Spanning a reported 80,770 square feet, 311 Boulevard of Americas is among several new midrise office buildings that have popped up in Lakewood in recent years. — Photo by Patricia Alex for Real Estate NJ
By Patricia Alex
Those heralding the death of the suburban office park may not have seen Lakewood recently, where the growth of Class A space is defying conventional wisdom and statewide trends.
Vacancy rates for higher-end office space remain stubbornly in most of New Jersey, hovering at 19 percent statewide. Long-term leases have allowed for rent stability, but new construction has all but flatlined. Not so in Lakewood — New Jersey’s fastest-growing town, fueled by the Orthodox Jewish community — where at least a half-dozen Class A buildings have popped up in recent years, with as many more under construction or renovation.
Published reports estimate that one developer alone, Mark Chopp, has built more than 500,000 square feet of new Class A space in Lakewood in the last decade. He did not return requests for comment.
“In the last five or six years we have seen an explosion of Class A office space,” said Steven Reinman, director of economic and industrial development in Lakewood. “It has become a corporate hub, a professional hub. Many companies found the way here because the owners located where they live … We have health care holdings, law firms, etc.”
The office development is an echo of the housing boom in this township in northern Ocean County that has seen its population grow by 125 percent since 2000. The last census counted more than 135,000 residents in Lakewood, and Mayor Raymond Coles estimated the population is now nearing 150,000.
The residential development was mostly due to the Orthodox Jewish families drawn to Lakewood by the presence of the Beth Medrash Govoha yeshiva, the second-largest college of its kind in the world. Many residents continued to commute to jobs in Manhattan after moving to Lakewood, but more recently — especially after the pandemic — commuters want to work nearer their homes.
“People want more work-life balance and companies are capitalizing on that,” said Tucker White, Northeast regional manager for Avison Young’s research group. The firm’s third quarter report on the New Jersey office market showed Ocean County had the lowest office availability rate, 5.8 percent, of any submarket in the northern and central parts of the state. And, while local availability rates in Lakewood are hard to quantify, township officials say demand is robust.
Ocean stood out also for the fact that 84,000 square feet of office space was under construction in Q3, when the vast majority of submarkets have no new building underway.
White said the Jersey Shore as a whole and the coast of Connecticut saw a boost in the office market after COVID, as company decision makers wanted to work where they live. Many of the new spaces are smaller leases of 10,000 square feet or so, as firms reconfigure and open satellite offices, said Nick Balancia, an insight analyst with Avison Young. He said the new builds in Ocean County stand out because inventory there is relatively small, at about 2.2 million square feet.
“(It) will be a big jump in inventory, something we’re not seeing in other areas of New Jersey,” Balancia said.
At least a half-dozen gleaming midrise office buildings, housing a variety of tenants, have risen in Cedarbridge Corporate Park in Lakewood in recent years and more are underway. The park was carved out of a 240-acre wooded tract near where the Pine Barrens give way to the shore region and, according to the Asbury Park Press, on land controlled by a redevelopment arm of the yeshiva.
A new upscale shopping center is adjacent to Cedarbridge, as is FirstEnergy Park, the longtime home of the minor league Jersey Shore Blue Claws off Exit 89 off the Garden State Parkway. Also nearby is the state’s second-largest industrial park, with nearly 2 million square feet and 35 buildings, according to Sudler Cos., the largest property owner there. And there, too, Class A office renovations are happening to accommodate new warehouse and industrial tenants, mostly in the pharma and e-commerce realms, the company said.
“The character of the location has evolved over the years from being a value-oriented location for small regional companies to a hub for the Northeast operations for larger corporations attracted by the strategic advantages of being situated between the New York, Philadelphia and Atlantic City markets,” said Brian Sudler, a Sudler principal. “The nature of the buildings has changed as well, with more companies installing Class A level office space at the front of warehouse and light manufacturing operations.
“Some of our office buildouts have been showplaces, where in past generations the office space was very basic.”
Sudler said leasing in the park has been brisk.
“Our Lakewood portfolio runs at an effective occupancy rate of 100 percent — the only time we have had vacancy is during the turnover of tenancy or when we are renovating a building.”
Township officials said smaller commercial developments have been going up all over town — beyond the busy Route 9 corridor — to accommodate the growing population.
“We’re very fortunate to have as healthy a commercial sector in town as we have,” Coles said. “The business and commercial development really offset (residential) growth.”
And the township will soon be selling off a parcel of land it owns near the small municipal airport, adjacent to the industrial park, for commercial and industrial development. Officials are negotiating to form a public-private partnership with an investor to build a new terminal and conference center at the airport, said Reinman, who is also manager of the airport. Township planners, meantime, are reviewing a preliminary proposal for a hotel near the corporate park and stadium.
Beyond that, very few large vacant parcels remain in this formerly sleepy resort town.
“We’re a fairly mature business community,” Reinman said.
Patricia Alex is a freelance writer in New Jersey and former reporter and editor at The Record in Bergen County.