8C — July 25 - August 14, 2014 — Brokerage Directory — Mid Atlantic Real Estate Journal
B rokerage D irectory
AST RUTHERFORD, NJ — After ticking high- er for three consecutive JLL finds vacancy rate for New Jersey remains unchanged from early 2014 Demand for New Jersey office space countered by additional vacancies E corporate restructurings and relocations.
during the second quarter. “While New Jersey’s un- employment rate reached its lowest level in May since No- vember 2008, the job market has struggled to gain traction,” said Robert Kossar , executive managing director and market director for JLL’s New Jersey and Long Island operations. “The state’s shrinking labor force appears to be the contrib- uting factor to the lower unem- ployment rate, rather than ac- celerating employment growth. The Garden State’s traditional drivers of demand — profes- sional/business and financial
services — collectively shed about 5,300 jobs in May, after a 7,900 job gain in January. The lack of consistent growth within these vital sectors continues to overshadow the office market.” New Jersey witnessed a slight slowdown in leasing vol- ume compared with the same time period this past year. The Northern and Central New Jer- sey office market posted about 2.0 million s/f in leasing trans- actions in the second quarter of 2014, slightly less than the nearly 2.1 million s/f recorded in the previous quarter, for a total of approximately 4.1 mil-
lion s/f year-to-date. This was in contrast to 5.0 million s/f of office leases signed during the first half of 2013. “The life sciences sector re- mains among the most active segments in the office market as companies expand their operations or shuffle their real estate holdings in the wake of mergers and acquisitions,” said Stephen Jenco , vice president of suburban tri-state research. “Life sciences companies ac- counted for more than one- quarter of the leases signed during the second quarter. Among the largest transac- tions completed in the office market were Sandoz’s lease of a 154,100 s/f building at 100 College Rd. West in Princeton after relocating from Carnegie Center and Merck & Co.’s long- term lease for 150,000 s/f at 2 Giralda Farms in Madison.” Highlights of the second quarter of 2014 include: •The Northern and Central New Jersey overall vacancy rate remained unchanged from the first quarter at 25%. How- ever, the vacancy rate remained above the 24.2% witnessed one year ago. •The Garden State’s class A product registered an average asking rental rate of $27.73 per s/f in the second quarter of 2014, an increase of $0.73 psf from one year ago. Class B rents inched $0.10 higher from one year ago to $20.72 per s/f in the second quarter. •The Rte. 24 submarket absorbed nearly 600,000 s/f of class A space this quarter, representing the largest vol- ume of positive net absorption in the state. Contributing to this absorption was Automatic Switch’s purchase of the va- cant 250,590 s/f 160 Park Ave. in Florham Park. In addition to Merck’s lease at 2 Giralda Farms, Maersk relocated into 70,000 s/f at 180 Park Ave. in Florham Park. The te. 24 class A vacancy rate subsequently plummeted nearly 7.0 percent- age points from early 2014 to less than 24.0%— its lowest level in two years. •After approaching 18.0% during the third quarter of 2013, the Hudson Waterfront class A vacancy rate trended lower during the past three quarters in response to a rebound in de- mand. By mid-2014, the Hudson Waterfront class A vacancy rate had fallen below 16.0% — the lowest vacancy rate in Northern and Central NJ. n
The Northern and Central NJ office market posted nearly 186,430 s/f of negative net ab- sorption in the second quarter of 2014, equally distributed be- tween class A and class B space. A closer analysis of activity at the submarket level revealed that much of this negative net absorption was attributed to additional availabilities in a small group of markets. Only seven out of the 20 Northern and Central New Jersey office submarkets posted negative net absorption figures
quarters and reaching 25% dur ing the first quarter, New Jersey’s overall va- cancy ra t e r e m a i n e d unchang ed t h r o u g h
mid-year 2014, according to JLL . Demand for Northern and Central New Jersey office space was effectively matched by new vacancies generated by
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