Regional Economic Profile and Market Analysis Fort Monmouth Economic
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DRAFT: FOR DISCUSSION PURPOSES ONLY Project Report Regional Economic Profile and Market Analysis Prepared for Fort Monmouth Economic Revitalization Planning Authority Fort Monmouth, New Jersey Submitted by Economics Research Associates September 26, 2007 ERA Project No. 17269 11 East 26th Street, Suite 1602 New York, New York 10010 212.481.6920 FAX 212.481.6921 www.econres.com Los Angeles San Francisco San Diego Chicago Washington DC London New York DRAFT Table of Contents General & Limiting Conditions ............................................................................. 3 I. Executive Summary................................................................................... 4 Strengths, Weaknesses, Opportunities and Threats (SWOT)................................. 5 II. Introduction............................................................................................ 19 III. Existing Conditions ................................................................................. 20 Demographic Analysis ...................................................................................... 20 Regional Economic Profile ................................................................................ 27 IV. Market Analysis....................................................................................... 31 Office............................................................................................................... 31 Industrial/Flex ................................................................................................... 43 Residential........................................................................................................ 53 Retail ............................................................................................................... 79 Hotel/Conference ............................................................................................. 93 V. Institutional Uses .................................................................................. 107 Post- Secondary & Community Education ....................................................... 107 Child Care ...................................................................................................... 115 Major Hospitals and Health Services................................................................ 118 Other Institutional Uses .................................................................................. 121 VI. Government Uses.................................................................................. 122 VII. Short Term and Enhance Use Leases .................................................... 124 Short Term (Interim) Leasing........................................................................... 124 Enhance Use Leasing ...................................................................................... 126 XI. Summary of Recommendations............................................................ 128 Appendix .......................................................................................................... 133 Notices of Intent (NOI) ................................................................................... 134 Interviews ...................................................................................................... 145 Economics Research Associates Fort Monmouth Market Analysis DRAFT General & Limiting Conditions Every reasonable effort has been made to ensure that the data contained in this study reflect the most accurate and timely information possible. These data are believed to be reliable. This study is based on estimates, assumptions and other information developed by Economics Research Associates from its independent research effort, general knowledge of the market and the industry, and consultations with the client and its representatives. No responsibility is assumed for inaccuracies in reporting by the client, its agent and representatives or any other data source used in preparing or presenting this study. No warranty or representation is made by Economics Research Associates that any of the projected values or results contained in this study will actually be achieved. Possession of this study does not carry with it the right of publication thereof or to use the name of "Economics Research Associates" in any manner without first obtaining the prior written consent of Economics Research Associates. No abstracting, excerpting or summarizing of this study may be made without first obtaining the prior written consent of Economics Research Associates. This report is not to be used in conjunction with any public or private offering of securities or other similar purpose where it may be relied upon to any degree by any person, other than the client, without first obtaining the prior written consent of Economics Research Associates. This study may not be used for purposes other than that for which it is prepared or for which prior written consent has first been obtained from Economics Research Associates. This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions and considerations. Economics Research Associates Fort Monmouth Market Analysis Project No. 17269 Page 3 C DRAFT I. Executive Summary Fort Monmouth is home to the United States Army Communications and Electronics Command (CECOM). The 1,100-acre base is located in Monmouth County, New Jersey and geographically spans three municipalities – Eatontown, Oceanport, and Tinton Falls (the “host communities”). In 2005, the Defense Base Closure and Realignment Commission (BRAC) recommended its closure, which is mandated to occur in 2011. The Fort Monmouth Economic Revitalization Planning Authority (FMERPA) retained a consultant team led by EDAW to develop a master plan for the base which will guide its redevelopment. The team tasked Economics Research Associates (ERA) with analyzing existing conditions in the region from a demographic and economic standpoint; assessing the market demand for office, industrial/flex, residential, retail and hotel uses; examining demand for institutional and government uses; and reviewing the opportunities for short- term and enhanced use leases. The following constitutes an executive summary of ERA’s findings: Existing Conditions Demographics The three host communities are expected to add a total of 484 households from 2006 to 2011, or roughly 97 households a year. Monmouth is projected to grow by 8,100 households through 2011 or 1,620 households annually. Oceanport residents are, on average, older than residents in the other two communities Eatontown and Oceanport are expected to have less children under 19 in 2011; Tinton Falls is expected to have more children aged 15-19 Oceanport and Tinton Falls are more affluent than Eatontown All three communities will add more households earning over $100,000 a year by 2011. This may bode well for retail development as the area becomes more affluent. All three communities will have more people aged 55 to 69 and over 80 by 2011. This may have implications on the demand for senior housing, some of which may be accommodated on Fort Monmouth. Regional Economic Profile Monmouth County is part of the Edison Labor Area along with Middlesex, Ocean and Somerset Counties (hereto referred to as the “Four-County Area”) The industries in the Four-County Area with the highest employment are: o Retail Trade o Health Care and Social Assistance o Local Government Economics Research Associates Fort Monmouth Market Analysis Project No. 17269 Page 4 DRAFT o Professional, Scientific, and Technical Services o Manufacturing The Four-County Area has experienced steady employment growth in the Health Care and Professional Services sectors over the last few years. This trend could present redevelopment opportunities for medical and professional office uses. The major employers in Monmouth County are in Health Care, Government, and Educational Services. Defense contractors associated with the Fort are a large part of the economic market in Monmouth County as both employers and users of office and industrial/flex space. Strengths, Weaknesses, Opportunities and Threats (SWOT) The Fort Monmouth local and regional areas present a unique set of strengths, weaknesses, opportunities and threats (SWOT) which will play an important role in the redevelopment of the base. Based on the existing conditions assessment, market analysis and examination of institutional and government uses, ERA has developed the following SWOT evaluation. Strengths Strong growth in empty-nester and pre-empty-nester age groups Good transportation access o Convenient to Garden State Parkway and Route 35 Existing recreational amenities, including golf course, marina, walking trails, etc. Weaknesses Rising housing prices Low wages in retail and service sectors Few options for truck access limit options for industrial/flex space Awkward building locations on site may limit future options Poor quality and vacant retail separates recent retail development on Route 35 and Fort Monmouth Opportunities Acres of open, developable land in heavily developed local area Provision of affordable housing Potential for transit connections Economics Research Associates Fort Monmouth Market Analysis Project No. 17269 Page 5 DRAFT Active community engagement and interest in the future of Fort enhances the potential to support uses on site in the interest of the communities’ and region’s future Good visibility in the region Potential reuse