Small businesses driving NJ office market

Despite recent struggles seen in many of the New Jersey's most popular commercial and business epicenters, two major factors are proving to show the resiliency of the central New Jersey office and commercial marketplace.

Volatility in today's corporate landscape has created significant vacancy rates in Manhattan and northern New Jersey as major mergers and/or acquisition have forced large companies to abandon or sub-lease space and created an abundance of available class "A" office facilities in areas such as Jersey City, Newark and New York City.

Owners and managers of commercial properties in central New Jersey are experiencing a different kind of trend--particularly those who concentrated on properties catering to minimal space users and small businesses. The after-effect of the rash of mergers and acquisition has been the formation of many start-up companies that need space to accommodate their needs.

Space in premier business centers is often too large and expensive, forcing many of these owners to turn to Somerset, Hunterdon, Warren and Mercer counties where they can lease offices at a fraction of the cost.

Prominent business professionals are increasingly willing to take more chances and we're seeing a rash of new companies emerge. Once-small companies are expanding and new corporations are being formed in just about every industry. These businesses need offices which allow them state-of-the-art spaces and considerable flexibility, all at reasonable rates. They're finding such space in central New Jersey.

Also contributing to the strength of the market is the influx of medical users occupying space in the areas outlying the major medical facilities and hospitals in Princeton and New Brunswick. An aging baby-boomer population has lead to an increase in eye care professionals, doctors, emergency medical centers and others venturing into business of their own.

Medical practitioners are breaking off from larger hospitals and forming new offices to handle the medical needs of one of this country's largest generations. However, these professionals still need quick access to major health facilities. They're leasing up space around St. Francis Hospital, Robert Wood Hospital and the major pharmaceutical companies.

Both of these trends have led to considerable success with the unique Executive Suites component offered at our Branchburg Commons and Amwell Commons medical and professional complexes. Executive Suites is an imaginative "shared space" office concept for small business operators who desire many of the amenities found at major corporate offices.

We've seen a flurry of leasing activity from medical-oriented tenants who are either establishing headquarters, expanding or relocating. In addition to the locations, they all appreciate the versatile "built-to-suit" opportunities and immediate occupancy dates available in these complexes.

Tenants of Executive Suites enjoy perimeter offices with windows, state-of-the-art telephone systems and intercoms, keyless entry systems, access to copy and work stations, multiple conference rooms and kitchen facilities.

In the first half of 2004, the central New Jersey office market has shown the resiliency to withstand economic conditions which have effected neighboring office and business epicenters. And it shows no signs of slowing down.

During the remainder of the year, we expect to see even more small business and newly-formed companies look to this area where they can find newly-constructed, state-of-the-art office spaces at a fraction of the cost.

VICTOR KELLY

VICE PRESIDENT, RAIDER REALTY

COPYRIGHT 2004 Hagedorn Publication
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