The region’s commercial real estate market continued to firm in the spring, with a trend toward owning instead of leasing, some significant sales and large players assuming exclusive representation of key properties.
Drew Fishman, broker associate with Re/Max Atlantic of Absecon, said an abundance of rental space is creating reduced-rent opportunities, but the selection and still-low mortgage rates are convincing businesses the time is right to invest in their properties.
Describing the increase in activity from last year, Fishman said, “What I’m seeing is interest from end users as opposed to investors right now. The businessperson who has been renting now sees an opportunity to buy something, have the write-offs, and have the property in the same range as what they were paying to lease.”
One major local agency, Levin Commercial Real Estate in Atlantic City, reported several spring sales, including:
* a 19,300-square-foot mixed-use facility on Mill Road in Pleasantville for $890,000;
* a 35,000-square-foot building on the White Horse Pike in Absecon for a new Dunkin’ Donuts with drive-through for $650,000;
* and a bank-owned store on Atlantic Avenue in Atlantic City for $192,000.
Major commercial firms showed confidence in the market by signing up to represent major available properties.
Last month, Weichert Commercial Brokerage Inc. announced it would exclusively represent a 16½-acre property with 775 feet of frontage on the Black Horse Pike just west of Hamilton Mall.
Weichert said the property has all needed approvals and will be sold as shovel-ready for building 103,450 square feet arrayed across seven stores from 3,600 to 64,000 square feet. Senior Vice President Sandford Schonberger will handle the marketing.
A bigger property was signed by Colliers International, whose Mount Laurel office exclusively will represent the 690-acre Hamilton Business Park on Route 40 in the township.
Tony DiDio, of Voorhees, the vice president who will represent the property, said about 400 acres are available, in parcels as small as one acre for an asking price of $40,000 per acre.
The business park’s list of current owners or tenants includes: Stroehmann Bakeries, Pepsi Bottling Group, Craig Test Boring Co., Internal Revenue Service, North American Composites, Nassar & Associates and the Atlantic County Criminal Courts.
“Pretty much anything but residential is permitted zoning-wise,” DiDio said.
He said site approvals are in place for buildings 40,000 to 80,000 square feet for expedited construction.
“If somebody needed a building in eight months, we could deliver that,” he said.
DiDio said he had represented the site for eight years when he was with another firm, a period that ended five years ago. “I’m very familiar with the park.”
He said retail in Atlantic County is very strong, with little vacancy, but the industrial sector is a bit more challenged, in particular with a few very large buildings still vacant, including: the 416,000-square-foot former Lenox site in Galloway Township, a 365,000-square-foot building in Hammonton, and a 240,000-square-foot property in Buena.
Those and several 100,000-square-foot facilities contribute to 5.5 million square feet of industrial space available, he said.
“The vacancy rate is kind of high, because these larger buildings have been sitting vacant,” DiDio said
Smaller sites have continued to move, in particular in response to rebuilding from Hurricane Sandy.
DiDio said, for example, he recently signed a five-year lease with Allied Building Supplies for a 28,000-square-feet building in Pleasantville. He’s working to close deals on several others.
The latest quarterly commercial real estate outlook from the National Association of Realtors expects continued modest declines in U.S. vacancy rates for the industrial (to 9 percent in 2014), office (16 percent) and retail (10 percent) sectors, with a small increase in multifamily vacancies resulting from more building in that sector.
Fishman, a former president of the New Jersey Association of Realtors, said activity in the region is focused on the mainland, with the islands lacking in inventory and still working through Hurricane Sandy issues.
He said he hopes spring’s momentum carries into summer.
“Right now, the biggest thing is finishing out the foreclosure cycle. We’re one of four states taking the longest,” he said, due to court delays in processing.
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