The report, “Reinventing the New Jersey Economy,” takes the pulse of the state’s office market 30 years after the start of a building boom that created the network. The authors note that 80 percent of all commercial office space ever built in New Jersey was erected in the 1980s, creating the country’s fifth-largest office market in just 11 counties.
But several trends have converged to weaken the suburban office sector, the report finds, including New Jersey’s shrinking employment advantage over its neighboring city. In 1950, the state’s total employment was less than half the size of New York City’s, and then grew to become 13 percent larger by 2003.
But the ratio had dwindled by 2011, leaving New Jersey’s work force just 2 percent larger.
“The factors that led to that emphasis and that economic engine have shifted,” said Joseph J. Seneca, a co-author of the report and professor at Rutgers’ Edward J. Bloustein School of Planning and Public Policy. He said long-term trends were compounded by recent dramatic events, like the recession, speeding the decline in the suburban office network.
“We were increasing our size differential over New York City, and then it reversed,” he said. “It poses the question of the future positioning of the New Jersey office market.”
The report discusses several other trends — like the thirst for modern office space, the preferences of highly skilled workers and contraction in some of New Jersey’s top industries — that have contributed to the trend. The authors noted that “as the balance of the decade unfolds, the supply of obsolete and underperforming office product is destined to grow. The same reality may confront its campus settings.”
“Such massive fixed investments can be neither quickly nor easily jettisoned,” the report says. “It may now be necessary to reinvent New Jersey for a third time — transforming, restructuring, and reimagining its suburban office ecosystems to adjust to the new employment and business dynamics that are emerging.”