Well folks, sales of industrial and office property in Central NJ of any consequence are off 80% year over year. So what is happening? The #1 question at functions and from owners and tenants, what trends do you see developing?, where are the rental rates going? What's my bldg. worth? What can I buy? See any 10% cap deals?
Let's tell the April story this way......great bldgs. are having problems, good bldgs. are surviving and 3rd tier bldgs. are doing ok just that their rental rates get hit the hardest on the downdraft. %wise, the rates being cut 20-35% are not uncommon, with some rent concessions upfront.
It will be interesting to see if the trend will continue through 2009 all the way till 2010. The bet is yes it will.... With lenders requiring 50% more equity on sales, it could actually help the rental market by forcing tenants to stay tenants. You can count on one hand deals north of $5,000,000 in the 1st quarter.
You have to admire Prologis, they are aggressively doing deals, I like that!
First Industrial, ditto! Not to mention AMB, doing their fair share....
The private local owners know the drill, retain the good tenants and listen to their story. They saw this in '91, it was actually more ugly then, but who knows if this is the 3rd inning of 9 here in 2009 Q2.
That's April, I'll have much more in the following months.
Chris Galiano
Managing Director
NAI DiLeo-Bram & Co.
(732)985-3000
cgaliano@naidileobram.com
Wednesday, April 29, 2009
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