Page 22 - RE-NJ

Photo by Aaron Houston for Real Estate NJ
STEADY HANDS
How Genova Burns is helping real estate clients navigate rising rates, changing market
By Joshua Burd
20 JANUARY 2023
WILLIAM F. HARRISON
EUGENE T. PAOLINO
Commercial real estate lawyers may well be the first call for developers and property owners, but their conversations with clients have undoubtedly changed
in recent months. Just ask the real
estate team at Genova Burns.
“There’s more caution in the marketplace,” said Jeff Rich, chair of the firm’s commercial real estate and redevelopment law practice group, citing a lag in lending activity. “People are slower to pull the trigger on a deal — maybe they’re waiting to see if the rates are going to fluctuate favorably — but there’s definitely a slowdown in the market in that regard.”
Genova Burns, home to one of the state’s most prominent real estate practices, is as busy and as integral to the industry as it was before the pandemic and before the Federal Reserve began to raise interest rates
last year. Increasingly, though, the Newark-based firm is helping clients either play defense or guide them through this period of uncertainty.
Interest rates have impacted everything from new development to investment sales, the attorneys said. That’s not to mention the lingering effects of COVID-19 and the slow rollout of new state incentive and gap financing programs, which they say are critical in times of economic turmoil.
Legal teams at Genova Burns and elsewhere are navigating those challenges while also tapping
into growth areas in New Jersey’s commercial real estate sector, from film and television studio facilities to the legalization of adult use cannabis.
“We’re now seeing the fruits of that regulatory scheme in the real estate space,” said Jennifer Mazawey,
a partner and longtime land use attorney with the firm, referring to the cannabis market. She added: “I think that’s an industry that’s not slowing down because it’s so new, it still needs to mature ... so that will continue to be a good source of work for real estate lawyers.”
Real Estate NJ recently sat down with the Genova Burns real estate team to discuss the state of the market, how clients are coping with economic headwinds and reasons for optimism in a time of unease.
DEVELOPMENT
In Jersey City, the home of the state’s most prolific development pipeline, rising interest rates have caused some builders to tap the brakes on sweeping, multiphase projects that have flourished in past years. Eugene Paolino, who represents some of the city’s most
active multifamily builders, said clients that have already received approvals are weighing whether
to redesign or reduce the size of a project or modify their schedule to lessen their risk.
“It is a constant attempt to address the market,” said Paolino, a partner in Genova’s land use and approvals and commercial real estate and redevelopment groups. That can mean anything from adding studio or one-bedroom units or considering a pivot to for-sale condominiums, which he believes is an underserved market in recent years.
“The developers are all looking to that market,” he added, referring to Jersey City, “and I constantly worry about the issue of saturation. What is the saturation point? When is the next project going to go up in which they don’t rent at a rate of 50 units a
AVI D. KELIN
GERARD D. PIZZILLO
MATTHEW KERTZ
JEFFREY R. RICH
JENNIFER MAZAWEY
JOHN SUWATSON