With signs the commercial real estate market in Northeastern Pennsylvania has heated up, Hinerfeld Realty in Scranton has ditched selling homes to focus exclusively on selling offices, stores, warehouse and factories.
The high-profile real estate firm, which has operated separate commercial and residential divisions, has gone all commercial and is now known as Hinerfeld Commercial Real Estate. Hinerfeld president John Cognetti said he saw a cooling of the residential market and more commercial sales opportunities.
The big change has been in the last five years, Mr. Cognetti said, as private groups invest in the area. Private companies for many years didn’t want to risk their investment in Northeastern Pennsylvania. That started to change in 2002, when First Industrial Realty Trust opened the region’s first privately owned industrial park in Covington Township. Since then, other private companies and real estate investment trusts have invested here.
Chicago-based Verus Partners, for example, has developed several “flex” buildings for sale or lease to others. Outside groups have purchased shopping plazas and malls.
“These people are looking at Northeastern Pennsylvania as a place to make money,” Mr. Cognetti said. “Ten years ago, groups like this wouldn’t return phone calls from Northeastern Pennsylvania.”
One of Hinerfeld’s competitors in commercial real estate, Wilkes-Barre-based Mericle Commercial Real Estate Services, began putting up its own buildings to lease and sell and has plans for a business park, Center Point, in Pittston Township. Another commercial real estate firm, NAI Mertz, has also been more aggressive.
Money will likely continue to flow into commercial real estates, said Barb Bush, marketing director with Real Estate Research Corp.
Real estate has regained respectability among investors with returns of 7 to 9 percent. Companies, she said, have money and access to money.
“An awful lot of money is still flowing into real estate,” she said. “Yet, there is still so much capital out there.”
Mr. Cognetti feels the residential real estate market will cool as interest rates rise. The home market has gotten competitive, as aggressive new firms such as Weichert Realtors and Semian & Gress Real Estate open offices.
Being commercial-only may also give Hinerfeld more credibility with out-of-town clients. “Commercial has always been my passion and our specialty,” Mr. Cognetti said.
– Courtesy of The Times-Tribune
