by Joseph R. Ridolfi
The development of retail space and expansion of the health care services industry are showing signs of rebounding as we enter the second quarter of 2012. Retail and health care development appear to lead the way at this juncture in the recovery of the economy in this region. The stock market is showing promise, though 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. Some areas of the country are doing better than others, while others are experiencing unemployment rates consistently higher than the national average. Foreclosures on commercial and residential properties continue to impact 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 a silver lining. As we enter the second quarter of 2012 and reflect on the first three 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 hospitals such as Robert Wood Johnson Hospital at Hamilton and St. Francis Medical Center 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 relevant to living wills, estate planning, business cessation plans, etc.
The expansion of hospital medical centers has spawned the need for additional doctors’ medical office space close 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 as they have in the past. Being located in or next to a major medical center offers doctors convenience and efficient use of their time and also convenience for their patients making office visits or 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 show us that the rebound of the economy is taking longer 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. For comments or questions, the writer, Joseph R. Ridolfi, broker/owner, can be reached at 609-581-4848 or E-mail firstname.lastname@example.org.
Joseph R. Ridolfi & Associates. 609-581-4848. www.ridolfi-associates.com