"The economy is in a tailspin when you look across to other regions, and yet we're standing head and shoulders above the rest," said Elizabeth Spinelli, executive director of the Hudson County Economic Development Corporation.
Joshua Levering, senior vice president of the Hackensack-based commercial real estate firm NAI James Hanson, saw a promising future for 2008 for a different reason.
"Because of the high costs of doing business in Manhattan, Hudson County should be a recipient of any overflow from New York City," said Levering. "In areas like Hoboken, Jersey City and Weehawken in particular, they have good transportation and a very comfortable quality of life, which creates a very viable place for people to live and relocate to [for work]."
David Stifelman, senior director of the New Jersey branch of the commercial real estate firm of Cushman & Wakefield, said, "[Businesses] want to cut costs. They want to be in a building that is more efficient to operate. In New York you have a lot of older buildings, where there are more columns, more elevator banks, and less usable [working space."
He said that in Manhattan, approximately 18 to 25 or 30 percent of working space is lost for the reasons stated above, as compared with the newer, more efficient buildings being built throughout Hudson County, where only 12 to 18 percent is unusable.
Stifleman also cited cheaper taxes and a reduction in construction costs through Urban Enterprise Zones (UEZs) in cities like Union City, West New York, and North Bergen. Those zones encourage development in blighted neighborhoods by offering investors tax and regulatory relief.
One of Jersey City's largest examples of commercial development is the Newport area, where the LeFrak Organization, a billion dollar real estate development company based in New York City, has created six million square feet of office space to date, with an option to build one to two million more.
"The Jersey City office market has begun to diversify outside the financial service industry, where we're beginning to see new service components, such as law firms and human resource departments, relocate to Jersey City," said Jamie LeFrak, managing director of the LeFrak Organization.
One company that has recently relocated to the Newport area of Jersey City is the life insurance company AXA, which according to Cushman & Wakefield's David Stifelman, moved into a 200,000 square foot office at 525 Washington Blvd. in January.
Approximately 65 percent of the 600-acre, $10 billion plus Newport development project has been completed, with the rest to be finished within 15 years.
Another massive mixed-use development that is expected to transform a significant portion of Jersey City is the 100-acre transit village located on the west side of town, near Route 440. It was approved by the City Council in January and is expected to add approximately 8,000 residential units and over one million square feet of commercial space. The site will be developed by Morristown-based Honeywell International Inc., and is expected to take two decades to complete.
Office space is still rising downtown. Last September, the financial firm of Goldman Sachs, which currently owns the tallest building in the state at 30 Hudson St., received approval from the Jersey City Planning Board to build a 500-foot high tower at 50 Hudson St., adjacent to its existing structure. The new construction, which will include just under 900,000 square feet for office space, is expected to cost in the area of $560 million.
Although Jersey City appears to be one of the hottest markets for new office space, it isn't the only one in Hudson County.
Hartz Mountain, which has developed several areas across Hudson County including the 60-acre Weehawken commercial waterfront property of Lincoln Harbor, is seeing an "increase in activity" in 2008 in its sprawling Harmon Meadow development in Secaucus, according to Hartz's Executive Vice President of Finance and Leasing Gus Milano.
In January, the professional services firm of Ernst & Young moved into a 175,000 square foot space in Harmon Meadow, while another New York City based company is expected to sign a lease for 100,000 square feet of office space in the coming weeks said Milano.
According to Elizabeth Spinelli, executive director of the Hudson County Economic Development Corporation, a "large food business company" based out of New York City, is looking to relocate to a 120,000 square foot office building in North Bergen. Spinelli refused disclose the name of the company or the location it was looking to relocate to, citing current negotiations as being her reason.
People need to shop
Consequentially, retail is also expected to do well in 2008.
"Retail space is always in demand when there are new companies coming in [to Hudson County]," said Robert De Ruggiero, President of De Ruggiero Inc. Realtors, which has recently increased its commercial sales division by hiring two new sales associates.
"There's a high demand for 'big bo'x [property] across the county," said De Ruggiero, who recently completed a land lease deal for Auto Zone on Tonnelle Avenue. In addition, De Ruggiero is currently in the process of working on a leasing agreement with Walgreens to open up a store on Kennedy Blvd in Union City. Other hot spots for Hudson County retail include Bergenline Avenue, which passes through Union City, West New York, and North Bergen as well as Hoboken's Washington Street.
Another example of retail coming to North Bergen is the $90 million shopping center being created by Vornado realty between 85th and 91st streets on Tonnelle Avenue. The 415,000 square foot shopping complex is expected to be completed by 2009 and will include several major retailers such as BJ's Wholesale Club, Staples, and possibly even a Wal-Mart "super center" store.
One of the most massive commercial development projects currently underway is the $2 billion entertainment/retail development known as "Xanadu," is being built next to the Meadowlands Sports Complex off Route 3. It's not in Hudson County, but adjacent to it.
The complex, which will consist of 4.8 million square feet of commercial space, is being built by developer Colony Capital, though the land itself is owned by the New Jersey Sports & Exposition Authority. According to Xanadu Spokesman Richard Edmond, the complex is in negotiations with a number of retailers. He expects them to sign leases before the grand opening this coming November. Retailers will be strategically placed throughout Xanadu's five theme-oriented "shopping districts" dedicated to fashion, home furnishings entertainment, sports, and family entertainment/youth.
Next door, in Secaucus, one of the township's most frequented shopping centers, the Mill Creek Mall at Harmon Cove, has been undergoing massive renovations of its own since mid-2007.
According to Gus Milano of developer Hartz-Mountain, the new mall will house just four stores of approximately 50,000 sq ft each, as compared with the previous arrangement of 45 stores between 2,000 and 10,000 sq ft.
Stores that have signed a lease include Toys-R-Us and Babies-R-Us, which will share one of the four new units and are expected to open sometime this fall. Milano refused to disclose which companies were looking at the remaining three commercial units. The 43,000 sq ft Stop & Shop and the 90,000 sq ft Kohl's, which are situated on either end of the mall, will remain open.
In Hoboken, which is mostly known for its residential development, residents in the Northwestern edge of town will see a brand new, 15,000 sq ft shopping center in the area of 14th and Adams streets. The retail property, which is being constructed by developer Michael Gorman, is expected to be completed by this summer. According to Gorman, the one-story structure will include at least one bank, a liquor store, and a national coffee chain as well as at least four other stores.
Meanwhile, in the city of Bayonne, The Cameron Group, based out of East Syracuse, N.Y., is in the process of creating a 30-acre Bayonne Crossing shopping mall. It plans to have the area at least partially completed by the end of 2008, with tenants expected to move in by this coming fall. The mall is expected to add 800 full-time jobs to Bayonne, incorporating major retailers like Lowe's Home Improvement, Circuit City, and the New York Sports Club.
One of the most anticipated commercial projects currently being built in Hudson County is the 25-story W Hotel on the Hoboken waterfront. After a late 2005 groundbreaking, it is expected to be completed by the end of this year. The hotel will be the city's tallest structure, containing 225 rooms and 37 luxury condos. The hotel, which is being built by the Hoboken-based Applied Development Company, will be staffed by approximately 200 employees and be operated by Starwood Hotels & Resorts Worldwide.
Hoboken won't be the only waterfront municipality receiving a hotel by the end of 2008. After breaking ground in May of 2006, the Newport Westin Jersey City Hotel, located on the corner of Washington Boulevard and Sixth Street/Thomas Gangemi Drive, is also expected to be completed this year, according to Jamie LeFrak of the LeFrak Organization which is developing the site. The hotel, which was designed by the Manhattan-based William B. Tabler Architects, will be 253-feet high and contain 429 rooms, a 10,000 sq ft ballroom and a 5,000 sq ft restaurant as well as a pool, fitness center and conference and banquet hall.
In December of last year, the North Bergen Board of Commissioners endorsed a redevelopment agreement with developer O.M. Vitithal, approving the construction of a Days Inn hotel on 26th Street and Paterson Plank Road. The hotel will contain 88 rooms and a swimming pool.
Another hotel construction that was approved last year was that of the Wyndham hotel in Weehawken, which will consist of 294 rooms spread over nine stories. The hotel is being built by developer Roseland Properties, which expects to complete the project by the end of 2010.
Michael Mullins can be reached at email@example.com