The developer who recently purchased 14 acres containing a roughly 117,000-square-foot office building in Morris County is eyeing potential housing at the site just off Interstate 287.
Whether or not anything comes of the idea remains to be seen. Josh Mann, co-founder of Millburn-based Iron Ore Properties LLC − which recently announced that it purchased the property − said he wants to get a discussion going with local officials and town residents.
The property, 240 and 255 Cedar Knolls Road in the Cedar Knolls section of Hanover, is currently zoned for office and medical, something Mann said would have to be addressed with the local zoning board of adjustment.
Similar efforts to rezone office space have taken years, like with the former Toys R Us headquarters in Wayne.
And the addition of more housing often meets fierce and sometimes organized pushback from local residents, like in the case of Wayne, who said the Toys R Us headquarters replacement could cause flooding and pollute the stream that snakes through nearby neighborhoods.
It’s sometimes referred to as “NIMBYism” or “not in my backyard," where local residents organize against efforts to construct local projects like housing or warehouses.
Hanover's mayor, Thomas "Ace" Gallagher, did not immediately comment on the prospect of housing at the Cedar Knolls property.
But the idea of an office-housing combination is not without precedent, Mann pointed out.
In March, developers for a massive office complex in Berkeley Heights just off Interstate 78 unveiled plans for two luxury apartment buildings that would have a combined 328 units.
That property already houses a hotel and several office buildings, including a financial technology hub by fintech company Fiserv that employs 3,000 people.
“You create a campus,” Mann said in a phone interview. “I think it’s a better alternative to think about doing something here than taking greenfields.”
In a similar instance in Cranbury in Middlesex County, local officials are trying to seize historic farmland to redevelop it for affordable housing, which has drawn public opposition. The owners have promised to take the issue to court.
Mann said the property is “already developed,” given the existing parking lots, he added. “You’ve got the infrastructure there to handle it.”
The property overall sold for an undisclosed amount, according to a Monday announcement from Iron Ore.
It previously fetched $9.35 million in 2018, after which the owners spent $2 million on upgrades which included new elevators, heat pumps, bathrooms and a lobby upgrade. Inside the building is a full-service cafeteria, conference center and gym with showers.
“It’s an incredible piece of land,” Mann said.
Office space out of vogue
The property sits near the busy Interstates 80 and 287 corridor, which according to James Hughes, a professor of urban planning and policy development at Rutgers University in New Brunswick, saw many office buildings spring up in the 1980’s.
Much of that office space fell out of vogue even before the COVID-19 pandemic, Hughes said, as younger talent flocked to urban centers like Jersey City, Hoboken and Manhattan.
The pandemic only hastened that trend amid the sudden adoption of widespread work-from-home and the slow return-to-office. In turn, some suburban office space has been demolished to make way for other developments such as apartments or warehouses.
The suburban offices most in demand are “Class A" offerings, the “newest, fanciest, best-designed buildings, which would attract high-quality tenants,” said Jeffrey Otteau, chief economist for the Otteau Group Inc., an Old Bridge-based real estate consultant.
“Class B and C are older suburban office buildings which are of the lowest quality and often not in very good condition,” he said.
The building itself is a Class A office space, according to real estate website LoopNet.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.