From start-ups seeking flex space to major corporations that are expanding or relocating an entire office, finding a modern office space in the northern New Jersey commercial market is always a challenge.
Barbara Gross, Sheldon Gross Realty
Overall, it’s a very mature environment, with many older structures and corporate parks lining the highways, and with limited new development. As an example of the resultant complexities, let’s look back to the 1980s and ’90s, when the Route 280 corridor (primarily in western Essex County) was bustling.
Office parks had few vacancies, and rental rates were among the highest in the state. Until relatively recently, only a few companies owned the majority of these buildings, thereby “controlling” who went where and at what rental rate. But over time, these owners have been selling the individual buildings in parks to a variety of new owners, resulting in a more competitive marketplace. It’s refreshing to see the new owners investing in renovations and adding new amenities.
However, responding to a younger generation coming to or returning home to New Jersey and demanding greener, 24/7 communities, developers are demolishing some of those older office buildings and parks.
Projects are before planning boards now that would replace mature structures with mixed use environments that include offices, hotels, restaurants and retail — plus affordable and other housing options — all in an effort to develop smaller, more walkable communities. We’re seeing this on the Route 280 corridor now, particularly on Executive Drive in West Orange and in 280 Corporate Park in Roseland.
Amenities, Coworking
Amenities is the name of the game. It’s no longer enough to simply have a “grab & go” café — now, there are larger cafes with more varied selections, including many healthy alternatives. Fitness centers with personal trainers are a popular amenity, as well as coworking areas serving cappuccinos.
More unusual but specialized amenities include private spaces for a massage or open areas with art classes to encourage teambuilding. Outside, we’re seeing electric charging stations in parking spaces closest to the building, solar-covered parking and bikes for riding during the day.
Coworking spaces are becoming a significantly more popular work environment, which means not simply renting a private office for a week, month or year, but instead utilizing large “benches” of open seating, incorporating collaborative areas, and also entertainment both for start-ups and well-established companies.
A wide range of food is typically featured, as are ping pong tables, “telephone booths” from which to make private phone calls, and
“happy hours” — yes, with alcohol — to encourage members of different companies to interact, in addition to the more traditional services.
Interconnectivity, Transit
We also are observing the degree to which we’re all interconnected, not just by social media and smart phones but because we (and sadly, viruses like COVID-19) can travel so quickly from one place to another.
Companies large and small are increasingly suggesting that employees work from home, at least part time, and are even pushing video conferencing as a more efficient alternative to some international travel. This demands a sophisticated, high speed internet provider. Additionally, companies are building out office space in one of two ways, either by decreasing their total square footage on the assumption that employees only come to the office occasionally, or by creating bench-style work areas where employees work alongside each other in a more open and collaborative, but compressed
environment.
Unfortunately, this updated style makes demands of traditional
buildings beyond the purpose for which they originally were designed, including more restrooms, parking spots and HVAC capacity. Some companies are seeking locations near mass transportation to reduce the need for parking, but these “transit villages” are few and far between in
New Jersey.
Urban areas are enjoying a resurgence in popularity, and northern New Jersey is no exception. Singles, young families and even the Baby Boomers are all moving in. As a result, commercial space, both office and retail, is benefiting. A good example is Morristown. Prior to the 1990s, it was a thriving city, benefitting from a proud Revolutionary War history (yes, George Washington slept there) and from being the county seat for Morris County. Then, both AT&T and Macy’s left town ttand other companies followed suit shortly afterward, resulting in years of significant commercial vacancies.
The city’s designation as a “transit village” with the Midtown Direct N.J. Transit station breathed new life into the community. Apartments sprung up around the station and South Street, large office buildings filled up again, there were new office and residential developments, and The Green came back to life.
Tired areas are now being renovated and older brick office buildings are being restored with exposed brick and other styles 21st century tenants demand. One great example is the M Station, very close to the train station. A strip mall will be demolished, and replaced with a 100,000-square-foot, state-of-the-art office building, preleased to Deloitte. This also will feature walking promenades and upscale restaurants.
The bottom line is that many existing office buildings are being renovated with a wealth of new amenities or being “reborn” with different uses while others are being demolished so properties can be used in ways more relevant to the times. With demand increasing in these areas, vacancies are down and, of course, rental rates are increasing.