Fort Lee becoming hub of commercial activity.

By Steven A. Frank Senior Director CB Commercial Real Estate Group, Inc./Hackensack

As many New York-based companies seek to find affordable real estate in a strategic location and growing market, many are looking just over the George Washington Bridge. And the trend is catching on like wildfire. One of the most active commercial real estate markets to hit the Tri-State area in recent months is none other than Fort Lee, New Jersey.

While the northeast office real estate market has experienced minimal improvement, office buildings in Fort Lee have gone against the grain and have been able to successfully release available office space quickly.

Over the past two months alone, the vacancy rate in Fort Lee has dropped three percent to 17.5 percent in early April. Comparatively speaking, the vacancy rate for all Northern New Jersey markets in the first quarter of 1994 held at 20.5 percent. The vacancy rate in Fort Lee is expected to continue its downward trend as the months continue.

Of the 12 major office buildings in Fort Lee, which total more than 1.8 million square feet, significant space is available in only two buildings: Fort Lee Executive Park (located at 1 and 2 Executive Drive) and Fort Lee Corporate Center (located at 2115 Linwood Avenue). If these two buildings are taken out of the occupancy equation, the vacancy rate plummets to a mere 4.8 percent. These two buildings represent more than 225,000 square feet of available space.

The strength of the Fort Lee market is apparent by the large number of Asian companies moving to the area, particularly several Korean companies which have invested in Fort Lee office buildings in recent months.

Most notable, and recent, is the Grant Building at 2160 North Central Road, which was purchased at the beginning of February by Hyosung (America), Inc., one of the largest Korean import and export companies. Other major Korean company building owners in the Fort Lee area include Hyundai, Samsung, Dae Woo and Dongkuk.

Another Fort Lee building, Parker Plaza, owned by the Jack Parker Corporation, has experienced a significant amount of activity over the past few months and is currently 97 percent leased. In fact, 1993 represented the third year in a row that Parker Plaza was occupied by a level of 95 percent or greater. Over 15 lease transactions, totaling over 70,000 square feet, have been completed at Parker Plaza over the past 10 months.

A 19-story, 300,000 square-foot, Class A office tower, Parker Plaza distinguishes itself not only by its impressive design and high quality offices but also by the financial strength of its ownership. The Jack Parker Corporation has established a highly respected record in the development of luxury office and apartment buildings in the New Jersey/New York marketplace.

Some of the more recent leases completed in Parker Plaza include the law firm Verde, Steinberg & Pontell; the Paige Company, a distributor of corrugated boxes; the Rampart Agency, an insurance brokerage company, and two international trading companies: Daicel (USA), Inc. and Machimpex America, Inc.

As Fort Lee continues to grow, companies are scrambling to find available space. The Nissin Building, located at 2125 Center Avenue is another major building which has filled its occupancy level to maximum levels in recent years, having enjoyed an occupancy level of greater than 90 percent over the past three years. The building is owned and partially occupied by Nissin Foods, a Japanese food company. The building caters to small tenants; a typical 700 square-foot space has over 20 feet of windows, while a 3,000 square foot tenant can enjoy two comers and magnificent views of the George Washington Bridge. Like Jersey City, located along the New Jersey Waterfront, Fort Lee has welcomed a steady stream of companies leaving New York/Manhattan who are looking for a less expensive way of life as well as a convenient location to other businesses in the Tri-State area. CNBC, the television network, recently renewed its lease in Fort Lee while relocating an additional 50,000 square feet out of New York City, bringing its total to more than 120,000 square feet.

It has become evident over the last few years that Fort Lee office buildings thrive in both good and bad economic times. In good times, companies within Fort Lee seek to expand their operations in surrounding neighborhoods. In bad times, companies looking for a strategic business location and a less expensive way of life can find just that -- just over the George Washington Bridge.

(Steven M. Frank, senior director of CB Commercial's Hackensack, New Jersey office, has completed over 50 transactions in Fort Lee over the past three years.)