Real Estate Journal — Commercial Office Properties — February 26 - March 10, 2016 — 3C

M id A tlantic

C ommercial O ffice P roperties Certain areas show rent growth, millennials impact development trends David Zimmel of Zimmel Assoc. answers three key questions about NJ office space market


for a three-year lease, three months free. Landlords were anxious and more open to those types of deals. That is not the case today. One month free, OK. But six months, not likely. Another difference is that we sometimes see landlords pay moving expenses as an enticement to get an excep- tional tenant. Moving an office is a big expense. Most companies prefer to stay in place when their lease is up. If there is no pressing reason to move they won’t. However, if they are considering re- newing a five to seven year

lease, they want to see what the current rates are and shop to attain knowledge for getting the best deal. In some cases they can pay less than they did five years ago. That will change as time goes on. What challenges face NJ brokers and their clients today? There is too much office space to choose from. Rather than five or six choices there may be 15 or 16. It makes the decision making process more difficult. If vacancy rates were a lot lower that would not be the case. In addition, the time frame

it takes from start to finish for the approval process from towns is much longer. What used to be 60 days now takes four to five months. Ten- ants who want to move need to start the process much sooner than before. Compa- nies can’t wait until the last minute anymore. If the broker does their job properly with the tenant, they can help narrow down the choices by providing real world insight. For instance, one town may be more dif- ficult to deal with than an- other. That’s how a broker helps a tenant make a deci-

sion and why strong market knowledge is imperative. David Zimmel is pres- ident of Zimmel Asso- ciates, the Edison, NJ corporate real estate ser- vices firm. His real estate career covers more than three decades of experi- ence and the closing of more than 3,000 corpo- rate real estate transac- tions. Zimmel Associates represents five million sq. ft. of exclusive office, industrial and flex space throughout New Jersey. For more information, visit www.zimmel.com. n

ow is the office space market in NJ doing?

There has been a sight dec l ine in v a c a n c i e s o v e r a l l . H o w e v e r , t he o f f i c e market re- mains some- what f l at . Certain ar-

David Zimmel

eas such as Metro Park, Jersey City, Weehawken, Hoboken and Newark show rent growth. For instance, inMetro Park we handle 100 Wood Ave., a 130,000 s/f building. Rent is $26 a s/f and only two units are available of 2,500 and 2,300 s/f. Areas such as Red Bank, Westfield, Cranford and Somerville show some growth as well, due to active downtowns and public tran- sit. Developers are thinking big picture. Areas that have dining and shopping for mil- lennials and commuter rail have an advantage. Exit 120 of the Garden State Parkway is another thriving location that is in demand with low vacancy. It is easily accessible to both the southern and northern NJ workforce. Our exclusive listing at 100 Matawan Rd., a 130,000 s/f class A building, is located there and is doing very well. The owner, Den- holtz Associates , recently completed a stunning reno- vation, which supported our closing a long-term 50,000 s/f lease with iCIMS, a lead- ing recruitment software company. However, in areas such as Bridgewater, Somerset, Pis- cataway or South Plainfield, there has been no growth to speak of. It’s going to take long time for that vacant space to fill up. If rents in a Somerset building were $16 a sq. ft. five years ago, they are still $16 a s/f today, maybe even a little less. Vacancies there are anywhere from 25 to 30 percent. Monmouth County took a big hit with the closing of Fort Monmouth, a lot of businesses left and con- tributed to vacancies there. Are deal negotiations different today? Yes. Five or six years ago tenants were asking for more free rent and getting it. For a five- year lease, the expec- tation was six months free;


ZIMMEL ASSOCIATES CORPORATE REAL ESTATE SERVICES 1090 King Georges Post Road, Suite 808, Edison, NJ 08837 (732) 661-9200 • Fax: (732) 661-9617 • www.zimmel.com 1 King Georges Post Rd., Suite 808, Edison, NJ 08837 (732) 661-9200 | www.zimmel.co

Class A Office For Lease 3,200 SF -15,000 SF


Exceptional Location • At Exit 120 Garden State Parkway

First-Class Amenities • Coffee Bar - Coming Soon! • 24/7 security card access • State-of-the-art HVAC • Under-building covered parking and surface parking • Gorgeous landscaped setting • On-site management

Beautiful, Modern Interior • Newly renovated lobby • Full height skylit atrium lobby with abundant seating • Complimentary Wi-Fi access in the atrium • High speed glass elevators • Quick access to NJ TPKE, Rtes 1&9, 34, 35 and I-287 • 10 minutes south of Metro Park/Edison/Woodbridge • Close to commuter rail to Metro Park, Newark and NYC • Just minutes from shopping, dining, banking, hotels

Owned and Managed by Denholtz Associates

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