"Strong Demand For Transit-Oriented Office Space In New Jersey"
Dana Rubinstein reports that rail access is an important driver of real estate trends in America’s most densely populated state:
The average vacancy rate in so-called transit hubs in New Jersey was 14.7% in the first quarter of this year, compared with 29.7% in areas not considered transit hubs, according to real-estate brokerage Jones Lang LaSalle. The report defines transit hubs as the 40 million square feet comprising office space in Newark, Elizabeth, Jersey City, Hoboken, Paterson, East Orange, New Brunswick, Trenton and Camden, Morristown and Metropark, all cities with rail service.
At the same time, asking rents in transit hubs were higher, averaging $27.43 compared with the rest of the suburban market’s $23.51, according to the Jones Lang LaSalle report. Since 2009, more than 20% of all leasing has occurred in the transit hubs, compared with 15 percent before 2009.
Good for New Jersey. It’s a reminder both that investments in rail can pay off, but also that it’s painful to see restrictions placed on dense building near stations. In Trenton’s relatively small downtown zoning district, for example, no building may be more than 210 feet tall. That’s more than we allow here in DC, and amidst a serious recession, it’s probably not having a discernable impact, but over the long run there’s a cost here. Some day the demand for office construction will come back in New Jersey. If us urbanist types are right, that demand will particularly express itself in terms of demand for transit-adjacent structures. But will that mean lots of new transit-oriented development, or will it just mean that Trenton real estate becomes expensive as we keep adding suburban office parks? Letting tall buildings go up near train stations is crucial to making it the former rather than the latter.