By David Cruz
The several hundred commercial and industrial real estate developers gathered for the annual conference of the New Jersey Chapter of the National Association of Industrial and Office Properties (NAIOP) were disappointed that their keynote speaker –- Gov. Chris Christie –- had to cancel his appearance this morning. They were ready to heap praise on the governor, who NAIOP CEO Michael McGuinness says has been a positive force for this important sector of the economy.
“We’re fortunate now to have an administration, under Gov. Christie, that is very supportive of certain business sectors that they’re targeting because they know the impact it has on the economy,” said McGuinness. “Fortunately, the logistics, transportation and warehouse distribution center industries is one of them.”
And one of the important plans in the works that industry members say will have a major impact on business over the next decade is a project that will increase the height of the Bayonne Bridge by over 60 feet, giving modern super container ships access to the ports of Newark and Staten Island, resulting in more jobs and development opportunities.
“I think what’s going to happen once these larger ships are able to come in here is that we’re going to have that much more cargo needing to be unloaded, distributed to the consumer. So it’s going to increase the demands for warehouse and distribution centers in the area, the demand for stevedores and folks that unload the ships,” added McGuinness.
The Bayonne Bridge project is slated for completion around 2016, which is not a moment too soon for Richard Cureton, whose company, Whitesell, owns 9 million square feet of mostly industrial real estate around New Jersey.
“We went from enjoying an 8 percent vacancy in our portfolio for 10 or 12 years to that increasing to 18 percent over a two-year period,” said Cureton. “Now it’s slowly working it’s way back down.”
Developers here say the relaxed (they call it streamlined) regulatory environment has helped to get some large-scale projects going. One example is Harrison Station, a large mixed-use development in the old industrial town of Harrison. Heller Parks is one of the companies involved in that redevelopment project. President Jeff Milanaik says he gives the governor credit for turning red lights into green.
“We all heard the expression ‘New Jersey was closed for business,’ and we experienced that,” he said. “We heard from our customers and tenants about the tax implications and the onerous regulations, but since the governor’s been in, he’s made a lot of positive moves in that direction. There’s no doubt that New Jersey has perceived as much more favorable to business and we’re real excited about that.”
The signs are positive, these developers say, but there are still challenges, mainly the slow pace of the economic recovery.
“The unemployment rate in New Jersey is still too high to move a lot of this office product,” said Frank Visceglin, president of Federal Business Centers in South Jersey. “If I do an office deal, I’m just taking office space from somebody else, so there’s no fundamental growth.”
The old movie line is “If you build it, they will come.” But in this stop and start economy, the new motto seems to be “if you promise to come, we will build it,” which after a difficult five years is actually a step forward.