We assembled a panel of industry experts to tackle this month’s question.
Here’s what they had to say.
Peter Bronsnick, senior vice president, SJP Properties (Parsippany)
As office tenants, e-commerce companies have a unique approach to occupancy that is notably different than conventional office tenants. Specifically, we find that their employee-to-square-footage ratio can be nearly twice as dense as most other tenants. This increased density makes it critical that they occupy buildings with efficient floor plates coupled with state-of-the-art building systems that can support their density requirements. These were both important factors in Jet.com’s decision to establish its headquarters at our Waterfront Corporate Center property in Hoboken. Waterfront Corporate Center not only provides unsurpassed transit access, but the buildings were designed to support the most demanding infrastructure requirements, while maximizing the efficiency of tenants’ space configurations.
Johanna Chervak, director of development, NJ/PA region, Rockefeller Group (Morristown)
E-commerce companies represent a newer and growing segment of office-using employment throughout the greater metropolitan area. They have had a fundamental impact on everything from the way space is designed and used to the types of amenities in office buildings and even the new geography of demand for office and residential space. E-commerce tenants were among the first to implement open office layouts that have become standard across even traditional sectors. Landlords have also sought to attract e-commerce by implementing building upgrades and improvements that are attractive to millennials. These have included the floor-to-ceiling glass to allow more natural light, shared lobby amenities, gyms, cafés and food options that provide service 24-7. In addition, e-commerce companies and their workforce emphasize opportunities to walk or bike to work, making locations close to mass-transit highly attractive. Based on this, office and residential in downtown locations like Jersey City and Hoboken have thrived.
Rich Dunn, senior vice president, Paramount Assets (Elizabeth)
The exponential growth of e-commerce and online shopping has significantly impacted all facets of commercial real estate, including multifamily development. Due to the ever-increasing volume of package deliveries — particularly among younger renters — developers and landlords are challenged to find ways to provide tenants with a secure, and convenient, process for receiving packages when residents are not home to accept them. This is particularly important in the absence of a building doorman or concierge services. Our redevelopment efforts are increasingly focused on meeting this growing tenant need. Package rooms for deliveries secured via access controls (key card or fob) are a necessity in today’s residential buildings. On-site package lockers are another effective solution.
Matt McDonough, managing director, Transwestern (Parsippany)
The e-commerce effect is stretching far beyond the industrial and retail sectors. For example, multifamily properties are now experiencing a higher volume of package deliveries, overloading some property managers. Today’s savvy developers and owners are exploring options to help ease this burden, including package lockers that residents can access or a community storage room where packages are delivered. But beyond multifamily, we are also seeing e-commerce influencing developers’ strategies. In many cases, existing office buildings are being redeveloped to accommodate e-commerce and tech startup companies, as well as to attract more established companies from the tech world that all have an e-commerce component. Once considered a risky bet just a few years ago, e-commerce companies are much more accepted by office landlords, and in some cases, assets with an e-commerce/tech tenant company in place are being viewed as much more attractive and stable.
Lewis Zlotnick, president, Woodmont Properties (Fairfield)
E-commerce’s exponential growth has undoubtedly affected multifamily and mixed-use development in a number of ways. Foremost, with the huge increase in consumer online retail purchases, an essential amenity is automated package lockers and software for receiving and tracking deliveries. Email notification and 24/7 resident access for pickup are no longer a luxury; these solutions are a necessity in order to facilitate the delivery of the influx of packages, especially during heavy shopping seasons. Proactively, we installed package lockers in all of our new and existing communities across New Jersey and Pennsylvania. Second, we are finding that e-commerce has also caused us to rethink the various components of our mixed-use developments. Retail is still a crucial component of our mixed-use properties. However, filling mixed-use developments with the ‘right’ retailers has become much more of a focus, as the type of retailers resonating with today’s apartment residents has certainly changed.