Page 18 - RE-NJ

16 OCTOBER 2024
OWNERS COUNCIL Q&A
LANCE BERGSTEIN
CEO
LINCOLN EQUITIES GROUP
How do you feel about the
market?
The macro environment had an
exponential eff ect on the com-
mercial real estate market. The
impact of increased infl ation
and borrowing rates magnifi ed
some of the underlying funda-
mentals in the New Jersey mar-
ket. With that said, the industri-
al market in the state remained
strong in comparison to the
rest of the country. The scarcity
of developable land in prime
locations for logistics prevented
rental rate cuts from becoming
prevalent in the overall market.
There is strong tenant demand,
however, corporate spending
approvals have been the barrier.
As spending approvals become
more att ainable, there will not
be enough chairs (buildings)
left for tenants when the music
stops. I continue to believe that
New Jersey is underserved from
an industrial and housing per-
spective and am very bullish on
the activity our market will see
in the next 18 months.
Did you learn anything new
about your business (or the
industry) in 2024?
I am not sure I necessarily
learned anything new, but 2024
certainly made us focus on the
entrepreneurial and adaptive
skillsets that my team employs.
Lincoln Equities as a business
has always been able to pivot
quickly when market condi-
tions may steer the business in
new directions. Today, our new
acquisition pipeline is heavily
weighted toward multifamily
development rather than indus-
trial. I was reminded in 2024
that good ideas require contrari-
an thinking and to not be afraid
to stray from the norm.
How quickly (or slowly)
do you expect the lending
environment to improve as
expected rate cuts take hold?
It really depends on how you
defi ne improve. Today, there is
liquidity in the lending environ-
ment for the right project with
the right sponsorship. There
is a lot of dry powder out there
especially on the debt fund side
of the business. I think rate cuts
will generate more transaction
volume, which will require
lenders to get more aggressive
not just on rates but on other
business terms. I do not think
this happens overnight but will
evolve a bit more gradually.
Besides the capital markets,
what is a major challenge that
the industry still faces?
There is a tremendous shortage
of ‘att ainable’ housing. Today,
there are no adequate programs
in New Jersey that incentivize
the private sector to deliver
att ainable housing. I think it
is extremely important for the
government and the private sec-
tor to work together and fi gure
out how to alleviate this major
issue. It is something I am very
focused on fi guring out, but the
economics need to make sense.
What can the state or federal
government do to help?
There needs to be dedicated pro-
grams that make the economics
of att ainable housing develop-
ment profi table. It could come
in the form of fi nancing, tax
abatement or a guaranteed exit
where the state buys the housing.
Obviously, this is hard without
a surplus, but some serious
thought and collaboration be-
tween the private and the public
sector needs to occur.
Where do you see opportunity
outside the Garden State?
Without giving away too much
of our secret sauce, we are very
focused on markets with an
abundance of natural resources.
I think in the long run as these
resources become scarcer, indi-
viduals will place higher value
on living in these locations.
How is technology helping
your business these days?
We are able to analyze deals
much more effi ciently. We can
extract and dissect data in a
fraction of the time with AI ap-
plications that we could histori-
cally. I think this trend will con-
tinue. On the management side
of the business, we have seen
increased tenant satisfaction by
implementing technologies that
allow for smoother facilitating
of administrative and operation-
al tasks.
Getting To Know You
FAVORITE JERSEY DINER
Colonial Diner, Lyndhurst
YOUR NEWEST HOBBY OR INTEREST
Racing cars — it is not new, but outside of work and family it is
my primary focus.
FAVORITE DAY TRIP OR VACATION SPOT
South of France
TV SHOW, MOVIE OR BOOK YOU’D RECOMMEND
‘When I Stop Talking, You’ll Know I’m Dead’ by Jerry Weintraub
IF I WEREN’T IN COMMERCIAL REAL ESTATE, I’D BE…
Racing cars full time