Across most sections of the real estate market, local experts say there’s been a great deal of waiting on the sidelines leading up to this week’s decisive elections.
According to leaders at REDCOM Design & Construction, there’s one industry, however, that never stalled out, the automotive sector. The Westfield-based firm gets involved in both the design and build side, and each side has stayed in high gear in the months, weeks and days before Donald Trump claimed victory in the United State presidential race.
Sam Rockaway, a senior vice president of sales at REDCOM, said the commercial real estate market, particularly the projects with the largest square footage in New Jersey, have slowed to a crawl in the past year, but the auto sector was thriving through it all.
“Since COVID really. When dealers weren’t getting many cars but were still selling and servicing them,” Rockaway said. “For the automotive dealers, as long as they’re selling cars and their brands are growing, there’s an interest. The industry stays the course based on their sales and inventory, and the election is not as critical to them.”
Ryan Teicher, CEO of Westfield-based REDCOM, noted that the transition to electric vehicles is making an impact on work with dealerships, such as the need for chargers and modifications to service centers required to accommodate these new vehicles. There’s also a steady stream of work in updating these facilities based on branding — with a company such as Honda refreshing its image a handful of times over the past decade.
Aside from the election, experts pin slowdowns in other areas of the real estate market on the high interest rates and point to as recently as two years ago when they hit their highest levels in more than two decades.
Teicher said there was not one election outcome that was going to hold sway in activity ramping up again. It’s more about having some sense of certainty going forward.
“What we find is that clients always say, ‘Let’s wait for the election and go from there,’ but it hasn’t always mattered who actually wins. There’s a slowdown that happens around any type of uncertainty, which there’s a lot of leading to elections. And then confidence comes back, often regardless of who is elected.”
“What we find is that clients always say, ‘Let’s wait for the election and go from there,’ but it hasn’t always mattered who actually wins,” he said. “There’s a slowdown that happens around any type of uncertainty, which there’s a lot of leading to elections. And then confidence comes back, often regardless of who is elected.”
President-elect Donald Trump’s victory reportedly led to a rise in mortgage rates. The housing sector market, sensitive to the movement of these rates, fell as a result.
Teicher anticipates that the residential sector will remain strong in New Jersey over the next few years, given the housing shortage and the demand for new homes.
The market for these automotive businesses isn’t expected to change at all. That’s not to say industry trends haven’t altered the shape of the sector.
“There’s half as many car dealerships as there were about 15 years ago, as the franchise companies managing a network of these facilities have consolidated and pushed “mom and pop” dealerships out of the market,” Rockaway said.
But the level of interest in dealerships, and the amount of business they’re doing overall, has remained steady throughout that.
And that’s even with companies such as Tesla, and more recently, electric vehicle maker Lucid Motors, marketing a direct-to-consumer distribution model that bypasses the traditional dealerships.
“That’s something Tesla is doing, and maybe they do it in New Jersey and other parts of the country, but when you look at other brands coming in, such as Rivian, they’re not taking the same direct-to-consumer model,” Rockaway said. “And when those companies come to New Jersey, we’ll try to get involved in some form.”
Conversation Starter
Reach REDCOM Design & Construction at: redcomllc.com or call 908-233-4030.
