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18 OCTOBER 2023
OWNERS COUNCIL Q&A
SAM MORREALE
FOUNDER AND MANAGING PARTNER VISION REAL ESTATE PARTNERS
How do you feel about the market?
The market is greatly
divided today between corporations that are making major investments in new facilities to attract and retain employees in a still-to-be- determined “back to work” versus “hybrid employment” environment. The remaining part of the market is indecision of corporations on utilization of their current office footprints versus the potential of downsizing due to a work at home component. Decisions also need to be made for improvements on
an existing facility, whether it be to potentially right-size or relocate to a more modern and amenitized facility consistent with the employer leaders mentioned earlier.
Where do you see opportunity in New Jersey?
Opportunities will always continue to abound in New
Jersey given our geography, quality of workforce and quality of life and diversity provided
by the tristate area. We have the Jersey Shore, mountains, lakes, urban centers, cultural and entertainment venues
and professional sports
teams. That said, the office stock is mature and still oversupplied. It is enlightening to see change of use of office product to multifamily, retail and entertainment and other unique uses. This not only reduces oversupply but provides a mixed-use environment within a given submarket which becomes attractive
to residents, employers and local stakeholders. Localized amenity offerings are equally as important to all parties as those that are in your office building.
Where do you see opportunity outside New Jersey?
Although New Jersey is selectively reducing office
stock for development of change of use, other states in the Midwest, Southeast and Southwest are much more flexible on redevelopment and development for projects that are well-developed mixed-
use or large specific use (e.g., industrial, multifamily, retail) than the current climate locally. These states and locales that are more welcoming to development will continue
to draw in quality developers throughout the country.
What’s been the biggest surprise of 2023?
The continuation of the workforce digging their
heels in on not going back
to work. It still seems to be astonishing that the debate
on “where to work” remains ongoing. It’s surprising to see the dichotomy in opinions still between what is right between employers and employees. The COVID-19 years of 2020 to 2022 were an anomaly and probably not a paradigm shift over the long term.
What is the biggest challenge facing the industry?
For the real estate industry globally, the stabilization of the capital markets remains the biggest challenge. Although we are not experiencing a liquidity crisis given the amount of pent-up capital, until such time that buyers, sellers, borrowers, lenders and investors accept
a stabilized capital markets environment without uncertainty and instability, the velocity of transactions and investments will continue to be touch and go.
Give us a prediction for the fourth quarter.
Although the real estate in- dustry is a trailing economic indicator, it is timeless and resilient. Economically sound transactions will continue to occur albeit limited through the fourth quarter. All parties will continue to evaluate capi- tal markets stability cautiously with an eye for readiness for the next cycle and pent-up de- mand heading into 2024.
Getting To Know You
FOOD OR BEVERAGE OF CHOICE
Homemade Italian veal chop, with some good Tuscany wine
FAVORITE JERSEY RESTAURANT
Trattoria Toscana in Whippany — “Dinner and a Show” — food is great and the scene is Jersey
BEST WAY TO BLOW OFF STEAM
Villanova basketball win with family and friends
FAVORITE VACATION SPOT
Italy — anywhere
TV SHOW, MOVIE OR BOOK YOU’D RECOMMEND
“In Search of Excellence” by Thomas Peters —
still a classic on well-run businesses and customer service