NAIOP New Jersey Panel: Non-traditional Entities are Driving Real Estate Development

Jersey City, NJ, June 15, 2015 (Newswire.com) - While office and industrial properties are still being built, bought and sold, and leased, non-traditional business sectors have moved to the forefront in terms of current real estate activity. And mixed-use, particularly in urban settings, as well as high-end residential, are part of the equation as well. That was the message delivered by a panel of officials at NAIOP New Jersey’s June Chapter Meeting at the Maritime Parc in Jersey City.

In the overview and relating to the meeting’s setting, “what Jersey City has done is sensational,” said moderator and chapter President Clark Machemer of The Rockefeller Group. “Tell us about Jersey City,” he invited Deputy Mayor Marcos Vigil. In response, Vigil provided a video presentation on the “Jersey City – Make it Yours” campaign, focusing on diversity, ongoing real estate development, and what the city has to offer its residents and businesses.

"Commercial real estate will thrive where young talented people want to be."

Michael McGuinness, CEO, NAIOP New Jersey

“Government can be a positive force,” said Vigil, noting ongoing development on the Hudson Waterfront, Journal Square, as well as residential development on the city’s west side. “What’s now driving the real estate market here is residential,” he said. “We’ve leveraged our location on the waterfront and proximity to New York City, and are now focused on the neighborhoods further inland. We’re listening to people and reacting to what they’re looking for.”

“What’s happening is that the city has grown organically, and we want to be part of that,” said Dr. Sue Henderson, president of New Jersey City University. “We’re working with private developers to create housing and retail on the west side of campus, and working closely with the Mayor’s office on incentives for developers.”

ACADEMIC PROJECTS

Among the academic projects are a new academic building on campus and, working with Mack-Cali, a business school on the waterfront. The proximity of the business school is particularly interesting: It’s directly across the river with views of Lower Manhattan and Wall Street, Henderson noted.

Also on the academic front, “it was important to re-establish Rutgers University’s position as a focal point in New Brunswick,” said Christopher Paladino, president of DEVCO, that city’s economic development organization. He noted that the same effort applies to Rutgers-Newark. The result in New Brunswick has been $330 million in on-site development, including 600 residential units and the “first new academic building since 1960.” And another 1.5 million square feet of development is “on the boards.

“These projects are creating a state-of-the-art environment for students,” said Paladino. “We’re serious about keeping the best and brightest students in New Jersey.”

Noting his city’s diversity, “we are looking at international investors and international students,” said Vigil. “We continue to bring students in from around the world,” added Henderson.

HEALTHCARE AND MEDICAL

On the impact of healthcare and medical, “what’s going on?” asked Machemer.

Noting an “evolution of science and technology requirements,” hospitals are “no longer centric to healthcare,” said Mark Sparta, executive vice president of Hackensack University Health Network (HUHN). That’s creating real estate activity in the development of medical facilities, because “more can be done in an outpatient setting. The focus is on health management and providing better access to care, including urgent care.”

Sparta termed the trend “the retail-ization” of healthcare.”

In terms of development, HUHN recently completed a 112,000-square-foot fitness center, and is teaming up with Seton Hall University to open New Jersey’s newest—and first private—medical school on the former Hoffman-LaRoche site in Nutley.

Where is the funding coming from for the latter project? “We’re looking for public support, philanthropy, and private investors,” said Sparta. “We’re pursuing a lot of different, innovative strategies.”

The arts are also a factor in real estate activity. “Executives at Johnson & Johnson started that process a long time ago,” said Paladino, noting that plans are in the works for a new $36 million theater to replace New Brunswick’s George Street Playhouse, a mixed-use project that will include high-end residential. “The private sector has been a real help in building the theater.”

“Mixed-use is what residents want,” said Vigil.

There has been much talk about new casinos outside of Atlantic City. “Is gaming part of the equation?” asked Machemer. “We are supportive of any endeavor that will bring jobs and economic vitality, and will use Jersey City’s resources,” said Vigil.

What’s the perception of New Jersey, and what is needed to generate and maintain commercial real estate’s momentum?

“We’re perceived as the ‘sixth borough,’ and we remain active, on the move and things are happening,” said Henderson. “That is having a distinct impact on real estate.”

One key ongoing requirement, according to Vigil, is “investment in transportation and infrastructure—where we are now and for the future.” A key factor for Jersey City and Hudson County, of course, has been the light rail system.

“Jersey City is our role model,” said Paladino, concurring on the importance of investing in transportation and infrastructure.

“Commercial real estate will thrive where young talented people want to be, and all of these factors come into play,” said Michael McGuinness, CEO of NAIOP New Jersey. “We’ve covered a wide range of topics in our programs, and appreciate the insights provided by our panel today.”