Despite the ongoing covid-19 pandemic, the logistics industry has performed remarkably well and facilitated the economy to stay afloat. As online sales continue to rise, it will also continue to drive the New Jersey metropolitan industrial market, it’s rental rates, footprint, etc. This will continue through 2021 and beyond.
American importers pay a significant portion of the increase and US consumers pay the remainder due to the increase on goods manufactured in China. However, China’s economy is slowing, with consumers holding back and infrastructure spending slowing sharply. This slowdown is expected to worsen as America’s tariffs ramp up. On the other hand, the United States has continued to experience vigorous economic growth, including the lowest unemployment rate since 2000.
The online e-commerce shopping boom sure has put a dent in retail and commercial real estate space as a whole, but is the damage getting worse or can industrial real estate bounce back and remain solid? The next downturn in CRE will be catalyzed initially by a stagnant economy and low growth, followed by multiple years of mild-to-escalating recession, credit re-rating, and demand for higher risk premiums by capital providers. Income growth will slow or go negative in the medium term, cap-rate compression will cease, and finding new tenants will be very difficult. With this happening, we will also witness aging demographics and subtle changes of consumption baskets and lifestyle, that revolutionize the format of office and retail.
It seems these days, there are growing numbers of supply chain disruptors. From erratic thunderstorms to tornadoes, hurricanes and droughts; natural disasters still pose the greatest threat to retail disruption. As these uncontrollable events happen, we feel the effects throughout the economy which directly translates to retail.
On May 10, 2019, talks with China ended abruptly; we saw the market tumble more than 600 points. This past Friday, President Trump responded by adding a 25% tariff on $200 billion of Chinese goods, substantially increasing the tariffs from their prior 10%.
The NJ industrial real estate market has now been in a bull market since 2013. Prices have seen levels that were thought to be untouchable, as short as five years ago. Inventories are still relatively low and the question on everyone’s mind is, “Where do we go from here?”
n the course of servicing our clients, we experience that at some time a few may consider relocating to other states. More often than not, the driver of the consideration …
“I think it’s essential to remember that just about everything is cyclical. There’s little I’m certain of, but these things are true: Cycles always prevail eventually. Nothing goes in one …
Donald J. Trump, 45th President of The United States of America, will most likely bring some much needed stimulus to the economy in his first year. His policies point to a combination of tax cuts and government spending in the form of upgrading the nation’s infrastructure and for national defense, which will provide a short term boost to the economy in the first half of 2017.