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One-Quarter of NJ Office Space is Vacant

7-4-14

By Brenda Flanagan
Correspondent

Available for rent: enormous office building — six stories, with mirrored windows, acres of lawn, lakes full of geese — in upscale, suburban Monmouth County, formerly home to Bell Labs. Inside — millions of empty square feet now owned by Somerset Development.

“This is the size of a football field right here. And we have another football field and another football field,” said Somerset Development President Ralph Zucker.

Bell’s headquarters boasted state-of-the-art technology 25 years ago. But the building aged, its non-digital infrastructure grew obsolete. Bell and corporations like it — the backbone of New Jersey’s economy — shifted their focus to other states. Jersey’s signature Big Pharma industries — Roche and Merck at Whitehouse Station — also folded campus-sized facilities.

“Suburban growth corridors are no longer cutting edge. They’re last year’s growth model. We are now in a ‘post-suburban’ economy, a post-suburban office era,” said James Hughes, dean of Rutgers’ Bloustein School.

Hughes says corporations now seek economy of scale with urban connections. The new, digital-age workforce of so-called Millennials, he says, wants no part of ’90s-era corridors and cubicles. He calls them the “digerati.”

“Brooklyn is draining the young demographic vitality of Central New Jersey. That’s where the leading edge Millennials want to be,” Hughes said. “The tech economy is moving to Brooklyn, so we have a very serious competitor now.”

So the Millennials left, the companies moved on, leaving behind the question: how do you retool — reinvent — two million square feet of space?

“We like to say we’re creating an urban setting in suburbia,” Zucker said. “People no longer want to segregate their life from their work. Your office today is in your cell phone.”

Somerset Development will replace corridors and cubicles with open spaces. Basically, Zucker plans to build a town.

“Imagine a cafe, a restaurant, a small clothing shop perhaps, a boutique, a nail salon — all the different things you’d find in a typical Main Street, USA,” he said.

Toll Brothers will construct housing on surrounding acreage, he says. His phone’s been ringing. Hughes says, the economic and cultural landscape is shifting.

“We are engaged in sort of retrofitting suburbia, and that’s gonna be our agenda for the next decade,” said Hughes.

With one-quarter of New Jersey’s office space lying vacant, it’s no small task.