4A — October 25 - November 7, 2019 — M id A tlantic
Real Estate Journal
www.marej.com
M id A tlantic R eal E state J ournal
Favorable economic conditions expected to continue into 2020 WCREThirdQtr. 2019 Report: Solid fundamentals, but modest gains in SNJ & Philly CRE markets
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was up in Camden County, and especially in Cherry Hill, but dipped for the region overall. Gross leasing absorption was positive but trending lower quarter over quarter. “We are in a continuing period of a strong economy with low unemployment. This has supported a long streak of slow, steady growth supported by strong fundamentals,” said Jason Wolf , founder and managing principal of WCRE. “Although a given indicator might fluctuate one quarter to the next, commercial real estate in this region remains strong, and there is reason to
stay optimistic.” There were approximately 266,867 s/f of new leases and renewals executed in the three counties surveyed (Burling- ton, Camden and Gloucester), which was a decrease of seven percent compared to the previ- ous quarter. The sales market increased, with about 1.67 million s/f on the market or under agreement. However, completed sales slowed to ap- proximately 329,769 s/f trad- ing hands, less than half the previous quarter, which had been notably active. New leasing activity ac- counted for approximately
36% of all deals for the three counties surveyed. Overall, gross leasing absorption for the third quarter was in the range 70,000 s/f, down from 150,000 in the second quarter. Other office market high- lights from the report: • Overall vacancy in the market is now approximately 11.50 percent, which is a slight uptick from the previous quar- ter. This is still near a 20-year low. • Average rents for class A & B product continue to show strong support in the range of $10.00-$15.00/s/f NNN or $20.00-$25.00/sf gross for the
deals completed during the quarter. These averages have hovered near this range for more than a year. • Vacancy in Camden Coun- ty dropped slightly to 11.1 percent for the quarter, back to where it stood in the first quarter. • Burlington County's va- cancy stood at 11.9%, increas- ing 40 basis points. Burling- ton's vacancy rate jumped ear- lier in the year due to several large blocks of space returning to the market. WCRE has expanded into southeastern Pennsylvania, and the firm's quarterly re- ports now include a section on transactions, rates, and news fromPhiladelphia and the sub- urbs. Highlights from the third quarter in PA include: • The vacancy rate in Phila- delphia’s office market dropped slightly to 8.6%, the second consecutive quarter to post a decrease of two tenths of a percent. The office vacancy rate is still near a 20-year low, and below that of comparable major cities. • The industrial sector in Philadelphia remains very strong. The third quarter saw vacancy rates virtually un- changed, at 5.0%, while net ab- sorption was constrained by a shrinking volume of available space. Rent growth of 6.0% has far exceeded long-termaverage of 1.7%. • Philadelphia retail is so far avoiding a major spike in vacancy due to the shift toward e-commerce. Rising wages and low unemployment are fuel- ing retail spending, buoying the CRE market. The vacancy rate inched up to 4.7%, while net absorption was negative 562,000 s/f over the last twelve months. WCRE also reports on the Southern New Jersey retail market. Highlights from the retail section of the report include: • Retail vacancy in Camden County jumped to 6.9% from 5.7% in Q2. While average rents increased in the range of $17.05/sf NNN. • Retail vacancy in Burl- ington County ticked up very slightly, to 7.6%, with average rents in the range of $12.68/ sf NNN. • Retail vacancy in Glouces- ter County dropped to 7.4%, with average rents in the range of $13.41/sf NNN. The full report is available upon request.
ARLTON, NJ — Comme r c i a l r ea l es tat e brokerage
WCRE r e - p o r t e d i n its analysis of the third qua r t e r o f 2 0 1 9 t h a t the Southern New Jersey and South- e a s t e r n
Jason Wolf
Pennsylvania markets con- tinued to show modest gains, continued investments, and overall solid fundamentals. Sales volume and prospecting activity held steady, leasing
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