Jersey City real estate tax credits are helping New Jersey challenge Manhattan in the commercial real estate market. According to a recent NJ.com report, the New Jersey state legislature recently introduced several bills designed to induce corporations to locate or stay in New Jersey by providing relief from the state's high corporate and personal income tax burden. The over $5 billion in corporate tax breaks handed out by the Christie administration to date have unquestionably helped boost economic development throughout the state. Jersey City, in particular, is poised to take on the outer boroughs of New York City and to some extent Manhattan proper as a premier location for office space.
Jersey City Becoming Manhattan's Chief Rival for Office Buildings
Jersey City is one of the biggest recipients of state sponsored financial incentives. Jersey City's proximity to Midtown Manhattan makes it a prime competitor for commercial development. As noted by Gregg Popkin, president of RFR Realty at a recent B'nai B'rith Real Estate luncheon cited by the Real Deal, tax incentives and PATH train access are helping Jersey City become a major challenger for commercial leasing over Brooklyn and Queens.
"They've had a lot of momentum," Popkin explained. "I'd love to change that because we have a lot of space in Brooklyn."
Popkin went on to comment on recent surveys that reported vacancy rates as high as 14 percent for commercial space in Midtown by 2019, a trend partly due to a lack of new commercial development and aging Class A office stock in Midtown.
The One Journal Square Project Could be a Game Changer
In November 2015 alone, the state legislature awarded over $166 million in tax incentives for three major northern New Jersey commercial development projects. According to NorthJersey.com, the most notable of these is a $400 million high-rise tower in Jersey City that is expected to bring in over 1,530 new jobs.
The 56-story One Journal Square project was approved by the New Jersey Economic Development Authority for $93 million in New Jersey tax credits, with an additional $34 million in tax credits through 2035. NJ.com reported that the project has the potential to be a game-changer in the commercial leasing market for Jersey City because it will be located on a formerly vacant lot directly across from the PATH train station, a location that can provide companies with a much desired transportation-friendly locale in an urban metro area with close proximity to Midtown Manhattan.
With completion expected in the spring of 2018, One Journal Square will feature two floors with 78,000 square feet of retail space in addition to 100,000 square feet over seven floors of office space. Expectations for a successful project are high and negotiations are underway for a second tower at the same location.
Jersey City’s Journal Square is quickly becoming one of the hottest commercial real estate markets not only in New Jersey, but in the tri-state area overall. According to an NJ.com interview with Carl Gaines, spokesperson for the KABR Group, developers and companies are clamoring to get into Journal Square.
"Full details of the project are yet to be released, but when they are, we're confident you will see why it's a very compelling investment for New Jersey that will have a disproportionate impact and really change the area," Gaines stated.
After One Journal Square is completed, the New Jersey Economic Development Authority projects the One Journal Square development to produce over $1.4 million in sales and corporate business taxes in the first year after completion.