Kevin Welsh, Executive Managing Director, Newmark

In an interview with Invest:, Newmark Executive Managing Director Kevin Welsh, of the firm’s Northern New Jersey-based Industrial Capital Markets team, sat down with Invest: to discuss Newmark’s growth, key milestones, shifting market fundamentals, and investor priorities.

What were some of the biggest transactions Newmark completed in New Jersey last year? 

The Northern New Jersey-based Industrial Capital Markets team is coming off a banner year, highlighted by the $300 million recapitalization of the Fairfalls Portfolio—the largest industrial transaction to close in Northern New Jersey in 2024. 

This complex deal involved securing a new capital partner for The Hampshire Companies and forming a joint venture. Despite the challenges of aligning interests and determining fair market value, we successfully structured a solution that worked for all parties.

There were 30 buildings in the Portfolio, which totaled 1.3 MSF. These properties cater to local businesses and offer a distinct value compared to larger warehouses along the Turnpike. Fairfield, often referred to as “Meadowlands West,” remains a highly desirable market due to its proximity to Manhattan and major highways.

What factors are driving investor interest in high-barrier-to-entry markets? 

The $156.3 million sale of 280 Richards Street in Brooklyn, led by the Capital Markets teams based in NYC and Northern NJ, highlights this trend. There are few modern buildings to accommodate demand from e-commerce/logistics companies, which will continue to drive the strong investor interest in these high-barrier-to-entry markets.

Located in Red Hook, a prime last-mile hub, the property features a unique design with warehouse space and rooftop parking for Amazon delivery vans, anchored by a long-term Amazon lease. The buyer, Terreno Realty, a San Francisco-based REIT, focuses on high-demand markets like New York’s boroughs and New Jersey’s Meadowlands and Newark. 

As demand for industrial assets in these markets remains strong, we continue to guide clients toward opportunities that combine strategic locations, strong tenancy, and innovative property solutions.

How do you see the commercial market shaping up, and what challenges are investors facing? 

The commercial real estate market is gaining momentum, even as challenges like the cost of capital persist. Interest rate movements, particularly the 10-year Treasury yield, continue to impact cap rates and liquidity. However, when investors gain confidence, deals happen—and the market moves forward.

While the rapid 500-basis-point rate hikes since March 2022 created uncertainty, transaction activity picked up notably in late 2024, especially in Q4, as the Fed began to lower the funds rate, and that momentum is carrying into 2025. Sentiment is improving, and as deals increase, sidelined investors are feeling pressure to act, encouraging more sellers to come to market.

Having weathered multiple market cycles, I’m optimistic that deal activity will continue building in the coming quarters and have the wherewithal to navigate clients amid these dynamics, positioning them to seize opportunities in a market that’s regaining its footing.

How is demand shifting between different commercial real estate segments? 

Demand across commercial real estate segments is evolving, and there are compelling reasons to be optimistic heading into 2025. Industrial remains a bright spot, with Northern New Jersey standing out as one of the nation’s most sought-after markets. Strong fundamentals, prime locations, and high-quality construction continue to attract investors and drive leasing activity. Confidence in the sector remains robust, fueled by its critical role in the supply chain.

The office market, while navigating challenges, is showing signs of stabilization. After a two-year “valuation reset,” investor sentiment is improving, and high-quality assets in prime locations are leading the way. The flight to quality is evident—top-tier properties like SUMMIT One Vanderbilt and Hudson Yards continue to attract tenants and maintain strong rents, outperforming the broader market.

As liquidity selectively improves and more deals close, the outlook for the office sector is increasingly positive, and we have compelling reasons to be excited about what’s ahead.

How are investor priorities shifting in the office market, and where do you see opportunities emerging? 

Investor priorities in the office market are increasingly focused on high-quality, well-located assets. Suburban markets like Morristown and Summit, New Jersey, stand out, attracting major tenants with walkability, amenities, and new top-tier developments.

After a challenging 12 to 24 months of valuation resets, signs of stabilization are emerging. A colleague of mine once said, “Basis is forever,” and today’s adjusted pricing offers investors a unique opportunity to re-enter the market strategically.

What challenges remain for the office market moving forward?
The office market is showing signs of stabilization, but challenges remain—financing chief among them. Lenders remain cautious, and financing costs for office assets are notably higher compared to industrial properties, making transactions more complex.

That said, we’re taking a proactive approach, bringing significant office products to market, which we view as opportunities to lead, whereas others might hesitate. And while “price discovery” is underway, our deep capital markets bench has demonstrated time and time again our ability to navigate this landscape, setting us apart.

The key takeaway: the steep decline in office valuations seems to have leveled off. Liquidity remains tight, and lenders are selective, but investor sentiment is gradually improving. The next few quarters will be pivotal as more office transactions close, providing a clearer outlook for the market.

What is your broader outlook on the real estate economy?
The market is evolving, finding its footing, so to speak, and while liquidity and financing remain challenges, each sector presents unique opportunities. Industrial remains a leader, with sustained demand in high-barrier-to-entry locations, driving strong leasing and investment activity. Retail is one of the top-performing asset classes, driven by strong demand for in-person experiences for consumers. The office sector is showing signs of stabilization, with the flight-to-quality driving demand for Class A properties that align with tenant needs. Retail is also gaining traction, with grocery-anchored centers and experiential concepts seeing increased interest from tenants and investors alike. Multifamily continues to perform well, backed by steady demand in both urban and suburban markets.

How does Newmark’s culture contribute to its success?
Newmark’s culture is built on collaboration, innovation, and a commitment to delivering best-in-class solutions and results for our clients. Leadership has created an environment that allows hardworking, talented professionals to thrive, all the while embracing teamwork, mentorship, entrepreneurial thinking, and innovative solutions—fundamentals that drive our success and set the firm apart from others.