New Jersey retail road map altered.

The start of '93 was wrought with concern. After a strong upsurge in retail sales during the '92 Christmas season, January retail figures were anything but encouraging. The first quarter of '93 brought a state of flux for retailers, and property owners saw many of their tenants, both chain stores as well as Mom and Pop stores, close their doors. Layoffs were rampant among blue and white collar workers, and there seemed little hope of an improvement in the immediate future for job opportunities. Yes, the word "bleak" may have been an understatement as the '93 year began.

Starting in mid '93, the New Jersey retail scene began to change. Landlords who found themselves with vacancies became more aggressive in pricing their retail properties and lower rental rates created opportunities for chain stores that were previously unable to make sensible economic deals in New Jersey. The retail scene was also altered by layoffs among white collar workers. Many employees who lost their jobs examined the possibility of becoming entrepreneurs, and some opened private businesses rather than accept a job that might lead to another layoff in the future.

In mid '93, the retail road map in New Jersey changed and evidence can be found along the various major retail corridors - Route 1, Route 9, Route 10, Route 46, Route 4, Route 35. These retail corridors are divided into prime and secondary areas, with more active retail sites in the prime areas. A drive along these roads reveals that vacancies still exist, but progress has been made to fill many of the vacant buildings, even in the secondary areas that are slowly but surely finding tenants.

Looking ahead to 1994, the retail market appears to be improving. Many major chains, like Home Depot, Office Max, Sports Authority and Price Wholesale Club, have opened new stores and plan additional openings in New Jersey in 1994. These giant retail units will bring shoppers out and breathe new life into smaller chains and Mom and Pop stores. The retail market has also been assisted by major food stores that are replacing 20,000 square foot stores with giant supermarkets from 40,000 square feet to 75,000 square feet.

New construction has surfaced in many major areas, however new projects are no longer being built on speculation. On Route 10 in the Livingston area, a brand new project is being readied to open in 1994. Key players in this 200,000 square foot center include Pace Wholesale Club, Office Max, Sports Authority and other well known chains. At the Livingston Circle on Route 10, a new center comprising approximately 150,000 square feet just opened, anchored by Grand Union. At the time of opening over 95 percent of the space was leased. Tucked off the highway on Route 1 in Linden, NJ, a major center recently held its Grand Opening. Anchored by Caldor, a 50,000 square foot supermarket and many other chains, this center is just about 100 percent leased. So although it is not free-wheeling days of the past, projects that make sense are going forward.

Channel Lumber, and other chains that have experienced difficulties in the past, have reorganized and set a new direction for themselves. These chains are again exploring new locations and are ready to make their mark in the future.

Retail brokers, retail property owners, future entrepreneurs as well as retail chains should be alert to the opportunity that 1994 potentially offers. Here at Weichert Commercial, our Retail Department flourished in 1993. A large number of transactions were completed in this past year and many deals that began in 1993 will come to fruition in 1994.

The biggest challenge faced by any commercial real estate brokerage company is to keep their finger on the pulse of the changes in retail attitude and set their direction accordingly. In my opinion, a positive attitude about the opportunities in 1994 is necessary to succeed, and many of the signs I read indicate that such an attitude is warranted.

Milt Meyerson Senior Vice President & Retail Director Weichert Commercial, Realtors.