NEW BRUNSWICK, NJ-Following an eventful first half, the last few sessions of RealShare New Jersey focused on opportunities in distressed assets, overall investments and mixed-use. “As everyone here is no doubt aware, we’ve heard a lot of talk about distress over the past few years but we haven’t seen as many transactions, at least not when it comes to physical real estate,” said moderator Alyson Grala, managing editor of Real Estate Forum. “But with well over one trilling in commercial real estate debt maturing in the next few years, there could be more buy opportunities.” With her to discuss what investors should consider before buying and selling were Bob Martie, executive vice president of the New Jersey region of Colliers International; Billy Procida, president of William Procida Incorporated; KABR Real Estate Investment Partners partner Adam Altman; and Jonathan Schultz, managing principal of Onxy Equities LLC.
According to Procida, "There are big opportunities in one- to four-family housing right now.” The reason: volume. “In the past six months alone, there have been well over 80,000 foreclosures but only 8,000 sold at auction,” he said, predicting that by fourth quarter 2010 there will be a deluge of one- to four-family housing opportunities nationally. "These are assets that are in foreclosure or REO, so they are typically beat up and non-habitable, creating a great opportunity for the industry to morph into property owners."
The second area of opportunity, according to Procida, is "the tremendous amount of half built jobs. Banks are not pushing on foreclosures and developers are underwater," he continued. "Before we see development again, we need to finish what we started." This could mean a focus on smaller infill projects around mega developments.
“In the last major real estate downturn the federal government created the RTC, which effectively wholesaled sour deals back to the market at a market-adjusted basis,” said Martie. “This served to stimulate activity, but this time around, the government is actually staunching the tide of assets that could potentially hit the market.”
Still, there are opportunities out there for investors, according to the “Investment Opportunities in New Jersey” panel, which was moderated by Edward Hunter, chair of the real estate practice group at Lowenstein Sandler PC, and included panelists Jose Cruz, senior managing director of HFF; Michael Fasano, vice president and regional manager of Marcus & Millichap; Cushman & Wakefield vice chairman Andrew Merin; CB Richard Ellis senior vice president Kevin Welsh; and Chip Walters, principal at Prudential Real Estate Investors. Fortunately, for the Garden State, a lack of overbuilding has helped to sustain it better than contemporaries such as Florida or California: the peaks are not as high and the valleys, not as low.
What’s more, Fasano said, it is helpful to finally have a good idea of how the state is moving forward, as opposed to the previous two years where industry professionals were "challenged to find what the next six, 18 and 24 months would bring us."
During the “Reworking Mixed-Use” panel, NAIOP New Jersey CEO Michael McGuinness had his eye on governmental policies. “With fewer acres of land to develop combined with empty lots of product types that are pass
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