WEST ORANGE, NJ—Boosted by a business-friendly government, the continuing recovery in New Jersey will be a “lazy U,” with a flat 2011 leading to a strong bounceback in 24 to 36 months, panelists said at a NAIOP NJ mid-year economic overview here. The growing need for data centers and distribution state should help the state, even as potential employers hire fewer employees and need less space for those they retain.
“Business owners attitudes are changing,” said Thomas Geisel, president of Sun National Bank, Vinelad, NJ. “Hopefully in 12 months, we’ll be climbing up the U. But it will only be one third of the way.”
There is still a lot to overcome, particularly in a state that, except for its transit hubs, is a suburban market. The decline was steep, said Reginald Ross, director of forecasting for Jones Lang LaSalle in New York City, but the recovery will not be equally rapid. Cap rates are under control, he said, and New Jersey real estate did not experience the same rapid run-up in values as other areas.
“Things will pick up when people start buying things again,” Ross said. “Sales are trending up, but the increase comes from fuel sales. And that U gets a lot longer if gas prices continue to go up.”
Geisel said Sun National is lending, but not to the extent they have before. “I do not believe capital will be as available as in the past. It can’t be,” Geisel said. “The costs of the banks are only going up.”
The Christie administration’s commitment to attracting business also will benefit the state, said Dennis Donovan, principal and owner of Wadley Donovan Gutshaw Consulting, Bridgewater, NJ. “I’ve been in the business since 1974, and since the advent of this administration, I’ve seen the most significant change,” Donovan said. “There is a recognition that New Jersey is finally serious about business.”
While no one anticipated a huge migration of businesses from Manhattan, many saw opportunities throughout the state. Data centers, warehouses and back offices are a huge possibility, as are medical facilities, Donovan said.
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