Hudson Lights in Fort Lee — a mixed-use complex by Tucker Development, Kushner Real Estate Group and funds managed by Ares Management — is one of two major redevelopment projects that have transformed a 16-acre site at the base of the George Washington Bridge. Courtesy: Tucker Development
By Joshua Burd
From downtown Fort Lee to the idyllic suburbs of Montvale and Park Ridge, Bergen County has become a focal point for New Jersey’s evolving commercial real estate landscape.
Many of those changes were on display during a recent conference known as the New Jersey Gold Coast North and Bergen County CRE Summit. Hosted by CapRate Events LLC, the program brought together real estate executives and public officials to discuss everything from revitalizing Main Streets to the redevelopment of obsolete suburban office parks.
Bergen County has plenty of each. In Fort Lee, borough officials have seen the impact of a long-awaited project at the base of the George Washington Bridge, where separate developments have led to gleaming new residential towers and a high-end retail and apartment complex.
“Everyone in New Jersey, every mayor in my position — we all yearn to get a piece of that Hoboken style of living,” Fort Lee Mayor Mark Sokolich said. “And that’s what we tried to duplicate in our billion-dollar redevelopment.”
The second of two glass high-rises known as The Modern is now under construction at the site by SJP Properties, while Tucker Development and Kushner Real Estate Group are working to lease the mixed-use, 1 million square-foot complex known as Hudson Lights. The projects have brought hundreds of new renters to Fort Lee — along with new businesses such as an indoor cycling studio and a luxury iPic movie theater — and Sokolich is beginning to see those residents interact with the older parts of the borough’s downtown.
“They’re finally starting to move over down to our Main Street and it took three or four years for that to be accomplished,” he said. “And the folks on Main Street are now finally starting to go over to the retail, so we’re very happy. It’s successful so far.”
Sokolich conceded that Fort Lee has lost some of its appeal as an office market, but other parts of Bergen County appear to be picking up the slack. Stephen Jennings, vice president of leasing and marketing for Alfred Sanzari Enterprises, said the search for less congestion has driven leasing at some of the firm’s more suburban properties. He pointed to a deal earlier this year in which an energy supplier moved from Fort Lee to 777 Terrace Ave., a Sanzari-owned building in Hasbrouck Heights at the junction of Route 17 and Interstate 80.
He also noted that some space requirements are tied to the fact that companies are looking to cut back on working from home.
“They want their teams to collaborate, work together and be more efficient as a team,” said Jennings, whose firm is based in Hackensack. “And they also want to have some oversight.
“Working from home is not working for everyone.”
That runs counter to the trends that have hindered office leasing in Bergen County and other suburban submarkets in recent years. Judy Troiano, a senior associate with NAI James E. Hanson, said technology and densification have reduced office requirements as millennials have become a larger part of the workforce.
But “when they do show up,” she said, they want to be in a modern office that blends the working environment with living and recreational space.
“The new word is ‘resi-mercial’ — offices are now being fitted out to look like homes,” Troiano said, pointing to elements such as sofas, coffee tables and moveable furniture. “And all of this furniture has plug-in capabilities.”
She also pointed to several projects in the suburbs of upper Bergen County, where real estate firms and other users hope to reposition outdated corporate parks. Both KPMG LLP and Memorial Sloan Kettering Cancer Center have acquired office buildings in Montvale and are renovating the facilities as part of their own expansions. Developers have also proposed readapting the former Mercedes-Benz and Sony headquarters sites in Montvale and Park Ridge, respectively, although such proposals have faced vocal opposition from residents of those towns.
Investors in some of those cases have proposed mixed-use redevelopment projects, reflecting a shift being seen elsewhere in northern New Jersey. Justin Korinis, a senior vice president with Sabre Real Estate Group, said “it’s all getting blended together.”
“The dynamics are changing … and I think in Bergen County, in general, we have a lot of great suburban office, we have a lot of really good daytime density,” Korinis said. “And frankly, the demographics are every retailer’s dream, but to a certain extent we’ve built out everything we can for traditional retail. So unless you’re redeveloping retail for more retail, we’ve kind of run out of land along our highways, along (Route) 4, along 17.”
“So the next step is trying to work creatively to figure it out. Maybe it’s a parking field that’s underutilized for an office building that doesn’t have the same parking requirement that it used to because people are using office space in different ways now. They’re hoteling in some of these spaces and they don’t have a permanent home, but they’re in the office three days a week and … which is causing more room potentially for these other things.”
Bergen County is also poised to see a transformation in Hackensack, the onetime hub of commercial activity in the region. A long-awaited effort to create a dedicated downtown redevelopment zone has succeeded in attracting mixed-use and multifamily developers. The city’s first new luxury multifamily project, a 222-unit project on State Street by Capodagli Property Co., is just about fully leased, and local officials are tracking a pipeline that includes more than 2,000 additional units as the anchor to a broader redevelopment.
“I think Hackensack has all the ingredients to do that and it has attracted a lot of investors,” Jennings said.