While being headquartered in a LEED-certified building is a must for many tenants, it’s not the only way a company can reduce its carbon footprint. Consider these facts:
- The typical public transit rider consumes, on average, one half of the oil consumed by an automobile rider (American Public Transit Association).
- If an individual switches a 20-mile roundtrip commute to public transportation, his or her annual CO2 emissions will decrease by 4,800 pounds per year — equal to a 10-percent reduction in a two-car household’s carbon footprint (PublicTransportation.org).
Statistics such as these have led environmentally responsible tenants to conclude that a building’s location can be just as important as the materials and methods used to construct it. With this in mind, a growing number of companies are seeking out office spaces that are located within close proximity to mass transit.
Here in New Jersey, this trend has been aided by the Urban Transit Hub Tax Credit (UTHTC) program, which provides a tax credit of up to the full value of capital investments for very large real estate projects located within a half-mile of urban rail stations. The UTHTC was put into place in order to spur private investment in New Jersey’s cities by creating pedestrian communities around mass transit, thereby increasing transit ridership and taking cars off the roads.
We recently released On Track, a report that analyzes the effect that the UTHTC has had on New Jersey’s transit hub office markets versus its suburban office markets, and the results are clear: transit hub office markets are some of the healthiest areas in the Garden State. For the first time in 60 years, new construction in New Jersey’s transit hubs has nearly equaled that of suburban office markets.
The report shows that transit hubs accounted for 25.5 percent of the state’s total leasing velocity in 2011 — up from the previous two years. Furthermore, vacancy is more than 12 percent lower in transit hubs than in suburban New Jersey, and the disparity between the transit hub and suburban New Jersey asking rents has risen to more than $5 per square foot — a 37 percent climb since last year.
We are currently tracking approximately 1.2 million square feet of new office construction in Northern and Central New Jersey. Out of that total, 881,900 square feet is being developed within transit hubs, with the remaining 338,000 square feet taking place in suburban markets. This is a drastic departure from just a year ago, when only 65,670 square feet — out of a total of nearly 595,700 square feet — was being developed in transit hubs.
With the metrics of a transit environment assisting companies in hiring and retaining employees, as well as lowering their carbon footprint to a more sustainable existence, we believe tenants will continue to seek out office spaces that offer transportation choices.