Lord, Abbett, a mutual fund management firm, will relocate its headquarters from New York City's General Motors building to Jersey City in a few months. Another New Yorker, investment house Paine Webber, recently signed a 266,000-square-foot deal in Jersey City in addition to the nearly 1 million square feet that it already has here. Also choosing the Garden State to expand out of New York City is American Express, now negotiating for property. Last September, Datek Online, an Internet firm, moved a large part of its operations from Manhattan and Brooklyn into Metro Park.

Lord, Abbett, a mutual fund management firm, will relocate its headquarters from New York City's General Motors building to Jersey City in a few months. Another New Yorker, investment house Paine Webber, recently signed a 266,000-square-foot deal in Jersey City in addition to the nearly 1 million square feet that it already has here. Also choosing the Garden State to expand out of New York City is American Express, now negotiating for property. Last September, Datek Online, an Internet firm, moved a large part of its operations from Manhattan and Brooklyn into Metro Park.

The cream of intellectual capital companies, whose businesses focus on such fields as the Internet and new media, financial services and telecommunications, are moving to the Garden State from the Big Apple. While the influx has been happening for years, the pace has quickened in recent months-and, many believe, motivations for the moves have changed. These companies are discovering that New Jersey is no longer just about cheaper real estate but about quality of life and expansion elbow room. The clincher, some say, is the state's package of tax and other incentives.

"Intellectual capital is what everybody's business is becoming more and more about," says Donald P. Eisen, executive managing partner, New York area for Cushman & Wakefield, an East Rutherford-based real estate services provider. He says companies are realizing it makes good business sense to move to New Jersey, adding that Lord, Abbett will be "one subway stop from Manhattan," Companies that don't "stay on the rail," he says, run the risk of losing their labor to other states.

Upwardly mobile and expanding firms are now talking more about open spaces, greater space availability, more single-story buildings and higher ceilings as attractions--loosely described as corporate quality of life. New Jersey real estate, many agree, can offer those specifications. Between January 1994 and the end of last month, the state's Business Employment Incentive Program had brought in 115 projects worth over $3.5 billion from other states, creating 26,645 new jobs. According to official New Jersey Commerce & Economic Growth Commission data, 29 of these projects have moved from New York state.

Industry statistics reflect the trend. In Northern and Central New Jersey, the average annual asking rental rate for office space has steadily climbed from $18 a square foot to nearly $22 over the last five years, according to a report released for the first quarter of 1999 by Cushman & Wakefield. During this period, average vacancy rates for office space in these areas have been cut in half from 24% to 12%. Industrial property has kept up, with the average asking rate rising to $4.09 a square foot at the end of March 1999 from below $4 in January 1994. The vacancy rate for such space is now at 7%. The declining vacancy rates are in part attributable to a contraction in construction activity--some 35% over the past year in Northern and Central New Jersey. This contraction in turn is attributed to a surge in construction completions last year.

Gualberto Medina, CEO of the Commerce & Economic Growth Commission, a political pro at articulating the state's commercial sales pitch, asserts that it is Governor Christie Whitman's business-friendly policies at work. Meanwhile, Caren Franzini, executive director at the New Jersey Economic Development Authority, stresses that companies are not only moving in, they're also branching out. "AT&T, for example, achieved a major expansion in Morristown," says Franzini. She adds that a Manhattan-based publishing firm also needing room to grow is currently considering a move to New Jersey.

But while the state can boast of many such corporate victories, it has also had its losses. Hoechst Celanese, for example, will vacate its 210,000-square-foot Warren Township building later this year. Mutual Benefit Life, too, will vacate its 440,000-square-foot building in Newark. Acutely conscious of the powerful business momentum that a New York City address brings, several firms are finding that it still pays to be in the nerve center of global commerce. "I have two daughters of working age," says Cushman & Wakefield's Eisen, "and they don't want to work anywhere else but New York." Many companies echo that sentiment

Even so, not every company is so image conscious. Eisen says New Jersey is well-positioned for the next big leap of newcomers, Internet-based businesses. Medina agrees that the shift into New Jersey--from around the country--is far from over. Southern New Jersey counties, he reckons, will be the next hotspot. "People are going to look at South Jersey as the South Carolina of the Northeast," he says. "The cost of land, labor and living is lower there, and they still maintain a lot of the traditional values." That would indeed be going back to the future.