6C — July 25 - August 14, 2014 — Brokerage Directory — Mid Atlantic Real Estate Journal
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By Raymond Trevisan, Cassidy Turley The push and pull of a stronger economy drives submarket success
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partially attributed to the Merck lease for 150,000 s/f at 2 Giralda Farms and Maersk leasing 70,016 s/f at 180 Park Ave.. The downturn in Parsip- pany was mainly a result of Time Warner relocating and downsizing to 6 Upper Pond Rd. from 260 Cherry Hill Rd.. As Pearson relocates to a new building in Hoboken, the entire property at 1 Lake St. in the North Bergen submarket will become available. Even though asking rents decreased from $27.75 to $27.11 psf, overall availability in Northern New Jersey was down 30 basis
assidy Turley recently released its Second Quarter Office Mar-
has dropped to an encourag- ing 6.2%, which should lead to increased absorption rates as more employees return to the workforce. However, the real- ity is, an increase in employees does not necessarily translate into a need for additional office space. One interesting insight is the increasing demand for modern open office floor plans, which coincides with submarkets that boast substantial inven- tory offering properties with flexibility as well as access to shopping, restaurants, pub- lic transportation and major
highways. Markets that tout walkability or lifestyle centers often outperform those saddled with the relics of the office park boom of the 1980’s. The evidence supporting this observation abounds in the Northern New Jersey Of- fice Market, which remained on an upswing with 289,479 s/f of positive absorption in the second quarter. Morris- town performed especially well in Northern New Jersey, while Parsippany and North Bergen limped along with reported negative absorption. Morristown’s success can be
points from last quarter to 24.3%. The slide in asking rents was not indicative of overall market performance, as other variables showed improvement quarter over quarter. Meanwhile, in the Central New Jersey Office Market the scales tipped slightly. A decrease in activity for the second quarter led to 560,504 s/f of negative absorption and availability rising to 22.9%. Despite this hiccup, overall asking rents rose to $24.80 from $24.60 psf the previous quarter, indicating positive momentum for the upcoming third quarter. The reason for a spike in availability in the second quarter in Central New Jersey can largely be attributed to the Somerset submarket, with 247,532 s/f of negative absorption. Onyx Equities placed the remaining space at 211 Mount Airy Rd. in Basking Ridge on the mar- ket, which resulted in 169,800 s/f of additional availability. As a result of Merrill Lynch downsizing and relocating, the Princeton submarket experi- enced 156,876 s/f of negative absorption. All of this ebb and flow through New Jersey’s submar- kets make it seem as though the Garden State resembles a stress ball, or even silly putty. As one submarket experi- ences increased absorption, it creates available space in an- other submarket. Shifts due to M&A activity, particularly in the Pharma industry, as well as the flight to quality, will continue to occur. The overall bottom line is, employees are changing the way they work and are becoming more mobile. Companies are shifting their ideas of what an office should be and are embracing more collaborative environments, meaning smaller conference rooms, less corner offices and lots of “collaboration” areas. Future offices require less square footage per employee, so naturally as the economy improves and more employees return to the workforce, the office blueprint is transforming in a way that is vastly different than its predecessor. Raymond Trevisan is the managing principal of Cas- sidy Turley’s New Jersey offices and is responsible for overall strategic direc- tion, business development and recruitment efforts. n
ket Snapshot for Northern and Central New Jersey and, like oth- er industry reports; it re- flected strong g r ow t h i n c e r t a i n
Raymond Trevisan
Northern submarkets while some Central New Jersey markets languished behind. Due to the improving economy, unemployment in New Jersey
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