16B — October 16 - 29, 2015 — New Jersey — M id A tlantic
Real Estate Journal
www.marejournal.com
S outhern N ew J ersey WCRE third quarter report
Southern NJ market remains steady despite national economic volatility
M ARLTON, NJ — While the national economy was affected
summer slow-down did slow the pace of transactions, but overall growth, expansion, and positive absorption stayed on track. Healthcare, insurance, financial services, defense contracting, and technology companies led the way. “As in the past several quar- ters, we saw a healthy volume of transactions due to business expansion and improving job growth during the third quar- ter,” said Jason Wolf , founder and managing principal of WCRE. “We also saw an uptick in deal activity among small and mid-size businesses, which
is welcome good news that the market had been waiting for.” The report details many fac- tors contributing to continued strength in the market, in- cluding large and small lease deals, the beginning of new construction activity, several investment acquisitions of of- fice properties, and continued repositioning among the area’s REITs. It also covers the latest coup for the GROW NJ pro- gram, a recently announced 1.7 million s/f mixed use develop- ment along the waterfront in Camden. According to WCRE, the
third quarter posted approxi- mately 477,983 of new leases and renewals executed. This is a nearly 20% improvement over the third quarter a year ago. New tenant leases consisted of approximately 280,360 s/f, and renewals and expansions made up approximately 197,623 s/f. New leasing activity repre- sented approximately 58.7% of all deals for the quarter. Over- all, gross absorption for Q3 is in the range of approximately 233,610 s/f. In addition to the consummated deals, there is a pipeline of approximately 350,000 s/f of significant pend-
ing lease deals expected to close in the near term. Other office market high- lights from the report: •Overall vacancy in the mar- ket continues to drop, and is now down to approximately 12.15%, an improvement of three quarters of a point over the previous quarter. Vacancy in Burlington County is now down to 8%, while in Camden County it stands at 16.3%. •The majority of leasing ac- tivity for the third quarter was comprised of deals ranging in size from 3,000-80,000 s/f. •Average rents for class A & B product continue to show strong support in the range of $10.00-$13.00/sf NNN or $21.00-$23.00/sf gross, with an overall market average showing strong support in the $10.00-$13.00/sf NNN or $20.00-$23.00/sf gross for the deals completed during the quarter. Rents have remained stable. •All of the major private owners and REITS showed moderate leasing and prospect activity for the quarter – with Burlington County vacancies tightening up, many larg- er vacancy opportunities are also shifting towards Camden County, which is not controlled by these ownership entities. WCRE also reported on the local retail market, finding moderate growth amid reposi- tioning by major retailers and a few big events in our region. The biggest news was the open- ing of the Gloucester Premium Outlets in Blackwood, NJ in August, which features 90 retailers. “Even with major retailers like Macy’s and Walgreens shuttering under-performing locations nationwide, malls and outlets report steady con- sumer traffic and moderate growth, which is likely fueled by the rebound in the labor market,” said Leor Hemo , executive vice president of WCRE. Highlights from the retail section of the report include: •Overall retail vacancy in the tri-county area is hover- ing around 10.4%, which is virtually unchanged from the previous two quarters, but is still encouraging compared to recent years. •Class A retail product rental rates continue to show strong support in the range of $30.00-$40.00/sf NNN, as rents have remained stable through- out the year to date. n
by turmoil in t he g l o ba l markets, the S o u t h e r n New Jersey commercial real estate market con- t i nu e d i t s p r o g r e s s for another
quarter, according to the lat- est quarterly analysis from commercial real estate broker- age firm WCRE . An expected Jason Wolf
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