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Merin: Flight to Safety in Scary Times

ISELIN, NJ-'People are looking for safety, they're looking for credit, and they're looking for term,' says the the C&W vice chairman. 'For that kind of product there is a very healthy appetite.'

By Alyson Grala | Updated on March 18, 2010

ISELIN, NJ-Since the height of the commercial real estate market in 2007, “investment sales are off 95%,” Andrew Merin, vice chairman of Cushman & Wakefield, Inc. and head of the firm’s Metropolitan Area Capital Markets Group, told attendees at ICREW NJ’s monthly breakfast meeting. The topic for Merin and fellow panelists was “Real Estate in New Jersey: Capital Markets & Beyond.”

“It has been challenging,” Merin conceded. “There was a big disconnect between buyers and sellers in 2008, but there at least were carryover sales. In 2009, things got worse because the carryover was gone.” And while there is a lot of money ready to invest in 2010 and “a lot of people are waiting for properties, what we are seeing now are mainly ‘cats and dogs’ in terms of the quality of properties hitting the market.

“For the right core properties, people are looking for safety, they’re looking for credit, and they’re looking for term,” Merin continued. “For that kind of product there is a very healthy appetite because the alternative is to leave your money in the banks, earning less than 1%. So a 7% to 8% return sounds pretty good.” And when sales do occur, “we hope to see low cap rates and high prices per-square-foot,” he said. “That is going to get a lot of people to re-look at their portfolios and think about putting some properties on the market.”

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