The glory days of near-zero vacancy and hard-to-fathom rent growth in the industrial market always came with the slightest bit of tension, especially among veteran landlords who know full well that nothing lasts forever. And with good reason, as we now know, as the asset class grapples with new headwinds that may not have seemed likely only two years ago.
As you’ll read in this month’s cover story, industrial owners in the state are adapting to a climate of caution in the capital markets, cooling demand from tenants and growing local resistance to large warehouse projects. Some are seizing the chance to double down in a market that they feel is still fundamentally strong, despite a pullback in big-box leasing. Others are pivoting to different, more conservative approaches to remain active in the near term, such as acquiring existing, stabilized properties or adopting a more flexible leasing strategy.
As Greek Development’s David Greek tells us, “This is the time to find really interesting opportunities. Everything is harder to capitalize and harder to entitle today, but we think there are great opportunities to be found in this marketplace because we do believe in the long-term strength of owning, managing and building industrial in this market.”
Our Summer issue also details how Faropoint, an investment manager focused on industrial space, is using data and artificial intelligence to streamline its acquisitions platform. The firm’s Itay Ron spoke at NAIOP’s I.CON East conference in early June, noting that its core market of small to medium-sized warehouses in infill locations is dominated by owner-users or private owners. That equates to a fragmented landscape “with siloed pockets of information,” he said, creating a need to collect and refine data from across its target markets and use A.I. to gain a competitive edge. As Ron describes, that comes in the form of improved underwriting and other insights that can support the fast-growing, Hoboken-based firm.
Elsewhere in this edition, we highlight the impressive rise of GZA GeoEnvironmental Inc.’s New Jersey team. The Fairfield-based unit has benefited from steady, organic growth and key acquisitions that have strengthened its foothold and expanded services such as geotechnical engineering, environmental consulting and planning. Its presence in New Jersey has grown from 40 professionals in 2017 to nearly 120 today, while its gross revenue in the state has increased during that span from roughly $9 million to a projected $24 million to $25 million this year, thanks in part to its work on many key development and infrastructure projects.
You can find those stories and more in our Summer issue, which also includes a full recap of The Newark Redevelopment Update, our recent program highlighting the economic opportunities and challenges in the state’s largest city. The event drew a registered crowd of more than 500, with a panel that included some of the state’s top real estate players. It was also a reminder that seemingly no other community in New Jersey enjoys the type of support and enthusiasm that Newark does, thanks in part to its untapped potential, but also the deep connection that business leaders and area residents feel with the city.
Until next time, thanks for reading and enjoy the issue!
Joshua Burd
Editor
josh@re-nj.com
