Jones Lang LaSalle
Morris economy holding its own
Location, education help, but office vacancies high
BY MICHAEL DAIGLE
DAILY RECORD
While a higher-than-average office vacancy rate remains a problem, several forces have helped Morris County's economy to recover following Sept. 11 and the changes in the region's telecommunications and pharmaceutical industries.
The county's proximity to New York City, the interstate highways running through the area and a highly educated workforce are among them.
Chris Marra, executive director of the Morris County Economic Development Corp., a division of the Morris Area Chamber of Commerce, told the freeholders last week that the county's unemployment rate at the end of 2005 was 3.1 percent -- near the 2.9 percent level that it had before the attack on the World Trade Center.
The unemployment rate had reached 4.6 percent in 2002 and 2004.
But the changes in large corporations that once populated the county have resulted in the vacancy of 23.4 percent of the county's 27 million square feet of office space -- above the state average of 19 percent.
The Morris vacancy rate has hovered between 22 percent and 23 percent for the past three years, Marra said -- about 3 percent above the state average.
Four large sites account for about one-third of the office vacancies: the former BASF headquarters in Mount Olive, at 970,000 square feet; a former AT&T facility in Morris Township, 412,000 square feet; the former Telecordia Technologies site in Morris Township, 320,000 square feet; and the former Kraft offices in Parsippany, 154,000 square feet.
The size of those office parks could make it hard to attract new tenants unless they are substantially reconfigured and upgraded, Marra said.
BASF would rather sell the entire Mount Olive site than divide it or lease it, Marra said.
The vacancy of the BASF site is a drain on the township's tax rolls, since the property's value has dropped $60 million to $80 million, Marra said.
At the same time, Marra said, a developer is building 175,000 square feet of Class A, or top-of-the-line, office space in Parsippany.
Educated force
Morris County's educated workforce still is an attraction, Marra said. He said it was a factor in Cadbury-Schweppes' decision to build a new research facility in Hanover after it purchased the Adams division from Pfizer, which manufactures gum and candy.
It made sense to take advantage of the ready supply of researchers in the county, Marra said.
That workforce also could see opportunities as Verizon moves into the former AT&T headquarters in Bernards in Somerset County, Marra said.
When that office was the AT&T headquarters, spin-off companies and support industries grew in Morris County, Marra said. He added that it is possible that growth could take place when Verizon completes the transition.
The possibility is supported by research by James Hughes, a dean of the Edward J. Bloustein School for Planning and Public Policy at Rutgers University. In a report last year, Hughes said 18 percent of New Jersey's jobs will require a bachelor's, graduate or associate degree through 2010.
Morris is one of three Central Jersey counties where at least 40 percent of the adult population has at least a four-year degree, Hughes said. The three counties are Morris, at 44 percent; Hunterdon, 41 percent; and Somerset, 47 percent.
The state labor department has projected that Morris County will gain 47,650 jobs by 2012 --a 15.4 percent growth rate that exceeds the state's projected job growth of 12 percent, Marra said. The growth is projected to take place in the areas of professional and technical services, health and social assistance and administrative and waste services, Marra said.
Changing scope
Hughes said that while highly skilled jobs such as those in information technology and engineering are expected to grow the most, jobs that might require lower levels of education but the ability to learn and think critically also will be available. To that end, Hughes said, electricians, plumbers and mechanics could see increased job opportunities.
"Each of these occupations can expect to see its scope change as innovations develop and the cross-industry skills --such as the ability to learn and think critically about new technologies -- become more important to everyday work functions," Hughes said.
The county's industrial base will get a boost this year as Dendreon Corp., a biotechnology company based in Seattle, opens a facility in a former manufacturing site in Hanover, Marra said. In 2005, 6.8 percent of the county's 40 million square feet of industrial space was available, up from 6.6 percent in 2004, Marra said.
That number also could change as companies supported by the Picatinny Innovation Center, a business incubator, outgrow their start-up spaces and move into new facilities, Marra said. One or two companies may be ready to make that move soon, he said.
Those changes could offset potential job losses from the announced closing of Pfizer's Parsippany site and Abbott Labs' Hanover site.
Morris economy holding its own
Location, education help, but office vacancies high
BY MICHAEL DAIGLE
DAILY RECORD
While a higher-than-average office vacancy rate remains a problem, several forces have helped Morris County's economy to recover following Sept. 11 and the changes in the region's telecommunications and pharmaceutical industries.
The county's proximity to New York City, the interstate highways running through the area and a highly educated workforce are among them.
Chris Marra, executive director of the Morris County Economic Development Corp., a division of the Morris Area Chamber of Commerce, told the freeholders last week that the county's unemployment rate at the end of 2005 was 3.1 percent -- near the 2.9 percent level that it had before the attack on the World Trade Center.
The unemployment rate had reached 4.6 percent in 2002 and 2004.
But the changes in large corporations that once populated the county have resulted in the vacancy of 23.4 percent of the county's 27 million square feet of office space -- above the state average of 19 percent.
The Morris vacancy rate has hovered between 22 percent and 23 percent for the past three years, Marra said -- about 3 percent above the state average.
Four large sites account for about one-third of the office vacancies: the former BASF headquarters in Mount Olive, at 970,000 square feet; a former AT&T facility in Morris Township, 412,000 square feet; the former Telecordia Technologies site in Morris Township, 320,000 square feet; and the former Kraft offices in Parsippany, 154,000 square feet.
The size of those office parks could make it hard to attract new tenants unless they are substantially reconfigured and upgraded, Marra said.
BASF would rather sell the entire Mount Olive site than divide it or lease it, Marra said.
The vacancy of the BASF site is a drain on the township's tax rolls, since the property's value has dropped $60 million to $80 million, Marra said.
At the same time, Marra said, a developer is building 175,000 square feet of Class A, or top-of-the-line, office space in Parsippany.
Educated force
Morris County's educated workforce still is an attraction, Marra said. He said it was a factor in Cadbury-Schweppes' decision to build a new research facility in Hanover after it purchased the Adams division from Pfizer, which manufactures gum and candy.
It made sense to take advantage of the ready supply of researchers in the county, Marra said.
That workforce also could see opportunities as Verizon moves into the former AT&T headquarters in Bernards in Somerset County, Marra said.
When that office was the AT&T headquarters, spin-off companies and support industries grew in Morris County, Marra said. He added that it is possible that growth could take place when Verizon completes the transition.
The possibility is supported by research by James Hughes, a dean of the Edward J. Bloustein School for Planning and Public Policy at Rutgers University. In a report last year, Hughes said 18 percent of New Jersey's jobs will require a bachelor's, graduate or associate degree through 2010.
Morris is one of three Central Jersey counties where at least 40 percent of the adult population has at least a four-year degree, Hughes said. The three counties are Morris, at 44 percent; Hunterdon, 41 percent; and Somerset, 47 percent.
The state labor department has projected that Morris County will gain 47,650 jobs by 2012 --a 15.4 percent growth rate that exceeds the state's projected job growth of 12 percent, Marra said. The growth is projected to take place in the areas of professional and technical services, health and social assistance and administrative and waste services, Marra said.
Changing scope
Hughes said that while highly skilled jobs such as those in information technology and engineering are expected to grow the most, jobs that might require lower levels of education but the ability to learn and think critically also will be available. To that end, Hughes said, electricians, plumbers and mechanics could see increased job opportunities.
"Each of these occupations can expect to see its scope change as innovations develop and the cross-industry skills --such as the ability to learn and think critically about new technologies -- become more important to everyday work functions," Hughes said.
The county's industrial base will get a boost this year as Dendreon Corp., a biotechnology company based in Seattle, opens a facility in a former manufacturing site in Hanover, Marra said. In 2005, 6.8 percent of the county's 40 million square feet of industrial space was available, up from 6.6 percent in 2004, Marra said.
That number also could change as companies supported by the Picatinny Innovation Center, a business incubator, outgrow their start-up spaces and move into new facilities, Marra said. One or two companies may be ready to make that move soon, he said.
Those changes could offset potential job losses from the announced closing of Pfizer's Parsippany site and Abbott Labs' Hanover site.
posted by Jones Lang LaSalle NJ News Blog at 9:59 AM
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