The year 2010 has been a roller coaster ride for landlords, tenants, and sellers attempting to survive in today’s turbulent economic times with depressed markets in the commercial, office, and industrial arenas. Landlords continue to make aggressive concessions to retain and stabilize their tenant base in today’s climate of unchartered economic waters.
Conversely, sellers are anxious to cash out and sell their properties at heavily discounted below market prices in many cases. This has created an opportunity for qualified cash buyers to acquire some good investment opportunities at today’s depressed market prices with the intent they will be well-positioned when the economy rebounds hopefully in the near future and the property values increase.
However, in light of the fact that we are experiencing record level property foreclosure rates, residential sales in the doldrums, high unemployment levels nationally, and lack of property funding from lending institutions, some are calling this a depression and not a recession as referred to in the media.
With all the negative talk about the state of the economy there may be a somewhat “silver lining.” As we enter the fourth quarter of 2010 and reflect on the last nine months of the year, our office has experienced a sizable increase in property listings for sale and lease, resulting in a good inventory base of realistically priced properties we are presently marketing. This has resulted in greater activity for our office completing sales and leasing transactions so far in 2010, and it appears this trend will continue for at least the near future.
There are some “bright spots” in certain business sectors such as the healthcare industry in general with the graying of the population nationwide. Healthcare seems to do well in both good and bad economic cycles as people of all ages require healthcare services. For example, in the greater Mercer County Region, now under construction is a $400 million Capital Health Medical Center in Hopewell Township and another $400 million Princeton Medical Center in Plainsboro. A $900 million Virtua Medical Center in South Jersey is also now under construction.
Other local hospitals such as Robert Wood Johnson Hospital at Hamilton, St. Francis Medical Center, and others are expanding into suburban locations that are convenient to service their patients. Also assisted care living facilities, hospice care facilities, adult medical day care centers, children’s day care centers, and wellness and fitness centers are experiencing a demand for their services in today’s soft economy. As the population ages this has created a need also for elder care legal services and attorneys are now specializing in providing elder care legal services relative to living wills, estate planning, business cessation plans, etc.
In concert with the expansion of hospital medical centers now taking place, this has spawned the need for additional doctors’ medical office space near these new planned medical centers. Many of these physicians are also looking to own their professional medical office condo units, as opposed to leasing office space. Being located in or next to a major medical center offers doctors the convenience and efficient use of their time and also convenience for their patients making office visits or in need of hospital services.
In the long run, a downward re-adjustment of property values could be beneficial to stabilize the real estate marketplace and economy in general. This would encourage development and expansion for business operations large and small and hopefully in the not too distant future.
Joseph R. Ridolfi & Associates is a 40 year old commercial real estate company specializing in the sales, leasing, tenant representation, investment properties, development land sites of commercial, office and industrial properties in the central New Jersey commercial real estate marketplace. For comments or questions, Joseph R. Ridolfi, Broker/Owner, can be reached at 609.581.4848 or email ridolfi@ridolfi-associates.com.
