NJ Market Update - December 2023

NEW JERSEY M A R K E T U P D AT E DECEMBER 2023

Welcome to Berkadia’s ‘NJ Market Update’ newsletter, your go-to source for the latest developments, trends, and insights in the dynamic world of commercial real estate. In this newsletter, we aim to provide you with a comprehensive overview of the most significant happenings in the industry, keeping you well-informed and up to date.

Harvard, US Treasury Economists Forced to Admit Trump Tax Cuts Worked as Advertised The Western Journal, November 11, 2023 The Wall Street Journal’s James Freeman wrote in a summary of the 51-page National Bureau of Economic Research report that the 2017 Tax Cuts and Jobs Act created a surge in business investment, which greatly benefited the economy.

“The results of the Trump corporate tax reform were more business investment, more growth, more wages for workers—and little impact on government revenue as lower corporate tax rates were offset by an expanding economy. Game, set, match,” Freeman argued.

NJEDA Approves Program to Expand Access to Capital for Emerging Developers ROINJ, November 22, 2023 A new $20 million pilot program to support rising real estate developers was approved last week by the New Jersey Economic Development Authority board. The Emerging Developer Fund will help developers gain access to capital and build additional capacity to expand their existing portfolio.

“Rising developers must be part of the process as we strengthen and build up underserved New Jersey communities,” Lt. Gov. Tahesha Way said. “The NJEDA’s Emerging Developers Fund is in line with Gov. Phil Murphy’s vision for a more accessible and equitable economy and a stronger Garden State.”

A New Newark Penn? $59M From Feds Will Go Long Way Toward That Aim ROINJ, November 7, 2023 “This Penn Station here changes and when it changes, people’s lives change throughout the region and the state but also in the city of Newark,” he said.

The biggest part of the funding, which came courtesy of the Infrastructure Investment and Jobs Act of 2021, includes $3.8 billion for the Hudson River Tunnel – as well as $300 million to rehabilitate the 90-year-old, six-track Dock Bridge over the Passaic River.

The funding means that Gateway Development Commission now has all of its funding.

Berkadia New Jersery Team

Market Update December 2023 |

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Westview Looks to Lead Development Along Jersey City’s West Side Jersey Digs, November 27, 2023 “Called Westview, the project is led by Bushburg, a developer that specializes in transformative projects in emerging markets.

With extensive experience in adaptive reuse projects throughout New York, New Jersey, and Florida, Bushburg is confident in their ability to turn this former industrial area into Westview – a multi-phase development project featuring three mixed-use, high-rise structures harmoniously blending commerce and residential living.”

McKinsey Plans Move to Newark, Eyeing New Home for Hundreds of New Jersey Employees Real Estate NJ, November 15, 2023 “The 6-0 board vote Thursday night means that tenants at the 527-unit Portside Towers, at 155 Washington Street and 100 Warren Street, some whose rent rose as much as 50% last year, could see their leases roll back to 2016 rental rates.”

Netflix at Fort Monmouth: A ‘Made in New Jersey’ Moment Edges Closer ROINJ, November 3, 2023 “This campus is no longer going to be a painful reminder of economic decline and disinvestment,” Murphy said. “Instead, Fort Monmouth now will stand as a symbol of renewed and revived hope. In the years to come, we’re going to put thousands of construction workers, laborers, electricians, carpenters, sheet-metal workers, Teamsters, plumbers, pipefitters and more to work right here at Fort Monmouth.”

Despite Controversy, Newark Approves 2,100-Unit Plan at IDT Properties Jersey Digs, November 22, 2023 “During the November 6 meeting of Newark’s Central Planning Board, unanimous approval was granted to bring 2,184 residential units to several lots at 516-532 Broad Street. The land, formerly headquarters to IDT plus a detached parking garage across Atlantic Street, was purchased last year for $49 million by affiliates of Brooklyn-based Sinai Equity Group.”

Berkadia New Jersery Team

Market Update December 2023 |

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Gov. Phil Murphy Sends Back NJ Liquor License Reform Bill With Conditional Veto NorthJersey.com, November 27, 2023 “One of my goals in calling for comprehensive liquor license reform was to ensure that our liquor laws are both modern and fair,” Murphy said. “Our craft alcohol industry continues to grow throughout the state, and our beer and wine manufacturers, distilleries and meaderies deserve our support to help them succeed.”

Murphy also said more equitable access to liquor licenses would benefit small family-owned restaurants and called them the “heart and soul of many of our communities and downtowns.”

Nobody Wants U.S. Treasury Bonds The Press of Atlantic City, November 1, 2023 “Elementary economic forces — too much supply and not enough demand — have collided to create the worst stretch for U.S. government bonds since the Civil War. The government keeps borrowing to cover its budget deficits, while once-reliable buyers of that debt, both at home and abroad, have pulled back. The result: Investors are demanding the steepest yields since 2007. Auctions of fresh bonds that were once routine are now going terribly. And bond portfolios are getting absolutely hammered. The longestdated Treasury bonds are in a bear market worse than the dot-com bust and almost as bad as 2008.”

Genova Burns Creates Distressed Assets Task Force ROINJ, November 29 2023 “The Newark-based firm has offered a range of legal services across multiple areas and industries for many years. The new distressed assets task force, headed by Matthew Kertz, aims to leverage the firm’s experience on the cutting edge of market trends and opportunities. Taking a multidisciplinary approach, Kertz said the team at Genova Burns is ready to assist clients who are looking at distressed assets in their real estate portfolio.”

Berkadia New Jersery Team

Market Update December 2023 |

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DECEMBER FEATURE Effective Rent & Occupancy $3,000 96.6%

97.0%

98.1% 96.1%

97.4%

100% 96.5%

96.6%

84%

$500

2018

2019

2020 2021 Effective Rent

2022 2023* Occupancy

$2,723

$1,000

$2,636

88%

$2,500

$1,500

$2,176

92%

$1,972

$2,000

$2,018

96%

$1,954

$2,500

2024**

80%

Sources: RealPage; CoStar Group; Yardi Systems

Fundamentals for multifamily in New Jersey are expected to remain strong into 2024 with a more modest increase in rents and occupancy rates modestly stronger than 2023.

Berkadia New Jersery Team

Market Update December 2023 |

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NEW JERSEY Investment Sales

Berkadia New Jersey Investment Sales, led by Nat Gambuzza, provides a depth of advisory and transaction services for income generating properties that is unparalleled in the industry. Their clients include private investors, partnerships, lenders and institutions of various net worth. The team has specialized expertise and excels in the most complex transactions, including portfolio sales, distressed property sales, note sales and time-sensitive 1031 tax exchange transactions. Prior to joining Berkadia in 2022, the team worked at two otherwise national real estate investment services firms

Nat Gambuzza

Spencer Beriont

Trevor Fiebel

Tim Blashford

Senior Managing Director

Senior Director

Senior Director

Director

973.809.1755

908.328.4494

908.285.6921

201.396.6253

862.309.5619

nat.gambuzza@berkadia.com

spencer.beriont@berkadia.com

trevor.fiebel@berkadia.com

tim.blashford@berkadia.com

mike.o’reilly@berkadia.com

Brian Antognini

Nick Balancia

Senior Transaction Manager

Associate Director

862.309.5618

908.642.1905

brian.antognini@berkadia.com

nick.balancia@berkadia.com

Mike O’Reilly Senior Financial Analyst

NEW JERSEY Mortgage Banking

Josh Lipsey Senior Director 201.577.1909 josh.lipsey@berkadia.com

Berkadia New Jersery Team

Market Update December 2023 |

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