Real estate expert — Jacob Frydman says that the reason for which the New York City region and other large cities see a high-demand but low supply in commercial buildings is the strong competition for this type of property. As explained by the National Real Estate Investor, such buildings stop being available as soon as they show up on the market, leaving companies paying higher rents or relocating to nearby areas. According to Jacob Frydman, this emerging trend is also confirmed in the release of the July Beige Book by the U.S. Federal Reserve Board, "Industrial real estate markets strengthened further--particularly across the New York City metro region--with asking rents continuing to climb briskly and vacancy rates falling to their lowest levels since before the recession." Frydman notes, as a result, retailers and third-party logistics operators, which prefer to be located in cities, are being forced to look at northern and central New Jersey and Long Island as distribution hubs. Additionally, less than half the anticipated demand for industrial space is under construction in the region.
The competition from growing tech companies is increasing, says Jacob Frydman, with landlords eager to make the switch as they see the price per square foot more than quadruple for office locations. On the other hand, according to a report from CBRE, a real estate services firm, rents for logistics centers saw an astounding year-over-year 5.6 percent increase. With e-commerce expanding and start-ups locating in urban areas, Frydman notes housing for employees is also in high demand. Millennial's typically choose to live close to work, therefore, multi-family conversions are tapping the available supply of office, production, warehouse, or distribution facilities. In addition to the East Coast, this trend is occurring in markets across the country, especially San Francisco - which is experiencing the strongest demand for office space in America.
For investors, Jacob Frydman suggests with U.S. interest rates still near a historic low, the borrowing landscape is attractive. Considering the high demand and short supply in the commercial and industrial market, he recommends doing your due diligence.
Jacob Frydman is a graduate of Boston University (B.S., Finance) and Case Western Reserve University School of Law (Juris Doctor). He has renovated over 5 million square feet into urban retail outlets, medical office buildings, financial center offices, and assisted living facilities over the course of his 30 year career. As a recognized property investment expert, Mr. Frydman is often a featured contributor and panelist at industry seminars speaking on complex acquisitions and transactions, guest lecturer on real estate finance at Columbia University, and in the Master’s Lecturer series sponsored by New York Law School. He frequently appears on television programs including CNBC, Bloomberg TV, FOX News, and others to discuss trends in commercial real estate.
Jacob Frydman - Blog - JacobFrydmanNews.com: http://JacobFrydmanNews.com
Jacob Frydman - CEO & Chairman - United Realty Advisors, LP - LinkedIn: https://www.linkedin.com/in/jacobfrydman
Jacob Frydman - Huffington Post: http://www.huffingtonpost.com/author/jacob-frydman
Release ID: 88913318