Key Take Aways from Northern New Jersey’s December 2021 Meeting
Infrastructure
The passage of the Federal Infrastructure Bill into law bodes well for the NJ area. Over the next five years, $550B will be available nationally for roads and other infrastructure projects, with $24B set aside for super funds, aimed at minimizing inflation. There is currently a big push for transportation projects with NJ DOT funding new road construction and improvements on the GSP and other major roads. Urban construction and redevelopment in Jersey City and elsewhere in Hudson County are up.
Transportation
The Electric Vehicle Charging Station statute was signed into law in September. New multifamily projects with 5 or more units are required to install charging stations for 15% of parking spaces over a 15-year period with 5% installed in the first three years. Developers are to pick up the costs. It is not yet clear how industrial and commercial properties as well as PILOT programs will be affected or if charging stations will be taxable (solar panels are not). Standardization of charging stations, infrastructure and payment methods all need to be worked out.
Pilot Programs
Municipalities are shopping around for PILOT programs that allow shorter terms, but most don’t have the technical knowledge to change zoning requirements. Some municipalities require 20% affordable housing for condos and 15% for rental units.
Back to Work Resistance
The impact of the pandemic has changed the workplace. Some workers have become accustomed to the flexibility of working from home full or part time, or working from satellite suburban offices. A forced return has led to a crisis of losing talented and mid-level people who are hard to replace; some firms have begun to hire out of state remotely because of the number of people who have relocated. The reduction or lack of office interaction has had an impact on communication, teamwork, training, and productivity.
Office to Warehouse Space Transition
The industrial market is “on fire” while the office sector remains stagnant. The decrease in office park demand has coincided with high requirements for warehousing still dominating the market with vacancies as low as 1 to 2%. The trend is to demolish or repurpose office buildings and complexes for warehouse use.
Retail Making a Comeback
People are tired of shopping online and are beginning to return to the mall environment. At the same time, big box stores are no longer the model. Millennials in particular want face-to-face interaction, which is one reason Ace Hardware is flourishing; they’ve opened five new stores in the last two years. The American Dream complex in Rutherford offers 40% entertainment venues along with high end retail; over the summer, people were flocking to the pool and amusement park.
Security Issues at Title Companies
While title companies routinely move money safely during real estate transactions, there have been increasing numbers of email fraud alerts due to bogus players – 3 or 4 a week reported by First American Title. Caution was emphasized.
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