Jacob Frydman Discusses Rising Commercial Property Demand in Cities
Jacob Frydman, property developer based in New York City, has watched the commercial real estate industry rise to new heights as there as a remarkably increased demand for larger facilities and buildings that can provide multiple functions all in one, especially in bustling cities. These properties are being purchased as soon as they come on the market, leaving industrial tenants paying higher rents or expanding their searches to neighboring boroughs and states, as reported by a recent article in National Real Estate Investor.
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.
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Jacob Frydman -- Huffington Post: http://www.huffingtonpost.com/author/jacob-frydman