Understanding Your Market for Redevelopment

1. UNDERSTANDING YOUR MARKET FOR
REDEVELOPMENT
SUPPORTING PRIORITY INVESTMENT IN
SOMERSET COUNTY
MARCH 10, 2017

2. 1987 Somerset County
Master Plan Land Use
Management Map
OVERVIEW

3. 2014 Somerset County
Master Plan County
Investment Framework
Map
OVERVIEW

4. OVERVIEW
County Investment Framework Goals
 Support ongoing regional and local smart growth,
preservation, economic revitalization, sustainability
and resiliency planning initiatives
 Achieve tactical alignment of land use, infrastructure
and preservation plans, resources, programs, policies
and investment decisions
 Convey a clear investment message regarding local
and regional land use priorities to both public and
private sectors

5.  Somerset County
Comprehensive Economic
Development Strategy
 Supporting Priority
Investment in Somerset
County through Access and
Mobility Improvements
 Supporting Priority
Investment in Somerset
County Phases I,II, and III
OVERVIEW

6. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 1
KEY FINDINGS
 Socio-economic Analysis
 Improvement to Land Value Analysis
 Labor and Industry Analysis
 Business Inventory and Industry Cluster Analysis
 Real Estate Supply and Demand Analysis
 Transportation and Utility Infrastructure Analysis
 Baseline Conditions: Land Use
 Assessment of Land Use Policies & Workforce Housing
 Build-out Analysis

7. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 1
SOCIO-ECONOMIC ANALYSIS
 Household and population growth flat through 2018
 Demand for Senior and multi-family housing dominates
 Median Household Income is among the highest in the Nation
IMPROVEMENT TO LAND VALUE ANALYSIS:
 Low ILV Commercial land comprise 18% of all Commercial
acreage and Industrial Land comprise 17% of all Industrial
acreage within PGIAs. Low ILV Low ILV Concentrations occur
in the following PGIAs:
 I-287 Industrial Complex, Franklin
 Meister Ave. /North Branch Station, Branchburg
 VA Depot, Hillsborough


8. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 1
LABOR AND INDUSTRY ANALYSIS
 Unemployment rates lower than the State, but still higher
than pre-recession levels
 New jobs will come from replacement openings, rather than
new job creation
 Growth in the health care and social assistance industry will
grow fastest
BUSINESS INVENTORY AND CLUSTER ANALYSIS
 Over 80% of available and rentable commercial, office and
industrial space falls within PGIAs
 The highest number of large businesses & facilities are found
in the Regional Center, Green Brook Route 22 Corridor and
Hamilton St./Renaissance Area

9. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 1
REAL ESTATE SUPPLY & DEMAND: RESIDENTIAL
 Demand for new units is expected to exceed the number of new units to
be constructed in the future
 Demand for smaller, entry-level multi-family and rental housing will grow
 Delivery of workforce housing is dependent on local land use policies, and
is an economic development imperative
REAL ESTATE SUPPLY & DEMAND: OFFICE
 Office Vacancy Rate in Somerset County rose to 26.6 % in 2013, exceeding
surrounding areas
 The existing inventory of office space should more than satisfy new
demand, assuming it can be reconfigured to meet today’s smaller space
requirements
 A 20% vacancy rate is projected for 2015

10. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 1
REAL ESTATE SUPPLY & DEMAND: INDUSTRY
 Vacancy rate is lower than in surrounding central and north
Jersey counties
 Large and growing industrial space inventory with an overall
vacancy rate of 5.7%
REAL ESTATE SUPPLY & DEMAND: RETAIL
 7.3 million sq. ft. of retail space Countywide
 The projected combined vacancy rate for retail space is above
10 percent for 2017, and currently exceeds that of nearby
counties
 As retail space becomes obsolescent, repurposing strategies
will be needed

11. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 1
ASSESSMENT OF LAND USE POLICIES & WORKFORCE HOUSING
 Complex PGIAs with diverse zoning districts may have a
combination of both adequate and inadequate zoning policies
 PGIA-specific recommendations include increasing FAR
and/or residential densities and mixed-use opportunities
BUILDOUT ANALYSIS
 Additional capacity for growth exists in all PGIAs – but at
different levels
 Redevelopment and re-use represents the greatest potential
for new residential growth
 Development of vacant land represents the greatest
opportunity for commercial and industrial growth within
PGIAs


12. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 2
Market Assessment
 Based on CoStar data, demographics and employment data
 Assessment of land use categories and vacancy rates
 Analysis of office vacancy, job growth, absorption rates
 Comparison to 5 surrounding counties
 Evaluate market trends
 Identify opportunities for targeted development

13. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 2
Office and Retail
 Vacancy among the highest in region
 Projected employment growth lower than all but Union
Co.
 Currently available vacancies exceed demand through
2035
 Points to need for innovative strategies for re-use
Mixed-use and restaurant uses
 Account for smallest share of space, but lowest vacancy
 Vacancy rates low throughout the region
 Region-wide opportunity

14. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 2
Warehousing and Light Industry
 Accounts for 23.6% of rentable space in Somerset
 Lacks connections to NJ Turnpike of nearby counties
 Middlesex dominates regional warehousing market
 Somerset positioned for small industry and warehousing
 Somerset has 2nd lowest warehousing vacancy rate
Manufacturing
 Accounts for 10.4% of rentable area
 Comparable to surrounding counties

15. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 2

16. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 2

17. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 3
Market Assessment
Source: REIS 2016

18. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 3
Market Assessment
Source: REIS 2016

19. SUPPORTING PRIORITY INVESTMENT IN SOMERSET
COUNTY: PHASE 3

20. IMPLEMENTATION SUCCESS STORIES
 Outlined a Consensus Vision for Somerset County’s
Future
 Resources and Information to Inform Local Decision
Makers
 Strengthened Linkages Between Master Plan
Elements and Planning Initiatives
 Municipal Master Plan and Zoning Ordinance
Reviews and Updates
 Leveraged Additional Grant Resources

21. QUESTIONS?
For more information, please contact:
Walter C. Lane, AICP/PP
Director of Planning
Somerset County Planning Division
(908) 231-7021
lane@co.somerset.nj.us