You might look at this list and see some familiar themes from 2013. That’s because nearly every major story in New Jersey’s commercial real estate industry from last year continued to evolve in 2014.
The stories got worse in some cases. In others, they got better. All you need to do is read on to find where things went — and where they might be going in 2015.
Mitchell Hersh had been at the helm for 15 years — and about three years into a plan to transform Mack-Cali Realty Corp. — when the other shoe dropped. The Edison-based real estate investment trust announced in early November that Hersh would step down in May as president and CEO, sending shockwaves through the state’s commercial real estate industry.
Many insiders said it was inevitable for a company whose stock price had plummeted in recent years. But it came amid Hersh’s aggressive push to expand Mack-Cali beyond its hard-hit suburban office portfolio and into the red-hot multifamily space.
That effort seemed to bring mixed results in 2014: The company broke ground on a massive rental project in Jersey City with Ironstate Development. But the firm announced this summer that Brad Klatt and Carl Goldberg, two of the three industry veterans who joined Mack-Cali in its 2012 acquisition of Roseland Property Co., were leaving two years into their three-year contracts.
All that leaves the industry giant in an uncertain position going forward as it begins to look for Hersh’s successor.
The new year was barely underway when the Atlantic Club closed its doors at the western end of the boardwalk. But the worst was still to come for Atlantic City’s struggling casino industry.
Fast-forward to mid-September: Revel had filed for bankruptcy for the second time since opening in 2012 — and it was one of three other gaming halls that had ceased operations after the Atlantic Club. Showboat and Trump Plaza were the other two, and recent weeks have been marked by uncertainty over whether Trump Taj Mahal would be the fifth casino to close in the resort town.
Now, as 2014 comes to a close, industry leaders and state officials are left hoping the city’s gaming market has been right-sized in a time of increased regional competition. And stakeholders are contemplating how to repurpose the shuttered casinos: Earlier this month, Richard Stockton College reached a deal to acquire Showboat from Caesars Entertainment Corp.
Not to mention that the struggles in Atlantic City have accelerated talks of expanding casino gaming to North Jersey, a prospect that had been off the table until at least the end of 2015.
The power of last year’s Economic Opportunity Act was felt across New Jersey in 2014, spurring job creation and development projects in all corners of the state.
But it reached another level when it came to Camden.
Yes, that was by design, but even the biggest South Jersey boosters had to be overwhelmed by the impact of this high-profile incentives overhaul. With the most recent approvals of tax breaks for Subaru of America and Cooper Health Systems, the Economic Development Authority has awarded more than $650 million in incentives to New Jersey’s city on the Delaware River.
Subaru plans to move its headquarters there from Cherry Hill, while earlier awards will bring Lockheed Martin and Holtec International to Camden. The once-proud South Jersey hub could be a very different place a few years from now.
Some 90 miles to the north is another city that has had plenty to talk about this year. With Steve Fulop marking his first full year as mayor, Jersey City in 2014 continued to be the focal point for real estate investment and redevelopment in North Jersey.
Like Camden, it’s reaping the benefits of state incentive programs, allowing it to keep major corporate tenants such as JPMorgan Chase and bring in new ones such as apparel company Charles Komar & Sons. And that’s only half the story: On the residential side, Jersey City has 6,000 residential units currently under construction and another 18,000 approved for building.
And Fulop thinks the city is only “in the fourth or fifth inning” when it comes to development. Stay tuned.
It was a year of slow but steady progress for the American Dream Meadowlands. Sure, you could have said that in 2013, but 2014 included some more key milestones for the debacle once known as Xanadu:
After a nearly two-year legal battle, developer Triple Five and the Giants and Jets in March reached an agreement on improvements to help traffic flow and mass transit options at the Meadowlands Sports Complex. The work is meant to ease concerns by the teams that an expanded project would cripple the roadways around MetLife Stadium on game days, clearing the way for Triple Five to reboot the failed retail and entertainment complex four years after taking it over.
That was followed by the signing of an agreement in April between the Edmonton, Alberta-based developer and the Bergen County Building & Construction Trades Council. Since then, construction crews have been active at the East Rutherford site, preparing what will be new amusement and water parks and, at long last, starting to change the infamously garish exterior.
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