Opper: Certainly, the New York market is a big driver and always will be. But what’s interesting and most important to note just recently, is the organic growth and the stability of the market from companies that have come from New York to New Jersey and are staying there. We’ve seen Fidelity move within the submarket and take additional space, approximately 180,000 square feet. In addition, we’ve seen large renewals from Bank of America and Merrill Lynch, as well as Bank of Tokyo/Mitsubishi. Organic growth is as important a driver as any other variable.

GlobeSt.com: In some sectors, occupancy has not translated into increased rents. Is that the case here?

Opper: Rents have gone up quite considerably in lockstep with the decline in availability. The overall Class A rents have jumped $29.50 to $34.80 on average in the last 12 months. That’s a huge jump and the first time since the fourth quarter of 2007 that we’ve seen class A rents that high within the market. So it’s had a big impact.

GlobeSt.com: Are we seeing growth in other sectors along the waterfront, including residential?

Opper: Yes. One of the other things that we brought up, in terms of drivers in the market, is that the Jersey City waterfront is a now becoming a 24-hour by seven-day-a-week destination. There’s been a huge influx of new professionals living there. Residential is incredibly, incredibly hot, as that also trades at a discount to Manhattan. There’s a lot of new product. In addition to a lot of retail space that’s become available, that has made it a 24/7 and not just an office destination. That’s been a big driver also – the quality of life – for companies relocating to Jersey City moving forward.

GlobeSt.com: How will transportation infrastructure have to expand and evolve to serve this growth?

Opper: Right now, the state and Port Authority have done a great job in servicing the waterfront in building in future capacity. The light rail system certainly has helped going from north to south in that submarket – there’s no need for a car. Obviously, the PATH trains are there. The advantage of having the direct train lines into Hoboken from all parts of the state is terrific, as well as the number of bus lines that go into there as well. It’s very well suited moving forward. As for capacity for the future, we’re already there.

GlobeSt.com: When do we run out of space – and do companies then move inland or farther south?
Opper: We’re pretty much at that place where we are out of space—in fact there are a couple of larger tenants of over 200,000 square feet that are in the market. There are heavy talks right now about new development within the market and within the submarket. The answer in general is that we’re there. There is the need for new space now.

Perhaps they’ll have to look elsewhere, but the first preference is that tenants are willing to pay more to be closer. That’s why I think new construction is more likely than moving inland. Within the waterfront area, there are approximately 14 sites, but those sites may be divided up between office and residential, depending on demand.