Retail: Cap Markets Woes Creates MXD Message

Despite the capital-markets downturn and lending squeeze, developers are moving forward with the construction of mixed-use projects across Northern New Jersey, even though original blueprints face the prospect of being slightly revamped. Projects scheduled for completion after 2007 total 7.7 million sf, 2.7 million sf of which is slated to come online in Bergen and Essex counties. A healthy amount of this product will be retail and mixed-use located in urban infill areas. Projects such as Vornado Realty Trust’s Bergen Town Center, which will include 1.5 million sf of retail, and the 275-acre Harrison Commons in Harrison are examples of this redevelopment trend.

Perth Amboy, Harrison, Jersey City, Englewood and River Edge can all expect to see their CBDs transformed in the near future, thanks to healthy market conditions in the first half of the decade when many regional and national developers embarked upon their plans to build in the Garden State.

During the height of the commercial real estate boom in the first half of the decade, New Jersey’s retail sales figures were fueled by homeowners who refinanced or renovated their existing homes, or purchased new ones. Since the single-family housing market has cooled, the retail investment-sales market has slowed down, but not softened. However, over the long term the market is expected to stabilize. Demand will always remain healthy in New Jersey because of its proximity to New York City’s extremely robust economy, which penetrates virtually every region of the Garden State.