by Joseph Ridolfi
The development of retail space and expansion of the healthcare services industry are showing signs of rebounding as we enter the fourth quarter of 2012. Retail and healthcare development appear to lead the way in the recovery of the economy in this region. The stock market is showing promise, although interest rates are at record level lows with money markets, savings accounts, CDs and the like with low yields.
Conversely, mortgage and home equity loan rates are at low levels. Unemployment rates are still relatively high at 8+ percent average nationally, 10 percent statewide. Some areas of the country are doing better than others, while others are experiencing unemployment rates consistently higher than the national average. Foreclosures, commercial, and residential properties continue to be impacting the real estate market in general, but there are signs that the worst could be over.
With all the negative talk about the state of the economy there may be somewhat of a silver lining. As we enter the fourth quarter of 2012 and reflect on the last nine months of the year, our office has experienced a sizeable 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 2012, 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 retail and 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, a new $600 million Capital Health Medical Center in Hopewell Township and another new $600 million Princeton Medical Center in Plainsboro, and a new $900 million Virtua Medical Center in South Jersey.
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 related 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 or in close proximity to these new medical centers. Many of these physicians are also looking to own their professional medical office condo units, as opposed to leasing office space. With the doctors located in or next to a major medical center offers them 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 far future.
All these indicators of the nation’s economic health are showing us that the rebound of the economy is taking longer to recover than past business recovery cycles.
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. Joseph R. Ridolfi, broker/owner, can be reached at 609-581-4848 or firstname.lastname@example.org.