I hope you all enjoyed the end of summer and you spent your Labor Day doing something that will have created memories to last. With the onset of fall, I wanted to share some of my thoughts with you pertaining to the state of the economy today as we head into the fall season here in New Jersey. I am also trying to prepare you for the unveiling of the New Jersey Commercial Real Estate Alliance (www.njcrea.com) which I have been working with a team of professionals over the past year or so to bring to the forefront a wealth of information that you may tap into to help assist you with making informed real estate decisions.

Snapshot of the Economy- Fall 2009 (from the perspective of other top notch professionals in their respective fields)

The first two quarters of the year, activity has been down across the board for all industry sectors, retail getting hurt the most. Healthcare industry and government sectors although seem to be holding the strongest ground, they are also affected by factors such as budget-crunching and if you thing about it, it makes tremendous sense. The government has to spend money to stimulate the economy and it is evident by looking at all the road work construction taking place today as you travel the local and state roadways of New Jersey. Although government is working to stimulate the economy they are also faced with cut-backs in other areas in order to meet budgetary concerns. Likewise, healthcare professionals must also deal with these issues, especially when dealing with patients that are calling on these professionals for elective services (i.e. cosmetic surgeries). If you would like additional information on what other industry sectors have been doing, contact Kevin Hansen (kjh@thehuntergroup.com) from the Hunter Group (www.thehuntergroup.com)

According to Joel Ives (JIves@isl-arch.com)from IS&L Architects (www.isl-arch.com), his firm is not only pursuing work from companies and clients looking to downsize or create more efficient space planning, but they are going after government related work as well. The government allocates budget money on many projects that must be spent in a timely fashion or face the possibility of losing their funding for the respective projects. Furthermore, Joel tells me of some other avenues he and his firm have been exploring although you will have to check in with Joel directly to find out more information. Feel free to contact him regarding any question you have pertaining to the field of architecture.

According to attorney Michael Stingone (MSTINGONE@winnebanta.com) of Winne Banta Hetherington Basralian & Kahn, P.C. (www.winnebantalaw.com), they are extremely busy today working with clients to help work out Landlord/Tenant situations that have arisen due to the economic downturn. Mike feels people have been in a state of “paralysis” for the past 8 or 9 months simply trying to figure out whether we have hit bottom or more bad news is going to surface. This happens first in an economic downturn before people recognize the reality of the world we live in today. Mike goes on to say that we are at the point where people are moving past “Frozen” and activity will inevitably have to increase. The difference this time around is Sellers and Landlords are no longer in the driver seat; it’s the buyers and tenants that are going to have more leverage with their negotiating positions. The best way to understand the “paralysis” Mike is referring to is to simply take a look at what banks have been doing this past year.

According to Rene Miranda (rmiranda@asbnow.com) from Atlantic Stewardship Bank (www.asbnow.com), banks have been rather quiet up until recently. They have been working on evaluating their existing loans and recognize loans will be coming due for refinancing over the next few years. Rene knows the banks are proceeding with much caution, and not only have underwriting procedures become much more stringent, but banks have the ability to cherry pick the ones they want to get involved with. In other words, they do not have to take on the risky loans, they do not have to place non-recourse loans, and they will carefully analyze a borrower’s credit worthiness not to mention the reduced loan-to-value ratios. Rene said that as of early summer, activity was hovering around a three year low, however, analyzing activity at the end of August, they have experienced growth of 25% above the low. Of course, much of the increased activity is in the housing sector, this improvement is a sign of what will come for the commercial sector, which always lags behind the residential marketplace. This is a clear sign that although the economy is still in a slump, activity is gaining momentum and deals will get done and banks are loaning money and will continue to do so. Feel free to reach out to Rene to further this “discussion” in more detail.

Deborah Nexon (DNexon@gswilcox.com), a mortgage broker from Q10| G.S. WILCOX & CO. (www.gswilcox.com), also recognizes some of the challenges the lending world will be experiencing over the next few years. She says she is working with clients to help provide extensions on loans that may be coming due in the near term. The last thing a lender wants is to be forced to deal with a troubled asset because the banks are not in the business of owning real estate, and they get forced into this business of owning if and when they foreclose upon a borrower that is in default. To help avoid this situation, her firm is working with clients to enable them to get through the troubled times smoothly, and enable a borrower to refinance when the market is more stable. Feel free to contact Deborah at your convenience if you want to find out more about the services she and her firm offer.

Coming Soon- NJ COMERCIAL REAL ETATE ALLIANCE (www.njcrea.com).

If you noticed this month’s issue contains information being brought to you not only by me, but other well known qualified professionals. I have been working with these professional for quite some time to collaborate on different issues faced in the world of commercial real estate. I chose to mention some of these people based upon our monthly meeting that took place the last week in August. Below are a few more people I highly recommend reaching out to in the event you have any question(s) relating to their respective field(s)!

The NJ Commercial Real Estate Alliance will be unveiled within the next couple months and is comprised of individuals and companies you know of and it will be a one-stop-shop to servicing all portions of a commercial real estate venture. You will find all my monthly news articles archived for future reference, you may comment on my blog entries, and you will also be able to tap into the latest industry news. Best of all, you will be able to create a forum by communicating with any member directly to address any issues you would like to find out more information about based upon the area of concern. You can reach out to a team of highly trained professionals that you will need to help you through a tough situation and you can engage as few or as many of us as you wish, individually, or collectively.

Stay tuned for upcoming information regarding the NJ Commercial Real Estate. Feel free to contact me at dlizzack@naihanson.com or call me to discuss any material from this month’s e-newsletter or any other commercial real estate matter you would like to discuss. Thank you for your time!!!