Once considered a viable alternative to pricey Manhattan office space, the New Jersey waterfront is now losing its luster in the eyes of fiscally-minded businesses, according to Crain’s, making 2009 the most dismal the region has seen in two years. The disparity in lease rates between New Jersey waterfront office space, in cities like Weehawken, Hoboken, and Jersey City, and Manhattan is slowly narrowing, leading to a slowdown in activity. After massive asking rent cuts in Lower Manhattan, the rent gap between there and New Jersey dwindled to just $6 per square foot, according to Cushman & Wakefield. As a result, the first nine months of 2009 saw 710,000 square feet of space hit the market with no takers.

Homeport on Staten Island’s waterfront

Ironstate Development of Hoboken plans to invest $150 million to build apartment buildings, stores and a public plaza as part of the long anticipated redevelopment of the Homeport on Staten Island’s waterfront. Ironstate, formerly known as Applied Development, is teaming up with the city of New York to make over a portion of a former Navy homeport in Stapleton on the northeastern side of Staten Island. Plans call for building two residential buildings up to six stories tall with about 800 apartments on a seven-acre site, according to the city’s Economic Development Corporation. Rents for one-bedrooms would run between $1,200 and $1,500 while two-bedrooms would rent for $1,500 up to $2,000. The complex would include 30,000 square feet of shops and restaurants on the ground floor with wide sidewalks and a public plaza for outdoor dining. The city has committed $33 million for infrastructure improvements including road reconstruction that would improve access to the site from the Stapleton neighborhood and a new waterfront esplanade next to the apartments, which would give the public access to the waterfront. The project would generate more than 1,100 construction jobs and 150 permanent jobs including retail and building maintenance positions. Construction is expected to start in early 2011. more

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If you think that the commercial leasing velocity has slowed down in
Manhattan, all you have to do is look across the Hudson River to New
Jersey and see an office leasing market that has been on life support
for the past few years. According to a recent report issued by CB Richard Ellis on the New
Jersey office market, leasing velocity continued to decline in the
first quarter of this year, asking rents slipped and availability rates
increased from last quarter, closing at 20.43 percent, the first time
the market has hit 20 percent since 2004. In a conference call with analysts, Mack-Cali Realty, one of the
largest owners of office space in New Jersey, noted that rents rolled
down during the quarter by about 6.1 percent compared to the fourth
quarter of 2008. In its core markets, North and Central New Jersey, the
company had roll downs of 6.4 percent and 7.5 percent respectively. [more]