It took several years, $102 million in tax credits and even a lawsuit, but Panasonic’s landmark decision to move from exurban Secaucus to Newark’s burgeoning central business district earlier this year symbolized more than just a 250,000-square-foot lease. For the commercial real estate industry, the deal demonstrated a profound shift in the state’s social fabric: people are trading suburban sprawl to live and work in New Jersey’s cities.

“There’s a whole human movement to becoming more metropolitan,” says Gil Medina, executive managing director at Cushman & Wakefield’s East Rutherford office. “It is very powerful. It is grounded in our being as social creatures.”

And the trend itself isn’t limited to just Newark. From the Gold Coast of Jersey City to the old manufacturing towns of Harrison, Rahway and New Brunswick, owners, managers, developers and local officials are beginning to re-think—and redevelop—New Jersey’s urban cores. “Given the fact that we are located between Philadelphia and New York, and then we’ve got Baltimore, Boston and Richmond, we are the fulcrum of this lever of major urban centers in the US,” Medina adds. “We’re part of a major metropolitan center that drives creativity, energy, economic efficiency, population and the movement of capital and people. It works significantly to the benefit of New Jersey as a state.”

This acceleration back to urban centers has been fueled by several economic and political factors. With rising gas prices, a fragile single-family housing market and stagnant job growth, the state’s population is beginning to return where infrastructure and transportation are already present. “You’re looking at a time in our economic cycle where there is a thought compression and a reduction in the standard of living,” says Peter Cocoziello, president and CEO of Advance Realty of Bedminster. “Whereas once people could live in the suburbs and have two or three cars, today that’s becoming a burden. If you are able to have one car and live in an urbanized environment, it’s kind of enticing. If you live in the suburbs, it’s very difficult and costly to maintain it. With the migration of jobs to the urban core and the cost of living being compressed, you’re going to see more people choosing to live in an urbanized area, where they have access to 500 entertainment events a year, transit and retail. It makes for a whole different quality of life.”

...To read the rest of the story, visit the November 2011 issue of Real Estate Forum.

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Garden State&#146;s Cities Take Center Stage

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