Most people I speak to about the industrial sector have kept a level head about the market’s recent pullback, using words like “normalizing” or “moderating” after the high-flying days of about three years ago. That perspective is to be commended, but it doesn’t change the fact that developers are now trying to work off an influx of new supply with fewer tenants.
As you’ll read in this month’s cover story, landlords say demand is coming back with what I’d imagine is one frustrating caveat: Occupiers remain indecisive, despite needing new space, amid lingering concerns about making major capital commitments. As we heard at NAIOP’s recent I.CON East conference, developers are noting the push and pull within the executive ranks of their would-be tenants. Chief financial officers have become more deliberate when it comes to signing a lease, even as others in the company push for new facilities.
“One of the things we see is the ops people want more and they want modern space, but the C-suite right now is hesitant,” said Brandi Hanback, an executive vice president and co-head of development with Rockefeller Group. “And I think that contributes to why you see so much renewal activity and also some of the (third-party logistics) activity to try to bridge that gap until they’re ready to make that next phase of investment into their supply chain network. Because it’s expensive, there’s a lot of capital deployment beyond just signing a lease.”
Our Summer issue also includes a profile of Ridgecut Road, a two-year-old real estate investment firm led by identical twins Eric and Scott Shalek. The 30-year-old brothers have focused on low-coverage and industrial outdoor storage properties, a niche asset class that’s drawn increasing attention, having acquired a half-dozen sites since 2023 alongside their investment partners. The Tenafly natives are also working on their first ground-up development, in New York’s Orange County, where they’re developing a 146,075-square-foot distribution center just north of Interstate 84.
Elsewhere in this edition, we detail the growth of the Urban Land Institute’s UrbanPlan program, which allows students to participate in hands-on, simulated real estate planning while working side by side with top industry professionals. It’s now expanding locally under the watch of ULI’s Northern New Jersey chapter, which launched the program at East Brunswick High School in 2019 and recently debuted it in East Orange. Participants this year are also benefiting from event sponsor Russo Development, which recently hosted students at a construction site in East Brunswick and at a completed multifamily property in Woodbridge, fielding questions on everything from rental rates to common development issues and how it funds its projects.
You can read those stories and more in our Summer issue. The season is flying by (to no one’s surprise), thanks to a busy July with a surprisingly busy news flow. We’ll see what August brings, but hopefully you’re all enjoying these summer months in the meantime.
Until next time, thanks for reading. Enjoy the issue!
Joshua Burd
Editor
