From February to July 2020, New York City saw a historical exodus due to COVID-19. Between New York and Brooklyn, the largest metropolitan area in the US lost 153,984 residents, according to US Postal Service change-of-address records. This loss was nearly 400 percent higher than the next highest urban area, Chicago. By November of 2020, these initial numbers had doubled to 300,000. Of the top destinations for New Yorkers, four of the most common destinations were zip codes in Jersey City, Hoboken, and Princeton.
While many of last year’s migrations occurred due to fear of living in a densely populated area, the core reasons that people – and companies – moved to New Jersey were a continuation of pre-existing trends, a fact confirmed by geospatial data librarians studying the area’s migration trends.
As businesses plan for the future, the following three factors will largely influence any choice related to site selection in the NY/NJ metropolitan area.
1. Cost of Living and Doing Business
According to a Manhattan Institute survey of high-income New Yorkers conducted last summer, the 44 percent that considered leaving the city at the time cited cost of living as their top reason. Cost of living for individuals in New York City is among the highest in the country. In fact, if your income in Manhattan is ~100,000 after taxes, moving to Newark, New Jersey would get you ~200,000 of purchasing power. The same is true for companies with dedicated office space in New York City. By shifting in-person operations to New Jersey, companies can enjoy up to 70 percent lower costs on workspace, depending on their needs. Class A office space in Jersey City or Hoboken is roughly half the cost of space in Manhattan—$45 per square foot versus $79 per square foot. On average, our commercial office space is 60 percent cheaper than New York. New Jersey offers all the access to New York City, but at a more affordable cost – and with more room to grow – for businesses and families.
2. Quality of Life
The pandemic accelerated the timeline for a plan many people already had: moving to an area where they can have more space for their money and an enhanced quality of life. The Northern New Jersey home real estate market saw a massive surge last summer driven by New Yorkers leaving Manhattan for the New Jersey suburbs. Many traded crowded neighborhoods and small apartments for backyard space and homes better suited for remote work. They also recognized that New Jersey is best for families – we are ranked the #1 state to raise children with the #1 public schools in the U.S. According to WalletHub’s Happiest States 2020 ranking, New Jersey is the “most mentally and physically fit” state in the U.S. – five spots ahead of New York at No. 6.
New Jersey offers lifestyle options as diverse as our state, from beachside communities to thriving cities and suburbs with charming downtowns. Oakland, NJ, for instance, is a 30-minute drive from New York City and is known for its rustic charm. Jersey City, right across the Hudson River to New York, is perfect for those looking to remain in an urban environment with great diversity (Jersey City was named the most ethnically diverse city in the country once again earlier this year). Beachwood, NJ was named one of the best work-from-home cities in 2021 by PCMag.com, is located near the beach and is still only a 90-minute drive to New York. Sparta, NJ provides access to 11 private lake communities and the rolling hills of northwestern New Jersey, but still sits only 45 miles from New York.
While workforces may end up more spread out, New Jersey’s transportation infrastructure is ideal for hybrid and remote work solutions. New Jersey offers easy access to mass transit for part-time commuters, including NJ TRANSIT and PATH. For remote workers seeking reliable internet connectivity, our State is also #1 in broadband access. This combination of factors creates excellent flexibility when deciding on a business location closer to where employees live.
3. Flexible Workspace
COVID-19’s most significant long-term impact may be the transformation of how and where employees work. A survey of global real estate executives conducted CBRE Research regarding the pandemic’s impact on office space found:
- 70 percent of those polled see at least a portion of their staff working remotely, and 61 percent could operate in a hybrid model of working remotely and in-office.
- Only 10 percent of those polled expected there to be no remote work policy in place down the road.
- When comparing pre- and post-COVID opinions on the role of employees in choosing where they work, stances changed to be more likely to empower employees to choose between a remote, in-office, or hybrid work schedule.
- 73 percent expect flexible workspaces to be part of their company’s real estate strategy.
- Most of those surveyed expected slight (41 percent of responses) or no change (22 percent) in the importance of still having a physical office.
In a world where decentralization of headquarters to a mix of satellite, project, and flex-space offices is being forecasted, the increased flexibility of building in New Jersey and reduced real estate costs are advantages. Decentralization of office space enables companies to take full advantage of their proximity to the New York City and Philadelphia markets while reducing overhead.
Both developers and the State of New Jersey have had pre-pandemic plans underway to reimagine corporate real estate offerings and create more live/work/play communities. Berkeley Heights, NJ is home to The Park, a $400 million, 185-acre redevelopment focused on combining flexible workspaces with residences, dining, and other amenities. New Brunswick, NJ will be home to The HUB, a state-backed collaborative center that will foster research, innovation, entrepreneurship, and incubation, and already has major tenants lined up at Princeton University, Rutgers University, Hackensack Meridian Health, and RWJBarnabas Health. The New Jersey EDA has also been working with co-working spaces – a mix of privately owned and university-backed incubators – to support tech and life science startups through its program NJ Ignite; one of many forms of assistance the State is currently offering early-stage companies.
Lastly, in Jersey City, Argent Ventures and H&R REIT have launched The COVE JC, a mixed-use campus across the Hudson River from New York City designed for tech and life sciences companies. The COVE will be a 10-minute walk away from the PATH train and two minutes from light rail. It will feature 1.4 million square feet of lab/tech offices and 1.6 million square feet of residences, all intertwined with gardens, greenery, event spaces, and biophilic design pieces. Tenants will have easy access to a top talent pool, since New Jersey is home to the largest concentration of both engineers and scientists in the U.S.
Come Home to the State of Innovation
Choose New Jersey is New Jersey’s leading nonprofit economic development organization. For businesses interested in learning more about your company’s potential in our State, we provide complimentary relocation and expansion services, including access to state resources information, site selection assistance, market intelligence, economic development connections, and public relations support. Get the best value for your business. Contact us today.
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