Christian Benedetto – Office – As the 1st Quarter of 2020 ends with the Stock Markets in a tailspin, the Coronavirus threatens to further shut down the global economy. 16 Million people are under quarantine in Italy – that’s 25 percent of the county’s entire population. Companies small and large are canceling Air Travel, Face to Face meetings, as well as conferences, drop-ins and networking events; all of which will help push the NJ Office market spiral in 2020.
The Office buildings of B- or below are being looked at as residential conversions both in the inner cities and suburbs that are within transportation hubs. Office vacancy will continue to rise as more and more firms are allowing employees to work from home, to help drive the cost of office space down on their bottom line. Some major Real Estate brokerage firms are cutting their sales, marketing and admin teams by 20 percent. All of which, will push rents further down as landlords compete for fewer and smaller tenants, which then gives existing tenants the ability to negotiate better lease renewals. What is great news for tenants, is bad news for landlords trying to fill or keep their office buildings full–worse yet, trying to sell them for adaptive reuse.