Realtor Roundtable – Real Estate Overview
- Meet the Realtors
- Union County – Hot or Not?
- Find the Right Realtor
- Where are the Good Buys?
- Anything Different this Year?
Meet the Realtors
How would you describe the overall current market for Union County commercial real estate? Hot or Not?
Tom Skobo (TS): It’s all about the location and the type of building you’re looking for. Retail and office is hot in Westfield and Summit because of the desirable demographics. But there are bargains to be found in other towns and older buildings.
Ian Grusd (IG): The industrial market is very active, particularly for moderately sized, owner-occupied buildings – there just isn’t much turn over in that segment. So when something does come up on the market, it usually goes pretty quickly.
Stan Kurzweil (SK): In industrial, demand definitely exceeds supply. Union County is a great location because of its proximity to the Port, Airport, Turnpike, etc. But there just isn’t much land left to build on and much of the existing inventory is obsolete, with low ceilings, etc.
When you talk about office space, I wouldn’t call it hot, but it’s better than it was. There’s a lot of less-than-desirable office space on the market, so if you can be flexible with what you’re looking for, you can get a good buy.
Peter Wisniewski (PW): Union County maintains lower vacancy rates than many other areas mainly because of its superior accessibility to transportation and shipping.
Alan Rasmussen (AR): The overall commercial real estate market in Union County has certainly heated up in the last month or so. It seems as though potential investors, tenants and buyers were “on the fence” due to such an extreme winter and now that the weather has improved, the activity has been frenetic!
How can the typical small business owner find the right realtor?
IG: It may sound simple, but buyers and sellers should drive around the area they are interested in to see which brokers are handling various properties. Usually, this means the broker is very active and knowledgeable in that particular market.
And knowing your real purchasing power is key – talk to your banker or UCEDC before you start the process to understand what’s realistic for you. Be candid with your broker – he/she needs to understand your business and financial situation to find the right property at the right price.
AR: If you’re looking to sell, you need to match your type of property with a realtor who has experience in that segment. There’s a world of difference between residential and commercial sales. Make sure you have a clear idea of how and where they would market your property.
Unfortunately, there is little regulation of commercial agencies in New Jersey and sometimes that leads to unethical behavior. One thing to keep in mind when selecting a realtor to help with a sale is to ensure that they cooperate with other realtors – that is, they share the commission with agents that bring in a buyer. Some realtors will hoard listings in hopes of getting both sides of the transaction and that clearly is not in your best interests as a seller.
PW: Sellers should be sure to personally interview prospective agents prior to enlisting their services. Make sure they have experience in your type of property and have them describe exactly what services they will undertake to sell your property.
TS: Driving around, doing online research, personal recommendations are all good ways of finding brokers who are strong in a particular geographic area and market segment (commercial vs. office, for example). But keep in mind that if you’re looking for a small property, say a local deli, you may wind up working with a residential broker who also carries a limited number of commercial properties.
SK: I always recommend going to the website of the Society of Industrial and Office Realtors (www.siornj.com). SIOR membership is conferred on only experienced commercial realtors who are committed to the highest ethical standards. That’s a great first step.
If you’re looking to buy or lease, it’s important for you to be realistic about what’s out there in the market and to be flexible in your “must-haves”. Your realtor has to understand what your true needs are in order to do the best job for you.
Considering the various market segments (office, retail, etc) in Union County, are any a particularly good buy now?
TS: Right now, office space is the best deal. But pricing depends on location – if it’s a very desirable location, it will be priced accordingly. The key to getting a bargain is to be flexible – can you make a less-desirable location work for you?
SK: There’s a lot of older office inventory on the market now and for the most part, it’s priced to sell/lease. But you have to decide if you can make that older space work for you.
AR: That’s right. The surplus of office inventory makes it the best buy out there now.
IG: Office space and to some extent, retail, is sitting on the market for long periods of time and although there is not a lot of inventory, this does afford a better opportunity to the buyer or tenant.
PW: Pay strict attention to properties that may no longer be the best use for the location. Recycling properties into other uses are where the best buys can be found.
How are things different in Union County from last year?
TS: From my perspective, there’s not been much improvement over last year. Certain towns make it very difficult to buy and sell due to convoluted permit, zoning and environmental regulations. And while banks may be lending a little more, it’s still tough to get the financing you need. You need to be prepared for an investment of time, effort and frustration. It remains a difficult and long process due to paperwork, red tape, etc.
IG: Last year we started to see an uptick in business confidence and while Sandy may have been a setback, I think the businesses that survived this year are stronger than before. They’ve weathered the financial crisis and have experience in dealing with downturns. That all translates into more commercial real estate activity.
AR: With the economy on the upswing, I’d say the market is better than last year. The highs and lows of 2013 resulted in a year of ‘fits and starts’ and I think we’re finally on a smoother path.
SK: Banks are beginning to loosen up on their lending and that will be good for buyers and sellers. But demand continues to exceed supply – we’re running out of land to build on and the economics of retrofitting doesn’t make sense in many circumstances.
PW: Certain parts of the county are faring better than others, depending on the type of property. Western Union County has a lot of activity in office space while redevelopment and re-use is picking up in Elizabeth and along the Turnpike corridor.
Be sure to check out our next issue, scheduled for November 2014. We’ll explore the pros and cons of leasing and buying. In the interim, if you have any questions about commercial properties, our panel is available to help.
