Christopher DeLorenzo, Vice President & Director of Leasing and Marketing, Alfred Sanzari Enterprises

In an interview with Invest:, Christopher DeLorenzo, vice president and director of leasing and marketing for Alfred Sanzari Enterprises, discussed the company’s strong performance and strategic vision. “We’ve seen tremendous activity at our higher quality assets,” DeLorenzo said, noting the Glenpointe project in particular, which is “rapidly approaching 100% occupancy.”

What changes over the past year have most impacted Alfred Sanzari Enterprises? 

We’ve seen tremendous activity at our higher-quality assets. Glenpointe, one of our larger office complexes, is rapidly approaching 100% occupancy. Within the 660,000-square-foot complex, less than 10,000 square feet remains available. This has allowed us to raise rental rates dramatically. We’ve found price indifference to some extent with higher-quality assets, as people acknowledge their value. They want to bring employees back to the office and are willing to spend more on assets that encourage return. It’s not about forcing people back; they’re enjoying our complex as a way to foster that return.

From a broader perspective, how have shifts in the real estate market and economy impacted your organization, if at all?

I would say anecdotally, there’s some trepidation in the corporate community regarding trade issues and market uncertainty. We’ve had a handful of international tenants pause or put requirements on hold. I think with more clarity, those requirements will return, allowing us to proceed. Currently, broader economic uncertainty, which we and our prospective tenants don’t control, prevails, leading to a wait-and-see approach that has tempered demand to some extent.

In terms of the market, newer assets in good locations with fully amenitized complexes are performing much better. That said, we’ve had success this year at our lower-tier assets as well. Demand for industrial space has forced tenants to free up warehouse space, still commanding a premium, bifurcating operations, and moving office requirements to those buildings. Interestingly, increased demand is evident at both ends of the scale. The buildings in between seem a bit lost right now, and time will tell what becomes of them. I think the market is certainly picking winners and losers here.

With ongoing discussions around redeveloping aging assets, what is your approach to shifts within asset classes?

Fortunately, our existing assets are well-positioned, but a substantial portion of office buildings have been sold in the hope of redeveloping them for residential or industrial use. Quite frankly, municipalities need a more forward-looking approach. Many buildings are approaching functional obsolescence, and once vacant, redevelopment occurs on a one-off basis. For the ultimate good of these communities, municipal leadership should adopt a cohesive zoning plan rather than the current ad hoc process, which is likely not best for those areas.

Have you seen a strong shift in the return to office mandate, or are many companies still favoring remote work?

It varies by industry. Some of our office buildings, particularly Court Plaza, have a high percentage of tenancy from attorneys and law firms. These spaces didn’t decline much during the pandemic, and their occupancy remains strong. We’ve also seen larger technology companies, previously shedding space, now pushing for a return to office, which is encouraging. Newer tenancy at Glenpointe includes companies where being in the office is crucial for developing their culture and business evolution. Senior management hours set the tone, which is nearly impossible to replicate remotely. That said, I don’t know if flexibility will disappear entirely. Employees demand hybrid arrangements — days at home and in the office — and that will likely persist barring a significant labor market downturn. However, the return to the office is a huge driver for communities around those complexes. From an operational standpoint, we see this firsthand at Glenpointe, where we run a food services platform and a gym. It’s challenging to keep those businesses running effectively without consistent occupancy, as tenant days in the office remain somewhat unpredictable.

To what extent do you think tenants are increasingly viewing ownership quality as an amenity?

Certainly, in the New Jersey market, with the sudden increase in interest rates, we’ve seen other landlords face challenging times. The higher rates have siphoned off cash flow from buildings, making it difficult to meet lease obligations, fund tenant improvements, and cover commissions. There’s significant interest in sponsorship, and we’ve noticed buildings with low occupancy being passed over by substantial tenants, who worry about receiving a notice to leave within a year due to potential redevelopment. Sponsorship has become paramount for everyone right now. We have seen many entities partnering to do redevelopments. In New Jersey, the entitlement process is lengthy and costly. There’s always execution risk when tearing down an office building for another use, but partnering helps defray or spread out that risk. 

Given Hackensack’s importance in the medical field, how do you evaluate and pursue growth in the medical office niche?

Our senior management team has great relationships with Hackensack Meridian Hospital. That’s been integral in what we’ve done. We have developed medical-specific assets tailored to their individual needs. We have a deep understanding of what they’re looking for. We have continued acquiring land around the hospital system. A medical building would be a straightforward use, but we’re also considering extended stay hotels to support visitors coming to see loved ones or visiting from out of town. This comes from a deep understanding of both Hackensack and the medical system’s needs.

What is your outlook for New Jersey’s real estate sector, and where do you see Alfred Sanzari Enterprises fitting in over the next five years?

The broader New Jersey market will continue to have buildings approaching functional obsolescence. Where the market has spoken and buildings are no longer in favor, redevelopment will continue. New Jersey has long had elevated vacancy rates. Although moving slower than people would like, the market dynamics are such that there will be a correction where assets get repositioned to their highest and best use. As far as Sanzari is concerned, we remain low levered with dry powder to deploy. We’ll continue looking at opportunities, taking an opportunistic approach to grow the company. The most likely project we’ll kick off soon will be a new apartment complex near our Hackensack assets, a 250-unit building that is highly amenitized and in a great location, with retail opportunities. We continue growing the company while being good managers and operators. This explains why our assets are improving rapidly in overall occupancy.