For example, "what we're seeing in the housing market for thefirst time in decades is deflation," Hersh told interviewer MichaelG. Desiato, VP of Real Estate Media Division of ALM, and theevent's more than 650 attendees. "The excess inventory and creationof subset markets have created a loss of value in housing. Thatsubset is facing the inability to move product and is competingwith national homebuilders and public companies, and that's puttingpressure on the industry.

|

"And we're losing employment in the financial services," addedHersh, which creates a need for the Federal Reserve "to stimulatethe economy. The question remains whether they can ward offinflation while simultaneously protecting the financial markets.The jury is out. When a deflationary environment exists, it changespsychology."

|

For Mack-Cali, which made a strategic decision to pull out ofmarkets outside of the Northeast several years ago, Hersh explainedthe company's vision is, "to expand our presence from Washington,DC to Boston." And the firm is focusing on urban areas: "Isubscribe to the notion that the wealth, intellectual and humancapital that exists, and the macro-economic environment thataffords diversity of opportunities in the Northeast isunparalleled. I prefer not to invest in markets with low barriersto entry."

|

And he's bullish on New Jersey, asserting that while there are"structural" problems, "the state has a lot of potential. We have ahuge immigrant population that can continue to make majorcontributions to our economic vitality, civility and culture."

|

That said, "in New Jersey we need to improve our highereducation system," Hersh continued. "We need to create more of aresearch centric focus so we can compete with places like Boston,Cambridge, Virginia and California. It won't take much more than aresolve and a commitment to accomplish that because we have thepopulation base."

|

And in general, New Jersey has been reactive rather thanproactive, said Hersh. "Major missteps have occurred in terms offiscal public policy," he added, pointing to the so-called"millionaire tax" as a "disincentive for business, especiallyintellectual property-type companies. The state felt it was themost expedient way to bring more money into the treasury, and thatwas the single most irresponsible act taken by the state. Proofpositive is that last year we lost 2.5% of our pharmaceutical workforce. We've lost the engine of growth, but it's not too late tofix it. There are corrective measures that can be taken."

|

But there are opportunities amid the adversity, and Mack-Caliremains selective about its development plans, he confided. Thefirm is currently building several corporate headquarters includingthe 250,000-sf facility for Wyndham Worldwide in Parsippany.

|

"We'll pick our spots," he concluded. "In the '80s we more thandoubled our inventory from 70 million to 165 million sf of A and Boffice product in the state, but in the past five years we've addedvirtually nothing. As excess inventory ages, there will be moredevelopment and redevelopment opportunities going forward."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.