TheGreatBailout Begins

Well folks, $700 billion is about as much as your going to get. After that we're on our own.
By the time the dust settles, Wachovia will merge and toxic debt as we know it will become
options held by the USA. We can all agree SOMETHING MAJOR had to be done AND quickly.
Office and warehouse pricing needs to be unfrozen with a blowtorch asap as to allow the systems to function in an orderly fashion. Retail leasing will suffer in Q4 but the real impact on the economy will be lending will be back with a fury. Without lending all the NJ firms report sales off 65-85%.
I don't think you see much written about the desert-like feeling of a 105 degree desert , dry with no real sellers, some buyers and few lenders. Yes, there are deals getting done, but they were teed up early in 2008 if not 2007 and are only now closing.
All in all, if this gives us the time we need to sort out the balance sheets then its all worth it. Then we can judge what and which assets are really worth.
Chris

September 2008

Is Lehman the next BearStearns, we'll know on Wednesday 9/10.
The REITS are holding their own but the retail #'s are hurting the store growth in the USA, if the
reits like ProLogis have Int'l exposure, then they are growing in Asia while flat in the Americas.
However the US reits with retail only exposure are flat lined from here on till the end of 2008.
Locally, we are at a pivot point , oil continues to fall hard and we could have $2.75 per gallon gas in a few weeks. Making trucking to Exit 8A less expensive and possibly filling more space down there as a result. Time will tell. Small flex is doing well Everywhere, office is still stumbling along while medical office space is behaving well and continues to grow.
Stay tuned,
Chris

Stalemate Sales Market

Buyers don't want to pay 2006 prices, seller's aren't moving off the highest closing sale numbers attained in their market. Thus no new supply, limited demand , creating stagnation and it looks like it will here for the rest of 2008. With very few foreclosures in the commercial arena, there will be a fall/winter scenario being set-up for the pivot pt. to move the mkt. in one direction or the other. The best bet right now would be for LOWER prices and even more lower prices as we get into 1st quarter of 2009. Local lenders are trying their best to gather mkt. share from the big guys as they try to get their house back in order.

August- Commercial RE Still Holding

OK, folks, looks like the tenant has more negotiating power in August vs. July. There are VERY FEW MAJOR DEALS getting done. CB Richard Ellis stock plunged on the 2008 sales volume news and Jones Lang along with Grubb&Ellis followed suit. Its all 100,000 sf and under deals getting done. A very hot area is 10,000-50,000 sf for some reason. We are talking warehouses...as far as office space ....one by one sublet space is coming up in bldgs.. as large companies cut back and those cheap sublets really do effect the psychology of the landlord's asking rent direct. The closing sale prices have FROZEN up, nothing new coming on the market and NO price reductions.
Surf's up
Chris

Big Banks Freeze Up

The lending at the Big Banks has frozen up.
Local lenders seize the opportunity, Columbia Bank, Peapack-Gladstone among others writing multi-million dollar loans.
Steve and Barry retailer files for the big one.
Looks like the retail rents have once again fallen way south, office rents are holding but more concessions for tenants are coming quickly in the form of free-rent.
Industrial rents are slipping but holding in key mkts. where the vacancy factor is less than 5%.
Less and less and less bigger deals are happening. Lots of 50,000 sf and under flex deals becoming the mainstay of the mkt.
Chris

July 4, 2008 Review

Second half of 2008 kicks off Monday:
Tale of the Tape:
Office Space is primarily holding up around key transportation spots around the Garden State.
Suburban office market is generally weakening under the $4.00 per gallon gas and some developers are offering gas cards for prospective tenant employees on deals that are made at their buildings.

Warehouse Space: The 8A mkt. has softened big time with many >100,000 sf availabilities,
flex space is holding rates below 30,000 sf.
Markets north of Exit 9 are in great shape especially Raritan Center and in and around the Port.
However there seems to be a trend toward the weakening as the vacancy in some of these mkts. were at all-time highs.

Retail Space- More retailers will be falling as the consumer shops at Walmart and the food markets.
Very few bright spots on the trend now deepening into minor to moderate vacancies across the main retail roads of the Garden State. The Costco's and BJ's are getting good traffic but looks like the rebate cks. have helped and they will not be around in the 4th quarter.

Chris Galiano