“All real estate is local,” an industry mantra, usually refers to variations between towns. For some properties, though, it’s as local as their high-traffic, prominent location — which changes the selling experience for real estate agents.
Gerald LaHay, of Levin Commercial Real Estate in Atlantic City, handled the leasing of the very prominent former Dunkin’ Donuts property at Route 9 and Tilton Road in Northfield.
Once the sign went up that it was available, the calls about it were nonstop every day, said LaHay, of Northfield and one of the region’s few certified commercial investment members.
“I tried to pick a day and stack up all of the showings. I could have just put up a tent and stayed in front of the spot,” he said. “I couldn’t wait to get my sign off of that property.”
The store was leased for Carluccio’s Coal Fired Pizza, whose owner felt the ultra-high visibility made up for the site’s smallish size.
Dolores “Dee Dee” McClave, of Berkshire Hathaway HomeServices Fox & Roach, Realtors in Turnersville, recently listed a prominent property — the former El Patio restaurant in Hamilton Township — which is on the busy Black Horse Pike west of Mays Landing.
In this case, the high-visibility property is large — a 23,000-square-foot building on 5½ acres, which also includes a two-bedroom house with a garage.
Putting up a large sign, bigger than 4-foot square, was enough to start generating phone calls from interested or just curious people, said McClave, of Williamstown.
“I’m getting a lot of calls, but it will have to go to the right kind of buyer,” she said.
Someone wanting to open a restaurant would be one possibility, since that would be a turn-key operation with a client base built since 1955. Owner Joseph Sacco, 82, closed El Patio to retire.
McClave said the restaurant was drawing customers from as far as Philadelphia, and Sacco and his son, Gary, are “willing to teach the new restaurant owner how to make his famous meatballs.”
While many are calling about the property, only a small percentage have or would qualify for financing in today’s still tight credit market, even though the currently rented house generates a $1,000-a-month income and the listing price is just $399,900, she said.
McClave said that when she sold a prominent bakery in downtown Pitman, she showed the property about 70 times — to some would-be buyers two or three times.
“These things are hard to finance. That’s the problem. Somebody has to have the financing and the stability necessary,” she said.
For many of the prominent properties handled by Rich Baehrle, of Berkshire Hathaway Fox & Roach’s Northfield office, the financing is much less of an issue.
But that’s because the properties — professional office buildings clustered among others along high-traffic highways — appeal to a very targeted market.
Just a couple of weeks ago, Baehrle said, he listed a 12,000-square-foot medical building on Route 9 in Northfield.
Unlike a retail location that stirs small-business dreams among the thousands driving by, this is a property that catches the eyes mainly of investors and those with Dr. in front of their names.
Baehrle said he had a similar property in a prominent location on Route 9 in Cape May Court House that was snapped up by an investor.
“The market is location-oriented. A good location improves the property capitalization rate and boosts the value,” he said.
The Court House property was already leased to the Children's Hospital of Philadelphia and an orthopedic doctor, producing the predictable return that many investors crave.
“A property with a Wawa, for example, usually has a 20-year lease and is such a stable investment that it’s almost like an annuity,” Baehrle said.
In the wider commercial real estate market, stable and slow growth continues to be the forecast from the National Association of Realtors.
U.S. retail vacancies are predicted to drift down in the year ahead to 9.9 percent from the current 10.2 percent, while retail rents grow at about half a percentage point quarterly.
Office vacancies likewise will be slightly absorbed but still high at 15.6 percent in the first quarter of 2015. Office rents will be advancing by 0.7 percent quarterly by then, NAR said in its latest commercial outlook.
Industrial properties are hardly expected to budge from the current 9 percent vacancy rate and half percentage point rent growth.
Multi-family housing, the star of the post-recession period, will see vacancies remain a low 4.1 percent early in 2015, while rent growth cools a bit to 1 percent per quarter, down from 1.4 percent in this quarter.
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