Barring any unforeseen events, and as long as interest rates stay close to where they are now, New Jersey’s office and industrial real estate markets in 2018 should be somewhat similar to 2017. I think it's going to be another robust year for the industrial sector, but not as record breaking. The office market will be active, yet overall absorption rates will stay about the same. Industrial rents are the highest I have ever seen in my 35 plus years of serving this marketplace. We are getting users who are paying numbers they normally wouldn't pay. We see continued business expansion from tenants who want more space. Strong segments are third party logistics, pharmaceuticals, research, lab and assembly. Rents for industrial space in Somerset, Middlesex, Essex, Union and Monmouth counties generally range between $6.75 to $8.50 a s/f, depending on building location, size, age and features. Three to four years ago the average rents for these markets were $4.75 to $5.50 a s/f, so the increase is quite marked. In certain Northern Jersey locations such as the Meadowlands, Central Bergen County and Newark, I'm hearing numbers in the $10.00 to $12.00 a s/f range for warehouse and distribution space. Rents may increase slightly in 2018, but not much. At some point businesses will not be able to afford them. Vacancy rates for our industrial exclusives, many of which are off of Exits 8 and 10 of the New Jersey Turnpike, are in the zero to 3 percent range. Our tenants renew quickly to ensure they have the space. It all comes down to supply and demand. Although we see new big box construction, and reports say there is more than 7 million s/f of new or proposed industrial construction statewide, there is still not enough spec building of divisible industrial and flex buildings for businesses that need anywhere from 5,000 to 50,000 s/f. I see this trend continuing because of limited land availability and the length of time necessary to go through the approval process. The industrial sector is capturing increased investor attention. For the first time in many years rents are high enough to support the cost of building from the ground up. Prior to 2017, industrial investors were better off buying older buildings and fixing them up. This is no longer the case. Now both rehabbing and new construction have appeal. Investors are open to being creative. A lot of builders are looking for office buildings to tear down and rebuild as warehouse space because it's the best use at this point. This is a trend to look for in 2018. Obviously not every office building can be used for this, but it is viable for certain projects. For instance, I recently sold a two-story 63,000 s/f office building in Bridgewater, NJ, to a buyer who is re-purposing it for self-storage. Onyx Equities recently bought an office building in the Meadowlands and they're constructing a distribution building in its place. Pennsylvania has benefited because there's not enough industrial space available in New Jersey. Some companies have opted to go to the Lehigh Valley. There is new construction off of Exit 6 of the New Jersey Turnpike near Pennsylvania and also off of Exit 7. The development trend is going south and west. The office space market has improved a little bit. A lot of deals are being made and this will continue in 2018, but I do not think it will impact absorption rates much. Excluding solid locations such as Metro Park or the Jersey City Waterfront, I think office is going to continue to be challenged over the next couple of years. The office market was already overbuilt when the financial crisis hit in 2008, and it has never fully recovered, but with the improved economy some tenants will pay premium prices for space in highly desirable locations. Vacancy rates in overbuilt areas such as Parsippany and Somerset are still in the 20 to 25% range. Companies have more people working from home and they don't need as much office space. Rents for class A space are about $25 to $40 a s/f depending upon the location. In premium areas such as Metro Park they are $30 to $35 a s/f. Rents in the Jersey City waterfront approach $40 a s/f. The office park we are located in at Raritan Center, which is a highly desirable central location, is competitively priced at $22 a s/f. Out of 122,000 s/f only 2,500 s/f is available. However, areas that are in a bit of trouble that have a lot of vacancies, for instance Parsippany, South Plainfield, Piscataway and Bridgewater, offer rents at about $16 a s/f. I see this remaining about the same in 2018. In summing up my outlook for 2018, it is positive. Industrial rents will stabilize. The economy continues to strengthen and investor activity and interest in the industrial sector will be robust. Some investors may see the office market as bottoming out and look for undervalued buildings. There is more confidence among investors that another recession is not on the horizon. Commercial real estate will further strengthen as an attractive asset class. David Zimmel is CEO of Zimmel Associates, the Edison, NJ, corporate real estate services firm. Zimmel is consistently ranked as a New Jersey Power Broker by CoStar.