NJ prospects looking good.
Following the state's strategy of pushing development to the inner cities and urban areas via the state plan, there is tremendous activity in places like Harrison, Newark, Perth Amboy, Jersey City and Hoboken, as well as Morristown. Other areas along the Jersey shore are also undergoing an exciting renaissance. The state's leadership is additionally telling the development community that they are attempting to streamline the approval process, thereby creating more development opportunities as well.
Other sectors that are hot include retail and retail development. Since NJ leads the nation in per capita income, national retailers continue to pour into the state at an unprecedented rate. With demand so strong, many developers are turning to converting older industrial facilities to retail space. Of course, as everyone knows, NJ is recognized as one of the top industrial markets in the entire country and this market segment shows no sign of abating.
As the state's vacancy rate remains stable and in most cases declining, tenants are still afforded many excellent leasing scenarios. There have been many large deals that have been making headlines in the office market of late, but the real story is that we are witnessing growing tenant demand across the board. While many developers are in strong positions, tenants do have the opportunity to negotiate rent, amenities and T.I. allowances.
Since interest rates are still at historically low levels and with the inconsistency of the stock market, private investors continue to be drawn to commercial real estate in record numbers. Many invest through REITS, private direct ownership or through funds that target high net worth individuals. We expect that returns for apartments, retail and industrial will continue to lead the way. The office market is currently perceived as being overheated and overexpansive in a lot of cases but deals are being made. Investors such as pension funds, overseas investors and hedge funds are still very active on the investment team.
In conclusion, New Jersey's position being situated halfway between New York City and Philadelphia/Washington, D.C., its outstanding labor pool, Fortune 500 corporate base and excellent infrastructure positions it as one of the strongest commercial real estate markets in the country. One concern is with our prices for housing going through the roof that we can maintain our competitive advantage as long as it remains too expensive to live in the state. However, it does appear that the state's desirability will not be affected in the short term.
MICHAEL WALTERS EXECUTIVE VICE PRESIDENT, NAI JAMES E. HANSON
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|Title Annotation:||New Jersey|
|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Oct 27, 2004|
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