With the new year upon us, we had 12 of New Jersey’s top commercial estate experts offer their predictions for 2014.With the new year upon us, we had 12 of New Jersey’s top commercial estate experts offer their predictions for 2014.
But don’t turn the page just yet: here are five of the biggest real estate stories from 2013.
The buzz about this began well before 2013 was under way, and it took lawmakers nearly the entire year to revamp the state’s business and development incentives.
But it was worth the wait if you ask real estate leaders across New Jersey.
Passage of the Economic Opportunity Act in September allowed the state to unfreeze a pipeline of projects that had sought subsidies under the wildly popular but expiring Urban Transit Hub program. And it took just three months for the Economic Development Authority to begin making awards, as applicants lined up to reap the benefits.
It took even less time for landlords and developers to market how the new incentives can help fill vacant office space across the state.
A tale of two office markets
While Bill de Blasio was campaigning on “a tale of two cities,” the divide between the haves and have-nots of New Jersey’s office market seemed to widen this year.
Vacancy in the state continued to hover around 20 percent, and the job growth needed to bring that down was hard to find. That meant tenants took advantage and traded up, sending even more obsolete space to a market that’s already glutted with 30-year-old office parks.
Those buildings looked even more ancient compared to many of the sleek new headquarters that New Jersey companies opened in 2013, including Panasonic and Bayer. The latter is one of several gut rehabilitation projects that shined this year, proving that those developers who are willing to spend the money will continue to thrive.
Mack-Cali multifamily spree
The Edison-based REIT certainly isn’t the first commercial landlord to make a move into multifamily, but has anyone else made this much of a splash along the way?
Fresh off its acquisition of Roseland Property Co. in 2012, Mack-Cali wasted little time dumping non-core office buildings — an estimated $420 million worth through July — and stockpiling cash for its new residential business. And Roseland’s rich development pipeline helped keep the headlines coming for its new parent company, as did a steady stream of apartment acquisitions over the past 12 months.
It was two months into 2013 — less than a year after its opening — when New Jersey’s newest casino officially crapped out.
Owners of the $2.4 billion megaresort filed for bankruptcy in February, hoping to shed roughly two-thirds of its $1.5 billion debt load and doing nothing to help revive the slumping Atlantic City. And the latest twist in the Revel saga coincided with a dramatic about-face — from its “resort first and casino second” mentality to the hard-to-miss “GAMBLERS WANTED” campaign.
If that wasn’t enough of a whirlwind 12 months, 2013 came to a close with rumors that Hard Rock International was considering whether to buy the struggling property.
The multifamily craze was almost ho-hum by the time 2012 was through, so it was time for state’s industrial sector to steal the spotlight.
And it did, thanks largely to a surge in demand for big-box space along the New Jersey Turnpike: CBRE earlier this month tracked “more than 20 active occupiers searching for 300,000 square feet or greater” in the state. Such demand fueled a spike in large investment sales in the industrial market — not to mention a new wave of speculative construction.
Whether it’s from the e-commerce explosion or an expected growth in port activity, it seems new warehouse and distribution space can’t be built quickly enough.