Great times for New Jersey's waterfront.
According to Patrick Murphy, Insignia/ESG executive director in the firm's New Jersey operations, these brand-new Waterfront buildings, which are an upgrade over older properties in Downtown Manhattan, are attracting today's modern generation office user.
"Five major office developers are responsible for most of the new construction on the Gold Coast," Murphy said. "These developers are also responsible for constructing hotel and residential properties in the area as well. LeFrak's 567,000 square-foot office tower is near completion and 100 percent pre-leased. This has been the first speculative building the waterfront has seen since the 1980's. The company broke ground for their next project, an 800,000 square-foot speculative building, in May.
Mack Cali Realty recently announced plans for development of three new buildings totaling 900,000 square feet at the Harborside Financial Center in Jersey City. These include a 150,000 square-foot office building being built for the New York City-based securities firm Waterhouse Securities, a Hyatt Regency Hotel, and a 440,000 square-foot parking garage.
Hartz Mountain bought two parcels known as 70 and 90 Hudson Street from Colgate. The first building, 90 Hudson Street is a 400,000 square-foot office tower which is almost completely pre-leased. Name brand tenants such as Paine Webber, US Trust, Cigna, Lord Abbott, and National Discount Brokers are filling these properties, as tenant demand emanates from Manhattan.
Although tenancy along the Waterfront is predominantly from the financial services industry, growth in tenant demand also stems from existing financial firms in New Jersey. "Favorable state economic incentives from BEIP (Business Employment Incentive Program) and the UEZ (Urban Enterprise Zone) have also contributed to the robust demand," said Murphy. "Transportation via PATH trains and the light rail system, which will run from Bayonne to Jersey City, make accessibility to the area and New York City easier than ever."
Private office developers have been the drivers of new development in the area, with REITs taking a more cautious approach, although Mack-Cali also has plans for another major Waterfront development project, American Financial Exchange.
Residential demand has also peaked causing a flurry of development along the Waterfront. Over 2,000 units are being constructed in Hoboken, with more planned. The availability of land at cheaper costs than in New York has been the key.
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|Title Annotation:||The Boroughs/Suburban Markets|
|Publication:||Real Estate Weekly|
|Date:||Jun 9, 1999|
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