The day began with the panel addressing retail and entertainment opportunities in Newark. Moderator Richard Johnson, SVP and partner with Matrix Development Group, led the discussion with Ron Beit, founding partner and CEO of RBH Group; Cubie Dawson, SVP of Jones Lang LaSalle; Leon Kafele, president of ICP Group; Joe Ritchie, CEO of Brick City Development Corporation; and Michael Saltzman, principal with Newwork LLC.
By and large, the panelists had high hopes for the City of Newark, which has been experiencing a resurgence lately with the opening of the Prudential Center and NJ PAC, venues that bring thousands of people into Newark's Downtown to attend events. Developing Downtown retail, according to Ritchie, will partly depend on encouraging those event attendees to stay in the city longer, instead of simply arriving to attend the event and then leaving immediately after.
Although Newark has good infrastructure features to bring people into the city--many important roads and a major rail station, the panelists agreed that housing Downtown was lacking, a need that must be addressed. "We need more residential Downtown so we can sell a 24-hour market," Ritchie said. Saltzman suggested marketing the retail to the surrounding suburban areas until residential real estate in Downtown Newark becomes more widely available.
Besides the lack of residents, Newark faces the same challenge shared by many up-and-coming cities: convincing the retailers to locate in the downtown areas. Dawson, whose company redeveloped the area around Washington, DC's Union Station, spoke of helping major retailers adapt to urban spaces, which may be smaller or have less parking than suburban locations. JLL's efforts in DC were very successful.
"The proof of the pudding is in DC," he reported. "We had 10 million sf of office development around Union Station in the last 20 years" since it was redeveloped.
A possible point in Newark's favor is the renewed interest many people have begun to show in urban versus suburban areas as spaces to live, work and recreate.
"The retail market is recognizing urban opportunities," Ritchie said. "The mood of the country is going from suburban to urban. We must continue to reach out to retailers, drive home the population density argument, and encourage them to look outside their usual expectations and requirements."
Although Newark may be poised for growth, the outlook for North and Central New Jersey isn't quite as hopeful, as presentations by Phil Lipper, senior managing director of Studley and Rae Rosen, senior economist and assistant VP of the federal reserve bank of New York showed.
"We've really had a reversal of fortune over the last couple of years," Lipper reported, sharing a chart indicating that the state's available office space passed the national average in 2005. Rents have remained relatively flat since 2001 and dropped below the national average in 2006, while rents in the powerful New York market have risen 72% since 2001. Rosen's presentation was similarly short on good news, showing slow growth and the high likelihood that unemployment in New Jersey would rise in the coming months due to the unstable economy.
The one bright spot for Northern New Jersey, according to Lipper, is rents for industrial space. Although Central New Jersey trails the national average, Northern New Jersey, helped, no doubt, by the port and proximity to New York, is higher than the average throughout the US.
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