2 min read April 2022 — Managing Principal of Camber Real Estate Partners, Chris Bellapianta, spoke with Invest: and discussed New Jersey’s market fundamentals. He explained the attributes that make New Jersey attractive for investors and key characteristics for certain asset classes that will become more popular in the coming years.
What were the goals for your company in 2021, and what challenges did you overcome in accomplishing them?
The industrial market in Northern New Jersey is best characterized by very favorable supply and demand characteristics. Market conditions are not only beyond what could have been imagined, they exceed what could have been rationalized just a few years ago. The pandemic accelerated the adoption of e-commerce, creating a surge in demand for warehouse space. Other factors like disruptions to the global supply chain have forced logistics and consumer goods companies to expand inventories creating additional demand. There are potential headwinds from inflation, labor shortages, legislative changes, etc., but market conditions are strong at the moment.
Our business is acquiring industrial properties with a value-add business plan. We try to find well-located infill product where we can invest capital to improve the asset and/or where we can roll expiring leases to prevailing market rents. We also target vacant buildings to redevelop or, if there is excess land, to add parking or develop another building, for example.
How important are the characteristics of North Jersey for industrial real estate companies?
Northern New Jersey is a mature, tier one market with incredible population density and very strong demographics. We have an extensive highway network, one of the largest and busiest seaports in the United States and one of the most robust international airports in Newark Liberty, not to mention proximity to New York City and all of its demand drivers. We can access a very large percentage of the U.S. population in less than a day’s drive from Northern New Jersey. These are some of the reasons that we, and many others, are focused here.
Separately, sub-markets within Northern New Jersey that two or three years ago would have been perceived as ‘secondary’ are now in demand from prospective users because there is a dearth of supply and continued surging demand for industrial space.
What are some of the emerging and ongoing market trends you are observing?
Everyone is aware that industrial and multifamily are the darling asset classes today. Separately, we have seen very favorable trends and cap rate compression on retail assets, and more specifically, grocery anchored properties in strong submarkets and on established trade corridors. We think brick-and-mortar stores will become a more prominent factor in fulfilling e-commerce orders and solving reverse logistics issues for e-commerce retailers. Store formats are going to change, but we think physical locations become more important on the whole.
It is getting more difficult for companies to acquire customers online. Having a physical store makes a difference. It will provide retailers with an edge in the crowded e-commerce marketplace creating brand recognition and a better overall customer experience. We expect to focus more on retail in the coming months and years.
How is your investment strategy related to the geographical area you are situated in?
Our business is owning real estate, so the tenants are our customers. Our philosophy is that real estate is a service business. We are very high-touch with our tenants and strive to be as accommodating as possible to their varying needs. We go above and beyond to make the tenant experience excellent and take pride in delivering great service.
As to geography, our core competency is acquiring value-add industrial properties in the Greater New York and Greater Philadelphia markets. We will likely expand that vertical to include Greater Baltimore and a few other select regional markets. In addition, we will spend more time studying retail assets in the hope of building that vertical as well.
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