Real Estate Journal — New Jersey — May 13 - 26, 2016 — 3B
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Transwestern’s Q1 2016 Office Market report Interest in Hudson water- front drives office leasing
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rate increased slightly to 16% from 15.9%, it remains im- proved from 16.3% this time last year. •Year-over-year net absorp- tion was greater than 1 million s/f for the seventh consecutive quarter. • The New Jersey economy continues to improve and now has an unemployment rate that is 0.6 percentage points below the national rate. •As biotech continues to grow in New Jersey, New York- based venture capital firms that fund the industry are seeking to relocate companies to the Hudson Waterfront. n
and retain a total of 400 jobs • Summit Medical Group, which will occupy a new cancer center in Florham Park that’s being developed by The Rock- efeller Group In central New Jersey, sig- nificant leases were inked recently in the Somerset/Inter- state 78 submarket including Linde Americas relocating its Americas headquarters to an approximately 116,000 s/f space and Hunterdon Health- care signing a new lease for 57,000 s/f. Additional highlights from the report include: • While the state’s vacancy
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demand first- class office a c c o mm o - dations, the state’s rents continue to rise, accord- ing to Tran- swestern ’s First-Quar-
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James Postell
ter 2016 Office Market report. Buoyed by the prevailing de- sire among office workers to work in amenity-rich environ- ments in northern New Jersey, asking rents in this area are now a dollar higher than the overall state average for the first time in five years. A prime example of the extreme interest in first-class accommodations can be found in the Hudson Waterfront submarket at Waterfront Cor- porate Center III in Hobo- ken. The 500,000 s/f build- ing, which is owned by SJP Properties , recently signed Rubbermaid for a new lease and saw technology company Jet.com double its space. De- livered to the market less than 18 months ago, the property is nearing full occupancy. While still favorable to rates across the Hudson River, rents in the Hudson Waterfront submarket are now typically in the high $30s psf and, in some cases, approaching $50 psf. “When looking at the mix of new leases, expansions and renewals that were signed during the first quarter, it’s clear that tenants are will- ing to pay more for quality,” said James Postell , partner and leader of Transwestern’s New Jersey office. “Tenants seemingly won’t settle for less than state-of-the-art work en- vironments, reflected by the fact that landlords continue to move rents higher at class A buildings that have enjoyed high demand or where en- hancements have been made.” When high-quality space is not readily available to ten- ants, companies seek new construction opportunities or to redevelop antiquated prop- erties. Examples include: • UPS, which broke ground on a new 200,000 s/f tech- nology center in Parsippany that’s projected to house 1,000 employees • Audible, which is expand- ing its Newark presence by renovating a historic church, allowing the company to create
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