Planning Board Resolution Memorializing Executive Drive AINR #20-09

(40908317: 4} tenants continued. The marketing effort included: (i) bi-weekly email blast to over 1,300 brokers (ii) bi-weekly emails to tenants in the market (iii) regular canvass calls to active tenants or tenants with upcoming lease expirations (iv) broker follow- up (v) listing in CoStar and (vi) leasing sign at the top of Executive Drive and two signs with Rt. 280 exposure. The current property owner invested in maintenance, upkeep, and some improvements to the buildings and properties, and actively tried to market and lease space within them. Despite these efforts, 100 Executive Drive’s vacancy rate rose from about 70% with four tenants in June 2017 to 77% with two tenants in December 2018, to its currently vacant state. No new tenants signed leases for 100 Executive Drive from the time the current owner acquired the property until present. A similar situation has played out with 200 Executive Drive. In June 2017, the building was about 51% vacant with Lincoln Educational as the primary tenant and two additional tenants in smaller spaces. By December 2019, one of the smaller tenants left. Today, Lincoln Educational remains as the only tenant and the building is about 53.7% vacant. No new tenants signed leases for 200 Executive Drive from the time the current owner acquired the property until present. The high vacancy rate of 10 Rooney Circle has remained stable for years. The TSA remains the only tenant occupying building. For years prior to the current owner taking title to the building, no other tenant spaces were leased. Since the change in ownership, no new tenants have signed leases for 10 Rooney Circle, and it remains 58.5% vacant. According to Cushman & Wakefield, the overall vacancy rate in the “Essex Rt. 280” submarket has been between 16% and 18% since 2018. Per Avison Young, the vacancy rate in the “Suburban Essex / Rt 280” submarket has been around 10% since 2017. “d” criteria analysis: There is substantial credible evidence contained in photographs of the buildings, building history and condition reports, and analysis of broader planning, design, and market trends to demonstrate that these office buildings are functionally obsolete. A review of real estate, planning, and design literature reinforces the various ways the buildings are obsolete. The buildings lack modern amenities such as full-service cafeterias, fitness centers, and

review of real estate, planning, and design literature reinforces the various ways the buildings are obsolete. The buildings lack modern amenities such as full-service cafeterias, fitness centers, and locker rooms. The property is isolated in a single-use location without walkable access to amenities or transit access. The broader market trends for office buildings in Northern New Jersey have shown that the market is relatively stable, but tenant demand is focused on newer and more recently upgraded buildings. Buildings of similar vintage that have been upgraded are seeking substantially higher market rents than the most recent leases of $21 per square foot at Executive Drive. The significant vacancy rates in the Study Area over the last six years are a symptom of the obsolescence of the facilities. The average vacancy rate in the Suburban Essex sub-market has been fluctuating around 17-18% for the last two years, while the buildings in the Study Area have been 50% or more vacant for a much longer period. The lack of market interest in these properties can be attributed to their isolation and physical obsolescence relative to their peers. There is also substantial credible evidence that the obsolete conditions of the property are detrimental to the public health, safety, morals, or general welfare. The inability to find new tenants and secure average market rents has diminished the value of the properties at 100