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Real Estate Journal — Spring Preview — April 29 - May 12, 2016 — 11C
M id A tlantic
N orthern NJ O ffice M arket
By W. Joshua Levering, SIOR, NAI James E. Hanson Macro changes drive profound change in Northern New Jersey’s office market
T
followed by new ground-up construction of something other than an office building or park, there is a future! In terms of new office con- struction there is very little activity except for our ex- isting base of corporations (which is substantial) looking to modernize their facilities. This is unlikely to change in the foreseeable future given the macro trends noted above. The additional fact that it is expensive to do busi- ness in New Jersey compared to many other markets. As they say, “the world is flat”
he Morris County— and Northern New Jersey—office mar-
Might they be altered for medical use, general health- care or even a retail use...are
are there for the taking! I hold out that creative inves- tors and developers have the
and it is not unusual for companies to look elsewhere. Fortunately, New Jersey has an extraordinarily educated and diverse workforce. For companies that stay in the Garden State, they increas- ingly turn to urban locations and/or properties that are located near mass transit, allowing millennials who do not drive easy access to work. This signals a long-term change that is here to stay for our state’s office market. W. Joshua Levering, SIOR is senior vice president of NAI James E. Hanson. n
k e t i s i n transition, d r i v en by macro eco- nomic and demograph- i c t r ends . While leas- ing activity has picked up, the im-
“Millennial workers are using their influence as the future of the workplace to drive change, especially in the TAMI (Technology, Advertising, Media, Information) industries”
W. Joshua Levering
the aesthetics appropriate for residential? The answer may be as simple as, “Can I walk to a Starbucks?” The bottom line is...These investment opportunities
insight and wherewithal to determine how to transform older office buildings and space into something desir- able and useful. Even if the alternative is demolition
pact on net absorption has been minimal. A key factor has been the suburbs vs. urban markets scenario – responding to the desire of many millennials to flee sub- urban areas for urban, tran- sit oriented communities, a trend known as the new ur- banism. Millennial workers are using their influence as the future of the workplace to drive change, especially in the TAMI (Technology, Advertising, Media, Informa- tion) industries. These tech and associated firms are opt- ing to do whatever necessary to attract well educated mil- lennials and an ever increas- ing number of companies have opted for urban loca- tions offering the “live, work and play” environments that millennials seek. Transportation hubs in areas such as Morristown, Summit/ Chatham, Montclair and others as well as larger cities like Newark, Iselin (Metropark) and Secaucus provide workers with the abil- ity to quickly board a train or bus to work. This availability to mass-transit has been posi- tive and stabilizing for many of these towns and some of the immediate surrounding municipalities. Suburban office proper- ties, many of them standing partially or fully vacant as a result, still provide oppor- tunities for those investors/ buyers willing and able to adapt that space. Potential uses can range from medical to healthcare, retail and even sometimes residential. Ques- tions and risks remain with much of Northern New Jer- sey’s suburban office product as most was constructed in the 1980s and 1990’s. As such they are considered rather functionally obso- lete for today’s office uses. Is a hi-tech infrastructure available? Is the parking sufficient? Local amenities?
Your Source For Commercial Real Estate
2016 SIGNIFICANT OFFICE TRANSACTIONS
Saddle Brook, NJ 18,140 sf - SOLD
Hackensack, NJ 58,512 sf - SOLD
Parsippany, NJ 36,216 sf - SOLD
Newark, NJ 13,321 sf - LEASED
Jersey City, NJ 30,000 sf - SOLD
New York, NY 11,000 sf - LEASED
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There were 31 office sales to date in New Jersey. NAI James E. Hanson sold five (5) of them. Ask us how we can help market your building.
Source: Real Capital Analytics®. Sales exceeding $2.5M
235 Moore Street Hackensack, NJ 07601 201 488 5800 naihanson.com
10 Lanidex Plaza West Parsippany, NJ 07054 973 463 1011
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