class A office space in Northfield or Linwood, maybe you have three or four options," she said.
An example is a former 7,000-square-foot warehouse at 2600 New Road in Northfield, which was purchased in September and will be redeveloped into 4,600 square feet of office space, she said. The space will be ready in December; 3,300 square feet of it is already leased.
Larger deals are coming soon.
"Right now, Frank and I have five projects under agreement that are big projects," Roessler said.
Sortino added, "All are development or major redevelopment deals."
Baehrle also said the mainland from Northfield through Somers Point has been a focus of activity, contributing to "one of my best commercial leasing years in recent times" last year. His clients were mainly financial services, law firms and medical-related businesses.
Joshua Levin, whose Levin Commercial Real Estate in Atlantic City was involved in many significant property transactions last year, said market activity continues to demonstrate that even in the digital age, experienced and qualified representatives are the key to successful deals.
He pointed to the sale of a 33,400-square-foot warehouse on 4.5 acres at 6805 Delilah Road, Egg Harbor Township, that his firm closed in December for $950,000. Across the street at 6804 Delilah, a similar 33,000-square-foot warehouse on 2.6 acres just sold at auction for $550,000.
"As important as it is to get a broker with all the latest technology, it's just as important to get a local broker who knows the market," Levin said.
Baehrle said there currently is "a slight glut of vacant warehouse space in the Pleasantville and Egg Harbor Township areas. We feel that it should start to be absorbed by midyear."
ForeSite Commercial Realty's analysis of the office market at the end of 2013 found substantial differences in the mainland communities.
The office vacancy rate in Egg Harbor Township increased to 13.8 percent for the fourth quarter, from 8.5 percent in the same period a year ago. Galloway Township's rate, while high at 16.1 percent, improved from 21 percent in the fourth quarter of 2012.
The Northfield office market continued to tighten, with the vacancy rate dropping to 11.2 percent from 13.5 percent in 2012 and 19.4 percent in 2011.
Linwood has become a seller's market, with just 5.8 percent of office space vacant, down from 8.2 percent a year ago. ForeSite figures there is just 28,754 total square feet still available there.
The National Association of Realtors estimates office vacancy nationwide will be trimmed to 15.5 percent from 15.7 percent last year. The industrial vacancy rate is expected to drop to 8.8 percent from 9.3 percent in 2013, and retail vacancy is forecast at 10.1 percent this year, down from 10.5 percent last year.
The overall steady absorption of space and continued sale and leasing activity "speaks to the health of the market," Sortino said.
Baehrle and Sortino expressed optimism that the new Atlantic City administration would help the area rebound.
"Overall, we look forward to positive growth provided we can stabilize the Atlantic City casino marketplace," Baehrle said.
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