Have Office Parks Become Obsolete?

The same demographic trends threatening New Jersey’s malls have left the state with dozens of abandoned office parks—sometimes referred to as “gray fields”—and countless vacancies in suburban office buildings.

The sprawling parks began springing up around New Jersey in the 1950s, offering corporations an escape from the cities. Office-park development boomed in the 1980s, when a changing economy helped create thousands of white-collar service jobs at a time when cities seemed to be in permanent decline.

The office parks and the buildings they supported were constructed for an environment in which workers performed largely repetitive tasks, isolated from one another in cubicles and separated from the corner offices of management.

Lately, however, technology has changed the workplace again. “In 2007, the iPhone was introduced, heralding the smartphone era and providing mobility for workers,” says James Hughes, dean emeritus of the Edward J. Bloustein School of Planning and Public Policy at Rutgers. He says office work today tends to be more creative and collaborative, requiring a new kind of office architecture.

The workforce also has been subject to demographic changes. Millennials, the new generation of workers, haven’t hewed to their parents’ vision of the good life; instead, they are taking the reverse route back to the cities and their urban pleasures. Corporations have followed, abandoning their former headquarters, many of which have become obsolete.

In other cases, office parks and corporate campuses emptied out after giant mergers or when companies defected from New Jersey. Faced with all of these forces, some of the state’s largest office parks—among them Bell Labs in Holmdel, Merck headquarters in Readington, BASF in Mount Olive and Roche in Nutley/Clifton—became virtual ghost towns, absent only the tumbleweeds. And municipalities that had long depended on the tax revenue from office parks were suddenly faced with a financial crisis.

These days, the glut of office space is a drag on New Jersey’s economy, says Hughes. “The demand just isn’t there to maintain the inventory that we have,” he explains.

But just as malls are reinventing themselves, developers are beginning to see the potential of some office parks as mixed-use developments incorporating businesses, retail shops, housing, restaurants and more.

That’s already under way at the old Roche site, where a new medical school is scheduled to open this summer. The rest of the site will likely include a blend of uses. Similarly, Somerset Development is reinventing Bell Works in Holmdel, originally Bell Labs and later Lucent and Alcatel-Lucent. Somerset refers to the site’s latest incarnation as a metroburb. The town of Holmdel moved its library into the building, several high-tech firms have signed on, a hotel is rising on its roof, and there are plans for cafés and WeWork-type communal office facilities. Similar projects are in the works at the former Sanofi Research Park in Bridgewater and at an old Merck site in Union.

The future of other large-scale office parks, though, is still in doubt. BASF’s former headquarters, for instance, was recently sold, but so far no plans for it have been announced. As with the malls, geography could play an important role in each park’s future.

“Some of the office parks that are really outlying may just end up going back to seed,” says Tim Evans, director of research for the smart-growth advocate New Jersey Future. But even those spaces could have a function in a changing economy. “If New Jersey legalized cannabis,” says Evans, “we could start growing pot in some of these defunct office parks”—an idea that was recently floated in the industry publication Real Estate NJ.

One thing is certain: It’s going to take some outside-the-box thinking to keep these big office boxes from falling fallow.