N ew J ersey 4B — January 21 - February 17, 2022 — New Jersey — M id A tlantic Real Estate Journal New Jersey | Office Market Snapshot Q4 2021 absorption for the second half of 2021 totaled positive 710,721 SF, while Class B net absorption continued to remain negative, with 354,552 SF of occupancy losses over the second half of the year. This is further consolidated multiple locations into 100 Connell Drive in Berkley Heights, leasing 411,954 SF, while Party City committed to 208,911 SF at 100 Tice Boulevard in Woodcliff Lake, relocating employe s from Elmsford, NY and Rockaway, NJ. Class A properties have been the clear winners as the flight to quality trend has been accelerated by the pandemic. The difference between Class A and B product has never been clearer. Class A net
expand in the Garden State. During the fourth quarter, Hikma Pharmaceuticals, Genosity and Sunovion Pharmaceuticals all inked new deals, exhibiting their commitment and growth in the state. Availability Rate Improves, Driven by New Demand and Redevelopments Strong demand in this quarter lowered the availability rate for the first time in the last seven quarters to 22.2%. Although this figure is still above the pre- pandemic rate of 18.6%, improving market
www.marej.com
CRE took major strides in its recovery during the 4 th quarter, despite the omicron variant Colliers New Jersey Office Market Overview
Q4 2021 1,530,663 fundam ntals suggest sustained progress. As such, net absorption turned positive for the first time since Q4 2019 to 500,050 SF. It is important to note, positive net absorption only occurred in submarkets that had major new transactions and was not wide ranging, with 14 out of the 21 submarkets still recording negative absorption figures. The Upper Parkway and East I-78 submarkets drove positive absorption totaling 332,368 SF and 455,024 SF respectively due to Q3 2021 Q4 2020 797,203 679,884 523,361 851,059 993,867 2,524,530 substantial relocations by Party City and Fiserv. The adaptive reuse trend has started to benefit 1,477,087 1,374,420 22.2% $30.57 certain submarkets where industrial development is desired. The South I-287 submarket saw its availability rate improve 130 basis points year-over-year to 18.8%, as additional properties were removed from office inventory, slated for industrial redevelopment. The 351,782 SF office building at 400 Atrium Drive in $26.86 $29.12 Somerset is slated to be demolished to make way for two warehouses totaling 426,000 SF after EverWest Real Estate Investors and Woodmont Properties acquired the site. 22.4% 21.9% 22.9% 22.3% 22.6% $30.53 $26.76 $29.04 21.6% 20.8% 21.3% $30.01 $26.30 $28.55
Leasing Activity evidenced by several new leases this quarter that saw occupiers upgrade their spaces. For instance, Valley National Bank will be relocating their headquarters from Wayne, NJ to downtown Morristown, committing to a 119,350 SF build-to-suit on Speedwell Avenue. The site not only gives Valley a modern workspace for their current employees but will ultimately give them access to a larger pool of potential talent. Moving forward, centrally located and well-amenitized office buildings will remain highly sought after by large corporate users. Northern NJ Central NJ NJ Overall Northern NJ
N
ew Jersey’s office mar- ket took major strides in its recovery during
the fourth quarter, despite the omicron variant and its pos- sible temporary disruptions to the recovery. At 2.5 MSF, leasing activity reached its highest level since Q4 2019 and was propelled by the return of large transac- tions that stalled during the pandemic. The fourth quarter alone saw seven new leases signed in excess of 50,000 s/f, while the first three quarters combined only had seven such transactions. This helped push the full-year leasing figure to 8.2 MSF, up 17.9% year-over-year. Heightened demand resulted in positive net absorption in the fourth quarter, marking the first quarter of positive gains since the start of the pan- demic. This helped improve the availability rate 40 basis points quarter-over-quarter to 22.2%. Demand Reaches Pre-Pandemic Levels as State Incentives are established New Jersey’s Emerge pro- gram, created under the Economic Recovery Act of 2020, reinstated the State’s incentives program to attract new businesses and promote growth within the state. Party City and Fiserv were awarded tax incentives in Septem- ber and inked the two larg- est new leases this quarter. Fiserv consolidated multiple locations into 100 Connell Drive in Berkley Heights, leas- ing 411,954 s/f, while Party City committed to 208,911 s/f at 100 Tice Boulevard in Woodcliff Lake, relocating employees from Elmsford, NY and Rockaway, NJ. Class A properties have been the clear winners as the flight to quality trend has been accelerated by the pandemic. The difference between class A and B product has never been clearer. Class A net absorption for the second half of 2021 totaled positive 710,721 s/f, while class B net absorption continued to re- main negative, with 354,552 s/f of occupancy losses over the second half of the year. This is further evidenced by several new leases this quar- ter that saw occupiers upgrade their spaces. For instance, Valley National Bank will be relocating their headquarters from Wayne, NJ to downtown
Availability Rate
Central NJ NJ Overall Northern NJ
Average Asking Rent ($PSF/Yr.) Health Care and Life Sciences Companies Continue to Expand While many occupiers are contemplating their future space needs, the health care and life sciences industries are expanding in New Jersey as the focus on human health and wellness persists. Health care systems looking to expand have taken major blocks of Central NJ NJ Overall
New Jersey Office Market Overview
New Jersey’s office market took major strides in its recovery during the fourth quarter, despite the omicron variant and its possible temporary disruptions to the recovery. At 2.5 MSF, leasing activity reached its highest level since Q4 2019 and was propelled by the return of large transactions that stalled during the pandemic. The fourth quarter alone saw seven new leases signed in excess of 50,000 SF, while the first three quarters Significant Office Lease Transactions Property Address & City SF L ased Tenant 100 Connell Drive, B rkeley Heights 100 Tice Boulevard, Woodcliff Lake 411,954 Fiserv 208,911 Party City
combined only had seven such transactions. This helped push the full-year leasing figure to 8.2 MSF, up 17.9% year-over-year. Heightened demand resulted in positive net absorption in the fourth quarter, marking the first quarter of positive gains since the start of the pandemic. This helped improve the availability rate 40 basis points quarter-over-quarter to 22.2%. Submarket Lease Type East I-78 New Lease
Upper Parkway
New Lease
123 Speedwell Avenue, Morristown 105 Eisenhower Parkway, Roseland
119,350
Valley National Bank
Morristown
Accelerating success. New Lease
Chiesa, Shahinian & Giantomasi PC
116,122
I-280 Corridor
New Lease
Source: Colliers
Market Snapshot| Q4 2021 | New Jersey / Office
2
Morristown, committing to a 119,350 s/f build-to-suit on Speedwell Avenue. The site not only gives Valley a modern workspace for their current employees but will ultimately give them access to a larger pool of potential talent. Moving forward, centrally located and well-amenitized office build- ings will remain highly sought after by large corporate users. Health Care and Life Sciences Companies Continue to Expand While many occupiers are contemplating their future space needs, the health care and life sciences industries are expanding in New Jersey as the focus on human health and wellness persists. Health care systems looking to expand have taken major blocks of vacant space in traditional corporate office buildings. On the heels of Atlantic Health Systems 536,662 s/f expansion and renewal in Morristown, Summit Medical Group signed a new lease in Fair Lawn, and will occupy 70,594 s/f at 17-17
note, positive net absorption only occurred in submarkets that had major new trans- actions and was not wide ranging, with 14 out of the 21 submarkets still recording negative absorption figures. The Upper Parkway and East I-78 submarkets drove positive absorption totaling 332,368 s/f and 455,024 s/f respectively due to substantial relocations by Party City and Fiserv. The adaptive reuse trend has started to benefit certain submarkets where industrial development is desired. The South I-287 submarket saw its availability rate improve 130 basis points year-over- year to 18.8%, as additional properties were removed from office inventory, slated for in- dustrial redevelopment. The 351,782 s/f office building at 400 AtriumDrive in Somerset is slated to be demolished to make way for two warehouses totaling 426,000 s/f after Ever- West Real Estate Investors and Woodmont Properties acquired the site. MAREJ
17-17 Route 208
Route 208, while Englewood Health signed a new 50,678 s/f lease at 910 Sylvan Avenue in Englewood Cliffs. Emerging life sciences companies con- tinued to expand in the Gar- den State. During the fourth quarter, Hikma Pharmaceu- ticals, Genosity and Sunovion Pharmaceuticals all inked new deals, exhibiting their commit- ment and growth in the state. Availability Rate Improves, Driven by
New Demand and Redevelopments
Strong demand in this quar- ter lowered the availability rate for the first time in the last seven quarters to 22.2%. Although this figure is still above the prepandemic rate of 18.6%, improving market fundamentals suggest sus- tained progress. As such, net absorption turned positive for the first time since Q4 2019 to 500,050 s/f. It is important to
Made with FlippingBook Annual report maker