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Hudson County is shining star of NJ office market.

Hudson County witnessed significant absorption levels this quarter - the highest in the area - as New York-based companies continued to take advantage of New Jersey's lower rents, cheaper utilities, tax abatements, and lack of an occupancy tax.

The largest transaction of the 1993 second quarter occurred at the Newport Office Tower in Jersey City with the Federal Deposit Insurance Corporation (FDIC) lease of 80,000 square-feet. The FDIC will be expanding its New York City regional operations and will ultimately relocate 300 employees beginning in September 1993. Further, Solar International Shipping Agency, a ship brokerage agency with Far East and United States markets, leased 22,000 square-feet at Newport and will move approximately 80 employees from Manhattan in December 1993. As a result, the overall vacancy rate in Hudson County decreased and now stands at 25.5 percent.

As we enter the second half of 1993, the lack of large blocks of Class-A available space is more evident now than ever before. In fact, the overall Class-A vacancy rate has steadily declined since year-end 1991. Nevertheless, certain markets - like Morris County - continue to-have high vacancy rates and negative absorption. However, with numerous transactions pending and no new speculative construction, Morris County is expected to be much stronger during the second half of 1993.

Construction activity has resumed in the Meadowlands with Liz Claiborne's eight story expansion of its headquarters in North Bergen. With five floors of office space above three levels of parking, this $65 million expansion will employ 1,200 workers. While some employees will be relocating from Secaucus and Moonachie, 300 new positions will be created within the facility upon completion in 1994. The public officials of North Bergen played an integral role in the consummation of this transaction as a $62 million tax break over a five year period was granted.

On a separate topic, the 1990 Clean Air Act continued to receive attention as each state's plan to reduce pollution by 15 percent must be submitted by November. As one of the largest commuter states in the nation, New Jersey is focusing on reducing polutants produced by auto emissions. While there will be more stringent controls on automobiles - such as: tougher car inspections and requirements for cleaner burning gas - the Employee Trip Reduction Program will have the greatest impact on both employers and their employees. Companies with more than 100 workers at a given location will be required to reduce the number of single occupancy cars arriving daily at the facility. Companies may offer incentives to encourage their employees to car pool, utilize public transportation or telecommute, whereby employees may work from home. Penalties of up to $5,000 per month may be assessed for non-compliance with the new program.

In addition, the Federal Transit Authority recently announced a $186 million program to fund the growth of the state's transit operations and capital improvements. This figure includes more than $100 million for system-wide rail upgrades such as track rehabilitation and electric locomotives. This program is a positive step toward the restoration of a sound transportation system that will be necessary to support our economy, create jobs, and attract new businesses. Infrastructure improvement projects include the completion of Interstate 287 later this year which will open up areas such as Morris County to other parts of the state that may have once been considered inaccessible.
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Article Details
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Title Annotation:Suburban Markets; Hudson County, New Jersey
Author:Eisen, Donald P.
Publication:Real Estate Weekly
Article Type:Column
Date:Oct 20, 1993
Words:557
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