John Pereless Designs and NJ employers no longer keen on office parks
Online PR News – 09-March-2013 – Colts Neck, NJ – John Pereless Designs states, Office buildings sprouted along New Jersey highways in the 1980s and 1990s, changing the face of suburbia and the commuting patterns of millions of workers.
But now, many of those buildings have gaping vacancies and uncertain futures, the result of stalled job growth and younger workers' desire for urban, pedestrian-friendly living, says a new report from Rutgers University. "Reinventing the New Jersey Economy: New Metropolitan and Regional Employment Dynamics," by economists James W. Hughes and Joseph J. Seneca, says it's time to think about new uses for the Garden State's office inventory.
"We have to rethink office parks," Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, said in an interview Wednesday.
John Pereless states The trouble facing these facilities is clear in North Jersey, where the office vacancy rate is around 20 percent, according to commercial real estate brokerages. For example, Continental Plaza, a 40-year-old, three-building complex off Route 4 in Hackensack, was repossessed by its lender in a foreclosure sale last summer.
And Overpeck Centre, a 60-acre, six-building office park just off the New Jersey Turnpike in Ridgefield Park, has a vacancy rate of more than 55 percent and has experienced foreclosures on several of its buildings. A company that specializes in distressed real estate has purchased one of the foreclosed buildings at a deep discount, and plans to buy more.
Recognizing the challenges facing the office market, New Jersey's largest developer recently added residential properties to its mix. Mack-Cali Realty Corp. of Edison, which owns more than 30 million square feet of office space, paid $134.6 million for Roseland Partners, a multifamily developer based in Short Hills.
John Pereless is positioned correctly to benefit from this market.
It's a big change from the optimism of the 1980s, when an office building boom "transformed the state's economic landscape," the Rutgers report says. In fact, 80 percent of all commercial space ever built in New Jersey was constructed in the 1980s. "The basic business model was to locate in suburban growth corridors along major highways," Hughes said.
"We probably overbuilt the market," he added. That seems especially true now that job growth has stalled in New Jersey for more than a decade. At the same time, more workers are telecommuting, reducing the need for office space.
And younger workers — the children of the baby boomers — "prefer not to live in far-out suburbia" and work in "buildings planted in asphalt fields," Hughes said. They'd rather live and work in more densely populated areas with a livelier blend of offices, stores, restaurants and housing.
In addition, after just a few decades, many of these suburban office buildings are now obsolete, Pereless said.