REALTOR Magazine October_REMAX CIA Article

Slow but Steady Improvements p. 13

Construction & Development p. 16

New Jersey’s Housing Market Update p. 20

Commercial RealEstate Trends –Stay Informed!

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CONTENTSOCTOBER 2014

FeaturesCommercial Real Estate Prognosis: Slow but 13Steady Improvementsby Michele Lerner

New Construction & Development for Commercial Real Estate 16by Jamie Biesiada

New Jersey’s Housing Market: A Look at the 20Numbers Through August 2014by Allison Rosen

DepartmentsPresident’s View: Triple Play Registration is Open! 4by Cindy Marsh-Tichy

Message from the CEO: Let’s Talk About Commercial 5Real Estateby Jarrod C. Grasso

New Jersey REALTORS® Events & Deadlines 6

Legislative Update: Trenton Focused on Strengthening 8Commercial Real Estateby Douglas M. Tomson

Technology Corner: It’s Time to Collaborate 10by John Shehata

Board/Association News 23

NEW JERSEY REALTOR® • OCTOBER 2014 • www.njar.com • 3

New Jersey REALTOR®

A publication of the New Jersey REALTORS®

295 Pierson Avenue, Edison, NJ 08837

Phone: (732) 494-5616 Fax: (732) 494-4723

Website: www.njar.com

Jarrod C. Grasso, RCE

CHIEF EXECUTIVE OFFICER

Allison Rosen

DIRECTOR OF COMMUNICATIONS

Advertising Sales

The Cyphers Agency

(410) 280-5451

2014 OFFICERS

Cindy Marsh-Tichy PRESIDENT

Eugenia “Jean” Bonilla PRESIDENT-ELECT

Tg Glazer FIRST VICE PRESIDENT

Angela Sicoli TREASURER

2014 DIVISION OFFICERS

Romeo Abenejo, Sr. ASSOCIATION OPERATIONS

Erin Brown COMMUNICATIONS ANDPUBLIC RELATIONS

Graeme W. Atkinson INDUSTRY ADVOCACY

Jeffrey Jones PROFESSIONAL CONDUCT

Brian Groetsch PROFESSIONALDEVELOPMENT

The New Jersey REALTORS® provides legal and legislative

updates as well as information on a variety of real estate

related topics solely for the use of its members. Due to

the wide range of issues affecting its members, NJ

REALTORS® publishes information concerning those issues

that NJ REALTORS®, in its sole discretion, deems the most

important for its members.

The content and accuracy of all articles and/or advertisements

by persons not employed by or agents of NJ REALTORS®

are the sole responsibility of their author. NJ REALTORS®

disclaims any liability or responsibility for their content or

accuracy. Where such articles and/or advertisements contain

legal advice or standards, NJ REALTORS® recommends that

NJ REALTORS® seek legal counsel with regard to any specific

situation to which they may seek to apply the article.

New Jersey REALTOR®, publication number 13260. Published

monthly, except for combined November/December and

January/February issues. Member subscriptions allocated

annually from annual dues: $3. Non-member annual

subscription: $10. Known office of publication: 295 Pierson

Avenue, Edison, NJ 08837. Periodicals postage paid at

Edison, NJ 08899 and at additional mailing offices.

POSTMASTER: Send address change to Editor, New Jersey

REALTOR®, 295 Pierson Avenue, Edison, NJ 08837.



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I know it seems the summer just ended, but it’s already time to start planning for Triple Play 2014.

Registration opened in early September and now is the time to register and plan out your course of action. All Registration PLUS classes and almost all other classes have been approved forcontinuing education credit by the New Jersey Real Estate Commission. If you register onlinebefore Oct. 17, the cost is only $79. The cost is raised to $89 for online registration between Oct. 18 and Dec. 5. If you wait to register until you arrive at the REALTORS® Triple Play Convention & Trade Expo in Atlantic City, the cost will be $99. The convention will be held from Dec. 8 – 11,this year, with education sessions running that Tuesday, Wednesday, and Thursday. Remember,the registration fee entitles you to attend any of the education sessions (excluding the designationcourses, Commercial Investment Marketing Session, Investment Property Analysis & CreativeTransaction Formulas, USPAP Update and Registration PLUS sessions), CE credit where applicable,the YPN Reception, the Icebreaker Reception at Caesars Atlantic City, entrance to the Trade Expo,and shuttle service from the official headquarters hotels to and from the Convention Center during trade show hours.

This will be the last Triple Play before the next CE cycle deadline, so make sure you takeadvantage! The convention allows you networking opportunities and educational sessions in one place for your convenience. If you’re looking for even more security in your CE sessions, consider adding Registration PLUS for an extra $39. This will guarantee you a seat in six specific sessions and provide private access to a café to refuel in between yourclasses. In order receive this, you must register before Oct. 17 and choose Registration PLUS.

In addition to dozens of CE classes scheduled, there will also be several designation and certification courses offered at an additional price, including Certified CommercialInvestment Member for $295; Sellers’ Representative Special for $295; Military RelocationProfessional for $150; and Certified Residential Specialist 201: Listing Strategies for $295.

If you’re specifically interested in a commercial track, consider registering for the CCIM course with Stan Gniazdowski for an introduction to commercial real estate for investment and the decision-making processes for buying, selling, and financing investment real estate. The Commercial Investment Marketing Session (for $25) should also be on your radar if you’re looking to foster some matchmaking between properties and buyers. If commercial leasing is more your interest, I would suggest sitting in on Peter West’s session on CommercialBrokerage: The Lease Offer and Basics of a Lease, which is included with your registration fee.

Whatever your specialization or specific interest may be, chances are there’s a class coveringit at Triple Play. Check out the entire schedule and register at realtorstripleplay.com – I lookforward to seeing you all there! �

4 • NEW JERSEY REALTOR® • OCTOBER 2014 • www.njar.com

P R E S I D E N T ’ S V I E W

Triple Play Registration is Open!

By Cindy Marsh-TichyPresident




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As a few of the features in this issue highlight, the commercial real estate market iscontinuing to show improvements with vacancy rates declining, added inventory, andmodest rent growth. The National Association of REALTORS® credits the increasedneed for commercial space to a boost in economic activity in the second quarter of2014. The sustained growth shown in both the first and second quarters of this year,despite the harsh weather that plagued the first few months of 2014, continues to show promise for the future. Expanded data on NAR’s commercial real estate outlook can be found at realtor.org/reports/commercial-real-estate-outlook.

The country’s trends seem to be mirrored in New Jersey as well, with concentratedpockets of growth in commercial real estate as companies opt to open multipledistribution centers within the Garden State and thriving e-commerce industrieschoose to call New Jersey home.

As demand for commercial properties rises, New Jersey REALTORS® will continue to support our members in this field. We place great value on our members’ interest in developing local market knowledge and concern for their communities. In turn,while REALTORS® are working in the field, the association proudly representsREALTOR® interests in government affairs and promotes the value of REALTORS®

to consumers.

Our 2014-16 strategic plan has a section dedicated to providing increased benefits forcommercial real estate practitioners. When it comes to education, you can trust that NJREALTORS® is listening. We’re adding new educational courses to help the commerciallicensees grow professionally. At this year’s REALTORS® Triple Play Convention & TradeExpo, you’ll see a commercial real estate track, which features classes that highlightmarketing strategies, commercial investments, and leasing commercial properties, toname a few. You can see a full list at realtorstripleplay.com on the 2014 sessionschedule under programs and events. Be sure to select the “commercial” category toview the track. Looking ahead to 2015, the NJAR® Academy of Continuing Educationwill be adding additional commercial education courses that are eligible for CEcredits and available exclusively to members. These courses will explore the nuances of commercial real estate in order to better help you serve your clients while alsofulfilling the New Jersey Real Estate Commission’s education requirements.

I welcome your feedback on the association’s areas of strength as well as aspects ofmembership that can be further improved upon to support the needs of commercialREALTORS®. I also invite you to tell your colleagues who are not members aboutthe advantage of REALTOR® membership so they, too, can benefit.

As always, my team and I are happy to answer any questions you may have aboutmembership benefits for commercial real estate professionals. �

Let’s Talk About Commercial Estate

By Jarrod C. GrassoChief Executive Officer

M E S S A G E F R O M T H E C E O

“True leadership

stems from

individuality

that is honestly

and sometimes

imperfectly

expressed –

leaders should

strive for

authenticity

over perfection.”

- Sheryl Sandberg





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New Jersey REALTOR®

Events & DeadlinesOctober 1, 2014 to December 31, 2014


Oct. 15 2014 NJ REALTORS® Leadership SeminarNew Jersey REALTORS®

Edison, N.J. • (732) 494-5616

Oct. 17 Early Bird and Registration PLUS Deadline for REALTORS® Triple Play Convention & Trade Exporealtorstripleplay.com

Nov. 4 Election Day

Nov. 7 NJ REALTORS® Committee Selection Forms Duenjar.com/forms/committee.php

Nov. 8-11 REALTORS® in Full Swing 2014 ConferenceNATIONAL ASSOCIATION OF REALTORS®

New Orleans, La.realtor.org/convention.nsf

Nov. 15 Pre-Registration Deadline for REALTORS®

Triple Play Convention & Trade Epxorealtorstripleplay.com

Nov. 27-28 NJ REALTORS® Office Closed - Thanksgiving

Dec. 8-11 REALTORS® Triple Play Convention & Trade Expo New Jersey, New York and PennsylvaniaAssociations of REALTORS®

Atlantic City, N.J. • (888) 818-4922realtorstripleplay.com

Dec. 25 NJ REALTORS® Office Closed - Christmas






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LEGISLATIVE UPDATE

Trenton Focused onStrengthening CommercialReal Estate

By Douglas M. Tomson

Following the economic downturn in 2008, the New Jersey State Legislature and governors from both political parties have enacted measures to support our economy. One of the areas the state has focused on has been strengtheningcommercial real estate, as the state’s overall economic health is directlyimpacted by the industry.

As a way to encourage commercial construction and provide incentives forexisting companies to stay in New Jersey, the state legislature has approvedmeasures over recent years with the goal of jumpstarting the industry. One of the major initiatives has been a suspension of the 2.5 percent non-residentialdevelopment fee. This fee, originally enacted in 2008 as a way to fund affordablehousing projects, placed a 2.5 percent fee, payable by commercial developers,for commercial properties built in state.

On its merits alone, funding affordable housing is a worthy endeavor, but the imposition of this fee quickly became an albatross on an industry sufferingthrough a recession. For this reason, the state legislature suspended the non-residential development fee on several occasions. When the fee was restored last year, Assemblyman John Burzichelli (D-3) and Senator Raymond Lesniak (D-20) sponsored legislation to suspend this fee through 2016.

Legislators overwhelmingly approved the bill this past June; however, Gov.Christie conditionally vetoed the measure last month. When it went back to the legislature, it included Gov. Christie’s recommendations, including a need to overhaul the state’s affordable housing laws, and indicated his support forenabling economic growth and commercial development. The Assembly andSenate can now consider the governor’s recommendations in his conditionalveto, attempt to override the veto, or take no action. No decision has been made yet.

RPAC of New JerseyWhere Every Dollar Counts

$432,003*

$ 625,000

$ 600,000

$ 550,000

$ 500,000

$ 450,000

$ 400,000

$ 350,000

$ 300,000

$ 250,000

$ 200,000

$ 150,000

$ 100,000

$ 50,000

$ 25,000

*As of September 1, 2014









New Jersey Legislative Bills

Douglas M. Tomson

Douglas M. Tomson is the Directorof Government Affairs. He can be

reached at (732) 494-4720 [email protected].

The following are some of the bills NJ REALTORS® is tracking that may be heard in the upcoming months of the New Jersey legislative session.

A938 – Singleton (D7), Rible (R30)/S297 – Rice (D28)Permits municipalities to hire private construction and subcode officials

New Jersey REALTORS® Position: SupportWe support this bill, which allows municipalities to hire private companies toperform municipal inspections often required when a property is sold or forproviding permits for work on a property. It will speed up the inspection and CO process required in many municipalities when a property is sold.

B I L L H I S T O R Y : 1/14/2014 – Introduced in Senate and referred to Senate Community and Urban Affairs Committee1/16/2014 – Introduced in Assembly and referred to Assembly Housing and Community Development Committee

A1007 – Benson (D14), Riley (D3)/S2142 – Singer (R30), Greenstein (D14)Requires DCA to establish inspection and abatement procedures for mold hazards

New Jersey REALTORS® Position: Support with amendmentWe support this bill with an amendment that requires it to take effect only when thefederal or state government establishes acceptable standards for mold. The bill willestablish standards for testing and remediating mold hazards and will create certificationprograms for mold inspectors and hazard abatement workers.

B I L L H I S T O R Y :1/16/2014 – Introduced in Assembly and referred to Assembly Housing and CommunityDevelopment Committee6/5/2014 – Reported out of Assembly committee with amendments, second reading inAssembly6/9/2014 – Introduced in Senate and referred to Senate Environment and EnergyCommittee6/23/2014 – Passed in Assembly 60-15-27/31/2014 – Reported out of Senate committee, second reading in Senate

A2030 – Greenwald (D6)Expands applicability of ‘The Truth in Renting’ Act

New Jersey REALTORS® Position: OpposeWe oppose this bill, as it creates another mandate for property owners renting out theirhomes. It expands the requirements of the ‘Truth in Renting’ Act – which currentlyonly applies to multi-family dwellings – to also include one- and two-family residentialproperties.

B I L L H I S T O R Y :1/16/2014 – Introduced in Assembly and referred to Assembly Housing and CommunityDevelopment Committee

SUPPORT MONITOR OPPOSE

There have also been numerous bills introduced –which are strongly supported by New JerseyREALTORS® – to do away with the 1 percentrealty transfer fee on commercial properties sold for over $1 million. The fee, originallyadopted in 2006, is a strong disincentive forcompanies to locate in New Jersey and is one of the main priorities the NJ REALTORS® areadvocating to change in Trenton. Earlier thisyear, the governor came out in support foreliminating the entire RTF, including this fee. New Jersey REALTORS® will continueadvocating for an elimination of this 1 percent fee to help stimulate commercial activity in the state.

Another big measure enacted over the last year was the New Jersey Economic OpportunityAct of 2013, signed into law last September. This new law enhanced the state’s ability to offer incentives to New Jersey businesses beingconstructed within the state through newlycreated tax credits. Similar legislation called the Economic Opportunity Act of 2014, Part 3, was passed by overwhelming margins in thestate legislature this past June. However, like to the legislation suspending the 2.5 percent non-residential development fee, this bill was also conditionally vetoed by the governor with a recommendation to assist nongamingconstruction in Atlantic City following therecent closures of several casinos.

Commercial real estate is a niche market unlikeother real estate in New Jersey and making sure it has the opportunity to grow is important to our members and the state’s economy. When itcomes to initiatives aimed at strengthening thissegment of New Jersey’s real estate profession and economy, NJ REALTORS® is working forour commercial members. �




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mailto:[email protected]






It’s Time to Collaborate

You spend much of your day out of the office showing

listings, meeting with clients, and networking. More

than ever, REALTORS® need tools that allow you to

get work done, even when you aren’t at your desk.

Recognizing many of today's workers are on the move,

many companies have developed products so work can

be done anywhere, not just your office. With so many

choices of personal, online, and group collaboration

available, you can pick the one to best suit your needs.

Google and Microsoft, two of the most well-known

companies in the technology world, provide full

office suites geared towards today's business owners.

Google Apps for Work and Office 365 both provide

email services, shared calendars, document storage,

spreadsheet management, and presentation creation –

all stored in the cloud.

Google Apps for WorkMany businesses are migrating their existing email

accounts to Google Apps for Work because of the cost

savings, the robust system, and because their users

already often have Gmail accounts, making it an easy

transition. Another valuable tool offered by Google is

Drive, which allows you to store, edit, and view nearly

any type of file online. Drive is tightly integrated with

Google Docs, which enables the creation of documents,

spreadsheets, and presentations.

Often times REALTORS® need to share several files

with another agent, assistant, broker, or client. Google

Apps for Work has some very powerful sharing tools

so users stay in control. You can choose to allow others

to edit and comment, or restrict them to just view the

files. Files have the ability to be simultaneously edited,

with each user seeing the respective changes being made.









John Shehata

John Shehata is the Director ofTechnology. He can be reached

at [email protected].

Office 365Office is Microsoft's most popular application suite,

and the recent rise of cloud services has fueled

Microsoft's desire to provide these services online.

Now when users sign up for Office 365 they have

access to all of the features they are accustomed to

offline. Additionally, each user receives five desktop

licenses so they can install Office applications on

their computers.

Office also comes with cloud storage and the ability

to share files with colleagues.

DropboxSince the profile of the tech junkie has grown, so

has our arsenal of tech accessories. We often carry

multiple notebooks, tablets, and smartphones

around – not to mention the possibility of a watch

making an appearance. It’s important to have access

to all of our files at all times. Dropbox has native

applications for Windows, Mac, Ubuntu, Android,

iOS, and Blackberry that allow you access to whatever

document you drop in. You can access Dropbox from

any Internet browser.

Dropbox also allows you to create shared folders,

which contain the option to appear on each team

member’s computer, or be shared with others

outside your organization.

TrelloTrello is an online system for keeping project

management as simple as possible. For each task,

you can create a card, which lives in a custom-titled

column, within a larger custom board. So, for example,

you could make a board for an individual client. Inside

that board could be a few columns, such as Properties

and Documents. Under the Properties column could

be several cards of pictures and links to properties

the client has expressed interest in. For each card

you can write comments, create checklists, assign

people, mark due dates, and add pictures. Visually,

it’s set up a lot like Pinterest – but for business needs.

YammerYammer is essentially a social network focused entirely

on your business. As with Facebook, new posts appear

in Yammer’s primary screen. However, groups can be

created to segregate conversations that are relevant

only to specific internal teams. Each group

conversation can have files attached so other team

members can review, edit, and comment on them.

BasecampIf you’re unsure of exactly what you need in an online

collaborative platform, try out a service like Basecamp,

which offers a free 60-day trial to get started. This

service has all the document storage and sharing needs

a REALTOR® could need. First, you invite people to the

team and then upload and collectively work on files

from one easy location. You can also manage lists for

to-dos, ideas, projects, and more.

Basecamp is great because it understands not everyone

is a technical master, so it offers help to become a pro.

It is a pretty intuitive, easy-to-use platform, but there

are free weekly classes and a live Q&A if you can’t pick

it up on your own.

HackpadFor things that are extremely copy-heavy, I recommend

Hackpad. It allows you to upload documents, invite

other to join, and simultaneously edit – similar to a

Google Doc, but it lays out clearly who made what

edit and when.

You can also create multiple sheets within one project

and organize them together cohesively. It allows for

seamless collaboration, with the ability to see copy

as it is being typed in real time. This way there’s no

need to save several versions of a document, because in

Hackpad, it’s always the most up-to-date, edited piece. �



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Commercial Real Estate Prognosis:Slow but Steady Improvements

“It’s the economy, stupid.” The phrase coined by former President Bill Clinton’s campaignstrategist James Carville, seems to be endlesslyapplicable, particularly when it comes to realestate markets. While there’s little crossover inthe performance of residential and commercialreal estate, both markets are heavily impacted by the local economy and, more specifically,employment.

“Jobs equal demand for both housing andcommercial space,” says Fred Schmidt,president and COO of Coldwell BankerCommercial in Madison. “It all comes down to the level and quality of jobs, so a steady growth in employment should have a ripple effect on all markets in New Jersey. Right now, we’re seeing a very slight growth in demand, so the commercialmarket over the entire state mirrors thenational picture: it’s not great, but not bad either.”

According to the Bureau of Labor Statistics, New Jersey’s unemployment rate in June 2014 was 6.6 percent. Liliya Magid, a researchanalyst with Cassidy-Turley in Chatham, saysunemployment has declined from 8.8 percent in the first quarter of 2013. She says employmentimprovement serves as the main motivation for companies to lease more office or industrialspace.

“New Jersey is one of the most affluent states in the country, which means that some of its commercial market property sectors are doing very well,” says Ryan Severino, a senioreconomist and associate director of research for REIS in New York City. “The office sector isthe laggard in the state, mostly because the










traditional bastions of employment in the state, thepharmaceuticals and telecommunications industries and casinos, are in a long-term decline.”

Commercial property performance varies both by propertysector and regional influences, so there are some pockets of improvement even in the office sector, says Severino.

Performance by the SectorsOffice space. “There are several things causing demand for office space to decline in New Jersey,” says Schmidt. “Oneis unemployment, but we’re also dealing with the shrinkingamount of space companies allot per person. It used to be 300to 350 square feet per person and now it’s 200 to 250 squarefeet, so even as employment improves there will be less needfor office space.”

A factor that’s hurting Central Jersey is that suburban officeparks that were in high demand in the 1980s are “functionallyand economically obsolete,” says Schmidt.

Office vacancy rates in North Jersey were 24.3 percent in the second quarter of 2014; down from the previous quarterand year-over-year, says Magid. Asking rents were up andabsorption rates are improving, she says.

In Central Jersey, asking rents also rose but vacancy ratesslipped to 22.9 percent and absorption also slipped slightly,she says.

“For the most part, any improvement right now is comingfrom existing tenants leasing more space rather than newtenants,” she says. “In central New Jersey, vacancy ratesincreased a little, but this is pretty much the result of a few tenants moving out and putting other space on hold, so we expect this to improve within the next six months.”

Jeffrey Jones, a commercial REALTOR® with AmerisourceRealty Network in Parsippany, says most of his customers for office space in North Jersey are small business owners. He says this past year has been one of the toughest markets in 50 years.

“Small businesses are suffering. They’re furloughing peopleand only hiring people part-time because of the combinationof economic concerns and financing concerns,” says Jones.

Jones says that while there are pockets of strength in placessuch as Hoboken, small towns are seeing the highest vacancyrates in years and he’s been forced to drop rents on officespace to keep it leased.

“The bottom line is that businesses need to work on a three-to-five year plan, but with the political and financial

uncertainty created by Washington, they can’t figure out how to plan even two quarters ahead,” says Jones.

In Central Jersey, Victor Kelly, executive vice president,commercial division, for Larken Associates in Hillsborough,says occupancy rates are strong in the single-story offices that he leases to private doctors and hospital systems,especially for small units of 1,000 to 3,000 square feet.

“A couple of the bigger buildings were slower to lease, butnow they’re 100 percent occupied because we negotiatedlower rents,” says Kelly.

Severino says that vacancy rates for office space throughoutthe state are still elevated because of the stuttering economy,the exodus of employers from suburban locations to urbanlocations, and the long-term decline of many industries thattypically operate in New Jersey.

“The state may need to set up tax breaks to attract companiesin the financial services or other sectors,” he says.

In South Jersey, office vacancy rates are at 25 percent, says Bryant Lafferty, an associate broker with RE/MAXConnection Commercial Division in Marlton.

“The office market is stabilizing now and we’re building afoundation for recovery,” he says. “It’s a great time to buy anoffice, especially if you’re currently renting space, because theprice per square foot is the lowest it’s ever been and interestrates are so low that’s it’s inexpensive to finance a purchase.”

Industrial sector. New Jersey has always been a primemarket for warehouse space because it sits geographicallybetween the Washington, D.C. – Baltimore markets and theNew York – Boston markets, as well as close to Philadelphia,says Severino.

“There’s been increasing demand in parts of North and Central Jersey to develop big centers to handle e-commerce, which need to be close to big populations and yet not located in the most expensive markets,” says Severino.

Demand has been particularly high in the industrial areas off the New Jersey Turnpike’s exit 8A, he says.

“Investor demand for industrial properties has surpassed evenmultifamily developments recently because of e-commerce,”says Schmidt. “Retailers call it ‘omni-channel’ distributionand for the industrial market this means more developmentand redevelopment of warehouse space to meet the demandfor things like same-day deliveries.”









Although Magid reports a slight increase in vacancy rates in industrial properties in North Jersey, this is primarilybecause of the movement of some larger companies from theMeadowlands and Hudson markets to different submarkets.

In Central Jersey, she reports, vacancy rates declined andasking rents rose during the second quarter. “The exit 8Asubmarket off the New Jersey Turnpike has been a topperformer for several quarters,” says Magid.

In Central Jersey, Kelly says occupancy rates for industrialspaces are up because of pent-up demand.

“I have smaller units that work well for new companies ornew divisions in New Jersey,” says Kelly. “The economy is just OK, not great, but people can’t sit around forever waiting for it to get better.”

With vacancy rates as high as 39 percent Lafferty says the industrial sector in South Jersey is suffering when you look at just warehouse space in this part of the state and leave out flex spaces and markets in Philadelphia and Delaware that are usually included in the analysis of the region.

“Unemployment and the soft overall economy have hit this sector hard and it won’t pick up until the economyimproves,” he says.

Multifamily sector. “Multifamily vacancy rates throughout the state are extremely low and that’s putting upward pressure on rents, too,” says Schmidt. “In northern New Jersey the vacancy rates were 3.8 percent in the second quarter of this year and in central New Jersey the vacancy rates were 2.8 percent.”

Severino says North Jersey benefits from the presence of high-income households around New York City.

“Vacancy rates are even lower in Central Jersey becausehousing is generally expensive, there’s a lot of populationdensity and not a lot of new developments,” says Severino.

Lafferty says the apartment market stayed very strong inSouth Jersey even during the recession because people who lost their homes needed to move into rentals. Vacancyrates in South Jersey were 4.2 percent in the second quarter of this year and rents have been steadily climbing, he says.

Retail sites. Severino says retail space in New Jersey has been performing even better than other areas of thecountry because of the presence of affluent households. He says rents, particularly for good spaces, are among the highest in the country.

“Retail space in North Jersey has some of the lowest vacancyrates in the country because there’s a tremendous populationdensity and not much space for new development,” saysSchmidt.

The retail space Kelly handles in Central Jersey is completelyleased, primarily because he says his company is willing to make deals that others might not in order to keep thesites filled.

“We’re taking lower rents and even throwing in somerenovations,” he says. “We feel that if we’re more flexible now, our customers will stay with us later when they’re ready to expand.”

In South Jersey, Lafferty says vacancy rates in strip malls are up to 20 percent.

“There are some hot spots and the regional malls and the ‘best of the best’ national chains are drawing business, but the ‘mom-and-pop’ businesses are suffering,” says Lafferty.“On the main streets of the smaller towns, every fourthproperty is vacant or for sale.”

Hotels. “We’ve generally seen more of a return in demandfrom business travel rather than leisure travel, so themarkets that are recovering are primarily in cities like New York, Washington, D.C., San Francisco and Boston,”says Severino. “There’s a little spillover in New Jersey close to New York City, but there hasn’t really been a return to strength for hotels in other parts of the state.”

According to the New Jersey Division of GamingEnforcement, occupancy rates at Atlantic City hotels rose in the second quarter of 2014 by 4.9 percent to 83.3 percent compared to the second quarter of 2013.In addition, five of the six "Tourism Indicators" for Atlantic City showed improvement during the secondquarter of 2014. However, a third of Atlantic City's casinos have closed since the beginning of the year,including Trump Plaza and Revel.

While there are variations in different regions of New Jersey and different property types, the commercial real estate market appears to be following the nationalpattern of a slow recovery from the recession.

“The trendline is unmistakable all over the state incommercial property sectors,” says Schmidt. “Slowly,gradually, we’re seeing decreasing vacancy rates, increasing demand, and stabilizing rents.” �

Michelle Lerner, a freelance writer from Washington, D.C., specializes in real estate-related articles. She

can be reached at [email protected].



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Despite the well-known hit the real estate industry took after the financial crisis in 2007 and the subsequentGreat Recession, the commercial real estate market iscoming back. New construction and development ishappening all around the state through the industrialboom, the move from urban condominiums to rentalunits, and investors' desire for fully approved residentialdevelopments.

Interest Lies In Pre-approvedResidential SitesBroker and owner Ray S. Smith, of Stafford Smith Realty in Shrewsbury, is handling a number of multifamilydevelopment projects throughout the state. His firm is solely focused on commercial and industrial real estate.

Right now, he says, the most attractive deals garneringinterest from national developers are for land that isalready fully approved for development for a simplereason – it used to take a year to gain approvals but is now taking up to three thanks to local, county, andstate regulations. “Especially if you're on a statehighway,” Smith adds.

Of those development projects, “generally speaking,there's an interest in bringing product on the market,”Smith says. Property selling in the affordable range of $300,000 to $500,000 is the most robust at themoment, he points out.


for Commercial Real Estate

New Construction& Developmentfor Commercial Real Estate

New Construction& Development









Smith is starting to see a fair amount of development in new areas, like Jackson, where construction is starting on a large amount of approved housing units, drawing a variety of new retail projects and a medical center. Within the past year alone, the Jackson Township Planning Boardhas approved a bank, indicative of residential units drawingcommercial ventures; a car wash; an 8,000-square-footmedical office building; an amended plan that will haveseveral hundred apartment units; a gas station with aconvenience store; and more.

“[Jackson] happens to be an area that's starting to catch upwith the rest of the urban sprawl,” Smith says. Constructionfor new retail uses are cropping up all the time along moreheavily trafficked highways. “Commercial follows whereresidential is blossoming. Where there's a stronger populationto serve, that's where you see services coming in.”

Rental Units In DemandBuyers aren't the only ones looking, though. RE/MAX

Commercial Investment Associates’ Managing Principal

Anthony Gomez says the need is growing for rental units,

and investors are looking to fund those projects in the

right locations.

Rental units today are also decreasing in size. From

around 2004 to 2007, the market was hot for larger

apartments because people were willing to pay more.

But a lot of larger-scale projects got stuck after the

economy crashed because they were planned to be 1,400

to 1,500-square-foot living units. “You can't build that in

today's market,” Gomez says. “Some of these projects

that got approved have to be redone to accommodate

today's market.”

According to Gomez, the “sweet spot” for residential units

is between 800 to 1,200 square feet. “It's more affordable,”

he says. The young professionals – which projects are

catering toward in urban markets – don't need bigger

spaces, which are often meant for families.

Gomez predicts a bright future for the development of

rental units so long as the economy keeps growing. “As

long as the rents hold, we're going to continue to see

development” in the tri-state area.

Gomez also points out the increased activity occurring in

regard to larger rental unit projects throughout the state,

with companies like Roseland completing the nearly 600-

unit Estuary in Weehawken that opened earlier this year.

Roseland has other projects in the works in North Jersey,

as well.

However, other investors are willing to put some legwork

into projects, including getting necessary approvals

themselves. “Really, that's where you create the most

amount of money,” Gomez says.

Some investors, Gomez said, are looking for turnkey

projects that have approvals in place. “But you're going

to pay a premium for that,” he says. “There's really not

a lot of land available.”

The market is also being partially driven by international

investors who, Gomez says, are “big players coming in

with millions of dollars looking to do development projects

within the area.”

Industrial Market Is BoomingTinton Falls-based GreenGate Capital Principal Ian

M. Grusd says the industrial market in New Jersey is

“extremely active,” which can be attributed in part to

location. “I think a big part of the demand specifically

in North Central New Jersey is proximity to major

highways, airports, and ports,” he says, noting the

area's equidistance to Boston and Washington, D.C.

Gomez agrees that the industrial market has come back,

and is noticing a good deal of companies that want to leave

New York and move to the more affordable North Jersey

area. “It's gotten expensive,” he says. “Brooklyn is out of

control, Manhattan is out of control.”

Another big factor in today's industrial market is

e-commerce. Companies are shifting logistics models

from one or two national distribution centers to creating

a greater number of smaller, regional distribution centers

to fulfill orders faster, Grusd says. New construction in the

past 10 years has resulted because older, existing industrial

buildings tend to have ceilings no higher than 28 feet.

Tenants today are willing to pay for space in a newer building

with ceilings 30 feet high and higher, which justifies the cost

of new construction.









A hotbed of activity is taking place along New Jersey Turnpikeexits 10 to 13, and the Interstate 287 corridor heading intoPiscataway – an area near New York, the Port of New Jersey,Newark Liberty International Airport, and several majorhighways.

For instance, development company J.G. Petrucci Co.recently completed the 570,100-square-foot industrialbuilding known as the Middlesex Logics Center, located off exit 10 of the Turnpike in Edison. It sits on 42 acres, has 36-foot clear ceilings, parking for nearly 150 trailers, and 108 cross-load dock doors. On a smaller scale, J.G.Petrucci is also offering a 63,580-square-foot building on a 5-acre plot in South Brunswick, built to suit.

Industrial logistics real estate firm Prologis also has severalproperties in the area, including a 582,961-square-footindustrial building in Carteret, off exit 12 of the Turnpike.The available 177,705 square feet of office space is built tosuit, and the building has 36-foot-high ceilings, 28 dockdoors, and 26 trailer parking spaces. Dubbed “Prologis PortReading,” the land is 10 miles from the Port of New Jerseyand Newark Liberty International Airport.

Carteret is already home to iPort 12, a 1.2 million-square-footwarehouse with a clear height of 36 feet and 80-by-80 footstructural bays, completed several years ago and designed byKSS Architects.

KSS Architects has also designed South Washington Park, a joint venture between the Trammell Crow Company and Clarion Partners in Piscataway. When complete, theindustrial center will total 538,800 square feet, splitbetween two buildings, that includes two office entrancesfor up to four tenants, 93 loading docks, and 36-foot clearbuilding heights.

In addition to traditional industrial uses and warehouses,data centers that provide cloud storage and solutions are“also something which is in hot demand,” Grusd says. “It's more tech-flex than it is industrial, but that category is also very active.”

Overall, e-commerce and data storage – as well as fooddistribution and related businesses that provide supportservices to those in e-commerce and data storage – are on the market looking for locations. While service businesses are typically looking for smaller spaces, e-commerce and data storage companies are looking for sites upwards of50,000 square feet.

Close To Manhattan, Kinder On TheWallet“I think investors from small to large are still continuing to look at New Jersey as a place to develop,” Gomez says.“They really are. They know it's a great place to develop, and you get more bang for your buck.”

New York prices are also driving companies across stateborders into New Jersey. Property here is a “fraction ofwhat the land acquisition would cost” in New York, Gomezsays. And considering that, as well as its proximity to bridgesand tunnels leading into New York, “New Jersey is definitely a great alternative” – especially North Jersey.

New Jersey is also a viable option for developments because,as the projects themselves cost less than they would in NewYork, the rent tenants are charged is less, as well. With anaverage residential rental in Manhattan running $3,400,Gomez says, “New Jersey's always going to be a bargain.”

South Jersey Industrial BoomNorth Jersey isn't the only industrial hot spot in the state –the southern area of the state is not without a good deal of



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activity, according to Marc R. Isdaner, senior vice presidentand principal of Mount Laurel-based Colliers International.

"Southern New Jersey, [Turnpike] Exit 7 and below, has had asharp increase in new industrial development," Isdaner says.

He highlights several larger-scale projects in that area, like a million-square-foot distribution center being constructed by W.W. Grainger in Bordentown. Additionally,in Florenceand Burlington, Express Scripts, Destination Maternity,Burlington Coat Factory, and Subaru have all either justrecently moved into new facilities, or are constructing newfacilities, ranging from 215,000 to 677,000 square feet.

"The 1-295 corridor in Gloucester and Salem counties hasalso been active," Isdaner says. Rastelli Foods in Pureland is expanding its existing manufacturing facility by 50,000square feet, while FoodComm is building a 123,000-square-foot cold storage building. "Liberty Property Trust haspreleased a speculative 202,908 square foot building – thefirst speculative construction since 2008," Isdaner says, andanother speculative building – this one a 171,600-square-foot, multi-tenant building – is being planned by DermodyProperties.

Isdaner also points to Mullica Hill Cold Storage's project in Oldmans Township off I-295. The company recentlyexpanded its cold storage facility by 150,000 square feet, hesays. Additionally, Five Below recently announced it ismoving its distribution center from Delaware to OldmansTownship, where it will have a million-square-foot facility.

State Offers IncentivesMore urban areas are also attracting businesses based onstate grants and incentive programs.

Under the New Jersey Economic Opportunity Act of 2013, the Business Employment Incentive Program helpsexpanding or relocating businesses that create jobs in New Jersey. According to the New Jersey EconomicDevelopment Authority, approved businesses receive annual cash grants based on the number of new jobs theyhave created in the state.

Also overseen by the NJEDA, the Business Retention andRelocation Assistant Grant will pay up to $2,250 per year, per job retained in the state, for up to six years. The BRRAGis only applicable to companies that retain a minimum of 50 full-time jobs in the state.

Smith, whose commercial - and industrial-only firm mostlycovers Central and South Jersey, says the northern portion of the state is reaping those benefits of state programs. “Wedon't have the same urban areas,” he says.

However, in more urban areas, the programs are provingbeneficial; and in some urban areas, proximity is anotherhuge bonus.

Additional incentives are also offered to commercial projectsin the four Garden State Growth Zones – Camden, Trenton,Paterson, and Passaic – according to the NJEDA. Those zonescomprise the cities in New Jersey that had the lowest medianincome, as revealed through the US Census' 2009 AmericanCommunity Survey.

Isdaner says Camden, specifically, is benefitting from taxincentives and "will be much more in play." The Philadelphia76ers "will be receiving a generous grant package," he says,for a new practice facility in Camden. Additionally, theNJEDA and Campbell Soup Company are making efforts todevelop Gateway Office Park in the city. �

Jamie Biesiada is an award-winning journalist based in New Jersey. She manages two Jersey Shore newspapers

and a regional magazine.









New Jersey’s Housing Market:A Look at the NumbersThrough August 2014The housing market in New Jersey may not have had

the boom so far in 2014 that was expected to follow

2013, but that isn’t all bad news. In fact, the slow,

steady growth that the state has experienced this year

is a stronger recipe for long-term maintained health.

“While we’d love to see the market activity return to

performance levels we saw before the bubble burst, the

reality is, the economy is still recovering,” said Cindy

Marsh-Tichy, president of New Jersey REALTORS®.

“The good news is that activity is picking up as sellers

feel more confident that they’ll get a stronger price for

their homes and buyers see that homes are more affordable

and mortgage interest rates are still low.”

So what exactly has been going on in 2014? Let’s dig

into the numbers to get a clear picture of how the first

eight months of the year have shaped up.

When looking at the entire market, the median sales

price rose 1.8 percent over last year and is currently

at $290,000. Following suit with that uptick, sellers

saw a 0.6 percent increase in the percent of list price

received to 96.2 percent. Interestingly, despite the

increase in median sales price, affordability also crept

up slightly to an index of 138. New listings increased 4.8

percent to a total of 132,983 for the year-to-date, and as

of August, the months’ supply of inventory dropped a

slight 2.2 percent to nine months. Closed sales for the year

are down 5 percent for a total of 60,333 so far, and pending

sales are lagging slightly over last year with a 1.9 percent

decrease to 68,102 to date. Homes are now spending

less time on the market, with a 10.6 percent decrease

to 84 days.

The single-family home market tells a similar story to

the overall market. The median sales price rose a slight

0.6 percent to $317,000 year-to-date. The percent of list

price received matched the entire market at 96.2 percent.

Likewise, affordability rose 1.6 percent to an index of 126

and new listings were up 5.2 percent to 95,573 so far.

Closed sales dropped, like the overall market, by 4.9

percent to 41,705 and pending sales also fell 1.2 percent

to 47,264. Days on market fell most dramatically at 9.6

percent to 85 days.

The townhouse/condo market also shows similar patterns

to both the single-family market and the overall home

market. The median sales price rose 2 percent to

$255,000 year-to-date. On par with the rest of the market,

the percent of list price received rose a half-percent to

96.2 percent and affordability rose about the same amount,

but is higher than the overall market at an index of 157.

New listings also increased in this market segment by

4.8 percent to 28,022 units. Closed sales for the year so

far are down 2.3 percent to 13,309 and pending sales

are also down slightly – 0.3 percent – to 14,898 units.

Like the single-family home market, the days on market

fell to 81 days, which is a 13.8 percent decrease over last year.









Finally, when examining the adult community market more

closely for year-to-date numbers, the trends seem to differ

somewhat from the other market segments. The median

sales price rose more dramatically at 10.1 percent to

$165,000, but that price is lower than in the other two

market segments, despite the large percentage increase.

Sellers received 95.8 percent of the list price, which is a

half-percent higher than last year, but also slightly lower

than the other categories. In this market segment, the

affordability index dropped 6.9 percent, which sounds like

a lot, but affordability overall has a much higher index

here at 242, so homes are still incredibly affordable in the

adult community market. Typically, this housing category

has a lower supply than the single-family and

townhouse/condo markets and as of August, despite a huge

19.6 increase, there’s just 5.5 months of inventory –

much lower than the approximately nine months’ supply

in the other categories. Though more homes are for sale,

fewer new listings have been put on the market – 7,394

for the year so far, down 2.6 percent over last year. As to

be expected, the days on market fell a huge 15.4 percent

to 77 days, which is in line with the lower supply.

To view the August 2014 state, county, and municipality

reports, visit njar.com/10k. �

Allison Rosen is the Director of Communications &Marketing for NJ REALTORS®. She can be reached at

[email protected] or (732) 494-4730.



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How does your county’s year-to-date median pricecompare to the state?

� $200,000� $110,000� $157,000

� $465,000� $325,000� $350,000

� $230,000� $159,950� $175,000

� $180,000� $104,000� $241,000

� $313,500� $405,000� $270,750

� $135, 000� $95,000� $107,000

� $434,000� $275,000� $553,000

� $195,000� $150,000� $201,493

� $402,500� $215,000� $295,000

� $308,000� $178,000� $270,000

� $315,000� $235,000� $160,000

� $400,000� $252,000� $202,000

� $445,000� $305,000� $265,000

� $260,000� $170,000� $135,000

� $299,000� $264,950� $391,500

� $144,950� $103,500� $132,500

� $466,125� $257,000� $376,500

� $227,000� $145,000� $195,000

� $340,000� $227,000� $210,000

� $230,000� $182,000� $177,500

Map Key� Single-Family

� Townhouse/Condo

� Adult Community

� $317,000� $255,000� $165,000


� $265,000� $433,000� $762,000








Board/AssociationNews

MCAR members Mary Nunziale and Diane

Traverso; MCAR President Robert White; BGCM

Executive Director Douglas Eagles and the young

people of BCGM

HomeFront Representatives, Irene Hosszu and

Walter Sarvino organized the donations.

M A R K E T P L A C E


Monmouth Holds FirstCharity RunThe Monmouth County Association ofREALTORS® held its first 5K/1-MileWalk recently in Asbury Park. REALTORS®

and community members came out fora beautiful morning run at the beach tosupport the Boys and Girls Clubs ofMonmouth County.

Event proceeds supported the Boys andGirls Clubs of Monmouth County, andMCAR was pleased to present theorganization with a check for $2,500.

Mercer Collects BackpacksMercer County Association ofREALTORS® members banded togetherrecently for the HomeFront Back-to-School Backpack Drive. Agents from allover donated to the drive to make surestudents had a good start to their year.

Ten times a year, REALTORS® statewidedepend on New Jersey REALTOR ®

as a key source of industry news.Approximately 41,000 strong, NewJersey Association of REALTORS®

(NJAR®) members are a key professionalbusiness audience throughout New Jersey.

Advertise Today

For more information or to reserve space,call Cindy Stambaugh at 410.647.5869



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