Six Big Market Changers or Northern New Jersey
The state is beginning to feel the results of the New Jersey Economic Opportunity Act, which was signed into law over the fall and intertwines five economic development programs. (Sounds like us after air squats, shoulder presses, push jerks, deadlifts, and medical ball cleans at CrossFit... except we need two aspirins.)
NJ Economic Development Authority prez Timothy Lizura told a crowd of 200 yesterday that he's been working on a dozen projects that will move or keep up to 15,000 jobs in the state. He was keynoting Bisnow's third annual Northern New Jersey State of the Market event at the Newark Club, where he said that if you invest in economically distressed communities, "We’re going to hammer you over the head with incentives." (Bring a helmet.) Think Camden, Trenton, Passaic, and Paterson, among others.
Since the act passed, there have been 20 approvals under the Grow NJ Assistance Program. Projects moving forward include Newark’s 15 Washington—unoccupied since 1999 and to be transformed into Rutgers student housing—and Ron Beit's Four Corners. Tim, above, hints at further major approvals over the next three months. He also reports that the NJEDA is one-third through the $300M earmarked for Sandy recovery and by May will be halfway committed. Here are six other big takeaways from the event:
1) Affordable office space will snag tenants.
NJ office has had the same vacancy factor for the past 25 years, says Onyx Equities co-founder Jonathan Schultz (who, when buying value-add office, likes “the messier, the better”). Want tenants to look at your space? Create an environment where they don’t have to spend money (which they’d rather set aside for talent), he says. That’s why his company is spending millions on space upgrades. Buildings should also support the new working environment of lower desk utilization, says CBRE senior managing director Jeff Hipschman.
2) Some buildings shouldn't be office anymore.
You really have no choice but to knock down obsolete buildings or start over. Advance Realty director of finance and acquisitions Christopher Bellapianta says there’s antiquated office buildings at a 1.2M SF campus it bought in Bridgewater, which will be demolished for mixed-use. “It wasn’t worth putting in the capital to reposition,” he says.
