Risk & Business Magazine Hardenbergh Insurance Group Magazine Fall 2017 | Page 7

of all deals for the quarter. Notable deals ranged from
5,000 to 31,000 square feet.
The office investment and sales market is also showing
increased activity. Buyers continue to take advantage
of the sustained low interest rate environment. Some
554,590 square feet of office space traded hands at a
combined value of more than $46.1 million during the
second quarter. The previous quarter was even higher.
Investment-grade-property prices have been holding
stable but are still off from pre-recession levels. Over
the past few years, commercial real estate values have
risen while cap rates continue to strengthen.
Many new investors have been entering the region,
while the real estate investment trusts (REITs) and
local and regional owners have continued to reposition
their holdings. Our records show approximately 3.1
million square feet on the market or under agreement.
The sell-off continues a trend of ownership turnover
that started almost six years ago when Liberty Property
Trust an d Brandywine Realty Trust began reducing
their presence in a market they once dominated. Now
Mack-Cali is seeking to exit.
The pursuit of higher yields and the improving job
market have attracted investors based outside the
region. The market has several new private owners,
including Somerset, Tequesta, Zamir, Nassimi, Crown,
Endurance, and Keystone Property Group.
Healthcare, insurance, technology, and service
businesses increased their occupancy needs during
the second quarter, and we note an increase in capital
spending, construction hiring, and expansions of
small- and mid-sized companies.
Another major trend in recent years is the transition
of local business owners from rent-paying tenants into
owner-occupied investor positions.
Rental rates have held steady in a higher range, and
there are clear signs of significant midsized business
expansion and job growth. These conditions have
helped to boost confidence and lending conditions.
While Burlington County leads the market in terms
of deal flow, there has been an increase in volume
and repositioning activity in Cherry Hill and western
Camden County, where a higher level of vacancies
makes for excellent below-market opportunities. This
shift was expected to happen, as large blocks of quality
space have become scarcer in Burlington County.
NOT JUST INSURANCE.
RISK MANAGEMENT
SOLUTIONS.
FOR YOUR HOME, YOUR CAR,
YOUR VALUABLES — YOUR
PEACE OF MIND.
Southern New Jersey has a persistent surplus of vacant
space, which it must absorb. Until that happens,
new spec construction will be limited, and most of it
will be geared toward build-to-suits or specialty and
redevelopment opportunities. +
call 856-489-9100
or visit www.hig.net
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