growth | Capital Analytics Associates

Startup ecosystem has a new Silicon Valley: Philadelphia

By: Beatrice Silva

2 min read July 2020 — The term “startup” may bring to mind a group of motivated mid-20-year-olds huddled together in a high-tech office somewhere in Silicon Valley. However, the southern part of San Francisco Bay is no longer the only hotspot for young, ambitious people. The Philadelphia Business Journal recently reported that Philadelphia has one of the top emerging startup ecosystems in the United States, according to a new study from the Startup Genome. Although startups are often small enterprises, the role they play in economic growth is extensive. With new entrepreneurs come new ideas, new innovations and new competition for bigger corporations.

While all startups have the ability to transform into a big business, there are many differences between the two. Along with having different visions for growth and sustainability, startups also tend to have a unique relationship with funding. Unlike a traditional business, startups often rely on capital from outside investors or venture capital firms. Running out of money is the second-most common reason for a startup’s failure. An estimated 29% of startups fold because they ran out of cash, according to CB Insights. With that being said, more and more entrepreneurs are opening up shop in Philadelphia because it has a diverse population, an urban atmosphere and most importantly affordable rents.

“People who do tech startups in Philly still feel that giddy sense of wonder and magic that comes from starting something totally new. We don’t take it for granted. We still feel lucky and grateful to be doing what we’re doing. We’re scrappy. Philly tech is the way I imagine Silicon Valley must have been before the personal computer boom, the first internet boom, and the second internet boom made startup success feel like a foregone conclusion. In the Valley, most employees don’t remember those days. In America, we’re used to thinking of the East as the past and the West as the future. But when it comes to tech, the tables are turned. The Valley is experienced and satisfied. Philly is young and hungry,” Michael Idinopulos, a social business pioneer, wrote in a blog originally for PeopleLinx, now FRONTLINE Selling, and reposted on Robin Hood Ventures.

Startups and small businesses are also a crucial part of Philadelphia’s economy. Startups have been proven to boost employment patterns, which leads to more job opportunities. In 2019, small businesses created 57,377 net jobs. Firms employing fewer than 20 employees experienced the largest gains, adding 34,585 jobs, according to Pennsylvania Small Business Economic Profile. Other than economic growth, startups also tend to revolutionize technology. Exyn Technologies, founded in 2014 by Nader Elm, is just one of the many startups using research to create technology designed to keep more people out of harm’s way. Exyn Technologies pioneers autonomous aerial robot systems to improve operational efficiencies and safety for data gathering in underground mining.

“I think it is interesting as we are watching the use of drones following the emergence of COVID-19. A lot of companies have started testing and demonstrating the capability of using drones to disinfect public areas. I think that is super relevant and very important not only for this pandemic, but it also shows how the industry at large is adopting autonomous tech in all kinds of environments. Also, it is fascinating to think about autonomous inspections and data collection for heavy industry,” Joe Snodgrass, field engineer at Exyn Technologies, told My Dear Drone.

Face Off: Miami-Dade ripe with opportunity

By: Max Crampton Thomas

4 min read July 2020 — While the ongoing pandemic has been nothing short of a gut punch to what was set up to be another monumental year for economic growth, real estate development and investment has continued to adapt and move forward through a somewhat uncertain landscape. Invest: recently spoke with two Miami-Based leaders within these spaces. Real estate investor Jeronimo Hirschfeld, chairman, founder and CEO of One Real Estate Investment (OREI), and commercial real estate developer Bernardo Rieber, president and CEO of Rieber Developments, both spoke to the immediate effect and changes the pandemic has created for their projects and industry, as well as why they continue to believe in the Miami-Dade marketplace regardless of the roadblocks thrown up by COVID-19.

What advantages does the Miami marketplace offer to your business operations?

Bernardo Rieber: I think that Miami is one of the greatest cities in the world. I travel a lot, especially in recent years, and it is hard to find a city like Miami where everything works. It’s new, beautiful, with great weather most of the year. People are amazing, and the properties in general are still less expensive than in other major urban centers. The airport is one of the top in the nation and they have done a great job of expanding to meet the need. I think that Miami will continue to grow. Money will continue to be invested here.

In the commercial segment, I also see a strong market, for several reasons. In particular, more and more people are moving to South Florida. It might be because of low taxes, and the fact that it is becoming more of a global city, compared to 40 years ago when it was beaches and malls. Now, we are a culinary center, with new cultural centers, museums, a lot of great things happening. People move here from the East Coast, from South America and Europe. There are a lot of young professionals in areas such as Brickell. There is great demand for offices because a lot of international companies in the financial world are doing business here.

But there has also been a situation related to traffic, in which smaller municipalities, like Aventura, have been developing more commercial infrastructure to accommodate the people who live there and don’t want to commute into Downtown Miami. More offices are needed, and that’s fueled the market. In my particular case, as I am a developer of mostly medical spaces, I see Miami as a tremendous hub for medical tourism. I am right next to the Aventura Hospital and Medical Center, which is a level two trauma center, with 500 beds. I am finishing an extended stay hotel next door, and a total of 80,000 square feet of offices.

Jeronimo Hirschfeld: In today’s market, especially in the asset class that OREI operates in, which is multifamily, I believe there are going to be many opportunities here. In previous years, there were a lot of developers and investors deploying money into these investments, but as more uncertainty surrounding the real estate sector becomes apparent, opportunities begin to arise for firms like One Real Estate Investment. What we are seeing today is that these investors are now realizing that their strategy and their returns are not what they expected, so they are turning around and selling.

Bernardo Rieber

Jeronimo Hirschfeld

Multifamily assets are commonly tiered in A, B, C, and D categories based on the asset, location, and tenant base. In the market where I play, which is typically workforce housing in the B+ to C+ space, the assets tend to have a level of insulation from macro market drivers and economic factors. This is because when there’s a crisis and we see unemployment increase, many people begin to downsize to a living space that is more economically practical and feasible. So, when looking in multifamily real estate, you’ll see renters that were previously paying $4,000 in rent coming down to $3,000, and so on. Looking at the assets I invest in, the rents average between $750 and $1,200. These assets tend to perform in times of crisis because, as I mentioned, when people adjust their lifestyle, rent is usually a major expense that can be altered. As individuals who were once living in the Class A and B apartments begin to see a decrease in income, they will make the shift to a B or C class apartment. Ironically, I’ve seen the occupancy of my properties across the board tends to increase during a crisis between 1 to 2% because in addition to the individuals downsizing, many tenants who currently reside at our properties work blue collar jobs that aren’t drastically affected by a downturn. We feel very good about where we sit and what we are doing. Our competitive advantage is showcased through finding the right opportunity, taking advantage of the right deals and making sure we put the appropriate debt structure in place. Multifamily is an asset that sustains itself and performs very strongly during these times.

Where do you see the real estate market in Miami going over the next couple of years?

Rieber: We are mostly focused now on selling office condominiums in the medical sector, and there’s been a great response. We are sold out at our project Ivory 214 and we broke ground on our 12|12 Aventura mixed-use development in early 2020. We demolished the previous structure, prepared the land, started piling, and we are now about to start the foundations. We are on schedule to be up and running by the first quarter of 2022. Of course, since the COVID-19 situation began, we have had to adjust our sales process, but we continue to have interest in our offering and I expect to fully rebound.

Hirschfeld: In terms of neighborhoods, Wynwood is pretty hot, and you have nearby Allapattah, which is also a growing area with a lot of opportunities. It is still industrial, but as population and developments move up north, all these industrial neighborhoods will start changing into places where people are going to be living, playing and working. That’s what we saw with Wynwood. OREI is still very much in acquisition mode, as we are consistently sourcing new deals, while bringing in new equity groups and private investors who are interested in the multifamily space.

How has the fallout from the COVID-19 pandemic altered your developments at least for the near term?

Rieber: It’s been a shock from a business perspective. We are monitoring the situation daily. Of course, there have been ripple effects because Miami-Dade County’s building department closed, and you cannot call for inspections, which you need to continue building, and permits are delayed, but everyone is powering through and adjusting as best as possible during this unprecedented time. I truly believe that this short-term pain does not compare to the long-term potential of this community.

Hirschfeld: (With more people working from home in the future) there are a lot of things that we are implementing. We are implementing USB outlets in new projects, to make sure people can connect their devices directly. We are also implementing smart thermostats that you can control remotely through your phone, making it more efficient because you can set it up to emit minimal power every time you leave and to start cooling five, 10 minutes before you return to the apartment. In our Wynwood project, we have a large bike space at the street level.

To learn more about our interviewees, visit:

http://www.rieberdevelopments.com/

https://www.onerealestateinvestment.com/

A deeper look into how Philadelphia’s economy is recovering

By: Beatrice Silva

2 min read – Philadelphia is the seventh-largest metropolitan area in the United States. Its diverse population, affordable rents and urban atmosphere make it an ideal location for entrepreneurs to open up shop. So much so, that small businesses make up 99.7% of its economy, according to the U.S. Small Business Administration Office of Advocacy. The city was on a strong growth course before COVID-19. However, that all came tumbling down when all non-essential businesses were ordered to shut down in Pennsylvania on March 19.

In an effort to limit the damage to the national economy, the federal government rolled out the Coronavirus Aid and Economic Security (CARES) Act on March 27. Part of the act, a loan called the Paycheck Protection Program, has played a particularly important role in Philadelphia’s recovery. The program set aside $349 billion for small business loans intended to help them stay afloat and keep their people employed during the pandemic. Within weeks, the federal aid was exhausted and small businesses were once again left with uncertainty. A second glimmer of economic hope presented itself when Gov. Tom Wolf allowed Philadelphia to transition into the yellow phase of his recovery plan on June 5. Stay-at-home orders were lifted and in-person retail was again allowed. Despite rising coronavirus cases, most businesses were eager to open their doors under regulated CDC guidelines.

Two weeks into Philadelphia’s reopening a new obstacle landed in the city’s lap. Some businesses experienced looting and vandalism due to nationwide protests in the wake of the killing of George Floyd, a black man who died after a Minneapolis police officer kneeled on his neck for nine minutes. On June 11, Philadelphia announced a new grant and loan program for small businesses affected by the COVID-19 shutdown and damages from recent lootings. The Restart PHl Loan Fund from the Philadelphia Industrial Development Corp. will be primarily for minority-owned businesses in low-income areas. The $3 million in loans to small businesses can cover costs for things like inventory, technology, staffing and employee training. Philadelphia also announced a $1.4 million “Restore and Reopen Program,” which will provide grants to independently-owned businesses that have suffered from property damage.

“These efforts are intended to provide equitable and immediate relief to ensure our small businesses can sustain themselves and return in a manner that allows them to thrive,” said Philadelphia Mayor Jim Kenney in a statement.

It may be too early to tell how the region’s economy will fare as it heads into a post-COVID-19 landscape. However, there is one sector that is expected to thrive as a result of all of this. Now more than ever before technology has proven to be a vital aspect of everyday life. One key advantage the industry has is the ability to have its employees work remotely, unlike retail and food services. The tech sector could even play an essential role in igniting the reconstruction of the local economy, according to the Greater Philadelphia Economy League.

Decatur Driving Global COVID-19 Response

Written by: City of Decatur

2 min read June 2020 — As the world seeks answers to the devastating impact of COVID-19, many of the most critical questions about the virus and how to eradicate it are being routed through Decatur. And while the CDC certainly plays an outsized role in this equation and generates most of the attention, The Task Force for Global Health in Downtown Decatur is quietly using its infrastructure to drive solutions.

“When it comes to our work, we take pride in operating mostly behind-the-scenes and shining the light on our partners rather than ourselves,” said Bill Nichols, executive vice president and COO for The Task Force for Global Health.

Behind the scenes or not, The Task Force has been a crucial force in the worldwide response to the coronavirus pandemic, including coordinating the distribution of 1.4 million pieces of personal protection equipment to hundreds of hospitals and healthcare facilities around the country, strengthening epidemiological and lab skills through training 14,000 individuals around the world, and hosting monthly teleconferences for health officials worldwide to connect and share best practices and treatments.

Additionally, The Task Force is coordinating critical collaborations between the public and private sectors, aligning the contact tracing efforts of tech giants like Apple and Google with health officials around the world.

“This pandemic has clearly changed the way our country thinks about global health, and it’s up to all of us to ensure we don’t lose focus on this critical issue in the future,” said Nichols. “Being properly prepared for a pandemic requires billions of dollars, but it’s an investment worth making as an ‘insurance policy’ to protect against the type of economic fallout we are experiencing.”

While the coronavirus pandemic has thrust discussions about vaccines into the mainstream, The Task Force regularly works on coordinating the vaccine safety efforts related to epidemics affecting areas and regions that are often overlooked. Having this infrastructure in place has allowed the organization to continue its lifesaving work in underserved regions around the globe while also addressing COVID-19, including through its Brighton Collaboration, a worldwide network of over 5,000 vaccine researchers that ensures vaccine safety, and the Partnership for Influenza Vaccine Introduction (PIVI), a program that works with low and middle-income countries around the world to develop their influenza vaccine delivery infrastructure, which will better prepare them for when a COVID-19 vaccine becomes available.

“Now more than ever, our location in Decatur serves as a major asset when you consider how closely we are working with the CDC, Emory and other Atlanta-based institutions to address the pandemic,” added Nichols. “It also allows us to give back, as we are sharing our global expertise with the Dekalb County Coronavirus Task Force to guide our own community through a safe reopening in the days, weeks and months ahead.”

To learn more about this, visit: https://www.decaturga.com/

Florida and Pennsylvania unemployment claims level off as economies slowly reopen

By: Beatrice Silva

3 min read June 2020 — As of June 5, most of Florida has taken the next step of reopening the economy that was devastated by COVID-19. Unemployment figures are starting to level off as businesses slowly start to open up again. On June 6, the U.S. Department of Labor saw its lowest figure for new unemployment claims since March 26. However, the sunshine state’s economy isn’t in the clear just yet. Florida has the fourth highest unemployment claims in the U.S. To make matters worse, some Floridans are still struggling to collect their unemployment benefits.

Since March 15, the Florida Department of Economic Opportunity (DEO) has paid out $1.5 billion in state claims and another $4.6 billion in federal unemployment benefits. Approved applicants should be getting $600 per week from federal benefits plus the state’s additional $275 weekly benefits. Unfortunately, issues resulting from an influx of people filing for benefits has caused the Florida DEO’s website to crash on multiple occasions. On April 15, Gov. Ron DeSantis placed Jonathan Satter, Florida Department of Management Services secretary, in charge of fixing the state’s unemployment benefits system. As a result, a new mobile-friendly website was born. People can now submit an application on the new website if they don’t currently have an open unemployment benefits claim on file.

Different markets were hit particularly hard by the COVID related economic slowdown. The transportation and hospitality sectors are expected to take the longest to get back on their feet.

“There are a couple of key industries that will be greatly impacted the longer this goes, especially tourism and real estate. On the positive side, there is a significant number of secondary markets in Florida. Traveling overseas will likely not be as popular in the next couple of years, speaking well for these secondary markets. Challenges do drive opportunities and developers might take cues from the latter. Hospitality and tourism will continue to suffer and will likely require continuous stimuli the longer this continues,” said Blain Heckaman, CEO for Kaufman Rossin in an interview with Invest: Miami.

Florida isn’t the only state feeling economic pressure as a result of COVID-19. Northeastern regions of the United States that were hit particularly hard by the virus, like Pennsylvania and New York, have also started reopening nonessential businesses in an effort to jumpstart the economy. Since March 15, the Unemployment Compensation department has paid over $16.4 billion in state and federal unemployment compensation benefits, according to Pennsylvania’s government website. The state is also preparing to activate an unemployment program that would extend benefits for up to 13 more weeks for eligible individuals. The last time Pennsylvania initiated the extended benefits program was during the fallout from the Great Recession in 2009.

Pennsylvania Gov. Tom Wolf is taking a three-phase, regional approach to reopening the state. The system consists of red, yellow and green phases that are then applied to individual counties. Red is the most restrictive and green is the least. On June 5, Wolf allowed 34 counties to transition into the green phase. Although most restrictions are lifted during this final phase, people are encouraged to follow CDC guidelines. Businesses like gyms, hair salons and indoor recreation centers that remained closed in the yellow phase can start to reopen at 75 percent occupancy. There are still 33 Pennsylvania counties in the yellow phase, which serves the purpose of slowly powering up the economy while still trying to contain the spread of COVID-19.

Gov. Wolf has publicly voiced his desire for Pennsylvania to reopen. However, he warns business owners not to open up too early. “By opening before the CDC evidence suggests you’re taking undue risks with the safety of your customers. That’s not only morally wrong, it’s also really bad business. Businesses that do follow the whims of local politicians and ignore the law and the welfare of their customers will probably find themselves uninsured because insurance does not cover things that happen to businesses breaking the law,” Wolf said during a press conference.

To learn more visit…

https://kaufmanrossin.com/

https://www.baynews9.com/fl/tampa/news/2020/06/15/florida-unemployment-benefits-update

https://www.miamiherald.com/news/business/article243450076.html?

https://www.pa.gov/guides/unemployment-benefits/

Florida’s phase 2 reopening and what it means for South Florida

By: Beatrice Silva

2 min read June 2020 — On June 3, Gov. Ron DeSantis announced his plans to transition the majority of the state into the second phase of its recovery plan. However, the three southeast counties hit hardest by COVID-19 — Miami-Dade, Broward, and Palm Beach — will not be included in the reopening.

“We’ll work with the three southeast Florida counties to see how they’re developing and whether they want to move into phase 2,” DeSantis said during a news conference in Orlando on June 3. “They’re on a little bit of a different schedule.”

Gov. DeSantis will allow the three southeast counties to enter phase 2 under certain circumstances. The county mayors or county administrators will have to seek approval to enter phase 2 with a written request. Palm Beach County Mayor Dave Kerner and County Administrator Verdenia Baker wasted no time sending their request letter to DeSantis.

“Palm Beach County is ready to go into ‘phase 2,” said Kerner at a news conference on Friday afternoon. “But we want to do it with some particular carve-outs that are necessary for the unique nature of Palm Beach County.” The county’s public officials are waiting for approval from Gov. DeSantis.

As for Miami-Dade, their previous reopening date was pushed back by protests against police brutality. Miami-Dade Mayor Carlos Gimenez lifted the countywide curfew on June 8, and approved the reopening of gyms and fitness centers under Amendment 2 to Miami-Dade County Emergency Order 23-20. Although the city isn’t officially included in the initial phase 2 reopening date, Gimenez says he is working with the state on reopening locations very soon.

Upon approval, restaurants may allow bar-top seating with appropriate social distancing. Bars will be able to operate at a 50 percent capacity inside and full capacity outside. Retail stores are going to be allowed to operate at full capacity and entertainment venues like movie theaters and bowling alleys will be able to welcome back guests at a 50 percent capacity. Residents who do decide to venture out will still have to follow CDC guidelines like wearing a mask, social distancing, and frequently washing their hands.

Although the north and south regions of Florida are on different opening schedules. State universities will have to submit their blueprints by Friday. The State University System of Board of Governors recommends things like social distancing, disinfecting, face masks and student’s desks being as far away from one another as possible. School districts on the other hand, will be given the final say on their own social distancing protocols. It is expected that students will have a much different learning experience upon returning to the classroom.

“We have a great opportunity to get back on good footing,” DeSantis said. “I know our kids have been in difficult circumstances. … Getting back to the school year is going to be really, really important to the well-being of our kids.”

Broward County school districts are in the process of surveying parents to gauge what they would like their child’s school to look like this coming fall. “We will have schools open. We will have teachers in schools. We will have students in schools … including hybrid models that some parents are rightfully demanding,” said Alberto Carvalho, superintendent of Miami-Dade County Public School, at Wednesday’s school board committee meeting.

Within the past four months, there have been 70,971 confirmed COVID-19 cases and 2,877 related deaths in Florida, according to the Florida Health.

For more information visit:

https://floridahealthcovid19.gov/#latest-stats/

https://www.miamiherald.com/news/local/education/article243464791.html

https://miami.cbslocal.com/2020/06/11/governor-ron-desantis-plans-reopening-schools-fall/

https://www.abcactionnews.com/news/state/florida-state-universities-must-submit-fall-reopening-plans-by-friday

Home sweet office: How to make your home office work

By: Max Crampton- Thomas

4 min read March 2020 — The COVID-19 health pandemic has upended daily life in unprecedented ways amid calls from the government for people to social distance and stay home as much as possible. Many businesses have had to close their doors and ask their employees to work from home. While some individuals may be accustomed to working from a home office setting, for a large majority of the working world this is uncharted waters that could benefit from some guidance. Invest: offers some need-to-know tips for working from home during this time of crisis.

Constant Communication

Working in an office setting, you often take for granted the ease of communication between you and your colleagues. Situations that could have been resolved by simply walking to someone’s desk now require more effort via other methods of communication. The key is to establish a consistent flow of communication that starts with a daily understanding of what your employees’ schedules will look like on any given day. This can be easily accomplished by having them send out their daily schedules and workload in a quick email at the start of every business day. Communication can then be maintained based around this schedule and productivity can be more easily managed as well. For more direct communication in regard to smaller issues that may not require a phone call, office communication applications like Slack can help facilitate these quick discussions.

Maintain a Daily Routine

For almost any working person, maintaining a daily routine becomes second nature. When unforeseen circumstances like COVID-19 interrupt this daily routine, it can throw a person off course quite rapidly, which can result in less productivity and a decrease in focus. The key is to adapt and maintain your daily routine to the changing environment as much as possible. Something as simple as getting dressed in business clothing can seem unnecessary when working from home, especially when staying in pajamas all day may sound a lot more appealing, but maintaining this daily activity can be key in starting your work day off on the right foot and retaining as much normalcy as possible. Make the effort to try and stick to your normal work schedule throughout the day, including taking breaks as you would in the office, eating lunch around the same time you normally would and trying to stick to your typical working hours as best as possible.

Maintaining Posture (Physical & Mental)

There are many arguments in favor of the benefits of working from home but maintaining your posture, both physical and mental, is probably not high on that list. From a physical standpoint, in an office setting you are usually sitting in a proper desk chair with a relatively straight back or even standing straight up thanks to standing desks. The same cannot normally be said for a home office setting. In an interview with CBS, New York chiropractor Dr. Joseph D. Salamone said, “Everybody’s going to be in sitting postures, having text neck.These people really need to make precautions and live a healthier lifestyle while we’re in this quarantine state.” He recommended that those who find themselves working from home should practice regular stretching to help maintain posture. For those who have the means and access to the proper resources it would also be advisable to create a proper workstation, not unlike the one you are accustomed to in your own office, as opposed to trying to work from a slouched posture on a bed or couch.
Maintaining posture also relates to mental health as much as physical well-being. Going from working in a sociable setting like an office with other people to unexpectedly working by yourself at home can be quite jarring for the mind. It is vitally important to maintain the social connections that you have grown accustomed to in a normal workday, like lunch with coworkers. This social time does not have to be lost as technology has made it so you can use your lunchtime from home to speak with or even video call with coworkers and friends. There is also the underlying issue of potential for increased anxiety during this time of isolation, especially with the influx of nonstop news about COVID-19. It’s crucial that individuals limit the daily amount of time they spend consuming this news, and instead focus their attention on other matters like work, family and the home.

Creating A Proper Workspace

A proper home workspace may help in maintaining posture but it is also important in helping to facilitate as normal a daily routine as possible. In theory, this workspace is where an individual will spend the majority of their eight-hour working day, so it is crucial that this space is not only comfortable but also practical for achieving daily tasks. Find somewhere in the house that you can maintain your workstation without much interruption, and if possible, somewhere that has access to natural light. Working from home can also be tricky as the lines become blurred between workspace and home space, resulting in it becoming harder to “switch off” after a full working day. It is important to try and establish this workspace in a section of the home that allows you to “step into” work at the beginning of the day and “step out” of work at the end.

To learn more, visit:

https://www.cbsnews.com/news/coronavirus-health-tips-working-from-home-stretching-stress-anxiety/

https://www.themuse.com/advice/coronavirus-work-from-home-tips

For up-to-date advice on the Coronavirus response, you can check the CDC website here. For Florida-specific information, click here

Spotlight On: Ian Richman, Senior Managing Director | Southern New Jersey, Colliers International

By: Yolanda Rivas

2 min read March 2020 — The Southern New Jersey region’s low real estate costs and strategic location near major highways is bolstering demand in the industrial market. Ian Richman, senior managing director in the Southern New Jersey at Colliers International, specializes in the leasing and sale/acquisition of commercial and industrial properties in Southern New Jersey. In a recent interview with Invest:, Richman shared the trends in the market and the possible disruptions that could take place in the face of COVID-19.

How are you preparing to face a possible economic downturn?

We haven’t seen signs of a slowdown yet. Construction is still going on and demand has been outpacing supply to an extent. But with the development of COVID-19, we are expecting to see disruptions in the supply chain and people are starting to get nervous about the impact on the economy. Companies that import raw materials or have their products manufactured in China or elsewhere overseas expect to see a lag in production, delay in delivery or in the extreme case, a stoppage of manufacturing in certain factories altogether. This is uncharted waters and a global pandemic will have ripple effects throughout all industries, not just real estate.

How strong is the industrial market in South Jersey?

The demand in the industrial market has continued to increase over the last 12 months. One of the biggest drivers has been our rental rates and sale prices on a price per square foot basis relative to neighboring areas such as Northern New Jersey and the New York metropolitan area. A significant part of our activity has been coming down the New Jersey Turnpike from these northern-based tenants, owner-user purchasers and investors.

What market trends are emerging?

The Philadelphia Port is one of the largest, if not the largest, food port in the country. We see a lot of demand from food-related companies looking for warehouse/distribution facilities or manufacturing facilities. This is not a new trend but rather one sector that has been increasingly growing from a demand perspective in Southern New Jersey. Additionally, the overall demand for warehouse space has continued to remain strong, especially with the uptick in e-commerce and the expectation by the consumer to have goods in their hands as quickly as possible. When Amazon Prime was introduced, two days for delivery seemed fast and quickly became the norm. We are now finding that next-day delivery, if not same-day delivery, is an integral part of the supply chain That is driving a lot of companies to look for warehouse space in South Jersey.

The new speculative and build-to-suit development in our market has been mostly in the northern parts of Burlington County and the southern parts of Gloucester County,

How do you expect the market to evolve in the near future?

We expect more companies to continue to consider South Jersey as a home. The prices are what is really driving most of the activity and that is a trend that we will continue to see. We are now seeing a lot of multi-generational family-owned real estate companies starting to sell some of their properties to more institutional owners. We are also seeing the presence of more institutional owners and large regional owners with real estate holdings in our market. Some of that is attributed to the development of large distribution centers and some of this is attributed to the merger and consolidation of ownership groups.

To learn more about our interviewee, visit:

Colliers International: www.colliers.com

Face Off: Understanding Unforeseen Change

By: Max Crampton- Thomas

4 min read March 2020 — With the global economy in a state of flux caused by COVID-19, it is important that both the community and industry leaders work together to not only flatten the curve of coronavirus but also help to understand its impact on the various sectors of the economy. It is just as vital to continue looking to the future, post-COVID-19, at what other continuing or emerging trends could have an impact on a specific industry throughout 2020 and beyond. In regard to real estate, Invest: Miami spoke with two of the region’s industry leaders in real estate, David Diestel, regional president, south for FirstService Residential, and Michael Fay, principal and chairman of the U.S. Capital Market Executive Committee for Avison Young. While they work in two seperate areas of real estate, both discuss how the coronavirus has affected their industry, other factors that will continue to spur change and trends they are keeping a close eye on in 2020.

David Diestel

How is the coronavirus outbreak impacting your industry?

Dave Diestel: The outbreak of the coronavirus has brought the country to a screeching halt. I don’t know if anyone was prepared for something of this magnitude that has impacted basically every industry. As the leader in property management in North America, it’s our job to provide support to the board members and residents of the communities we manage. We immediately formed task forces throughout the organization, continuously monitored reliable information from the CDC, World Health Organization, as well as local authorities and health agencies. And the key to our support: communication. On everything from preventing the spread of the virus to working with boards to enhance cleaning and sanitation at our properties to working with attorneys to discuss any change in community rules and regulations. This situation has helped cement the importance of communication during a crisis – to report facts and to keep people calm. And to let our customers know that we’re in this together.

Michael Fay: We are such an international city at this point that we need to look at how we fit on the geopolitical stage, as well as how the virus will shape how we live in the future. We are always looking at the Latin-American influence within our market, as well as the European, Asian and Canadian influences, given Miami has become such a major, global city. When I first did this interview, the COVID-19 virus was just an Asian problem and not a global pandemic. I truly believe the two asset classes that will provide opportunity and stability as we move through this will be real estate and well-positioned stocks. With Miami being such a global city, and having been through many other crises, we tend to bounce back quickly with resilience. We will continue to see strength in the multifamily sector as well as the industrial sector as we understand new, global supply chain issues. Retail and hotel will see weakness as we move through this pandemic and new way of life for the foreseeable future. There is more capital in the marketplace overall, outside of opportunity funds, with lots of mezzanine equity, loans and regular equity creating a sizable amount of capital. The interest rate environment we are in is the lowest we have seen in the United States. Distressed will have a new meaning.

Michael Fay

What other factors will continue to spur or change your market’s growth?

Diestel: The demographic shift in this region is challenging our communities to keep up with the times. New owners and residents are challenging those communities to invest more in technology and in amenities. People are looking for investment back into their community, and also looking for investment into community spaces. These demographics do not just want the standard gym or card room, they want thoughtful programming, focusing on wellness and convenience. One of the drivers of real estate values ultimately comes down to a building’s reputation. When people feel good about living where they live, realtors know people feel good about it and there is a great sense of community. This all drives property values up.

Fay: I’ve been in this business for 36 years. When it’s good, it’s good for everybody, but when it’s bad, it’s great for us. We are highly cognizant of inflexions and disruptions in the marketplace. We built a major business on understanding the bad times better than the good times. We understand how to operate in a bad market better than others. Anybody can be good in a winning streak. Year in, year out, decade after decade, issue after issue, we spot early, watch early and see how things are going. In my own opinion, we will be seeing a recession; however, I believe it will be short-lived because of the strength of the economy going into the crisis. On the negative side, we saw a 14% rise in the homeless population in 2019. The lion’s share of this increase is coming in from other cities in the Midwest. Absent thoughtful solutions, it can really hurt the city. Also, we need to take care of our environment. Global warming is a slippery slope if we do not understand it and deal with it by making rash decisions. Sea rise needs to be studied further. If we have any narrative of investors, owners or companies leaving Miami due to sea rise, our city will have a major issue. We need to think about ways to mitigate it and work around it.

What is a trend in your industry that you are keeping a close eye on moving forward?

Diestel: Short-term rentals are a hot topic throughout Miami, especially in Miami Beach. It’s also constantly talked about in the Florida legislature. Investors are looking to own real estate with the purpose of using it as a short-term rental. Innovations like Airbnb aren’t going away. In fact, communities built for short-term rental are starting to pop up. We are actually in talks to manage two of these types of properties. This is a trend that will continue to evolve. Some cities are not quite there yet in terms of understanding it. We are very active in Tallahassee because there are bills being introduced in regard to short-term rentals. Our position, as both FirstService Residential and as the industry, is to allow the homeowner association the right to govern as they were set up to do. We are educating the legislature and are working to help protect the rights of an individual community.

Fay: The Opportunity Zones will come into much more focus in 2020, and we will gain a real understanding of how it fits into the market. In 2019, many guidelines and an interpretation of the tax code were not available. When Opportunity Zones were laid out initially, they were based on basic census tracking, with governors approving wherever that might be. Several developers were left in the dark and as a result, lots of Opportunity Zone funds slowed raising capital given the uncertainty. There is a lot more clarity now, which is key. The new guidelines issued will have much more effect going forward and an increase of funds and transactions.

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