Real foresight: ROI-NJ asks real estate experts what they see ahead in 2020

It’s an annual tradition here at ROI-NJ: Kicking off the new year by surveying some of the New Jersey real estate industry’s top experts to find out what they see for the coming year. Read on for the 2020 edition!

Jose Cruz, senior managing director, JLL

We see significant positive momentum heading into 2020 across all asset classes. We see this coming year as highly focused on driving yields. Office product will continue to attract capital from private sources, but we expect to see some potential institutional interest as they chase higher returns. No significant changes in multifamily and industrial investments expected this coming year, as they provide stable cash flow with upside in rent growth. Class A retail continues to be sought after, but investors will be selective, with grocery and multiuse properties at the top of the lists.

Mike DeMarco, CEO, Mack-Cali Realty Corp.

The world continues to change rapidly, more so than any other period of time I’ve ever experienced or studied. Consider the impact on the respective industries of the following: Amazon and retail, Airbnb and hotels, Uber/Lyft and parking garages; as well as the shift in office dynamics brought about by open floor plans and the rise of WeWork and coworking spaces. We are going to build and own the real estate of the next 20 years — not the last.

Jennifer Mazawey, partner, Genova Burns

In 2020, we will see continued desire for industrial development to support e-commerce, and, if the constitutional referendum on recreational cannabis is successful, there will be even more drive for industrial space, especially in Q4. As the guidance crystalizes, Opportunity Zone development will continue to rise. The Legislature and the governor will come to agreement on a state incentive program, which will allow continued urban redevelopment.

Jason Pierson, president, Pierson Commercial Real Estate

We expect continued aggressive leasing momentum within the New Jersey retail space. Urban retail markets such as New Brunswick, Newark and Jersey City will continue to thrive. Expect to see some exciting cross-market growth of popular New Jersey establishments within those and other downtown markets.

Jim Postell, partner, city leader, Transwestern

On a national level, we expect a deceleration of leasing velocity for the office market in 2020. Due to disciplined growth during the past several years, New Jersey is well-positioned for a potential slowdown, with redevelopment remaining at the forefront. While opportunities are becoming more scarce, savvy investors who inject capital into well-located, aging assets stand to benefit from a population shift to the suburbs, led by older millennials.

John Saraceno Jr., co-founder and managing principal, Onyx Equities

Newark’s destiny as the center of tech, transit, culture, community and business will be fulfilled for its daily commuters and long-term and new residents. Developers’ investments in Newark will showcase the reimagined Brick City as a walkable urban downtown community and destination. Newark’s previous drought of Class A retail and office options will be rectified by projects including Onyx Equities’ Gateway’s interior and exterior public space redevelopment plan that will change the way people interact with the city through unique eating, retail and entertainment spaces, and more than 15,000 square feet of street-facing retail.

Deb Tantleff, founding principal, Tantum Real Estate

The year 2020 will continue to see a consistent and flurried influx of housing product in both the planning and construction pipeline throughout the state. As greater emphasis is placed on middle-income housing, a more realistic approach to land valuation will be prudent, particularly as the industry wrestles with a robust labor-related legislative agenda that will bring significant cost implications to already-stressed underwriting, as well as to overall housing affordability.

Kim Vierheilig, managing partner, AECOM Buildings + Places

Transportation-oriented development will lead the industry, with major new residential and office growth in key locations throughout New Jersey. Offering a very desirable active lifestyle, paired with easier commutes, we expect these buildings to lease up quickly and the demand to be ever increasing.

Ted Zangari, chair, Real Estate Department, Sills Cummis & Gross

Policy makers in Trenton will finally come to an agreement on a pair of redevelopment and business incentives that are recalibrated to address current market realities. Also, active interest in the River Line transit areas from redevelopers will inspire New Jersey Transit to put out additional Requests for Expressions of Interest for transit-oriented developments elsewhere in the state, and new ferry terminals will likewise spur additional TOD projects.

Ralph Zucker, president, Somerset Development

As we move into 2020 and the next decade, the reverse migration toward suburban areas with strong urban cores will continue, particularly as owners and developers reimagine the traditional office model in favor of more diverse, mixed-use environments. Many of our region’s urban ‘Main Streets’ will continue to thrive, while the suburbs will benefit from the creation of spaces that emulate the experience of a true downtown destination.