REALTOR Magazine October_REMAX CIA Article

Slow but Steady Improvements p. 13
Construction & Development p. 16
New Jersey’s Housing Market Update p. 20
Commercial Real
Estate Trends –
Stay Informed!
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CONTENTS
OCTOBER 2014
Features
Commercial Real Estate Prognosis: Slow but 13
Steady Improvements
by Michele Lerner
New Construction & Development for Commercial Real Estate 16
by Jamie Biesiada
New Jersey’s Housing Market: A Look at the 20
Numbers Through August 2014
by Allison Rosen
Departments
President’s View: Triple Play Registration is Open! 4
by Cindy Marsh-Tichy
Message from the CEO: Let’s Talk About Commercial 5
Real Estate
by Jarrod C. Grasso
New Jersey REALTORS® Events & Deadlines 6
Legislative Update: Trenton Focused on Strengthening 8
Commercial Real Estate
by Douglas M. Tomson
Technology Corner: It’s Time to Collaborate 10
by John Shehata
Board/Association News 23
NEW JERSEY REALTOR
®
• OCTOBER 2014 • www.njar.com • 3
New Jersey REALTOR
®
A publication ofthe New JerseyREALTORS®
295 Pierson Avenue, Edison, NJ 08837
Phone: (732) 494-5616 Fax: (732) 494-4723
Website: www.njar.com
Jarrod C. Grasso, RCE
CHIEF EXECUTIVE OFFICER
Allison Rosen
DIRECTOR OF COMMUNICATIONS
Advertising Sales
The Cyphers Agency
(410) 280-5451
2014 OFFICERS
Cindy Marsh-Tichy PRESIDENT
Eugenia “Jean” Bonilla PRESIDENT-ELECT
Tg Glazer FIRST VICE PRESIDENT
Angela Sicoli TREASURER
2014 DIVISION OFFICERS
Romeo Abenejo, Sr. ASSOCIATIONOPERATIONS
Erin Brown COMMUNICATIONS AND
PUBLIC RELATIONS
Graeme W. Atkinson INDUSTRY ADVOCACY
Jeffrey Jones PROFESSIONAL CONDUCT
Brian Groetsch PROFESSIONAL
DEVELOPMENT
The New Jersey REALTORS® provides legal and legislative
updates as well as information on a variety of real estate
related topics solely for the use of its members. Due to
the wide range of issues affecting its members, NJ
REALTORS® publishes information concerning those issues
that NJ REALTORS®, in its sole discretion, deems the most
important for its members.
Thecontentandaccuracyofallarticlesand/oradvertisements
by persons not employed by or agents of NJ REALTORS®
are the sole responsibility of their author. NJ REALTORS®
disclaims any liability or responsibility for their content or
accuracy. Where such articles and/or advertisements contain
legal advice or standards, NJ REALTORS® recommends that
NJ REALTORS® seek legal counsel with regard to any specific
situation to which they may seek to apply the article.
New Jersey REALTOR®, publication number 13260. Published
monthly, except for combined November/December and
January/February issues. Member subscriptions allocated
annually from annual dues: $3. Non-member annual
subscription: $10. Known office of publication: 295 Pierson
Avenue, Edison, NJ 08837. Periodicals postage paid at
Edison, NJ 08899 and at additional mailing offices.
POSTMASTER: Send address change to Editor, New Jersey
REALTOR®, 295 Pierson Avenue, Edison, NJ 08837.

I know it seems the summer just ended, but it’s already time to start planning for Triple Play 2014.
Registration opened in early September and now is the time to register and plan out your course
of action. All Registration PLUS classes and almost all other classes have been approved for
continuing education credit by the New Jersey Real Estate Commission. If you register online
before Oct. 17, the cost is only $79. The cost is raised to $89 for online registration between Oct.
18 and Dec. 5. If you wait to register until you arrive at the REALTORS® Triple Play Convention
& Trade Expo in Atlantic City, the cost will be $99. The convention will be held from Dec. 8 – 11,
this year, with education sessions running that Tuesday, Wednesday, and Thursday. Remember,
the registration fee entitles you to attend any of the education sessions (excluding the designation
courses, Commercial Investment Marketing Session, Investment Property Analysis & Creative
Transaction Formulas, USPAP Update and Registration PLUS sessions), CE credit where applicable,
the YPN Reception, the Icebreaker Reception at Caesars Atlantic City, entrance to the Trade Expo,
and shuttle service from the official headquarters hotels to and from the Convention Center
during trade show hours.
This will be the last Triple Play before the next CE cycle deadline, so make sure you take
advantage! The convention allows you networking opportunities and educational sessions
in one place for your convenience. If you’re looking for even more security in your CE
sessions, consider adding Registration PLUS for an extra $39. This will guarantee
you a seat in six specific sessions and provide private access to a café to refuel in between your
classes. In order receive this, you must register before Oct. 17 and choose Registration PLUS.
In addition to dozens of CE classes scheduled, there will also be several designation
and certification courses offered at an additional price, including Certified Commercial
Investment Member for $295; Sellers’ Representative Special for $295; Military Relocation
Professional for $150; and Certified Residential Specialist 201: Listing Strategies for $295.
If you’re specifically interested in a commercial track, consider registering for the CCIM
course with Stan Gniazdowski for an introduction to commercial real estate for investment
and the decision-making processes for buying, selling, and financing investment real estate.
The Commercial Investment Marketing Session (for $25) should also be on your radar if
you’re looking to foster some matchmaking between properties and buyers. If commercial
leasing is more your interest, I would suggest sitting in on Peter West’s session on Commercial
Brokerage: The Lease Offer and Basics of a Lease, which is included with your registration fee.
Whatever your specialization or specific interest may be, chances are there’s a class covering
it at Triple Play. Check out the entire schedule and register at realtorstripleplay.com – I look
forward to seeing you all there! I
4 • NEW JERSEY REALTOR
®
• OCTOBER 2014 • www.njar.com
PRESIDENT’S VIEW
Triple Play Registration is Open!
By Cindy Marsh-Tichy
President

NEW JERSEY REALTOR
®
As a few of the features in this issue highlight, the commercial real estate market is
continuing to show improvements with vacancy rates declining, added inventory, and
modest rent growth. The National Association of REALTORS® credits the increased
need for commercial space to a boost in economic activity in the second quarter of
2014. The sustained growth shown in both the first and second quarters of this year,
despite the harsh weather that plagued the first few months of 2014, continues to
show promise for the future. Expanded data on NAR’s commercial real estate outlook
can be found at realtor.org/reports/commercial-real-estate-outlook.
The country’s trends seem to be mirrored in New Jersey as well, with concentrated
pockets of growth in commercial real estate as companies opt to open multiple
distribution centers within the Garden State and thriving e-commerce industries
choose to call New Jersey home.
As demand for commercial properties rises, New Jersey REALTORS® will continue
to support our members in this field. We place great value on our members’ interest
in developing local market knowledge and concern for their communities. In turn,
while REALTORS® are working in the field, the association proudly represents
REALTOR® interests in government affairs and promotes the value of REALTORS®
to consumers.
Our 2014-16 strategic plan has a section dedicated to providing increased benefits for
commercial real estate practitioners. When it comes to education, you can trust that NJ
REALTORS® is listening. We’re adding new educational courses to help the commercial
licensees grow professionally. At this year’s REALTORS® Triple Play Convention & Trade
Expo, you’ll see a commercial real estate track, which features classes that highlight
marketing strategies, commercial investments, and leasing commercial properties, to
name a few. You can see a full list at realtorstripleplay.com on the 2014 session
schedule under programs and events. Be sure to select the “commercial” category to
view the track. Looking ahead to 2015, the NJAR® Academy of Continuing Education
will be adding additional commercial education courses that are eligible for CE
credits and available exclusively to members. These courses will explore the nuances
of commercial real estate in order to better help you serve your clients while also
fulfilling the New Jersey Real Estate Commission’s education requirements.
I welcome your feedback on the association’s areas of strength as well as aspects of
membership that can be further improved upon to support the needs of commercial
REALTORS®. I also invite you to tell your colleagues who are not members about
the advantage of REALTOR® membership so they, too, can benefit.
As always, my team and I are happy to answer any questions you may have about
membership benefits for commercial real estate professionals. I
Let’sTalk About Commercial
Estate
By Jarrod C. Grasso
Chief Executive Ofﬁcer
MESSAGE FROM THE CEO
“True leadership
stems from
individuality
that is honestly
and sometimes
imperfectly
expressed –
leaders should
strive for
authenticity
over perfection.”
- Sheryl Sandberg

New Jersey REALTOR®
Events & Deadlines
October 1, 2014 to December 31, 2014
®
Oct. 15 2014 NJ REALTORS® Leadership Seminar
New Jersey REALTORS®
Edison, N.J. • (732) 494-5616
Oct. 17 Early Bird and Registration PLUS Deadline for
REALTORS®
Triple Play Convention & Trade Expo
realtorstripleplay.com
Nov. 4 Election Day
Nov. 7 NJ REALTORS® Committee Selection Forms Due
njar.com/forms/committee.php
Nov. 8-11 REALTORS® in Full Swing 2014 Conference
NATIONAL ASSOCIATION OF REALTORS®
New Orleans, La.
realtor.org/convention.nsf
Nov. 15 Pre-Registration Deadline for REALTORS®
Triple Play Convention & Trade Epxo
Nov.27-28 NJ REALTORS® Ofﬁce Closed - Thanksgiving
Dec. 8-11 REALTORS® Triple Play Convention & Trade
Expo New Jersey, New York and Pennsylvania
Associations of REALTORS®
Atlantic City, N.J. • (888) 818-4922
Dec. 25 NJ REALTORS® Ofﬁce Closed - Christmas

_________________________

LEGISLATIVE UPDATE
Trenton Focused on
Strengthening Commercial
Real Estate
By Douglas M.Tomson
Following the economic downturn in 2008, the New Jersey State Legislature
and governors from both political parties have enacted measures to support
our economy. One of the areas the state has focused on has been strengthening
commercial real estate, as the state’s overall economic health is directly
impacted by the industry.
As a way to encourage commercial construction and provide incentives for
existing companies to stay in New Jersey, the state legislature has approved
measures over recent years with the goal of jumpstarting the industry. One
of the major initiatives has been a suspension of the 2.5 percent non-residential
development fee. This fee, originally enacted in 2008 as a way to fund affordable
housing projects, placed a 2.5 percent fee, payable by commercial developers,
for commercial properties built in state.
On its merits alone, funding affordable housing is a worthy endeavor, but
the imposition of this fee quickly became an albatross on an industry suffering
through a recession. For this reason, the state legislature suspended the non-
residential development fee on several occasions. When the fee was restored
last year, Assemblyman John Burzichelli (D-3) and Senator Raymond Lesniak
(D-20) sponsored legislation to suspend this fee through 2016.
Legislators overwhelmingly approved the bill this past June; however, Gov.
Christie conditionally vetoed the measure last month. When it went back to
the legislature, it included Gov. Christie’s recommendations, including a need
to overhaul the state’s affordable housing laws, and indicated his support for
enabling economic growth and commercial development. The Assembly and
Senate can now consider the governor’s recommendations in his conditional
veto, attempt to override the veto, or take no action. No decision has been
made yet.
RPACof
NewJersey
Where Every Dollar Counts
$432,003*
$ 625,000
$ 600,000
$ 550,000
$ 500,000
$ 450,000
$ 400,000
$ 350,000
$ 300,000
$ 250,000
$ 200,000
$ 150,000
$ 100,000
$ 50,000
$ 25,000
*As of September 1, 2014
®

New Jersey Legislative Bills
Douglas M.Tomson
Douglas M.Tomson is the Director
of Government Affairs. He can be
reached at (732) 494-4720 or
dtomson@njar.com.
The following are some of the bills NJ REALTORS® is tracking that may
be heard in the upcoming months of the New Jersey legislative session.
A938 – Singleton (D7), Rible (R30)/S297 – Rice (D28)
Permits municipalities to hire private construction and subcode officials
New Jersey REALTORS® Position: Support
We support this bill, which allows municipalities to hire private companies to
perform municipal inspections often required when a property is sold or for
providing permits for work on a property. It will speed up the inspection and
CO process required in many municipalities when a property is sold.
B I L L H I S T O R Y:
1/14/2014 – Introduced in Senate and referred to Senate Community and Urban
Affairs Committee
1/16/2014 – Introduced in Assembly and referred to Assembly Housing and
Community Development Committee
A1007 – Benson (D14), Riley (D3)/S2142 – Singer (R30),
Greenstein (D14)
Requires DCA to establish inspection and abatement procedures for mold hazards
New Jersey REALTORS® Position: Support with amendment
We support this bill with an amendment that requires it to take effect only when the
federal or state government establishes acceptable standards for mold. The bill will
establish standards for testing and remediating mold hazards and will create certification
programs for mold inspectors and hazard abatement workers.
1/16/2014 – Introduced in Assembly and referred to Assembly Housing and Community
Development Committee
6/5/2014 – Reported out of Assembly committee with amendments, second reading in
Assembly
6/9/2014 – Introduced in Senate and referred to Senate Environment and Energy
Committee
6/23/2014 – Passed in Assembly 60-15-2
7/31/2014 – Reported out of Senate committee, second reading in Senate
A2030 – Greenwald (D6)
Expands applicability of ‘The Truth in Renting’ Act
New Jersey REALTORS® Position: Oppose
We oppose this bill, as it creates another mandate for property owners renting out their
homes. It expands the requirements of the ‘Truth in Renting’ Act – which currently
only applies to multi-family dwellings – to also include one- and two-family residential
properties.
1/16/2014 – Introduced in Assembly and referred to Assembly Housing and Community
Development Committee
SUPPORT MONITOR OPPOSE
There have also been numerous bills introduced –
which are strongly supported by New Jersey
REALTORS® – to do away with the 1 percent
realty transfer fee on commercial properties
sold for over $1 million. The fee, originally
adopted in 2006, is a strong disincentive for
companies to locate in New Jersey and is one
of the main priorities the NJ REALTORS® are
advocating to change in Trenton. Earlier this
year, the governor came out in support for
eliminating the entire RTF, including this
fee. New Jersey REALTORS® will continue
advocating for an elimination of this 1 percent
fee to help stimulate commercial activity in
the state.
Another big measure enacted over the last
year was the New Jersey Economic Opportunity
Act of 2013, signed into law last September.
This new law enhanced the state’s ability to
offer incentives to New Jersey businesses being
constructed within the state through newly
created tax credits. Similar legislation called
the Economic Opportunity Act of 2014, Part
3, was passed by overwhelming margins in the
state legislature this past June. However, like
to the legislation suspending the 2.5 percent
non-residential development fee, this bill was
also conditionally vetoed by the governor
with a recommendation to assist nongaming
construction in Atlantic City following the
recent closures of several casinos.
Commercial real estate is a niche market unlike
other real estate in New Jersey and making sure
it has the opportunity to grow is important to
our members and the state’s economy. When it
comes to initiatives aimed at strengthening this
segment of New Jersey’s real estate profession
and economy, NJ REALTORS® is working for
our commercial members. I
NEW JERSEY REALTOR
®
_____________

®
It’s Time to
Collaborate You spend much of your day out of the office showing
listings, meeting with clients, and networking. More
than ever, REALTORS® need tools that allow you to
get work done, even when you aren’t at your desk.
Recognizing many of today's workers are on the move,
many companies have developed products so work can
be done anywhere, not just your office. With so many
choices of personal, online, and group collaboration
available, you can pick the one to best suit your needs.
Google and Microsoft, two of the most well-known
companies in the technology world, provide full
office suites geared towards today's business owners.
Google Apps for Work and Office 365 both provide
email services, shared calendars, document storage,
spreadsheet management, and presentation creation –
all stored in the cloud.
Google Apps for Work
Many businesses are migrating their existing email
accounts to Google Apps for Work because of the cost
savings, the robust system, and because their users
already often have Gmail accounts, making it an easy
transition. Another valuable tool offered by Google is
Drive, which allows you to store, edit, and view nearly
any type of file online. Drive is tightly integrated with
Google Docs, which enables the creation of documents,
spreadsheets, and presentations.
Often times REALTORS® need to share several files
with another agent, assistant, broker, or client. Google
Apps for Work has some very powerful sharing tools
so users stay in control. You can choose to allow others
to edit and comment, or restrict them to just view the
files. Files have the ability to be simultaneously edited,
with each user seeing the respective changes being made.

NEW JERSEY REALTOR
®
John Shehata
John Shehata is the Director of
Technology. He can be reached
at jshehata@njar.com.
Office 365
Office is Microsoft's most popular application suite,
and the recent rise of cloud services has fueled
Microsoft's desire to provide these services online.
Now when users sign up for Office 365 they have
access to all of the features they are accustomed to
offline. Additionally, each user receives five desktop
licenses so they can install Office applications on
their computers.
Office also comes with cloud storage and the ability
to share files with colleagues.
Dropbox
Since the profile of the tech junkie has grown, so
has our arsenal of tech accessories. We often carry
multiple notebooks, tablets, and smartphones
around – not to mention the possibility of a watch
making an appearance. It’s important to have access
to all of our files at all times. Dropbox has native
applications for Windows, Mac, Ubuntu, Android,
iOS, and Blackberry that allow you access to whatever
document you drop in. You can access Dropbox from
any Internet browser.
Dropbox also allows you to create shared folders,
which contain the option to appear on each team
member’s computer, or be shared with others
outside your organization.
Trello
Trello is an online system for keeping project
management as simple as possible. For each task,
you can create a card, which lives in a custom-titled
column, within a larger custom board. So, for example,
you could make a board for an individual client. Inside
that board could be a few columns, such as Properties
and Documents. Under the Properties column could
be several cards of pictures and links to properties
the client has expressed interest in. For each card
you can write comments, create checklists, assign
people, mark due dates, and add pictures. Visually,
it’s set up a lot like Pinterest – but for business needs.
Yammer
Yammer is essentially a social network focused entirely
on your business. As with Facebook, new posts appear
in Yammer’s primary screen. However, groups can be
created to segregate conversations that are relevant
only to specific internal teams. Each group
conversation can have files attached so other team
members can review, edit, and comment on them.
Basecamp
If you’re unsure of exactly what you need in an online
collaborative platform, try out a service like Basecamp,
which offers a free 60-day trial to get started. This
service has all the document storage and sharing needs
a REALTOR® could need. First, you invite people to the
team and then upload and collectively work on files
from one easy location. You can also manage lists for
to-dos, ideas, projects, and more.
Basecamp is great because it understands not everyone
is a technical master, so it offers help to become a pro.
It is a pretty intuitive, easy-to-use platform, but there
are free weekly classes and a live Q&A if you can’t pick
it up on your own.
Hackpad
For things that are extremely copy-heavy, I recommend
Hackpad. It allows you to upload documents, invite
other to join, and simultaneously edit – similar to a
Google Doc, but it lays out clearly who made what
edit and when.
You can also create multiple sheets within one project
and organize them together cohesively. It allows for
seamless collaboration, with the ability to see copy
as it is being typed in real time. This way there’s no
need to save several versions of a document, because in
Hackpad, it’s always the most up-to-date, edited piece. I
____________

__________________________________________________

Commercial Real Estate Prognosis:
Slow but Steady Improvements
“It’s the economy, stupid.” The phrase coined
by former President Bill Clinton’s campaign
strategist James Carville, seems to be endlessly
applicable, particularly when it comes to real
estate markets. While there’s little crossover in
the performance of residential and commercial
real estate, both markets are heavily impacted
by the local economy and, more specifically,
employment.
“Jobs equal demand for both housing and
commercial space,” says Fred Schmidt,
president and COO of Coldwell Banker
Commercial in Madison. “It all comes
down to the level and quality of jobs, so
a steady growth in employment should
have a ripple effect on all markets in New
Jersey. Right now, we’re seeing a very
slight growth in demand, so the commercial
market over the entire state mirrors the
national picture: it’s not great, but not
bad either.”
According to the Bureau of Labor Statistics,
New Jersey’s unemployment rate in June
2014 was 6.6 percent. Liliya Magid, a research
analyst with Cassidy-Turley in Chatham, says
unemployment has declined from 8.8 percent
in the first quarter of 2013. She says employment
improvement serves as the main motivation
for companies to lease more office or industrial
space.
“New Jersey is one of the most affluent states
in the country, which means that some of
its commercial market property sectors are
doing very well,” says Ryan Severino, a senior
economist and associate director of research
for REIS in New York City. “The office sector is
the laggard in the state, mostly because the
NEW JERSEY REALTOR
®

®
traditional bastions of employment in the state, the
pharmaceuticals and telecommunications industries
and casinos, are in a long-term decline.”
Commercial property performance varies both by property
sector and regional influences, so there are some pockets
of improvement even in the office sector, says Severino.
Performance by the Sectors
Office space. “There are several things causing demand
for office space to decline in New Jersey,” says Schmidt. “One
is unemployment, but we’re also dealing with the shrinking
amount of space companies allot per person. It used to be 300
to 350 square feet per person and now it’s 200 to 250 square
feet, so even as employment improves there will be less need
for office space.”
A factor that’s hurting Central Jersey is that suburban office
parks that were in high demand in the 1980s are “functionally
and economically obsolete,” says Schmidt.
Office vacancy rates in North Jersey were 24.3 percent in
the second quarter of 2014; down from the previous quarter
and year-over-year, says Magid. Asking rents were up and
absorption rates are improving, she says.
In Central Jersey, asking rents also rose but vacancy rates
slipped to 22.9 percent and absorption also slipped slightly,
she says.
“For the most part, any improvement right now is coming
from existing tenants leasing more space rather than new
tenants,” she says. “In central New Jersey, vacancy rates
increased a little, but this is pretty much the result of a
few tenants moving out and putting other space on hold,
so we expect this to improve within the next six months.”
Jeffrey Jones, a commercial REALTOR® with Amerisource
Realty Network in Parsippany, says most of his customers
for office space in North Jersey are small business owners.
He says this past year has been one of the toughest markets
in 50 years.
“Small businesses are suffering. They’re furloughing people
and only hiring people part-time because of the combination
of economic concerns and financing concerns,” says Jones.
Jones says that while there are pockets of strength in places
such as Hoboken, small towns are seeing the highest vacancy
rates in years and he’s been forced to drop rents on office
space to keep it leased.
“The bottom line is that businesses need to work on a
three-to-five year plan, but with the political and financial
uncertainty created by Washington, they can’t figure out
how to plan even two quarters ahead,” says Jones.
In Central Jersey, Victor Kelly, executive vice president,
commercial division, for Larken Associates in Hillsborough,
says occupancy rates are strong in the single-story offices
that he leases to private doctors and hospital systems,
especially for small units of 1,000 to 3,000 square feet.
“A couple of the bigger buildings were slower to lease, but
now they’re 100 percent occupied because we negotiated
lower rents,” says Kelly.
Severino says that vacancy rates for office space throughout
the state are still elevated because of the stuttering economy,
the exodus of employers from suburban locations to urban
locations, and the long-term decline of many industries that
typically operate in New Jersey.
“The state may need to set up tax breaks to attract companies
in the financial services or other sectors,” he says.
In South Jersey, office vacancy rates are at 25 percent,
says Bryant Lafferty, an associate broker with RE/MAX
Connection Commercial Division in Marlton.
“The office market is stabilizing now and we’re building a
foundation for recovery,” he says. “It’s a great time to buy an
office, especially if you’re currently renting space, because the
price per square foot is the lowest it’s ever been and interest
rates are so low that’s it’s inexpensive to finance a purchase.”
Industrial sector. New Jersey has always been a prime
market for warehouse space because it sits geographically
between the Washington, D.C. – Baltimore markets and the
New York – Boston markets, as well as close to Philadelphia,
says Severino.
“There’s been increasing demand in parts of North
and Central Jersey to develop big centers to handle
e-commerce, which need to be close to big populations
and yet not located in the most expensive markets,”
says Severino.
Demand has been particularly high in the industrial areas
off the New Jersey Turnpike’s exit 8A, he says.
“Investor demand for industrial properties has surpassed even
multifamily developments recently because of e-commerce,”
says Schmidt. “Retailers call it ‘omni-channel’ distribution
and for the industrial market this means more development
and redevelopment of warehouse space to meet the demand
for things like same-day deliveries.”

NEW JERSEY REALTOR
®
Although Magid reports a slight increase in vacancy rates
in industrial properties in North Jersey, this is primarily
because of the movement of some larger companies from the
Meadowlands and Hudson markets to different submarkets.
In Central Jersey, she reports, vacancy rates declined and
asking rents rose during the second quarter. “The exit 8A
submarket off the New Jersey Turnpike has been a top
performer for several quarters,” says Magid.
In Central Jersey, Kelly says occupancy rates for industrial
spaces are up because of pent-up demand.
“I have smaller units that work well for new companies or
new divisions in New Jersey,” says Kelly. “The economy is
just OK, not great, but people can’t sit around forever
waiting for it to get better.”
With vacancy rates as high as 39 percent Lafferty says
the industrial sector in South Jersey is suffering when
you look at just warehouse space in this part of the state
and leave out flex spaces and markets in Philadelphia
and Delaware that are usually included in the analysis
of the region.
“Unemployment and the soft overall economy have hit
this sector hard and it won’t pick up until the economy
improves,” he says.
Multifamily sector. “Multifamily vacancy rates
throughout the state are extremely low and that’s
putting upward pressure on rents, too,” says Schmidt.
“In northern New Jersey the vacancy rates were 3.8
percent in the second quarter of this year and in
central New Jersey the vacancy rates were 2.8 percent.”
Severino says North Jersey benefits from the presence
of high-income households around New York City.
“Vacancy rates are even lower in Central Jersey because
housing is generally expensive, there’s a lot of population
density and not a lot of new developments,” says Severino.
Lafferty says the apartment market stayed very strong in
South Jersey even during the recession because people
who lost their homes needed to move into rentals. Vacancy
rates in South Jersey were 4.2 percent in the second quarter
of this year and rents have been steadily climbing, he says.
Retail sites. Severino says retail space in New Jersey
has been performing even better than other areas of the
country because of the presence of affluent households.
He says rents, particularly for good spaces, are among
the highest in the country.
“Retail space in North Jersey has some of the lowest vacancy
rates in the country because there’s a tremendous population
density and not much space for new development,” says
Schmidt.
The retail space Kelly handles in Central Jersey is completely
leased, primarily because he says his company is willing
to make deals that others might not in order to keep the
sites filled.
“We’re taking lower rents and even throwing in some
renovations,” he says. “We feel that if we’re more flexible
now, our customers will stay with us later when they’re
ready to expand.”
In South Jersey, Lafferty says vacancy rates in strip malls
are up to 20 percent.
“There are some hot spots and the regional malls and the
‘best of the best’ national chains are drawing business, but
the ‘mom-and-pop’ businesses are suffering,” says Lafferty.
“On the main streets of the smaller towns, every fourth
property is vacant or for sale.”
Hotels. “We’ve generally seen more of a return in demand
from business travel rather than leisure travel, so the
markets that are recovering are primarily in cities like
New York, Washington, D.C., San Francisco and Boston,”
says Severino. “There’s a little spillover in New Jersey
close to New York City, but there hasn’t really been a
return to strength for hotels in other parts of the state.”
According to the New Jersey Division of Gaming
Enforcement, occupancy rates at Atlantic City hotels
rose in the second quarter of 2014 by 4.9 percent to
83.3 percent compared to the second quarter of 2013.
In addition, five of the six "Tourism Indicators" for
Atlantic City showed improvement during the second
quarter of 2014. However, a third of Atlantic City's
casinos have closed since the beginning of the year,
including Trump Plaza and Revel.
While there are variations in different regions of New
Jersey and different property types, the commercial
real estate market appears to be following the national
pattern of a slow recovery from the recession.
“The trendline is unmistakable all over the state in
commercial property sectors,” says Schmidt. “Slowly,
gradually, we’re seeing decreasing vacancy rates,
increasing demand, and stabilizing rents.” I
Michelle Lerner, a freelance writer from Washington,
D.C., specializes in real estate-related articles. She
can be reached at MVLerner@comcast.net.
_______________

Despite the well-known hit the real estate industry took
after the financial crisis in 2007 and the subsequent
Great Recession, the commercial real estate market is
coming back. New construction and development is
happening all around the state through the industrial
boom, the move from urban condominiums to rental
units, and investors' desire for fully approved residential
developments.
Interest Lies In Pre-approved
Residential Sites
Broker and owner Ray S. Smith, of Stafford Smith Realty
in Shrewsbury, is handling a number of multifamily
development projects throughout the state. His firm is
solely focused on commercial and industrial real estate.
Right now, he says, the most attractive deals garnering
interest from national developers are for land that is
already fully approved for development for a simple
reason – it used to take a year to gain approvals but
is now taking up to three thanks to local, county, and
state regulations. “Especially if you're on a state
highway,” Smith adds.
Of those development projects, “generally speaking,
there's an interest in bringing product on the market,”
Smith says. Property selling in the affordable range
of $300,000 to $500,000 is the most robust at the
moment, he points out.
®
for Commercial Real Estate
New Construction
& Development
for Commercial Real Estate
New Construction
& Development

NEW JERSEY REALTOR
®
Smith is starting to see a fair amount of development in
new areas, like Jackson, where construction is starting
on a large amount of approved housing units, drawing a
variety of new retail projects and a medical center. Within
the past year alone, the Jackson Township Planning Board
has approved a bank, indicative of residential units drawing
commercial ventures; a car wash; an 8,000-square-foot
medical office building; an amended plan that will have
several hundred apartment units; a gas station with a
convenience store; and more.
“[Jackson] happens to be an area that's starting to catch up
with the rest of the urban sprawl,” Smith says. Construction
for new retail uses are cropping up all the time along more
heavily trafficked highways. “Commercial follows where
residential is blossoming. Where there's a stronger population
to serve, that's where you see services coming in.”
Rental Units In Demand
Buyers aren't the only ones looking, though. RE/MAX
Commercial Investment Associates’ Managing Principal
Anthony Gomez says the need is growing for rental units,
and investors are looking to fund those projects in the
right locations.
Rental units today are also decreasing in size. From
around 2004 to 2007, the market was hot for larger
apartments because people were willing to pay more.
But a lot of larger-scale projects got stuck after the
economy crashed because they were planned to be 1,400
to 1,500-square-foot living units. “You can't build that in
today's market,” Gomez says. “Some of these projects
that got approved have to be redone to accommodate
today's market.”
According to Gomez, the “sweet spot” for residential units
is between 800 to 1,200 square feet. “It's more affordable,”
he says. The young professionals – which projects are
catering toward in urban markets – don't need bigger
spaces, which are often meant for families.
Gomez predicts a bright future for the development of
rental units so long as the economy keeps growing. “As
long as the rents hold, we're going to continue to see
development” in the tri-state area.
Gomez also points out the increased activity occurring in
regard to larger rental unit projects throughout the state,
with companies like Roseland completing the nearly 600-
unit Estuary in Weehawken that opened earlier this year.
Roseland has other projects in the works in North Jersey,
as well.
However, other investors are willing to put some legwork
into projects, including getting necessary approvals
themselves. “Really, that's where you create the most
amount of money,” Gomez says.
Some investors, Gomez said, are looking for turnkey
projects that have approvals in place. “But you're going
to pay a premium for that,” he says. “There's really not
a lot of land available.”
The market is also being partially driven by international
investors who, Gomez says, are “big players coming in
with millions of dollars looking to do development projects
within the area.”
Industrial Market Is Booming
Tinton Falls-based GreenGate Capital Principal Ian
M. Grusd says the industrial market in New Jersey is
“extremely active,” which can be attributed in part to
location. “I think a big part of the demand specifically
in North Central New Jersey is proximity to major
highways, airports, and ports,” he says, noting the
area's equidistance to Boston and Washington, D.C.
Gomez agrees that the industrial market has come back,
and is noticing a good deal of companies that want to leave
New York and move to the more affordable North Jersey
area. “It's gotten expensive,” he says. “Brooklyn is out of
control, Manhattan is out of control.”
Another big factor in today's industrial market is
e-commerce. Companies are shifting logistics models
from one or two national distribution centers to creating
a greater number of smaller, regional distribution centers
to fulfill orders faster, Grusd says. New construction in the
past 10 years has resulted because older, existing industrial
buildings tend to have ceilings no higher than 28 feet.
Tenants today are willing to pay for space in a newer building
with ceilings 30 feet high and higher, which justifies the cost
of new construction.

®
A hotbed of activity is taking place along New Jersey Turnpike
exits 10 to 13, and the Interstate 287 corridor heading into
Piscataway – an area near New York, the Port of New Jersey,
Newark Liberty International Airport, and several major
highways.
For instance, development company J.G. Petrucci Co.
recently completed the 570,100-square-foot industrial
building known as the Middlesex Logics Center, located
off exit 10 of the Turnpike in Edison. It sits on 42 acres,
has 36-foot clear ceilings, parking for nearly 150 trailers,
and 108 cross-load dock doors. On a smaller scale, J.G.
Petrucci is also offering a 63,580-square-foot building
on a 5-acre plot in South Brunswick, built to suit.
Industrial logistics real estate firm Prologis also has several
properties in the area, including a 582,961-square-foot
industrial building in Carteret, off exit 12 of the Turnpike.
The available 177,705 square feet of office space is built to
suit, and the building has 36-foot-high ceilings, 28 dock
doors, and 26 trailer parking spaces. Dubbed “Prologis Port
Reading,” the land is 10 miles from the Port of New Jersey
and Newark Liberty International Airport.
Carteret is already home to iPort 12, a 1.2 million-square-foot
warehouse with a clear height of 36 feet and 80-by-80 foot
structural bays, completed several years ago and designed by
KSS Architects.
KSS Architects has also designed South Washington Park,
a joint venture between the Trammell Crow Company
and Clarion Partners in Piscataway. When complete, the
industrial center will total 538,800 square feet, split
between two buildings, that includes two office entrances
for up to four tenants, 93 loading docks, and 36-foot clear
building heights.
In addition to traditional industrial uses and warehouses,
data centers that provide cloud storage and solutions are
“also something which is in hot demand,” Grusd says.
“It's more tech-flex than it is industrial, but that category
is also very active.”
Overall, e-commerce and data storage – as well as food
distribution and related businesses that provide support
services to those in e-commerce and data storage – are on
the market looking for locations. While service businesses
are typically looking for smaller spaces, e-commerce and
data storage companies are looking for sites upwards of
50,000 square feet.
Close To Manhattan, Kinder On The
Wallet
“I think investors from small to large are still continuing
to look at New Jersey as a place to develop,” Gomez says.
“They really are. They know it's a great place to develop,
and you get more bang for your buck.”
New York prices are also driving companies across state
borders into New Jersey. Property here is a “fraction of
what the land acquisition would cost” in New York, Gomez
says. And considering that, as well as its proximity to bridges
and tunnels leading into New York, “New Jersey is definitely
a great alternative” – especially North Jersey.
New Jersey is also a viable option for developments because,
as the projects themselves cost less than they would in New
York, the rent tenants are charged is less, as well. With an
average residential rental in Manhattan running $3,400,
Gomez says, “New Jersey's always going to be a bargain.”
South Jersey Industrial Boom
North Jersey isn't the only industrial hot spot in the state –
the southern area of the state is not without a good deal of
____________________
_________

NEW JERSEY REALTOR
®
activity, according to Marc R. Isdaner, senior vice president
and principal of Mount Laurel-based Colliers International.
"Southern New Jersey, [Turnpike] Exit 7 and below, has had a
sharp increase in new industrial development," Isdaner says.
He highlights several larger-scale projects in that area, like
a million-square-foot distribution center being constructed
by W.W. Grainger in Bordentown. Additionally,in Florence
and Burlington, Express Scripts, Destination Maternity,
Burlington Coat Factory, and Subaru have all either just
recently moved into new facilities, or are constructing new
facilities, ranging from 215,000 to 677,000 square feet.
"The 1-295 corridor in Gloucester and Salem counties has
also been active," Isdaner says. Rastelli Foods in Pureland
is expanding its existing manufacturing facility by 50,000
square feet, while FoodComm is building a 123,000-square-
foot cold storage building. "Liberty Property Trust has
preleased a speculative 202,908 square foot building – the
first speculative construction since 2008," Isdaner says, and
another speculative building – this one a 171,600-square-
foot, multi-tenant building – is being planned by Dermody
Properties.
Isdaner also points to Mullica Hill Cold Storage's project
in Oldmans Township off I-295. The company recently
expanded its cold storage facility by 150,000 square feet, he
says. Additionally, Five Below recently announced it is
moving its distribution center from Delaware to Oldmans
Township, where it will have a million-square-foot facility.
State Offers Incentives
More urban areas are also attracting businesses based on
state grants and incentive programs.
Under the New Jersey Economic Opportunity Act of 2013,
the Business Employment Incentive Program helps
expanding or relocating businesses that create jobs in
New Jersey. According to the New Jersey Economic
Development Authority, approved businesses receive
annual cash grants based on the number of new jobs they
have created in the state.
Also overseen by the NJEDA, the Business Retention and
Relocation Assistant Grant will pay up to $2,250 per year,
per job retained in the state, for up to six years. The BRRAG
is only applicable to companies that retain a minimum of
50 full-time jobs in the state.
Smith, whose commercial - and industrial-only firm mostly
covers Central and South Jersey, says the northern portion
of the state is reaping those benefits of state programs. “We
don't have the same urban areas,” he says.
However, in more urban areas, the programs are proving
beneficial; and in some urban areas, proximity is another
huge bonus.
Additional incentives are also offered to commercial projects
in the four Garden State Growth Zones – Camden, Trenton,
Paterson, and Passaic – according to the NJEDA. Those zones
comprise the cities in New Jersey that had the lowest median
income, as revealed through the US Census' 2009 American
Community Survey.
Isdaner says Camden, specifically, is benefitting from tax
incentives and "will be much more in play." The Philadelphia
76ers "will be receiving a generous grant package," he says,
for a new practice facility in Camden. Additionally, the
NJEDA and Campbell Soup Company are making efforts to
develop Gateway Office Park in the city. I
Jamie Biesiada is an award-winning journalist based in
New Jersey. She manages two Jersey Shore newspapers
and a regional magazine.

®
New Jersey’s Housing Market:
A Look at the Numbers
Through August 2014
The housing market in New Jersey may not have had
the boom so far in 2014 that was expected to follow
2013, but that isn’t all bad news. In fact, the slow,
steady growth that the state has experienced this year
is a stronger recipe for long-term maintained health.
“While we’d love to see the market activity return to
performance levels we saw before the bubble burst, the
reality is, the economy is still recovering,” said Cindy
Marsh-Tichy, president of New Jersey REALTORS®.
“The good news is that activity is picking up as sellers
feel more confident that they’ll get a stronger price for
their homes and buyers see that homes are more affordable
and mortgage interest rates are still low.”
So what exactly has been going on in 2014? Let’s dig
into the numbers to get a clear picture of how the first
eight months of the year have shaped up.
When looking at the entire market, the median sales
price rose 1.8 percent over last year and is currently
at $290,000. Following suit with that uptick, sellers
saw a 0.6 percent increase in the percent of list price
received to 96.2 percent. Interestingly, despite the
increase in median sales price, affordability also crept
up slightly to an index of 138. New listings increased 4.8
percent to a total of 132,983 for the year-to-date, and as
of August, the months’ supply of inventory dropped a
slight 2.2 percent to nine months. Closed sales for the year
are down 5 percent for a total of 60,333 so far, and pending
sales are lagging slightly over last year with a 1.9 percent
decrease to 68,102 to date. Homes are now spending
less time on the market, with a 10.6 percent decrease
to 84 days.
The single-family home market tells a similar story to
the overall market. The median sales price rose a slight
0.6 percent to $317,000 year-to-date. The percent of list
price received matched the entire market at 96.2 percent.
Likewise, affordability rose 1.6 percent to an index of 126
and new listings were up 5.2 percent to 95,573 so far.
Closed sales dropped, like the overall market, by 4.9
percent to 41,705 and pending sales also fell 1.2 percent
to 47,264. Days on market fell most dramatically at 9.6
percent to 85 days.
The townhouse/condo market also shows similar patterns
to both the single-family market and the overall home
market. The median sales price rose 2 percent to
$255,000 year-to-date. On par with the rest of the market,
the percent of list price received rose a half-percent to
96.2 percent and affordability rose about the same amount,
but is higher than the overall market at an index of 157.
New listings also increased in this market segment by
4.8 percent to 28,022 units. Closed sales for the year so
far are down 2.3 percent to 13,309 and pending sales
are also down slightly – 0.3 percent – to 14,898 units.
Like the single-family home market, the days on market
fell to 81 days, which is a 13.8 percent decrease over last year.

NEW JERSEY REALTOR
®
Finally, when examining the adult community market more
closely for year-to-date numbers, the trends seem to differ
somewhat from the other market segments. The median
sales price rose more dramatically at 10.1 percent to
$165,000, but that price is lower than in the other two
market segments, despite the large percentage increase.
Sellers received 95.8 percent of the list price, which is a
half-percent higher than last year, but also slightly lower
than the other categories. In this market segment, the
affordability index dropped 6.9 percent, which sounds like
a lot, but affordability overall has a much higher index
here at 242, so homes are still incredibly affordable in the
adult community market. Typically, this housing category
has a lower supply than the single-family and
townhouse/condo markets and as of August, despite a huge
19.6 increase, there’s just 5.5 months of inventory –
much lower than the approximately nine months’ supply
in the other categories. Though more homes are for sale,
fewer new listings have been put on the market – 7,394
for the year so far, down 2.6 percent over last year. As to
be expected, the days on market fell a huge 15.4 percent
to 77 days, which is in line with the lower supply.
To view the August 2014 state, county, and municipality
reports, visit njar.com/10k. I
Allison Rosen is the Director of Communications &
Marketing for NJ REALTORS®. She can be reached at
arosen@njar.com or (732) 494-4730.
___________

How does your county’s
year-to-date median price
compare to the state?
I $200,000
I $110,000
I $157,000
I $465,000
I $325,000
I $350,000
I $230,000
I $159,950
I $175,000
I $180,000
I $104,000
I $241,000
I $313,500
I $405,000
I $270,750
I $135,000
I $95,000
I $107,000
I $434,000
I $275,000
I $553,000
I $195,000
I $150,000
I $201,493
I $402,500
I $215,000
I $295,000
I $308,000
I $178,000
I $270,000
I $315,000
I $235,000
I $160,000
I $400,000
I $252,000
I $202,000
I $445,000
I $305,000
I $265,000
I $260,000
I $170,000
I $135,000
I $299,000
I $264,950
I $391,500
I $144,950
I $103,500
I $132,500
I $466,125
I $257,000
I $376,500
I $227,000
I $145,000
I $195,000
I $340,000
I $227,000
I $210,000
I $230,000
I $182,000
I $177,500
Map Key
I Single-Family
I Townhouse/Condo
I AdultCommunity
I $317,000
I $255,000
I $165,000
®
I $265,000
I $433,000
I $762,000

Board/
Association
News
MCAR members Mary Nunziale and Diane
Traverso; MCAR President Robert White; BGCM
Executive Director Douglas Eagles and the young
people of BCGM
HomeFront Representatives, Irene Hosszu and
Walter Sarvino organized the donations.
M A R K E T P L A C E
NEW JERSEY REALTOR
®
Monmouth Holds First
Charity Run
The Monmouth County Association of
REALTORS® held its first 5K/1-Mile
Walk recently in Asbury Park. REALTORS®
and community members came out for
a beautiful morning run at the beach to
support the Boys and Girls Clubs of
Monmouth County.
Event proceeds supported the Boys and
Girls Clubs of Monmouth County, and
MCAR was pleased to present the
organization with a check for $2,500.
Mercer Collects Backpacks
Mercer County Association of
REALTORS® members banded together
recently for the HomeFront Back-to-
School Backpack Drive. Agents from all
over donated to the drive to make sure
students had a good start to their year.
Ten times a year,REALTORS® statewide
depend on New Jersey REALTOR ®
as a key source of industry news.
Approximately 41,000 strong, New
Jersey Association of REALTORS®
(NJAR®) members are a key professional
business audience throughout New Jersey.
AdvertiseToday
For more information or to reserve space,
call Cindy Stambaugh at 410.647.5869
_____________
______________
_______________________________
__________ ____________

______________________________________

REALTOR Magazine October_REMAX CIA Article

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