Commercial space's demand remains strong in New Jersey - Brief Article

New Jersey's commercial real estate market will hold up extremely well in the midst of a national economic slowdown. The office market's fundamentals remain very strong and there is still a great deal of demand by users who require both small and large blocks of space. With regard to new development, new acquisitions and new redevelopment projects, our company expects to be extremely busy in the coming year.

One of the main drivers in the office market that remains healthy is the relationship between supply and demand. With very little new product being added relative to the size of the owner marketplace, we are in no danger of experiencing the over-building phenomenon of the late 1980's. Furthermore, while the headlines of massive layoffs dominate the news, in fact, the number affecting New Jersey residents is relatively small. The real story is how many of our companies in the state continue to grow and expand. Ironically, onl1y 18 months ago, New Jersey was being compared unfavorably to markets such as Boston and Washington DC because of their strength in the high tech sector. Today, New Jersey's strength is the fundamental industries which act as drivers in our market.

One only need to look at what is happening in Hudson Waterfront, Morris, Somerset and Mercer counties to see how strong demand is. Vacancies are still at historically low levels and while rental growth has slowed, it is still strong. Just ask any of New Jersey's top owners/developers about their vacancies and most will tell you they have none or very little.

At Advance Realty Group, we currently have approximately 500,000 square feet of new office space under construction to help meet market demand. We are typically seeing users that are requiring 40,000 to 50,000 square feet of space on average for regional headquarters or high-level operations. Companies are looking for reasonably priced space with the technological infrastructure they demand and a quality working environment for their employees. New, high-quality developments have become an effective way for companies to recruit and retain employees. We are seeing very strong demand among high-end financial, pharmaceutical and service industries. A good example of the market demand is evidenced in our new Park Place development in Florham Park. While we have just begun redeveloping the 350,000 square feet of space at this campus, we have demand far exceeding the space we have available.

Additionally, an important area of new development activity is at our urban centers. Advance Realty Group has made this an important focus for our company. Currently, we have urban redevelopments underway in Trenton, Bound Brook and Harrison, New Jersey. The state of New Jersey, the most densely populated in the country, has rightfully begun to redirect development to our urban centers where the infrastructure, existing zoning and transportation systems are already in place. There is little doubt that our urban centers hold the key to our continued prosperity in New Jersey.

In conclusion, all of the fundamentals remain strong in New Jersey. The state's diversified economic base, excellent infrastructures and lack of new space all culminates an ideal market condition for continued growth. Advance Realty Group, by virtue of our substantial new development pipeline, will continue to be a major force on the state's commercial real estate market in both the suburban and urban settings.

COPYRIGHT 2001 Hagedorn Publication
COPYRIGHT 2001 Gale Group