CONSTRUCTION AND REAL ESTATE
Key Industry Trends in 2022 Will Impact Building , Leasing , Growth
By Diane C . Walsh Contributing Editor
New Jersey ’ s booming warehouse market continues to surge , making it undeniably one of the hottest segments of the state ’ s real estate industry — with no signs of a letup .
Experts say warehouse demand has been on the uptick for years . But the market got a big boost when e-commerce took off as consumers overwhelmingly resorted to online shopping when they were forced to stay at home due to the COVID‐19 pandemic .
“ It ’ s hotter than I ’ ve ever seen it and I don ’ t expect it ’ s going away any time soon ,” says William C . Hanson , SIOR , president of NAI James E . Hanson , one of the most well-regarded , full-service brokerage and property management firms in the state . Hanson is also chairman of the Commerce and Industry Association of New Jersey ( CIANJ ), a business advocacy group with more than 900 corporate members .
COMMERCE spoke with CIANJ members whose focus is real estate and other state experts for an overview of the industry and where it is going in 2022 . From their remarks it is evident the warehouse market is flying high , residential home sales are having another great year , but the office market faces a big question mark .
Terrie O ’ Connor , founder and president of Terrie O ’ Connor Realtors , a leading Northern New Jersey realtor , says the housing market continues to be very strong . “ There are more buyers than houses and we ’ re still seeing bidding wars ,” she explains . The inventory shortage is exasperated by homeowners hesitant to list their
Cole Schotz P . C . Member Richard W . Abramson , Esq .
NAI James E . Hanson President William C . Hanson , SIOR
properties because they do not know where they are going . Still , she says the market is very active . There ’ s every reason to believe 2022 will be another good year , O ’ Connor adds .
Past CIANJ Chairman Richard W . Abramson , Esq ., an attorney specializing in commercial real estate at Cole Schotz P . C . in Hackensack , was very upbeat in his analysis also . “ There ’ s plenty of money in equity and the lenders are willing to lend ,” he says .
In his practice , Abramson says industrial properties are emerging as the “ darling asset
SNS Architects & Engineers PC Principal Steven Napolitano
Terrie O ’ Connor Realtors President Terrie O ’ Connor
now because the rents are high and they ’ re in demand .” He also identified a curious trend — properties held in families for generations suddenly going up for sale . The sellers are getting high prices and they are not deterred by the capital gains taxes .
Abramson and many others identified the conversion , repurposing or adaptive use of former commercial space as a growing trend . Steven Napolitano , a principal at SNS Architects & Engineers PC in Montvale , says his firm is seeing office buildings razed or converted to make way for townhouse developments , assisted living facilities , nursing homes and even self-storage facilities .
The Garden State ’ s office market is “ overbuilt and under-demolished ,” according to James Hughes , the retired dean of the Edward J . Bloustein School of Planning and Public Policy at Rutgers University , who has conducted extensive studies on the state ’ s real estate industry . He says most of the state ’ s office space was built in the 80s well before the advent of the Internet and the current pandemic , which is causing companies to rethink their space needs .
Furthermore , Hughes says New Jersey is “ over-stored ,” meaning with more than 32 million square feet of retail in 30 malls there is a glut of shopping centers . These “ temples of consumption ,” as Hughes calls them are giving way to the demand for warehouse space .
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