Garden State Commercial Real Estate Landscape Varied
Cassidy Turley New Jersey Releases Local First Quarter Market Overview
SOMERSET, NJ – April 16, 2013 – Cassidy Turley, a leading commercial real estate services provider in the U.S., today released its Office Market Snapshot for Northern and Central New Jersey.
Northern New Jersey demonstrated a positive first quarter with 434,341 square feet 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 square feet of negative absorption, as large single tenant office/R&D campuses continued to lose their luster while demands shifted to more collaborative office environments.
Northern NJ’s vacancy rate is down to 15.0% 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 occupiers’ movement towards more efficient office floor plans. This positive sign reinforces that tenants are no longer waiting on the sidelines and are making decisions and committing to space, which inevitably drives increased leasing activity. Bergen County, where the Bergen Central submarket has reported three consecutive quarters of positive absorption, emerged as a top performer with three submarkets recording positive demand – 96,122 square feet in Bergen Central, 71,290 square feet in Bergen East and 137,171 square feet in Bergen North.
Meanwhile, the Central NJ office market experienced an uptick in vacancy to 17% from 16.8% 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 rate is 13.4%, down from 13.6% in the previous quarter, which will hopefully offset 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 increasing demand towards 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.