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Legislation that aims to repurpose abandoned or outdated commercial properties – or stranded assets – across New Jersey is gaining traction in the state Senate.

The Community and Urban Affairs Committee advanced Senate Bill 1408 March 17. The measure would authorize the conversion of certain office parks and retail centers into mixed-use properties.

Crucial to its implementation, the bill would do this potentially working around local zoning measures. It comes amid a national and statewide housing shortage, particularly for affordable options.

According to the National Low Income Housing Coalition, New Jersey lacks more than 205,000 affordable/available options for extremely low income renters. Last year, the New Jersey Department of Community Affairs released figures for the state’s Round 4 affordable housing obligations, which calls for approximately 150,000 units to address present and prospective needs.

The new legislation would address the lack of available housing and ensuing increased rents and home prices alongside persistent office vacancies. Creating new mixed-used properties – inclusive of housing options within desirable live-work-play communities – can help feed demand from employers and employees.

“Companies are recognizing the value in high-quality offices and premier locations, not just for recruitment and retention advantages, but also to motivate return-to-office strategies,” commented Jacob Rowden, U.S. Office Research Manager at JLL, on the topic for the firm. “And more frequently, these places are emerging in peripheral regions of the urban core.”

Under the measure, to qualify as eligible a New Jersey property must meet certain requirements:

• Office parks must comprise least 50,000 square feet and retail centers must stand at least 15,000 square feet
• The property has had a vacancy rate of at least 25% for at least 18 months immediately preceding the application for development; or, the office park/retail center has suffered an economic downturn with evidence that expenses for the premises have exceeded revenues by 30% or more (over the three-year period immediately preceding the date of the application)
• Have undertaken projects eligible for PILOT (payment in lieu of taxes long-term tax exemption) and deemed to be an “area in need of redevelopment” or rehabilitation

These conversions, provided they meet all requirements, would be considered a permitted use and would not require a use variance.

Democratic Sens. Troy Singleton, 7th District, and Benjie Wimberly, 35th District, serve as primary sponsors of the legislation.

The measure was first introduced in January 2024.

“In recent years, vacant retail and office parks have become eyesores and economic burdens to communities throughout the state,” Singleton, also chair of the Senate and Urban Affairs committees, commented. “By repurposing these outdated, unused spaces into mixed-use developments, we will be able to address the housing shortage and create economic growth opportunities in these areas.”

Speaking during a panel at the recent Rutgers Center for Real Estate symposium, Singleton also highlighted the extended economic benefits stemming from repurposing stranded assets and creating other housing opportunities.

“I’m really cognizant of the idea of the economic multiplier, even more so of what construction means to our economy,” he said.

“We have a housing crisis in our country frankly, but in New Jersey especially, [we] cannot say we have a housing crisis and not use many of the tools that are to alleviate set crisis.”

The Committee advanced the legislation in a unanimous vote.