Amazon has long been known for having a profound impact on the bricks-and-mortar retail business. But as it turns out, that’s only one piece of the story of how the e-commerce powerhouse is transforming commercial real estate. New Jersey is poised to feel that impact as much as any other state in the country.
While there are still months to go before Amazon reveals it selection for its HQ2 project, making the pitch has rallied developers and public-sector leaders in Newark in a way that the city hasn’t seen in recent memory. That show of unity was only amplified on Oct. 16, when Gov. Chris Christie announced that the state would officially support the city’s bid, even as several other cities in New Jersey jockeyed for the project.
There’s no ignoring Amazon’s impact on the state’s industrial sector since early 2013, when the company committed to building its first New Jersey fulfillment center in Robbinsville. Not only has Amazon absorbed at least roughly 9 million square feet of warehouse and distribution space since that time. It quickly emboldened other pure e-commerce players that were hesitant to establish a footprint in New Jersey, amid concerns over having to collect sales tax from customers if they had a physical location here.
Amazon in mid-October detailed a partnership with some of the country’s largest apartment owners and management firms to install its smart phone-connected package lockers at their properties, in the latest sign of the impact that e-commerce has had on the multifamily sector. Developers have sought to include more sophisticated package rooms and concierge services into their new luxury projects in recent years, in an effort to handle the constant stream of boxes coming into their buildings.
The news of Amazon’s $13.7 billion acquisition of Whole Foods Market this summer came with a bit of irony: Many bricks-and-mortar supermarkets in New Jersey and elsewhere had offered online delivery for years, but Whole Foods wasn’t among them. But at the very least, the deal signaled to those other operators that Whole Foods is not to be taken lightly, especially with Amazon’s stated goal of lowering the chain’s notoriously high prices.
The growth of the sharing economy — including platforms such as Airbnb, Uber and Lyft — has created new opportunities for developers and landlords, providing additional ways for them to appeal to renters and help their projects stand out in an increasingly crowded market.
In partnering with Uber, Capodagli Property Co. aimed to provide another amenity and a new level of convenience for its existing tenants.
The decision is also helping to attract future residents — perhaps in a way that it didn’t expect.
It has only been a few months since the start of a partnership between Airbnb and the owners of Jersey City Urby, but all signs point to an arrangement that will be mutually beneficial.
In a market that has been hurt by densification and lackluster job growth, many of the state’s largest office leases in recent years have been tied to tenants looking to consolidate and upgrade their space. But technology and information firms have been a rare source of expansion in New Jersey, fueling new space needs that are about more than just a flight to quality.
Making sure the Garden State can grow its technology sector is a matter of creating the right environment and promoting what the state can offer in the way of labor, education and accessibility. Experts say it’s also up to landlords to ensure that they provide the space that tech users are looking for.
Blending the past with the future is one of the main principles behind Edison Properties’ $80 million plan to convert a well-known, 107-year-old warehouse along McCarter Highway in Newark into state-of-the-art, loft-style office space.