PARSIPPANY — The residual effects of COVID -19 are still negatively affecting the commercial market. During the three-year period from March 2020 to May 2023 most employees were forced to work from home. The pandemic forced business meetings to be held virtually through multiple online platforms. In the years leading up to COVID-19, many real estate professionals and appraisers predicted a virtual workforce, but COVID-19 seemed to make it occur overnight. Due to this, many office buildings remained unoccupied, and some have already been demolished for apartments and warehouse buildings.
Prior to COVID-19, Parsippany-Troy Hills Township had a very active 12,000,000 square feet of office space, second only to the City of Newark, with many companies having their corporate headquarters located in Parsippany. During the last two years, 20 office buildings containing over 3,000,000 square feet of office space were scheduled or already have been demolished. One of these buildings, 8 Wood Hollow Road, was recently converted into a 101-room boutique hotel – Troy Hotel. In addition, over 2,000 new luxury apartments including PARQ, The Lexica, The Lawrence, District 1515, Ballentine Greens and Avalon Bay have either been completed or are under construction on vacant sites where office buildings once stood. There are seven warehouse buildings containing over 1,100,000 square feet, that are also planned or nearing completion on sites previously used as office space. There is even a Topgolf under construction which is scheduled to open June 2026, on Route 46 East where two office buildings once stood. In addition, over the last 12 months the Township Council approved numerous properties to be “In Need of Redevelopment”, eight of which were buildings containing over 600,000 square feet of office space.
This reduction in office space has also had a direct effect on the hotel market. With most meetings now being held virtually, in-person meetings have been reduced significantly, therefore there is less reason for business travelers to rent hotel rooms. Hotel occupancy rates have seen an increase since 2020 but they are still lower than pre–COVID-19 occupancy rates.
During the past year many companies have been requiring their employees to Return-To-Work (RTW). Some private companies are also beginning a hybrid schedule, with employees working 3 to 4 days in the office and one or two days from home. As of today, most New Jersey State office employees are required to work three days in the office and two from home. Companies like AT&T, Goldman Sachs, JP Morgan, Tesla, Amazon, Home Depot, PNC Bank and others are going a step further requiring their employees to return to the office for the full five-day work week. Company executives feel that a return-to work policy will help boost employee productivity, while also allowing longer term employees the chance to mentor new employees. This new work schedule will eventually have a positive effect on the office market.
During COVID-19 (March 2020 to May 2023) the retail market was also hit hard since most of the retail shopping was done online. Many regional malls have already been forced to close and many more are having problems. This has led to the rise in the warehouse market, which explains why so many new warehouse buildings are being built. Major retail companies use local warehouses to store popular inventory closer to consumers. This is where the term “Last mile Delivery” came from. Some warehouses are being branded as Modern Logistic Facilities. They begin as National warehousing, then Regional warehousing and finally Urban warehousing which are located near consumers for the final delivery point. Many retailers are now guaranteeing overnight delivery, so it is very important that they have storage facilities in close proximity to consumers. New planned or under construction warehouse buildings, located in Parsippany, having a total square footage of over 1,114,000 are listed below on sites where office buildings are listed below on sites where over 1,101,000 square feet of vacant office buildings once stood.
1 Hilton Court was a 172,000 square foot office building constructed in 1990 and was occupied by Diachii Sanko pharmacy company. It has been demolished, and a new 122,664 square foot warehouse building is nearing completion to be occupied by US Auto Force.
7 Campus Drive was a 154,395 square foot office building constructed in 1982 and was occupied by Nabisco Brands in the 1990’s. It has now been demolished for a new 128,150 square foot warehouse building.
9 Sylvan Way was a 60,111 square foot office building constructed in 1983. It has been demolished for a new 67,219 square foot warehouse building.
3 Century Drive was a 71,941 square foot office building constructed in 1981. It has been demolished for a new 64,800 square foot warehouse building.
8 Lanidex Plaza was a 56,230 square foot office building constructed in 1980 and was previously occupied by Silox. It has been demolished for a new 140,031 square foot warehouse building.
169 Lackawanna Avenue was a 256,750 square foot office building constructed in 2001 and was originally occupied by New York Life Insurance. It has been demolished for a new 281,198 square foot warehouse building.
4 Wood Hollow Road is a 329,940 square foot office building constructed in 1980 that was granted approval to demolish the building and build a new 310,168 square foot warehouse building.
In Parsippany-Troy Hills Township there have been a few bright spots in the office market with companies leaving older office buildings and moving into office buildings that offer employee amenities such as fitness centers, cafes etc. This trend is known as renovation driven leasing. These moves have accounted for the recent leasing of over 330,000 square feet of office space.
Some examples of these are:
8 Sylvan Way – B & G Foods leased 31,000 square feet and Day Pitney leased 56,000 square feet
3 Sylvan Way – Acrisure Insurance leased 42,800 square feet
5 Sylvan Way – Porzio, Bromberg, & Newman leased 39,600 square feet.
4 Campus Drive – Einhorn, Barbarito, Frost & Botwinik leased 26,700 square feet and Summit Financial expanded their office area to a total occupancy of 42,000 square feet.
1 Sylvan Way – PBF Holding Company expanded their lease to include a total of 69,200 square feet
9 Entin Road – Provident Bank leased 23,000 square feet.
Other highlights include:
1269 Route 46 – a new 67,000 square feet Topgolf facility is scheduled to open in June of this year.
8 Wood Hollow Road – was once a 50,700 square-foot office building and it has now been converted into a 101-room boutique hotel to be branded as Troy Hotel by Wyndham.
6A Sylvan Way – a 100,000 square foot Lifetime athletic club is currently under construction is scheduled to open in the second quarter of 2027.
Within the 25 square mile area of the Township, major highways intersect throughout the Township including Interstate 80, Interstate 287, Route 46, Route 10, Route 202 and Route 53. The Township offers easy access to major highways for companies looking to move to Parsippany -Troy Hills which has resulted in recent commercial growth.
Cassese, who has more than 47 years of experience in tax assessment and real estate appraisal, currently serves as the Tax Assessor for Parsippany-Troy Hills Township.
