Real Estate Journal — New Jersey — February 12 - 25, 2016 — 13B
M id A tlantic
C entral N ew J ersey
By Stephen Cassidy, Denholtz Associates Adaptive reuse: A solution for a suburban office market in a state of flux
he suburban office market as it exists in New Jersey today
play, as does the ability to adapt the existing building to the high level of technology
ban-centric, is there enough residential demand in the particular market to justify
building for residential use— or would the building have to be razed to pave the way for new construction? The picture is further clouded by the fact that cer- tain obsolete properties are also victims of neglect by ownership entities lacking the vision to effectively cre- ate value as the market has evolved. However, for an entrepre- neurial real estate company with vision, that scenario provides the opportunity to acquire an undervalued property, ask all the right
questions, complete a thor- ough analysis, and ultimate- ly make the right decision about the property’s future use. The current suburban of- fice market is clearly primed for rebirth, providing many opportunities for savvy, vi- sionary owners. Stephen Cassidy is the president of New Jersey-based Denholtz Associates, a real estate development, invest- ment and management company with 60 years of experience. n
is largely in a s t a t e o f flux, created in no small part by the cultural and economic de- mands of the baby boomer generation, which came
“For entrepreneurial developers and owners with vision, skill and expertise, these antiquated properties provide an enormous opportunity to repurpose and rehab existing building stock into better, more contemporary uses. ”
that medical use requires. Would that process be cost- prohibitive? Should it be converted to residential? While younger generations are more ur-
adaptive reuse as residen- tial? Do the market’s current vacancy rates and avail- ability justify residential development? What would be the cost of adapting an office
of age in the 60s and 70s and migrated in large numbers to the suburbs in the 80s and 90s. In fact, it’s been estimated that two-thirds of the Garden State’s office properties were constructed during that period. But yesterday’s state-of- the-art product, 30 to 40 years later, is often obsolete, the result of technological advances, changing cultural demands, and other market forces. Today’s Gen-Xers and millennials are more urban- centric, choosing to live in cities or suburbs that are easily accessible to large cit- ies, rather than more distant suburbs. As a result, while New Jersey’s urban office markets are thriving its sub- urban markets are bogged down with high vacancy rates and falling property values. For entrepreneurial de- velopers and owners with vision, skill and expertise, these antiquated proper- ties provide an enormous opportunity to repurpose and rehab existing building stock into better, more con- temporary uses. Obviously, adaptive reuse of an obsolete suburban office building is not always a “slam-dunk.” The process begins with careful analysis of the prop- erty–location, surrounding demographic, accessibility, condition of the property and more. It’s the role of an experienced, integrated real estate company to ask the right questions and ul- timately provide maximum returns on an adaptive reuse. What use would work best for the property? Perhaps, retail? That depends on the surrounding consumer de- mographic, existing compe- tition, highway access, abil- ity of the location to attract strong, well-known retailers. What about Medical? Park- ing ratio clearly comes into
Retail Property: Clark Commercial Center Clark, NJ
Capitalize on our ability to access niche market opportunities and execute complex investment strategies.
Office Property: 14 Cliffwood Avenue Matawan, NJ
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Industrial Property: Piscataway Corporate Center Piscataway, NJ
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Office | Industrial | Retail | Residential 14 Cliffwood Ave. • Suite 200, Matawan, NJ 07747 P: 732.388.3000 • Fax: 732.626.4300 www.denholtzassociates.com
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