NEW YORK – Cassidy Turley, a leading commercial real estate services provider in the U.S., today released their Office Market Snapshot for the Northern and Central New Jersey areas. Northern New Jersey demonstrated a positive first quarter with 434,341 SF of net absorption, reversing the trend of six consecutive quarters of negative absorption. Meanwhile the changing landscape of the Central NJ office market played out with 216,077 SF of negative absorption as large single tenant office/R&D campuses continued to lose their luster while demands shift to more collaborative-friendly office environments.
Northern NJ vacancy rate is down to 15.0 percent in the first quarter from 15.3% in the fourth quarter of 2012. This is particularly impressive considering the current environment of corporate consolidations and movement towards more efficient office floor plans in the market. The positive sign reinforces tenants are no longer waiting on the sidelines and are making decisions and committing to space which inevitably drives volume increase of leasing activity. Bergen County, whose Bergen Central submarket has reported three consecutive quarters of positive absorption, emerged this quarter as a top performer with three submarkets recording positive demand (96,122 sq. ft. in Bergen Central, 71,290 sq. ft. in Bergen East, and 137,171 sq. ft. in Bergen North).
Meanwhile the Central NJ office market experienced an uptick in vacancy to 17 percent from 16.8 percent at year-end 2012. Average asking rates have stabilized for the most part at $23.23 per square foot, slightly down from $23.38 per square foot in the fourth quarter of 2012. The Somerset/ I-78 East submarket vacancy rates is 13.4 percent down from 13.6 percent in the previous quarter, which will hopefullyoffset contraction along the I-287 corridor.
Looking forward, as the overall demand for more open floor plans continues to rise, landlords will need to place a priority on renovations to maintain a competitive edge in the NJ office market. Corporate relocations and consolidations will continue to put negative pressure on absorption. However, concession packages from landlords have stabilized. Asking rents will most likely not increase until vacancy rates approach levels prior to the economic downturn.
“Understanding the nuances and the shifting outlook of the New Jersey office market as well as the potential impact of the increasing demand towards a modern open office space gives us the ability to provide the best possible product and service to our clients,” comments Raymond Trevisan, Managing Principal of Cassidy Turley.
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider with more than 3,800 professionals in more than 60 offices nationwide. The company represents a wide range of clients—from small businesses to Fortune 500 companies, from local non-profits to major institutions. The firm completed transactions valued at $22 billion in 2012, manages approximately 400 million square feet on behalf of institutional, corporate and private clients and supports more than 23,000 domestic corporate services locations. Cassidy Turley serves owners, investors and tenants with a full spectrum of integrated commercial real estate services—including capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. Cassidy Turley enhances its global service delivery outside North America through a partnership with GVA, giving clients access to commercial real estate professionals in 65 international markets. Please visit www.cassidyturley.com for more information about Cassidy Turley.