While class A multifamily is leading the way in terms of rents and occupancy rates, Holland explained that opportunities to reposition class B and C product present opportunities for investors. “We are seeing cap rate compression where we are buying sub-6 for B and C, and that’s what most of New Jersey is made of, buildings that were built in the 60s and 70s,” he said. We call them bread and butter apartment buildings. Some of these places have older kitchens, older bathrooms and the opportunities for investors to buy these, they upgrade the units, they get the rent pop for putting in a new kitchen. They are never going to be ‘A,’ but their occupancies are extremely strong. There are more buyers than sellers, and a lot of that is being driven by rates.”

Michael Fasano, VP and regional manger at Marcus & Millichap’s Elmwood Park office, said developers or investors who are unable to crack the state’s core markets should look to New Jersey’s outer-rings.“The opportunity for multifamily moving forward is going to be those folks who would like to be in a core market but are being elbowed out of the race and we are going to see it going west in our state to be in a more secondary or tertiary market because they can’t compete in the core markets,” he said.

Emanuel Stern, president and COO of Hartz Mountain, said the company has 2,000 apartments units in the pipeline because the “demise of regional office has been dramatic” and the productivity of internet age has put a significant challenge on the office sector. “You will start having a lot of users gravitating toward location, location, location,” he said.

George Sowa, executive vice president and senior managing director of Brandywine Realty Trust, said the statewide office leasing market has remained flat, but bright spots such as the Gold Coast in Hudson County carries the lowest vacancy rate in the state (6.1%) and commands the highest rents ($38 per square foot), followed by the Princeton submarket in central Jersey with a 12.1% vacancy rate and an average asking rent of $33 per square foot.

“When you think about real estate today, location, location, location when thinking about office could be replaced with jobs jobs jobs,” Sowa said. If you look at 2008 at the beginning of 2008 to 2010, we’ve had 250,000 jobs we’ve lost. At the beginning of 2012, we’ve gained back 100,000 jobs. If you assume half of those jobs were in office, our vacancy level across the state would basically be cut in half, so it is really critical to where the jobs are. We actually need to fill the space that we have.”

Sowa said at the same time office utilization rates are going up, thanks to increased collaboration and technological advances. “We are seeing how office is being changed in terms of use,” he said. “Historically in the past, people went to the office as a formal place to do business, and now that’s starting to migrate.”

Based on these trends, the question of attracting and retaining business in the state remained a concern among the crowd. Following the EDA’s re-up of $500 million in funding for the Urban Transit Hub and Grow NJ tax credit programs, several panelists questioned the state’s strict focus on using business incentives to spur development around transit centers while existing suburban product gets squeezed.

Gil Medina, executive managing director at Cushman & Wakefield and former secretary of commerce under Gov. Christie Whitman who implemented many of the state’s incentive, finance and regulatory programs that resulted in incentive benefits of $1 billion during the administration, explained that while incentives are helpful in creating jobs, structural fiscal issues remain unsolved in the state’s current budget.

“We paid $250 million Prudential to consolidate their operations in Newark and we gave Panasonic $175 million to consolidate their operations out of Secaucus into Newark,” he said. “The problem with incentives is that the ocean is not big enough and we don’t have enough money to sustain this kind of level, especially with our credit being downgraded and especially when you’ve got a number of structural problems that still have to be corrected. We have to keep in-mind that incentives are helpful, but they are not the solution. Like quantitative easing, it is not really improving the performance of the fundamentals of the economy. I think the incentives were helpful because they created construction jobs, they created some permanent jobs and are saving some jobs, but long-term, it is not a sustainable way to try to stimulate the economy.”

Bob Martie, executive vice president of the NJ Region at Colliers International, called the state guilty of quantitative ‘pleasing’. “I, for one, think the current administration is doing a fantastic job on a lot of things, but they are not doing a very good job of showing the other side of the incentives,” he said. “We can quantify what the grants are costing to the state, but what they haven’t done a good job of showing us the research in real terms that show what are impacts of these monies that we are spending on Panasonic, Prudential, Pearson and the list is never anything. We can’t see what these grants are doing. Are they keeping people? Yes. Is it worth the money and is there a return on investment is what I’m saying.”

At the same time, Goldberg said many of his projects in Hudson County would not be possible without the program, and Kislak said competition is mounting from other states like Pennsylvania, where it is quicker to get approvals and land is cheaper. “I see the fear in incentives, but I also see the bigger fear in not incentivizing and losing companies and jobs to other states,” he said.

[Missed the event? Check photos on Facebook later today.]