N.J. market health linked to NYC. (Insiders Outlook).
Overall, New Jersey real estate reflected the weakening national economy during the third quarter of 2001. Although the diversity of industries based here helped us stay ahead of other national markets, leasing slowed throughout the state. The exception occurred in the last two weeks of September, when a flurry of activity resulted from Manhattan-based corporations that needed immediate solutions to regroup their businesses and their people. And while some displaced companies filled vacant space along New Jersey's Hudson Waterfront, many found opportunities to remain in New York. At the same time, a great deal of "shadow space" was added to the market, particularly large blocks of corporately held space.
As we move forward, we expect the cycle to continue downward, with less demand in most sectors, except the pharmaceutical/life sciences industries, which continue to actively expand in the state. We also anticipate a second wave of tri-state suburban leasing as companies rethink their long-term real estate strategies. Countering the trend toward consolidation during the past several years, businesses will likely consider the importance-of back-up operations. We do not foresee an exodus from Manhattan, but we do project the increased establishment of complementary suburban offices in the months ahead.
Many professionals in the field have also observed companies seeking space suitable for data center operations. Clearly, the affected companies that regrouped the fastest following the World Trade Center collapse were those with the best data recovery operations.
As we head toward the end of 2001, the events of Sept. 11 and the world instability will continue to be the most influential factors impacting business and, in turn, New Jersey's commercial real state industry. And while we all wait for the corporate and residential populations of this area to regain strength, we are focusing on the renewed sense of unity in New York and New Jersey as a positive and mutually beneficial outcome. of these uncertain times.
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|Title Annotation:||New Jersey real estate market linked to New York City economy|
|Author:||Eisen, Donald P.|
|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Dec 5, 2001|
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