Sean Ryan is associate editor of Real Estate New Jersey last Friday
"The bulk of the tenants in Eastern Monmouth County service the contracts of the government," says Suzanne Macnow, senior associate at CB Richard Ellis in its East Brunswick office. "Over 70% of the Avenue of Commons tenants in Shrewsbury service the government. If the fort closed, and all that business went away, it would be devastating to the Eastern Monmouth market."
Fort Monmouth is the largest of the military bases affected in New Jersey. The possible shuttering will take 620 military jobs and 4,652 civilian jobs out of the area. Other bases are picking up jobs, including Fort Dix and McGuire Air Force Base for military jobs and the Picatinny Arsenal for civilian positions. Even with these, New Jersey will have a net loss of 3,713 civilian jobs and 47 military positions if the current closings and realignments are approved.
"It's a pretty serious impact on a fragile market. The market has just begun to pick up, and just begun to begin looking like good things. And this'll be disastrous," Gross adds. "I would think the housing market would be even worse. Several of the service people on the base have houses off the base, in addition to the civilians servicing the base."
Macnow remembers the massive layoffs AT&T and Lucent subjected New Jersey to a few years ago. "When the layoffs happened, you saw a glut of housing come on the market in Holmdel. If you're going to take away 4,652 civilian jobs, you're going to have to come up with those jobs somewhere else in New Jersey. There's nothing going on in Monmouth County that's going to create those kinds of jobs."
The DoD's Office of Economic Adjustment will work with affected towns to reuse the property. Gross is not entirely confident on the OEA's promise to make the base closings as painless as possible. "That sounds good, but I've never found the state to run fast." The closed Fort Monmouth--if the government releases it in a timely schedule--is a huge plot of land for new development. "I've heard medical facilities. One guy wants to put a PUD [Planned Urban Development] on it," Gross says. "It's a great spot to do it, because there's a lot of land, and as I understand it, there's not a lot of hazardous materials there. So it could happen pretty quickly, if someone with big bucks come along. You could build a whole city there."
Macnow is not so confident in redevelopment. "If you close the fort, and you take away all those jobs, and all that other office space comes back on the market, there's not going to be a need for it," she says. "We're at 11% to 15% vacancy, and a little tighter in Eastern Monmouth County. If you put all that space back on the market, who's going to put the money in to develop new space?"
"If you look downrange, 20 to 25 years, maybe a different use might generate better jobs or more jobs, but for the next 10 to 20 years it'll be a disaster," Gross says.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
