Experts see a significant conundrum in the office market, as every economic indicator used to forecast absorption performed at or above the forecast level. Further, closely related macroeconomic variables — such as office-using employment — grew steadily, meaning that more office employees were added without much corresponding space leased over the previous six months. While the first quarter reading of just 1.3 million square feet absorbed may be a one-time anomaly, it cannot be ruled out that a structural shift in the office space market has occurred or is occurring.
Supply or cargo chains are complex ecosystems involving multiple organizations, infrastructure modes, carriers and workers that comprise the movement of commodities from their point of origin (factory, farm, mine, etc.) to the retailer and consumer. They include beneficial cargo owners (BCOs), ocean carriers, port authorities, regulatory agencies, marine terminal operators, port labor, rail and motor carriers, warehouse, distribution, fulfillment and e-commerce centers and retail businesses. A problem at any link in this chain can cause the entire system to back up.
I am convinced more than ever that forward-thinking New Jersey suburbs are poised for a comeback. Many city residents, especially those in their 20s and 60s will seek alternate residences. Towns that have invested in their infrastructure and assets for the long term and are ready to accommodate this exodus of consumers and their preferences will be able to compete for this wealth of talent and the resources they bring to the community.
In listening to the presentations by the eight finalists for NAIOP’s annual Deal of the Year competition, what struck me most was the collaborative nature and level of cooperation that is taking place among all the participants in both the public and private sectors. It wasn’t always this way.
The shortage of labor with the right skillset and talent is being felt across all sectors and is much more pronounced in some parts of our state. Building owners, businesses, communities and government officials — all of whom are in the real estate business, need to take steps to attract the younger generations who are today’s and tomorrow’s consumers and workforce.
Admittedly, “this (tax reform) legislation represents an important victory for NAIOP members and the commercial real estate industry. The first major tax reform in more than three decades, the Act recognizes the important contribution that commercial real estate is making to the economy by supporting pro-growth initiatives and acknowledging the long-term nature of commercial real estate investment.”
While many New Jersey residents and business owners are rightfully concerned about the potential adverse impacts from federal tax reform measures at the same time as increases to state taxes are being discussed by Gov.-elect Phil Murphy and our Legislature, let’s not overlook the possible ways that local mayors can help to ameliorate this situation.
NAIOP’s premier industry event this fall was CRE.Converge 2017 in Chicago, which attracted nearly 1,500 attendees from across North America. Held Oct. 10 to 12, the conference provided valuable insights into cutting-edge trends in the commercial real estate industry and projections for the future.
As our next governor focuses on making our state more affordable for both businesses and residents, it would make sense to ramp up efforts to cut red tape by eliminating ineffective rules and empowering qualified private-sector professionals to handle more administrative work, technical reviews and project approvals.
Our next governor and new Legislature best be laser-focused on two immediate priorities: investing and deploying critical resources into our transportation system and stimulating permanent property tax reductions through shared services and municipal consolidations.