BLOOMFIELD, NJ—The "new urbanism," with rising demand from millennials and empty nest Baby Boomers for urban "live-work-play" settings, is critical to successful development in the long term, according to Eugene Diaz, principal partner of Prism Capital Partners.

"For the past several decades, regional municipalities have approached office, retail and multifamily development as distinct silos that should not be mixed together," Diaz tells GlobeSt.com exclusively. "They are now re-thinking that strategy – and with good reason."

A key change in the way urban planning is being conducted has to do with the "convenience lifestyle philosophy of the millennial generation," Diaz says. "Balanced downtowns are the focus. These younger residents and professionals are drawn to a 24/7 lifestyle with centralized environments that include live, work and play components. At the same time, millennials are being priced out of cities where these components have traditionally co-existed."

At the same time that traditional urban core cities are working hard to attract millennial-friendly developments, suburban municipalities are also reimagining their own development plans to achieve this traditionally urban balance, Diaz says. "They are encouraging more housing options and amenities to make their downtowns and commercial corridors attractive for millennials and the businesses looking to hire them," he says.

"The other part of the thought process driving the millennials is about jobs," Diaz says. "They're looking for a good rental alternative, not necessarily making a commitment to own, because the idea of working for a company for 40 years and getting a pension is just no longer there. It's not part of the American Dream any more, so people have to be flexible, and I think millennials realize they need to go where the job is."

And towns are finding that making this effort does pay off in terms of increased commercial and residential rents, and enhanced tax base stability, Diaz says.

"In New Jersey, Morristown was a frontrunner. Now others are following suit," he says. "Englewood altered its downtown zoning to allow higher building heights, encouraging residential development to support robust retail. Summit has been considering significant changes to its land use plan, providing for a greater mix of alternative uses in their downtown zone to achieve greater balance."

In Woodbridge, Prism Capital Partners recently signed a definitive agreement to purchase a five-acre parcel at the corner of Rahway Avenue and Green Street, directly across from NJ Transit's Woodbridge Station. Designated for redevelopment with residential zoning, the property formerly housed a car dealership converted into a 12,000-square-foot retail property with a Quick Chek convenience store. Prism plans to build a 180-unit multi-family rental community on the site (preserving the retail amenities) and looks forward to providing the type of luxury, fully amenitized property for which demand is so strong and which is associated with Prism.

"Transit is a wonderful anchor for these things," Diaz says. "Walkable downtown environments are really the springboard. To the extent that your downtown, walkable environment has access to public transportation, that's important, but it's not necessarily driving it. What we're finding in mass transit locations is that everybody still has a car. They're not necessarily using mass transit every day as their primary mode of transportation, but it's there as a convenience because they will use it once or twice a week."

Prism has completed Phase I of Parkway Lofts in Bloomfield, where a 118-year-old former General Electric warehouse was transformed into 361 apartments.

"That project is more than 70 percent rented. One third of the residents there came from addresses outside New Jersey," Diaz says. "We also expect to break ground imminently for Phase I of Edison Village in West Orange, another downtown project focusing on the conversion of a 100-year-old factory complex into 331 rental apartments."

Diaz thinks this "new urbanism" approach to redesign is essential to future growth in New Jersey and its neighboring states.

"Ultimately, our navigation through this positive, transformative period will result in better-balanced business centers with a multitude of housing options and appealing amenities, making our region all the more competitive in attracting and retaining jobs and residents," he says.