Mid Atlantic Real Estate Journal — Commercial Office Spotlight — February 22 - March 14, 2013 — 13B NAI F ennelly By Gerard J. Fennelly, NAI Fennelly Princeton Office Market Report Internet, Software, Electronic & Fiber: this category finished 2012 with close to 129,648 square feet of growth. twenty two percent of the total growth came from the following companies: aLK, goodrich and Sparta Systems, who all doubled their space for a total of 150,000 square feet, all leasing Class a Space. Education, Government, & Non-Profit: the education/government expansion grew from 8% of the absorption to 22% of the growth. eden Institute leased 17,000 square feet of office work space for their “eden W.e.R.C.s Program” at 4 Crossroads in Hamilton. the gSa has leased 25,000 square feet in Lawrenceville. this sector will probably grow considering 73% of the national job growth this year is with state and local governments. the educational sector should also see growth as people have to retrain themselves to get hired in the coming years. educational institutions are gearing up for this by decentralizing their campuses and creating satellite locations closer to their growing constituency. GROwTh PER SECTOR Net Absorption Service/Bus./Legal Govt/Edu./Non-Profit Bio Internet/Software/Electronic/Fiber Medical Sports & Entertainment 2011 348,441 27,700 574,314 96,904 55,610 11,543 2012 195,027 37,497 127,960 129,648 35,057 9,900
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T he greater Princeton area experienced a 35% decrease in growth from 2011, primar- ily due to a declined ve- l o c i t y. The n umb e r o f transactions decreased by 2 2 % , y e a r o v e r y e a r, however, the average transaction size in- creased by 17%. Overall, it was an anemic de- mand as everyone waited for the presidential election to be over, only to be hit with Superstorm Sandy, and a now a government “branded” Fiscal Cliff. The positive sign was the continuing migration of companies, includ- ing Sparta Systems (Software) who relocated from Holmdel, Taiho Pharmaceuticals (Japa- nese Company) and Hisun Pharma (Chinese company) and Essential Power and Intellect technologies both migrating from North Jersey. This migra- tion is a welcome event which should continue into 2013 with Dr. Reddy (India) and Otsuka Pharmaceuticals (Japan) choos- ing to expand in Princeton. The internet software media and electronics category showed positive signs with 75,000 s/f of growth, this was due in part to the expansion of Goodrich, Sparta and XM Sirius. Medical grew by 47,000 s/f for the year. Government, educa- tion and non-profits grew by 29,500 s/f . Service, Business, Legal, & Finance: this sector accounted for approximately 195,000 s/f of growth, only 44% of the growth in 2011. The decrease, year over year, is because the financial and ser- vice sector markets are finish- ing a major contraction. MRM reduced their space from 40,000 to 29,000 s/f, adP reduced from 67,000 s/f to 36,000 s/f of office space at the Matrix Corporate Center in Cranbury. Tyco sale of its divisions, renamed Pentair, created a reduction from 75,000 s/f to 8,857 s/f. Mathmatica expanded by 21,000 s/f and re- newed their lease, occupying the majority of its 100,000 s/f headquarters. BioPharma, Chemical, & Technology: In this category companies completed 11 of the 149 lease transactions or 8% of the growth for the year. FMC leased 20,000 s/f of classAspace at Princeton South in Ewing. Abbott Labs continues to grow Jerry Fennelly
servicing the growing diabetic field and Medical Indicators tripled their space due to the purchase of a company. Medi- cal diagnostics Lab moved into their new facility of 60,000 s/f . Princeton continues to be a pre- ferred location for international companies due to its central east coast location, proximity to Pharma industry HQ’s and the region’s international recogni- tion. The major research and
development remains centered on cancer, medical diagnostics and diabetes, which all continue to produce company growth. Medical: growth in the Medi- cal Industry grew by 35,600 s/f over the last twelve months. doctors are experiencing a backlash from Obama Health- care, leading to break-ups, reshuffling and reorganization amongst practices and medical groups. Larger practices are
positioning themselves into multiple markets, with greater geographical distances between each office. Smaller groups have been splitting up due to the pres- sure placed on them to invest in group owned technology and to compete with larger, more avail- able, practices. Two hospital locations with 2012 openings, Capital Health in Hopewell and University Medical Center of Princeton in Plainsboro, are
creating a relocation of medical related tenants across the whole regional market. Internet, Software, Electronic & Fiber: This category finished 2012 with close to 129,648 s/f of growth. Twenty two percent of the total growth came from the following companies: aLK, Goodrich and Sparta Systems, who all doubled their space for a total of 150,000 s/f , all leasing continued on page 18B
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