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  profiles for different asset classes. The multifamily sector continues
to draw institutional capital, he said, “but they’re being cautious, they’re being smarter about how to underwrite.” The same is true for industrial properties, while office buildings remain a target for private investors but few others.
Retail, meantime, has caught the eye of some institutions, at least in the case of grocery-anchored properties.
“There’s still a lot of money that’s floating out there and we are still seeing deals happen,” Cruz said in a follow-up interview. “It’s not a hard stop — there’s activity and there are bids.”
He added that “it’s deal-specific,” depending on asset class, location, upside and other variables, “but there’s still capital to put to work, so we are getting things done.”
In the interim, there’s no denying that economic uncertainty has impacted all
property types,
including
industrial,
which has
grown to
become a
coveted asset
class for real
estate investors.
Jessica Fraser, a vice president and investment officer with Prologis, said there is a growing divide between sellers and buyers about the value of development sites, making it more difficult to transact than six to nine months ago.
“When prices ultimately come in
a lot lower — at least in a market like New Jersey, where maybe
the sellers don’t have to transact because this is a deep market and land values will ultimately rebound here — those deals are coming off the table,” said Fraser, who is based in Prologis’ East Rutherford office. “So, it’s just a real mismatch and it makes it really hard to get that deal done.”
That could ultimately benefit well- heeled, entrenched developers like Prologis “because it pulls folks out of the market,” she said, but only after sellers have adjusted.
“It’s a period of price discovery right now,” said Dan Connaughton, a vice president for development with Link
Logistics, who agreed that it would be harder to close land deals for at least the near term.
Deal volume figures to stabilize in the months
“Why is this question so hard? Because it probably depends on
the Fed, it depends on inflation,
it depends on market sentiment,” said Davis, the Paul V. Profeta chair in real estate at Rutgers Business School. “But if you’re going to think about acquiring land and doing a development deal, you have to start thinking of: ‘What are cap rates going to be?’”
Davis also asked the panelists how they would mitigate risk as they transact in the months ahead.
“The bar is undoubtedly much
higher than it was even back in the first quarter
of this year,”
Connaughton
said. “Location is key right now. The more infill, the better here. Close
to population
centers is the
goal, as close as we can get, and sometimes that means smaller sites, where we’re building smaller facilities.” RE
Morris Davis
where capitalization rates are heading.
TM 19
  ahead, but
the speakers were reluctant to speculate when asked
by Rutgers University’s Morris Davis, the moderator,
Dan Connaughton
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                   Jessica Fraser


















































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