South Jersey Officials Want A Trophy Office Tower To Revitalize Camden. Will It Work?

Camden County is lining up tax incentives and real estate for what could be the first office tower built in South Jersey since the pandemic — and the tallest in the region. 

Officials spent $4.7M on a parking lot next to the Walter Rand Transportation Center in downtown Camden last week, with plans to find a developer to build a 25-story tower dubbed the Beacon Building. 

The 500K SF structure’s name is meant to be taken literally, Camden County Commissioner Jeff Nash said: “It is a beacon telling people near and far that Camden is back.”

But the Beacon is far from a done deal. It still needs to land office tenants, and, as the design details aren't finalized, it remains unclear what impact the development would have on a quiet neighborhood dominated by parking lots.

“We just want to make sure all the boats are rising with the tide and not just the big ships,” Camden Business Association Vice President Nichelle Pace said.

The county has tapped Gilbane to do preliminary site work and commissioned a series of eye-catching renderings, but there are many open questions.

Officials haven’t yet identified a private-sector developer to bring the project to fruition. That decision will be made through a competitive request for proposals process, Nash said. 

He doesn’t expect construction to begin without at least some occupants signing leases.

“In order to finance the building, it will need some strong commitments from tenants,” Nash said.

Officials have targeted education and medical anchors with an existing presence in the city, including Cooper University Hospital, Rutgers University and some companies currently based in Philly. But nobody has agreed to a lease yet.

Avison Young New Jersey Office analyst Jordan Katz believes tenants will pursue leases at the Beacon because the project is filling unmet demand for trophy office space in a market with little in the pipeline.

“I think it’ll lease up at a solid rate,” he said.

Many commercial real estate players turned away from the office sector after occupancy plummeted nationwide in the wake of the pandemic.

South Jersey hasn’t gotten any new office space since then. The last delivery in the region happened at 2 Cooper St. in Camden in 2019, according to Newmark's fourth-quarter market report.

Across the river in Philadelphia, officials regularly highlight the city’s robust residential conversion trend, which is shrinking the office sector’s footprint there. The only space under construction in the city is a 438K SF build-to-suit project under construction for Chubb, according to Avison Young’s Q4 report. 

Katz said he believes South Jersey’s low availability compared to the rest of the Philly suburbs and user demand for trophy space have created a lane for the Beacon.

“Right now, people are looking for higher-class office,” Katz said. “That would fill that need a bit more on this side of the river that you’re not seeing done in Philly.”

Avison Young calculated 16.6% total availability across Camden County’s 7.7M SF of office space last quarter. That rate was even tighter in neighboring Burlington County at 13.6%. Both are well below the 27.5% and 30.8% seen in Conshohocken and the Plymouth Meeting area, two of the most prominent submarkets on the Pennsylvania side of the Philly suburbs.

The $23.30 per SF asking rents in Camden County are 77% lower than Conshohocken’s, but Katz said the bargain rates are a product of the region’s largely noncompetitive office stock.

Nash expects the Beacon Building project and related renovations next door at the Walter Rand Transportation Center to be complete within five years.

Officials are seeking $250M in tax credits from the New Jersey Economic Development Authority's development-centric Aspire program.

The initiative has a particularly generous carve-out for a list of “government restricted municipalities,” which also includes Atlantic City and Trenton. “Transformative” projects in these places are eligible for $400M in tax credits or up to 80% of the total construction costs.

Nash said the county is still waiting for NJEDA to approve Aspire credits for the Beacon. The project won’t be feasible without it.

“The cost of construction makes a building like that not possible in the city of Camden because the cost to build exceeds the return on investment until Camden goes to the next level on values of what people can get in terms of rent,” he said.

The commissioner added that the developer won’t be getting an upfront check from NJEDA. The incentives are paid back over several years, so they would need to arrange their own financing to get started.

Parking for commuters will likely take up several floors of the building, Nash said, even though it is planned for one of the most transit-accessible sites in South Jersey.

After decades of businesses fleeing Camden, tax breaks enacted under Gov. Chris Christie in the 2010s drew some back within city limits. 

But when Subaru moved into a 250K SF office there in 2018, the company picked a site with direct highway access far from the downtown transit hub and with little connectivity to the surrounding streetscape. 

Other companies have taken similar approaches, so these workers tend to not explore the city or patronize its businesses.

“Some of the new buildings in Camden are self-contained,” Nash said. “I personally think that is harmful to building the economy of the surrounding neighborhood.”

The Beacon Building would also overlook Martin Luther King Jr. Boulevard, where six lanes of traffic, a median, and the River Line train with service to Burlington County separate the Walter Rand Transportation Center from Cooper University Hospital and the residential neighborhood behind it.

While Nash said officials are considering changes to the downtown streetscape so it can accommodate more drive-in commuters, he is also hoping some of those white-collar workers will move to Camden and contribute to the city’s tax base.

“The goal is to build the housing so people are going to walk to work,” Nash said.

The city’s master plan has identified roughly half a dozen nearby lots for new housing, some of which have already been secured by Camden Redevelopment Authority.

But at the moment, the Walter Rand Transportation Center is not set up as the hub of a mixed-use community.

Most of the public spaces in and around the station are fenced off, and parked police cars with flashing lights are a persistent presence. The area has a longstanding loitering problem that improved when a nearby methadone clinic was moved to a different part of Camden, Nash said. 

While the neighborhood has a few restaurants and small businesses, they are a shadow of what downtown had to offer in the early 20th century, when Camden was the indisputable economic hub of South Jersey.

“We do have kind of a glaring hole in amenities,” said Pace, whose company, Brand Enchanting Media, occupies an office north of City Hall on Market Street.

She said the city also has a lack of modern office space for small-footprint professional services businesses like accountants and law firms. Office developers and the officials behind the Beacon Building appear to be focused on large-scale anchors, so she wasn’t sure if the project will provide much relief on that front.

The eds and meds institutions in Nash’s crosshairs are predominantly staffed by white-collar workers. Pace wondered if the Beacon would create many jobs accessible to residents of overwhelmingly blue-collar Camden, where just 10% of the population held a bachelor’s degree between 2020 and 2024, according to the U.S. Census Bureau.

“Are we focusing on job creation for Camden residents from some of the anchors or institutions, or are we just transplanting already had jobs?” Pace said.