Commercial development has slowed in Hudson County in recent years, but brokers are predicting a gradual increase in late 2013.
Hurricane Sandy severely impacted local businesses, but many are digging out. Many commercial projects are slated for 2014, bringing jobs and money to the county.
Commercial real estate brokers Cushman and Wakefield released a report at the end of 2012 that offered a projection of the year and upcoming vacancy.
“While 2012 saw demand lag historical averages in the submarket,” the report said, “we expect the Hudson waterfront to slightly rebound as 2013 progresses. With some uncertainty behind us, demand should pick up steam during the latter part of the year with asking rents projected to record an uptick. However, large corporate consolidations remain a challenge, as Morgan Stanley will vacate more than 300,000 sq. ft. at Harborside Financial Plaza [in Jersey City] next year, causing a spike in vacancy.”
Sharing is caring
One way to combat an atypical year in commercial development is to offer an atypical work space alternative. The concept of a “shared” office work space is a big trend. Two examples are Mission Fifty in a Hoboken office building in the city’s southwest corner, and Sackman Suites on Bergen Avenue in Jersey City.
Mission 50, started by Hoboken Chamber of Commerce President Greg Dell’Aquila, is a flexible, shared office environment for small businesses, entrepreneurs, and freelancers, designed to foster productivity and collaboration. Located in the penthouse of the Hoboken Business Center, Mission 50 provides its members with daily to monthly leasing options and a choice of private and shared workspaces.
“In 15 or 20 years, this will be the future,” said Dell’Aquila. “As technology continues to flatten our ability to communicate, it allows us to work and do business anywhere with anyone. A co-worker might say ‘My logo was designed in Argentina, my bookkeeping is done in India, my marketing in the Phillipines and my content is written by someone across the US while I store all of my files in the ‘cloud….’ ”
Dell’Aquila also noted that exorbitant rents are another advantage to shared office space. “Typically in Class A buildings in Class A locations, executive suites can be expensive,” he said. Dell’Aquila said he is currently searching for two locations ranging from 15,000 to 30,000 sq. ft. in Hoboken and Jersey City to open in 2013.
“Our shared office facility was born with the mind set of offering a refined professional work space at an affordable price,” said Kelly Formisano, facilities manager for Sackman Suites in Journal Square. “The Suites cater to entrepreneurs and small businesses seeking to establish themselves in a professional office environment. In this time many businesses, especially just starting out, need to be frugal with their out-of-pocket expenses.”
Office towers to come
Still, some developers are dreaming of office towers in their upcoming mixed use projects.
Hoboken recently released a 163-page study of the northwest end of town and its need for redevelopment. In that area, the Rockefeller Group owns quite a bit of property under the name Park Willow LLC. In 2010, officials said that Rockefeller Group had plans that included an office tower up to 40 stories tall.
Though the Rockefeller Group recently declined to comment on exactly what they hope to build there, Julie Roginsky said, “We look forward to working collaboratively with the community to ensure that a vision for a revitalized northern end of Hoboken becomes a reality. As the city moves forward with its plans to enhance this gateway to Hoboken we welcome the opportunity to participate and contribute to the process.”
In the south end of town, New Jersey Transit has proposed a couple versions of a mixed-use project on their 52 acres of rail yards stretching from Hoboken Terminal down Observer Highway to Marin Boulevard. Their original plan proposed office tower heights of 70 stories, a size that was quickly shot down by the city administration. In 2012, New Jersey Transit scaled down their plan to a 27-story commercial building maximum.
Recently, after months of silence on the project, New Jersey Transit reemerged with a revised plan for what they coined “The Crossing.” In their recent presentation at the Hoboken Elks Club, Brent Jenkins, development director of LCOR (New Jersey Transit’s developer) estimated that development at the south end would result in an estimated 6,500 permanent new jobs and an estimated $50 million per year of additional retail spending. The plan would include four office buildings, if approved.
In November, ground was broken on the south waterfront by city officials and Pearson, the world’s largest learning company, for a new 14-story, 500,000 square-foot retail and office building near the W Hotel, known as Waterfront Corporate III. Waterfront Corporate III is the third and last phase of SJP Properties’ 1.5 million-square-foot, three building office and retail complex. Pearson will relocate over 900 jobs to the new building.
Hotels in Jersey City
In Jersey City, at least two new hotels will be erected in 2013. At a City Council meeting on Feb. 13, legal counsel for Marbella Tower Urban Renewal Associates South LLC discussed their proposed project downtown between an existing residential tower (Marbella Apartments) and another that is proposed. The hospitality brand was not yet named.
Concord Hospitality Enterprises Company, which owns and operates 84 hotels around the country, including five in northern New Jersey but none in Hudson County, won the rights to transform the condemned One Exchange Place property into a 13-story, 247 room hotel. Concord Hospitality Enterprises Company’s portfolio of hotels includes such brands as Courtyard, Courtyard by Marriot, Fairfield Inn, Residence Inn, Renaissance, MainStay Suites, Hilton Garden, Doubletree, and Sheraton. The hotel is expected to open for business in 2014.
Chris Brenner of Concord Hospitality Group could not be reached for comment by press time.
In other hotels, toward the end of last year, it was reported that the U.S. Post office was discussing, with a private developer, erecting a hotel on its property near Hoboken’s south waterfront. City officials said they didn’t know much about the proposal yet.
Just outside the county lies the massive American Dream project. Gov. Christopher Christie said in February during a press conference in Little Ferry that construction on the project, formerly Xanadu, will resume this quarter.
The $3.7 billion project, on Route 3 by the MetLife Stadium, includes a mega mall, entertainment center, and indoor ski park.
“I am convinced that in the first quarter of 2013 construction will start on American Dream,” said Christie. “I am convinced that will happen.”
The once-private project stalled before completion in 2009, already $1.9 billion in the hole. The state of New Jersey resuscitated it, along with Triple Five, who developed the Mall of America in Minnesota. The project is set to include a live performing arts theatre, multi-screen, luxury movie theatre, an indoor ski and snowboard park, observation wheel, indoor amusement park, indoor water park, indoor skydiving, indoor skating rink, indoor bowling, a Legoland Discovery Center and miniature golf course.
Companies on the move
In September, Goya Foods Inc. broke ground on what will be its new 615,000 square foot headquarters on County Road in Jersey City. Merging some operations from the existing two headquarters in Secaucus and West Bethpage, N.Y., the site is expected to create about 80 new jobs and 150 temporary construction jobs.
Additionally, Denver firm CoreSite Realty Corporation purchased a two story, 283,215-square-foot industrial property in Secaucus for $18.4 million that it plans to convert to a data center, according to an announcement made last week by commercial real estate services provider HFF, which closed the sale of 2 Emerson Lane.
HFF marketed the leasehold interest on behalf of the seller, Hartz Mountain Real Estate. The facility at 2 Emerson Lane is located on a 10-acre site about 10 minutes from midtown Manhattan in the Meadowlands submarket of Secaucus. The property is close to the New Jersey Turnpike, Interstate 495, Newark Liberty Airport and Port Newark. The two-story industrial property has office and showroom space plus a six-story, 634-space parking garage. It was purchased vacant.
Law firm Genova, Burns, Giantomasi & Webster law firm announced this month that they are expanding to Jersey City. The firm, which is based in Newark, has offices in Red Bank, Camden, New York, and Philadelphia. The new location will have 10 attorneys in the new 30 Montgomery Street office.
“I think the proximity to NYC with Jersey City being kind of the sixth borough of New York, is one reason we are there,” said Brian Kronick, managing partner. “That location gives the firm the ability to attract young attorneys and associates who either live in Manhattan or Hoboken or Jersey City. This makes it easier for them to get back and forth to work, and it meets with our mission of being the firm to go to if you want connections between New York and Philadelphia.”
A residential development called Avalon Bay opened in North Bergen on Kennedy Boulevard and 56th Street in mid-2012, offering 164 residential units and 17,000 square feet of retail space. This retail space is expected to bring jobs into the area.
Gus Milano, managing director of Hartz Mountain Industries, one of the largest privately-held real estate development companies, said, “Though there are substantial vacancies, there is just very little new retail development. I think that that could ultimately change, but I’d be very surprised if any substantial commercial projects went up in 2013.”
In Secaucus, several outlet stores closed last year, but others moved to new space. Children’s Place relocated to 210 Meadowlands Parkway and reopened for business in December. Hartz Mountain is also in negotiations to relocate Gymboree, Van Heusen, and Bass from the Harmon Cove Outlets on Fifth Street to 210 Meadowlands Parkway. Lenox and East West Bridals was relocated within the Harmon Cove Development and are now open for business.
In addition, the Perfume & Cosmetic Outlet and Candyland were relocated to the Plaza at Harmon Meadow in Hartz’s mixed use development.
Amanda Palasciano may be reached at firstname.lastname@example.org.