Rehab of antiquated facilities answer to lack of space in NJ.

In my opinion, regardless of what happens on Wall Street, New Jersey's real estate market will continue to see diminishing availabilities for the next several years. During the next couple of months, for example, large blocks of currently available space on the Rt. 78 Corridor will fill up upon the completion of a number of pending major deals.

Even Newark, which seemed like the last stronghold, is experiencing a tremendous demand as companies are shifting space searches from Jersey City (where available space is all but gone), and taking advantage of the high quality buildings and proximity to the best transportation system in the state. More recently, 88,000-sq. ft. of space -- the last large block of available space -- was leased at 744 Broad Street, a building recently acquired by Cogswell Realty Group in deal arranged by Newmark. The Matthew Bender Corporation is moving from New York to this special building. As a result of this major deal, there is no large Class A or B office space available remaining in Newark.

There is little doubt that new development throughout the state is required to meet the space needs of companies searching the New Jersey market. However, due to the tightening capital markets in areas other than Jersey City and Rt. 78/287 Corridor, investors and developers are hesitant to build entirely on spec. A large deal will be needed for any other new development to break ground.

Short term, the answer to New Jersey's space woes lies in the renovation of old antiquated buildings. Properties once considered beyond use just a few months ago are being rehabbed throughout the New Jersey. A perfect example is the reuse of the former jewelry manufacturing facility located at 375 McCarter Highway in Newark. The property is being purchased by New York-based JEMB Realty in a transaction arranged by Newmark. JEMB plans. on building on its successful repositioning of such properties as the New York Telcom Exchange@75 Broad Street and the Herald Center retail complex in Manhattan by transforming this excellent building into a telecom hotel. Many buildings that a year ago most believed would be torn down have been rehabilitated into successful telecom hotels and other such uses.

The adaptive reuse of formerly antiquated product seems to be the only logical step in providing adequate office space to the growing number of tenants entering the New Jersey Market. However, we must keep in mind the rehab of these properties is just' a short-term solution to a growing problem.