Could his $400M revamp of a 1980s NJ suburban office park become a national prototype?
By Ashley Fahey
Tampa Bay Business Journal
Published: Feb 2, 2022

A corporate park in Berkeley Heights, New Jersey, is undergoing a $400 million renovation that its owners hope can serve as a national model for the new suburban office campus.

The Connell Co. of New Jersey is adding 200,000 square feet of retail, hundreds of apartments, hotels, parks and activation space — as well as upgrading office buildings and adding new hospitality and retail concepts through its Table & Banter business — at The Park, a 185-acre redevelopment of what had long been called Connell Corporate Park. Home to office tenants like L'Oreal SA, Hewlett-Packard Enterprise Co. and Samsung Electronics Co. Ltd., the park is undergoing a wholesale reimagining, both before and through the pandemic.

Connell debuted the office park in the 1980s, when companies were setting up corporate campuses in U.S. suburbs, said Shane Connell, executive vice president at The Connell Co., who is spearheading the redevelopment. A return to the urban core took place in the 2000s and into the 2010s but, driven by household formation by millennials and pandemic-accelerated demand for more space and a shorter commute, Connell is banking on a return back to suburban office — but not the kind found in the '80s.

"There was an oversupply of (suburban) office probably in the last 15 years," Connell said. "We've always had strong occupancy. What we weren't seeing was rent appreciation, or how do we keep up with office trends and work trends — work life balance, mixed use and all those things — so that's what the repositioning is. It’s changing the suburban office complex into something bigger and better."

The Business Journals caught up with Connell about The Park and its approach to suburban office development through the pandemic. The following excerpts have been edited for brevity and clarity.

When did the plan to remake this into a mixed-use environment come about?

We saw a vacancy problem in New Jersey. We did an analysis, I'd say, 10 years ago. Other owners of office parks and property in New Jersey were making decisions to basically liquidate their positions. You had some pretty large REITs downsizing their offices and pivoting almost exclusively to apartments, or buying or selling and reinvesting in other parts of the country. We then looked at our property and saw that we consistently had 95% occupancy.

With (a) mix of communities around us, with this proximity to New York City and the airport, with access directly off Route 78 and with our occupancy over our history of owning The Park since the '80s, our decision was to then make it viable for the next generation instead of liquidate. We did a lot of studying on what does that mean, to be viable for the next generation. What were high-tech firms doing on the West Coast to attract the best talent? Can we do that to a multi-tenant office (park) and create, basically, comparable offerings to tenants?

And then, what were college campuses doing to attract the best students who wanted to be a part of their campus life? During Covid, we were seeing that college kids couldn't wait to get back to school. Some (workers) like to work from home; some like a flexible schedule. If you have the offerings of a college campus, would that then make (an office park) more desirable as a work solution than your home or some urban options?

We've seen a lot of disruption since Covid-19 and questions about what's going to happen with office and other real estate sectors. How has the pandemic influenced how you have approached this project?

All of these things were part of a business plan prior to Covid. And I think what Covid has done is shifted people's priorities of work experiences. Everything that we're doing — creating this hospitality approach and wellness and work-life balance — are all things that people now appreciate more when they have the opportunity to work from home. You now have an environment that isn't just great service (and) great space but also competes with home, and also is a reason for people to want to gather.

Our general view is that people are social by nature and so the desire to be around people, colleagues, activities, indoor and outdoor spaces is all still relevant. We already were seeing demographic changes of millennials leaving the cities and coming to the suburbs and starting families. I think that people have now seen that one of the best amenities is flexibility and convenience — eliminating the long commutes, I think, is now a really desirable amenity.

What kind of office tenant demand do you see in New Jersey suburban submarkets with companies making relocation decisions based on population and job growth?

I think last year was a pretty good indicator of what we're seeing. We've started this process of upgrading these buildings. We finished one building, we're under development with a second building. That second building was a building that was fully leased to one company. It was about to become vacant; they were relocating to another location after being there for 15 years, so we (began working on) the gym, the game rooms, the elevated culinary services, outdoor spaces, rooftop terraces, all those things. (Fiserv Inc.) (NASDAQ: FISV) then came in and took the whole building. They chose us over any other location in New Jersey and will have 3,000 people coming in. They have a primary location in New York City. The dual use of New York City and New Jersey was really important to them, and is really important to a lot of companies. That is not unusual for our campus mix. Most of the companies on our campus have New York operations as well.

Once you're done with the full buildout of the $400 million investment, what's the future of The Park? Is there potential for more development?

There is a maximum density we can build on the campus, which, maybe over time, we can grow. There are opportunities to continue to add apartments later or more retail or more office but, right now, this is the vision. (There is an) opportunity to then take this vision and expand it nationally. There are probably other suburban campuses that would like to have the same mix, to make sure that their campus is just as viable as maybe our campus is, so we can work with other people who own office parks around the country. Maybe they brand it The Park, maybe we can brand it with our entertainment uses, maybe we can brand it with our wellness solutions, maybe they brand it with our catering services. There's opportunities to show that this works, and then other people may be able to then have us come on to their campus and provide our services.

So you see this as potentially a pilot for what other suburban office park owners nationally could do?

If you're a hotel, you're now offering restaurants, you’re offering event space, you’re offering maybe coworking, you're offering gyms, spas, all those things. Gyms are doing the same thing: you have a lot of large gyms getting into coworking, health, wellness, they're even getting into apartments. You have office buildings delivering the same thing. Apartments are now offering coworking uses, elevated coffee shops, all those types of things. We are looking, holistically, at the campus. We have all those users here — how do you service them?

The campus, as a whole, is a brand called The Park. And The Park, to me, is almost like a high-end resort. Just like you have the Four Seasons or the Ritz or anything else, (that's something) that you recognize as offering all these sort of design experiences and amenities. For an office park, is The Park now a brand that can be transferable nationally?