6B — July 11 - 24, 2014 — New Jersey — M id A tlantic
Real Estate Journal
www.marejournal.com
S outhern N ew J ersey Southern New Jersey office market shifts from recovery mode toward real growth WCRE report: new investment, small business expansion strengthen SNJ real estate market S OUTHERN NEW JER- SEY — The Southern New Jersey office mar- business confidence, which is fueling expansion.” edly lower vacancy rate than Camden, at 9.1%comparedwith Camden's 18.1%.
bullish tone in the market for 2014. The CRE market was very busy during the quarter, bouncing back fromthe setbacks imposed by the harsh winter to reclaim another portion of va- cancy and set up a healthy pipe- line of deals that are expected to close later in the year. There were approximately 310,493 s/f of new leases and re- newals executed in Burlington, Camden, and Gloucester Coun- ties during the second quarter, including several large spaces, ranging in size from 6,000 to 44,000 s/f. Notably, expansions and new deals remained strong
this quarter, representing 52% of all transactions. Net absorp- tion for the quarter was approxi- mately 112,368 s/f, and prospect activity was extremely active, with a pipeline of approximately 350,000 s/f of pending deals ex- pected to close during the third quarter. “Vacancy rates continue to fall, and conditions in our re- gion have improved to the point where we expect to see them fall even further,” said JasonWolf , founder and principal of WCRE. “We're seeing lower unemploy- ment, including gains in office jobs, and a general boost in small
The report noted that for the second straight quarter, many of the subject properties were located in prime 3M locations within Burlington County, and that the tightening of those ar- eas was causing demand to shift toward vacancies in Camden County. Other officemarket highlights from the report: •Both Burlington County and Camden County saw sig- nificant decreases in vacancy this quarter, though Burlington continued to maintain a mark-
•Average rents for class A&B product continue to show strong support in the range of $11.00- $14.00/s/f NNN or $21.00- $24.00/s/f gross, with an overall market average showing strong support in the $10.00-$12.00/s/f NNN or $20.00-$22.00/s/f gross for the deals completed during the first quarter. This is es- sentially unchanged from the previous quarter. •New lease activity for Q1 is in the range of approximately 161,316 s/f of new deals and/or expansions and approximately 149,177 s/f of renewals. •All of the major private owners and REITS showed a significant increase in prospect activity for the quarter, and all continue to remain cautiously optimistic for 2014. WCRE also reported on the local retail market, where the news is quite bright for Center City Philadelphia, but less so for Southern New Jersey. High- lights from the retail section of the report include: •Several major retailers are moving into large Center City spaces, including Nordstrom Rack, Forever 21, andAmerican Eagle Outfitters. •Southern New Jersey wel- comed a new Whole Foods and saw a new outlet center break ground in Deptford, but there are some troubled centers amid those still experiencing growth. •Overall retail vacancy in the tri-county area is at 15.7%, up for the second straight quarter.. •Class A retail product rental rates continue to show strong support in the range of $30.00- $40.00/s/f NNN, which is es- sentially unchanged from the previous several quarters. •Class B product shows sup- port in the range of $15.00- $25.00/s/f NNN, which is also unchanged. n a section of the Mid Atlantic Real Estate Journal P.O. Box 26, Accord, MA 02018 781-871-5298 • 800-584-1062 fax 781-871-5299 www.marejournal.com New Jersey Real Estate Journal
ket seems to have shifted from recovery mode toward the first steps of real growth, according to t h e l a t e s t analysis by Wolf Com-
Jason Wolf
mercial Real Estate (WCRE) . The firm's quarterly market report finds amix of mostly posi- tive trends during the second quarter, making for an overall
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