Thursday, January 21, 2021
South Jersey Shopping Center Outside Philadelphia Trades Hands
A retail center anchored by a ShopRite grocery store in the suburbs of Philadelphia has traded hands.
Mill Pond Village, a 94,550-square-foot shopping center at 380 Egg Harbor Road in Sewell, New Jersey, was sold to Sterling Organization of West Palm Beach, Florida, by Edens of Washington, D.C. The sale price wasn't disclosed.
ShopRite, a dominant grocer in South Jersey, has been an anchor at the Gloucester County shopping center for nearly 13 years. The tenant roster at the 98% leased property also includes Inspira Health, Orangetheory Fitness, Hair Cuttery and AAA.
Mill Pond Village spans two buildings and is about 14 miles from Philadelphia's Center City District. The property's neighbors include Rowan University and Jefferson Health, and the retail site serves a trade area that includes 161,499 residents within a 5-mile radius.
"With ShopRite performing extremely well at this location and attributing to such a large portion of the income, Mill Pond Village is a stable investment," Colin Behr, a JLL senior director, said in a statement. "We saw a great amount of competition for this asset and we are pleased to have the opportunity to work with both buyer and seller as they worked diligently to complete the transaction."
Wednesday, January 20, 2021
The Rising Cost of Building Materials for Real Estate
As building material prices and demand for houses increased throughout the year, total construction spending on residential housing rose to almost $667 billion.
These building material prices rose 5.4% in 2020, led by a jump in lumber costs due to an interruption in production at the start of the pandemic, which limited supply. High housing demand and weakening of the U.S. dollar also contributed to the increase.
The charts below show the trend in building material prices since 2015.
Lumber
Lumber prices reached historic peaks this year, but those prices have been volatile. This year’s price index has been roughly four times as volatile as it was during the recessionary years of 2008 and 2009.
Softwood lumber prices rose by 12.5% in December following a 23.9% decline over the prior two months.
Ready-Mix Concrete
Ready-mix concrete prices rose by 0.7% in December, after a drop of 1.1% in November.
Gypsum Products
Prices for gypsum products, such as drywall and ceiling tiles, bounced around during the year until surging by 4.8% in November. They ended the year about 0.9% higher than December 2019.
Tuesday, January 19, 2021
Friday, January 15, 2021
Lehigh Valley Industrial Market Well Positioned for 2021
By Ben Atwood CoStar Analytics
The Lehigh Valley, Pennsylvania, industrial market took everything COVID-19 dished out without missing a beat. And it appears ready for whatever 2021 may throw its way.
Lehigh Valley's unique location and proximity to every major city along the northeastern shore meant at the start of the shutdown, it had a deep base of strong tenants relatively unexposed to risk. This helped keep the market stable through a few turbulent months in the second quarter when leasing activity dried up across the county.
Because COVID-19 has accelerated the growth of e-commerce, demand quickly resumed. Last year ended with nearly 2.5 million square feet of net absorption — the difference between move-ins and move-outs — which kept vacancies stable even as millions of square feet of industrial space came online in the midst of a global pandemic. The market posted year-over-year rent growth of nearly 5.5%, which is incredible considering the chaos surrounding the initial shutdown.
Demand was heaviest in the Fogelsville corridor, where Interstates 78 and 476 intersect. This is one of the state's best locations for distributors, and 14 of the year's 52 leases over 10,000 square feet were signed here. There was also an interesting flurry of activity near Easton and close to the airport, where Geodis and Natural Foods each signed for over 1 million square feet in 2020.
This level of activity likely helped give developers the confidence to resume building, breaking ground on more than 7 million square feet last year. Many of these projects are northeast of Fogelsville and hug I-22. There's several major projects underway around Easton, which offers the most direct access into New York City but also substantial work being done near the Airport.
Given the market’s location and the growth of e-commerce, it is not too surprising that investment exploded in the Valley. Total industrial sales volume was over $730 million, one of the highest levels in market history and the third consecutive year of sales growth. Big buyers on the year included Prudential, Uline, Prologis, and the BlackStone Group.
