NAI James E. Hanson gathered some of our leading brokers to provide insights on what the market holds for a variety of asset classes as well as key factors that will impact our industry throughout 2019.
John J. Schilp, Senior Vice President, on Land Sales
As a new year dawns, the availability of land continues to be the underlying factor in northern New Jersey’s red-hot development sector. With fewer and fewer prime development sites left across the region, locations with the rare combination of access to public utilities, convenience to employment centers and public transportation will attract exponentially higher prices in 2019.
Requiring both a proximity to population centers and transportation arteries, industrial and multifamily developers will continue to compete for increasingly limited land in northern New Jersey and drive pricing velocity as the year progresses. As these shovel-ready opportunities become more difficult to find, developers will need to become more creative, either through assembling smaller pieces of land or looking to less-traditional areas for development, both of which can add complexity to deals.
On the other side of the equation, retail and office-oriented land sales will continue to cool. Entering 2019, new office development is almost non-existent and retail developers are becoming increasingly selective in their site selection efforts. However, an insatiable need for land from industrial and residential developers may open up additional sale opportunities for owners of obsolete or vacant offices looking to recoup value from the land beneath their buildings.
Despite the overall strength of the land sale market, at the core of all land sale activity in 2019 will be the possible economic uncertainty on the horizon. With this in mind, developers will need to practice extra caution in land acquisitions as the lengthy New Jersey approval process and record high-pricing will make some deals difficult to pencil in as the year progresses.
To learn more about NAI James E. Hanson’s land sales team and our work, please contact John J. Schilp at firstname.lastname@example.org.