Real Estate New Jersey
Cushman & Wakefield vice chairman Andy Merin and executive vice president David Bernhaut picked up the top sales spot. They completed a total of 27 deals for $969 million between August 2008 and August 2009. Also from Cushman & Wakefield, vice chairmen Robert Donnelly and Marc Rosenberg snagged top leasing honors, by completing 140 deals with a total square footage of 5.6 million.
Despite a dismal employment picture, the downturn paves the way for new production, affirmed Hessam Nadji, managing director, research, at Marcus & Millichap Real Estate Investment Services and RealShare New Jersey's keynote speaker. However, the real worry here is the consumer. "In past recessions we didn't see a significant drop in retail sales, like we have this time around," he said, adding that a major problem for the economy is consumer debt. "A lot of the focus needs to be on the corporate side. Right now we are just trying to borrow our way out of this mess."
According to Nadji, the consensus is that there will be tepid job growth in 2010, likely around 0.5%. To date, Northern New Jersey has lost around 20,000 jobs, while Central New Jersey comes in closer to 30,000. Still, these are better than the national numbers.
Following Nadji's address, RENJ editor Maria Wood moderated a State of the Market Town Hall Meeting, with panelists Mitchell Hersh, president and CEO, Mack-Cali Realty Corp.; Colliers Houston & Co. president David Houston; Nicholas Minoia, managing partner, Diversified Realty Advisors, LLC; Stephen Santola, executive vice president and general counsel at Woodmont Properties; and Mark Scott, managing director and senior vice president at NorthMarq Capital.
"There is no question this has been a vicious cycle, but I expect a new normal to evolve," affirmed Hersh. "As there is traction and employment gained, we will be able to take advantage of that movement." He also noted that job loss has been largely concentrated in male-dominated industries. According to Hersh, the hugely positive trend of women taking on a larger role in the workforce, particularly in suburban office markets, is consistent with gains in better work-home life balance.
Houston added that while the economy bottomed in the first quarter of 2009, real estate won't even begin to recover for another six to nine months. "This industry is a lagging indicator," he said. "You cannot fill office space if you are not adding jobs and retail won't recover until consumers start shopping."
On the financing front, Scott noted that life companies have returned with a vengeance and their spreads have come down considerably. Santola added that there is plenty of capital sitting around on the industrial side. "If you can live with lower returns then there are opportunities."
Looking at the multifamily sector, Minoia stated that there is a lot of activity, especially in smaller deals around $1 million and under. "When there is risk, there is reward, and the greatest reward tends to be on the other side of a recession."
Wrapping up the morning session were two concurrent panels: "Opportunistic Investment & Finance" and "Public Funding Opportunities for Sustainable Design and Construction."
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