It’s not always easy to find positive business news in New Jersey, what with our high taxes, political shenanigans and high cost of living. But when you need something to feel good about, our commercial real estate market is usually a dependable place to start.
Nowhere is that more true than Hudson County, which is increasingly finding itself the belle of the ball, with companies in New York City increasingly looking west as they consider their own real estate costs in Manhattan. It’s a fable we’ve long been told would come true someday, and while it’s too soon to say that day has come, the signs are very encouraging.
Take last week’s report from Newmark Grubb Knight Frank, which said surging demand was helping to put a dent in the vacancy rate, now south of 13 percent and with rising asking rents increasing to nearly $37 a square foot. That’s driven in no small part by proximity to mass transit in cities such as Hoboken and Jersey City, which are clearly driving the bus here, and we’ve got a preview of what they might offer in the future. Earlier this month, the Economic Development Authority awarded more than $80 million to companies to entice them to relocate to, or grow their operations in, Jersey City; the largest, Omnicom Group, would bring 415 full-time jobs across the river if the company decides to make the move. Meanwhile, accounting giant EY would get nearly $40 million if it moves a chunk of its operations from Times Square to River Street in Hoboken.
Jersey City, Hoboken are the model; it’s time for other areas to figure out how to replicate their great success.
This, of course, is an example of incentives done right. Those are some big dollars the EDA is poised to hand out, but the kind of jobs that would be retained — advertising and marketing professionals and accountants — would strongly benefit the state’s economy, with new high-wage earners with the spending power to live in all the new high-rise projects being built along the water in Hudson and also coastal Bergen County, such as Fort Lee’s Hudson Lights project.
It’s also why we use this space to discuss the dangers of underinvestment in transportation. While these employees may no longer work in Manhattan, they would obviously rely upon access to the Big Apple to effectively do their jobs — not to mention accountants, who often travel to visit clients. Crumbling rail and road infrastructure will prohibit firms from making moves like this if stunts like the governor’s ill-advised gas tax showdown and road project shutdowns continue.
Can other counties make a play for New York firms? It’s premature to say, but it would be an encouraging win for the EDA if some of these heavy hitters made the leap.