Market appeal broadening throughout New Jersey

Real Estate Weekly, Sept 1, 1999 by Emanuel Stern

As pleased as we are by the success at 90 Hudson and now the beginning of 70 Hudson. our Colgate Center developments, four recent leases at other Hartz properties had even more impact on my view of the market.

As background, consider that Hartz is coming off back-to-back record years of leasing throughout our portfolio, with more than 8 million square feet leased. The trend to higher rents has an enormous impact, but equally important has been the evolution of our portfolio, enabling us to lease a larger portion of it in higher-yielding categories. In many instances, 20-year-old warehouses have become back office centers and even prime office space, which demonstrates that the market's appetite pushes ever outward from New York and continues to grow with the success of New Jersey-based companies.

But even more exciting than the success of our long-term initiative of adapting our industrial space has been the robust performance of our suburban office centers.

Recently we leased nearly 400,000 square feet of space to top users in not one, but four separate sub-markets. We expect headquarters users to be attracted to our waterfront properties, but when we see major institutions locating in Secaucus, Teaneck, Newark and Parsippany, we know the market is all the way back. As an example, Chase Mellon Shareholder services headquarters will be with us for 20 years at Overpeck Park in Ridgefield Park, on the New Jersey Turnpike just south of Teaneck. Every bit as prestigious as some of our tenants at 90 Hudson and our prospects at 70 Hudson, Chase Mellon had all the options in the market available to it - from Manhattan prime office on down.

Headquarters space is a significant bellwether for a market, even one that has been leasing back office and executive regional space for years. And there is no question that quality of life issues and technology that enables remoteness are at the heart of this market swing. In most markets, few organizations can truly afford to take advantage of remoteness and locate away from urban centers, because the infrastructure and the personnel that they require would not be available. But, the good news for New Jersey is that it's established base of professionals and highly skilled employees - many of whom prefer not to commute - make it the best positioned suburban market in the country for growth. Coming from a conservative company such as Hartz Mountain, this is quite a statement, but it rings truer every day.