“Users including Planet Fitness, Dollar Tree, Harbor Freight, Raymour and Flanagan, salon suites concepts, Five Below and others are leasing up vacant spaces quickly,” the veteran retail real estate broker writes in a new column examining the region’s retail market in the March/April issue of Northeast Real Estate Business. The column led off a special section focusing on four different segments of the commercial real estate market in Northern New Jersey.
Her column provides an overview of the recent moves of these and other expanding operators in Northern New Jersey. Brunelli contrasts this positive economic activity with the challenging times that occurred last year.
“In 2020, we saw leasing activity decline by almost 30% year-over-year,” writes Brunelli, whose Old Bridge-based firm exclusively represents Dollar Tree and Family Dollar in New Jersey, along with chains such as Raising Cane’s Chicken Fingers, European Wax Center, Crumbl Cookies and My CBD Organics. “This languishing activity resulted in a 3.1% drop in the market rent on a per square foot basis.”
Northern New Jersey’s retail markets were also affected by the bankruptcies of Modell’s, Justice, Pier 1 Imports, Tuesday Morning and Stein Mart, while Covid-19 dining restrictions exacted a heavy toll on many restaurants as well, she observes.
Nonetheless, retailers, restaurants, developers and service tenants have shown a high degree of resiliency. Other operators, such as those that sell essential goods, saw sales increases that propelled their growth. Discount retailer Dollar Tree, for one, signed leases for eight new Dollar Tree stores and one new Family Dollar store in New Jersey in 2020, Brunelli notes. She also cites moves by grocers Amazon Fresh, Lidl and Uncle Giuseppe’s to open new stores in the market.
Among restaurants, meanwhile, the increase in demand for drive-up and curbside pickup enabled Popeyes, Chipotle Mexican Grill, Jersey Mike’s, Wingstop and Smashburger to continue signing leases in past year, the broker writes.
“Despite various public-health encumbrances, some tenants were able to move quickly to lease, buildout and debut their stores in 2020,” Brunelli adds. “For example, R.J. Brunelli & Co. negotiated a deal for Chipotle at a drive-thru location in North Bergen in which the tenant signed the lease, obtained permits, constructed the space and opened all within 2020.”
Likewise, Gregory’s Coffee and the fast-casual chicken restaurant Raising Cane’s continued to seek drive-thru locations as part of their expansion plans.
On the landlord side, many owners and developers continue to aggressively court new deals, Brunelli notes. “Rents have dropped slightly, and landlords have been more willing to provide free-rent periods, though they still may not provide tenant allowances.”
The challenges of the past year also promoted a higher degree of coordination among real estate professionals. “Real estate professionals spent less time on the roads and had more time to pick up the phone and talk,” Brunelli writes. “Zoom calls occurred in which multiple brokers shared information on their clients who continued to make deals, and landlord reps shared information on their available locations.”
This spirit of collaboration led to new professional relationships and rapid business adjustments, including the launch of new retail prototypes. “In 2021, these new modes of operating will only help the future of brick-and-mortar retail, in both Northern New Jersey and the country,” Brunelli concludes.
The full article is available at:
About R.J. Brunelli & Co.
R.J. Brunelli & Co. serves as exclusive broker for 35 retail properties with a combined gross leasable area (GLA) exceeding 2.3 million square feet, and five properties for sale. The properties are located throughout New Jersey. The firm also serves as exclusive or preferred tenant representative for approximately 20 retail, restaurant and service chains. These include representation in various New Jersey, New York and Pennsylvania counties for such companies as Dollar Tree, Family Dollar, Raising Cane’s Chicken Fingers, European Wax Center, Asian Food Markets, New Jersey Spine and Wellness, Crumbl Cookies, My CBD Organics, Mobile Health Solutions, and Legend Park—the latter, a national account.
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SOURCE R.J. Brunelli & Co.