Citing current real estate market statistics, especially the office sector, he cautioned that one has to look beyond the general numbers at specific markets. Noting that the vacancy rate in Newark, for example, is just 5.5%, while it's in the 27% to 28% range in the Princeton market, "which is typically overbuilt. The statistics, therefore, are not always meaningful." But marketwide, "the state needs to continue to be attractive for such sectors as financial services, which create a lot of jobs and fill space. We're not doing enough--we need to do more." That said, he expressed confidence that, "Gov. [Jon] Corzine, coming from the business sector, understands."
In the larger sense, "New York very much drives what happens here," Martin said. In that regard, the Garden State stacks up pretty well. In terms of comparables, space in 50- to 60-year-old buildings in Lower Manhattan is going for $45 per sf, Martin said, while space in new or nearly new buildings in Jersey City, just across the river, is going for $30 per sf.
Turning to the local market--the NRBP is a regional group focused on building business in the region--"Newark is a very interesting story, and it will be a success story over time," Martin said. He mentioned the variety of projects going on, including the new arena for the Devils hockey team, an extended light rail system and new downtown housing.
He conceded that there is "not enough affordable housing" in the market, a view that could be extended to the entire state. But for Newark in particular, "the infrastructure here is too good not to support," Martin said. For New Jersey in general, "in a market, that's very viable, the 'gloom-and-doom' people are wrong," he said, while reiterating that, "we're at a crossroads. More companies are going from New York, through New Jersey to Pennsylvania and Delaware. I think we can overcome the problems through a partnership between government and business."
In terms of the economy in general, Mark Zandi, chief economist of Moody's economy.com, laid out several points. First, "the economy is performing well, broadly speaking, and that should continue through 2007 into 2008. Job growth will continue. There are good reasons to be optimistic.
"But the economy does have some problems," Zandi admitted, specifically citing manufacturing's struggles and a housing market that's, "in the middle of a significant correction." For the tri-state area, he predicted the economy would "hold its own," for the time being, with layoffs in telecom, pharmaceuticals and insurance abating.<p.That said, he cited what he termed "the most significant obstacle to growth" in the tri-state area--"the region's cost structure." He added that a key factor in long-term growth is "education. Spending is a problem, but spending on education is vital."
In conclusion, he expressed general optimism, but cautioned against the "risk of a global financial 'event,' citing the worldwide sell-off of the past week or so. But even that could have an upside if it lasts a few months: "It could result in a repricing that makes sense."
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