6B — July 22 - August 18, 2022 — Southern New Jersey — M id A tlantic Real Estate Journal
www.marej.com
S outhern NJ
Uncertainty returns to commercial real estate in Q2 after a strong first quarter WCRE Q2 2022 Report: With Omicron in the rearview mirror, SNJ & Philly markets face new obstacles
M ARLTON, NJ — Commercial real estate brokerage
ubiquity of hybrid and remote work models, among other pressures. “Only a few months ago we were impressed by the unex- pected strength of many indica- tors, but Q2 felt much more like a roller coaster with unpredict- able twists, turns, and unfortu- nately some drops,” said Jason Wolf , founder and managing principal of WCRE. “As usual, industrial stayed far ahead of the pack, and retail leasing in the suburbs was strong, but the office market is still well below pre-pandemic levels, and vacancy is increasing.” In the second quarter there
were approximately 311,271 s/f of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester). This is a de- crease of about 35% from Q1. New tenant leases comprised approximately 215,554 s/f, or about 69% of all deals for the three counties. Other office market high- lights from the report: • Overall vacancy in the mar - ket is now approximately 15.7 percent, a setback compared with the previous quarter. • The sales market-main - tained momentum, with 1,296,020 s/f actively on the
market or under agreement. • Both the total dollars and s/f of completed sales increased in the second quarter, with $114,300,111 in completed sales comprising 906,903 s/f. • Average rents for Class A & B product remain un- changed, as they continue to show strong support in the range of $10.00-$15.00/sf 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. WCRE has expanded into southeastern Pennsylvania, and the firm's quarterly re-
ports now include a section on transactions, rates, and news from Philadelphia and the suburbs. Highlights from the second quarter in Pennsylvania include: • Vacancy in Philadelphia’s office leasing market is still nearly 20% below the three- year average before the pan- demic. There were modest gains in 2021, but those have largely been erased in the past few months. Net absorption was negative 300,000 SF for the past 12 months, which is a marked improvement. • The industrial sector in Philadelphia continues its in- credible run. Over the past 12 months, 17.5 million new s/f of inventory became available, and the sector saw 15.6 million s/f in net absorption. Rents grew an average 12.2%. • Retail remains the sector most responsive to market con- ditions, but it has also proved to be the most adaptable. Average retail net absorption in Phila- delphia continues to improve and was at 1.7 million s/f for the 12 months just concluded. Av- erage rents grew a modest .7%. WCRE also reports on the Southern New Jersey retail market. Retail highlights from the report include: • Retail vacancy in Camden County posted an improvement to 9.0 percent, while average rents were essentially un- changed, in the range of $13.18/ sf NNN. • Burlington County retail vacancy ticked up slightly to 8.4 percent, while average rents in- creased by a dime, to the range of $14.41/sf NNN. • Gloucester County im - proved slightly, to 11 percent, building on a solid improve- ment last year, with average rents inching up further, to the range of $16.53/sf NNN. The full report is available upon request. About WCRE WCRE is a full-service com- mercial real estate brokerage and advisory firm specializing in office, retail, medical, indus- trial and investment properties in Southern New Jersey and the Philadelphia region. We provide a complete range of real estate services to commercial property owners, companies, banks, commercial loan ser- vicers, and investors seeking the highest quality of service, proven expertise, and a total commitment to client-focused relationships. MAREJ
WCRE re- ported in its analysis of the second quarter that new chal- lenges, in- cluding fear of a recession, knocked the
Jason Wolf
post-pandemic recovery off course. Although some sec- tors and indicators remained strong, others were dragged down by persistent inflation, the war in Ukraine, and the
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