16A — January 11 - 24, 2013 — New Jersey — Mid Atlantic Real Estate Journal
www.marejournal.com
s outherN N ew J ersey There are some reasons for optimism, WCRE finds
Neither hurricane, nor election, nor Fiscal Cliff can stay the So. Jersey comm’l. RE market from its slow, steady climb
V
OORHEES, NJ – De- spite the headlines, the local commercial
the election, and the threat of the temporarily-resolved fiscal cliff exerted pressure on
fourth quarter showed a sig- nificant uptick in both new deal activity and expansion.
increase over the third quar- ter. This includes new lease and expansion transactions of approximately 235,000 s/f. Notably, expansions and new deals outpaced lease renewals this quarter. The report also noted that New Jersey’s unemployment rate improved to 9.6% - com- ing down from a 35- year-high notched during the previous quarter – and that there are many new real estate deals nearing completion. Other office market highlights from the report: • Average rents for class A & B product remained at the
improved level they reached earlier this year, continuing to show strong support in the range of $11-$14.00/s/f NNN with an overall market aver- age of $11.00/s/f NNN for the deals completed during the fourth quarter. • New deals and expansion transactions of 235,000 sf for the fourth quarter was more than double the third quarter mark of 106,000 s/f. • Moorestown, Marlton and Mount Laurel (3M) continue to show strength, while a large share of the region’s vacancies remain in Voorhees, Pennsauken, and the west side of Cherry Hill. Burlington County continued to maintain a significantly lower vacancy rate than Camden County. • Tenants continue to take advantage of low rental rates and are securing long-term lease commitments. The pat- tern of this flight to quality – upgrading to better loca- tions and spaces – is expected to continue, especially among larger firms. • All of the new major own- ers and REITS are showing a significant increase in deal activity and occupancy – both renewals and new deals – and are all cautiously optimistic. Retail market highlights from the report include: • Moorestown has issued its first ever liquor licenses, and PREIT acquired them in order to bring four new high end restaurants to the Moore- stown Mall. • Overall retail space va- cancy is still hovering in the 17-18% range, but the market has stabilized, and prime re- tail locations have very little vacancy. • Average rents for class A retail product continue to show strong support in the range of $30-$40.00/s/f NNN. class B product shows support in the range of $15-$23/s/f NNN. • The Haddonfield Road cor- ridor, Route 70, and Route 73 are the prime destinations for retailers. The report also anticipated challenges in 2013, with at least 250,000 sf of additional vacancy expected to return to the market as Lockheed- Martin, Catalent Pharma, and others follow through on plans to downsize. But Wolf said that even this development could be positive, because large blocks of quality space in ex- cess of 30,000 s/f have become scarce. n
real estate market ex- ceeded sev- eral o f i ts third quarter benchmarks, WCRE said in its latest q u a r t e r l y a n a l y s i s .
“Though Hurricane Sandy, the election, and the threat of the temporarily-resolved fiscal cliff exerted pressure on businesses, investors, and consumers, there were signs of accelerated growth and reasons for optimism amid the overall climate of cautiousness,” said JasonWolf, founder and principal of WCRE.
businesses, investors, and con- sumers, there were signs of ac- celerated growth and reasons for optimism amid the overall climate of cautiousness,” said Jason Wolf, founder and prin- cipal of WCRE. According to WCRE, the
Several deals of significant size were completed, and prop- erties in prime locations per- formed better than the overall market vacancy rate. There were approximately 389,000 sf of notable deals executed in the market, a nearly 25%
Jason Wolf
While the third quarter was marked by caution, the re- port found that in the fourth quarter the market proved its resiliency. “Though Hurricane Sandy,
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