Economic uncertainty and a host of public policy issues continue to impact commercial real estate in New Jersey-as elsewhere. As industry professionals seek information and insight, as well as networking opportunities and advocacy, NAIOP New Jersey has seen its membership ranks grow to record levels. Indeed, the commercial real estate development association has strengthened its position as the industry's "first line of defense."
Against that backdrop, Michael Seeve of Mountain Development Corp., recently elected as president of NAIOP New Jersey, reflects on the challenges the association-and the industry in general-face in the year ahead.
Q: In the current business climate, what's NAIOP New Jersey's - and your own - approach to dealing with the issues?
A: It involves "a little offense and a little defense." Offensively, it's a good time for the organization because the State is very focused on growing its ratables and bringing new projects on line-smart new buildings to attract smart new companies, smart people, and to create well-paying jobs. It's a good time to be involved as an advocate for developing commercial real estate.
Defensively, there are things going on in the world and certainly in New Jersey that can impede this progress. We have to be cognizant of the issues and special interest groups, which, despite good intentions, may ask for rules and legislation that can have derivative consequences that negatively impact our ability to put up new buildings and create new jobs and opportunities.
The strength of NAIOP New Jersey is that it's so representative of all myriad components and professions that make up the commercial real estate industry - office, industrial, mixed-use, medical, data center, higher education, design and construction professionals, people on the land use and site development side, lawyers, engineers-that it can speak in a very informed way on so many issues. It has become a real resource for the policy makers.
And NAIOP is a special resource for its members because the networking between all of those components is critical. Real estate development is a cooperative, collaborative business. Very few companies do everything themselves-almost everybody seeks and leans upon the expertise of their professionals and associates, especially today as projects are getting more complicated and sophisticated. The best projects are those where the developer is able to assemble the right team. Without team work, there is no development. And NAIOP is where the players all come together.
The organization serves its members in other ways as well. Besides being an advocate on the legislative front, a major focus is education and programming-finding ways to transmit information to members and assisting members in building relationships that are essential to professional success.
Q: You mentioned the legislative front-as an advocate, NAIOP New Jersey has addressed numerous issues. What are the key issues right now, in your view?
A: Two issues are most pressing. One is business incentives, where the focus is getting the many different existing programs all under one roof with the New Jersey EDA, with the capacity for the EDA to disperse the incentives to more markets over as wide a spectrum as possible both geographically and size-wise-scaling them so smaller and mid-size companies also have the opportunity to compete for economic incentives (i.e., tax credits). Many new job opportunities are with smaller and mid-sized companies.
The second is the pending expiration of the moratorium on non-residential COAH fees. As I alluded to earlier, sometimes there is well-intentioned legislation, ideas, or litigation with unanticipated derivative and highly negative consequences. The COAH non-residential fee is case in point. It all stems from the Mount Laurel decision thirty years ago-who then would have dreamed that it would play this kind of job-killing role in development today?
To me, it couldn't be clearer-at a time when the State wants to attract companies, grow its revenue base and have more job opportunities for its residents, we've got this glaring anchor attaching itself to new projects. It's essential that we welcome, not push away, new companies and the jobs they bring. In New Jersey, real estate is a heavily regulated business, and land use is especially closely governed on the local level. We must be vigilant in protecting the ability for land to be put into service, and developed or redeveloped into its highest and best use, if we want to compete for jobs against our neighboring states.
Q: What's the impact of NAIOP New Jersey's members on the state's economy?
A: This State runs on property taxes. The people in our industry create clean ratables; consistent real property tax generators without necessarily creating corresponding service costs. With new ratables, the State can balance its budget and establish a firm financial footing for the future. Without that, there is no future for New Jersey. Beyond that, the commercial real estate industry and all of its subfields provide opportunities for people with a multitude of degrees, experiences and areas of expertise to earn a living and make a career.
Last but not least, if we can build great buildings - contemporary buildings that meet the needs of discriminating companies - then we can attract those companies to the State. Commercial real estate, and thus NAIOP, are right at the nexus of jobs, finance, land use and ultimately the future direction of the State.
Q: You also mentioned education and programming-what are some of the organization's key achievements in that arena?
A. One is the ability to offer Continuing Education Units (CEUs) now required by the State or other licensing bodies for professional re-licensing. Another is the Developing Leaders program: A key responsibility for those of us in the industry is engaging young people who want to pursue careers in the real estate business and helping them advance. What makes it interesting and special is that it's not only an opportunity for younger people to interact and learn from those who have been in the industry for a long time, but also vice versa; it's an opportunity for people in different generations to come together and compare thoughts and ideas. Getting Developing Leaders (35 and under) together with those who have been successful in the different facets of the industry, and with different product types and in different geographies and with very diverse career paths; that's exciting and inspirational.
Q: What's the mood in the industry right now?
A: To be a real estate developer, one has to be generally optimistic-it's a forward-thinking business. On the other hand, we're on the front lines, constantly dealing with end-users for space, and if there are issues that prevent them from making commitments and investments-and there are-we're hearing them.
That said, people seem upbeat. Our members see that the economy is recovering, and with the recovery comes new opportunities. How quickly it's recovering and will continue to recover are open questions, of course, but it's clearly getting stronger. New Jersey remains a very select and rarified place to do business. It has one of the premier port systems in the world. It has an outstanding roadway network serving half the country's population in a one-day drive. It has an exceptionally well-educated workforce across a broad range of fields of study and avocations, and that has always allowed the State to attract a wide range of companies. Attracting new companies and persuading them to make commitments, financial and with personnel, in New Jersey is our business.
Q: Bottom line?
This is a precious time for New Jersey. We can move forward and become a business hub and leader as the economy recovers, and that's the path we're on. Or we can be sidetracked with litigation and legislation that scares off employers, costs us jobs and ultimately, our tax base. Trenton has been a great ally to business over the past few years, and if that continues, New Jersey has an opportunity to build on the things that have been put in place and become an outstanding place to do business. NAIOP New Jersey is at the forefront of that effort.