M id A tlantic Real Estate Journal — Southern New Jersey — July 24 - August 13, 2020 — 9B S outhern NJ
www.marej.com
Despite widespread lockdowns, closures, and uncertainty, the market showed strength WCRE2ndQtr report: Under coronavirus restrictions, SNJ&Philly CREmarkets still exceed expectations
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market. Highlights from the retail section of the report include: • Retail vacancy in Camden County dropped to 5.4% from 6.2% in Q1. While average rents fell slightly to the range of $17.20/sf NNN. • Retail vacancy in Burling - ton County dropped to 7.6%, with average rents in the range of $12.14/sf NNN. • Retail vacancy in Glouces - ter County ticked down to 12.4% from after posting a major increase in Q1, with average rents in the range of $14.21/sf NNN. MAREJ
from the crisis. Rising wages and low unemployment had been fueling retail spending, buoying the CRE market. But with unprecedented job loss and many businesses temporarily shuttered by stay-home orders, retail will bear the brunt. The vacancy rate inched up to 5.0%, while net absorption was negative 546,300 s/f over the last twelve months. These figures may well become more dire in Q2, as the true economic effects of the pandemic take hold. WCRE also reports on the Southern New Jersey retail
Philadelphia’s office market dropped slightly to 8.5%. The office vacancy rate is still near a 20-year low, and below that of comparable major cities. • The industrial sector in Philadelphia remains very strong. Q2 saw vacancy rates at 5.5%, only slightly higher than the previous quarter. Net absorption dropped about 20 percent, to 4.3 million s/f, which was still strong. Rent growth jumped again, to 5.3%. Rent growth for the past few quarters has far exceeded the long-term average of 1.7%. • Retail may be most at risk
• Vacancy in Camden Coun - ty increased a full point to 12.6 percent for the quarter. • Burlington County's va - cancy further dropped to 10.4 percent after dropping more than a point during the first quarter. 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 Pennsylva- nia include: • The vacancy rate in
ARLTON, NJ — Commerc i a l rea l estate brokerage
WCRE r e - ported in its analysis of the second qua r t e r o f 2 0 2 0 t h a t the Southern New Jersey and South- e a s t e r n
Jason Wolf
Pennsylvania markets held their own amid the most un- certain quarter in recent histo- ry. The coronavirus pandemic has upended every aspect of life and deeply impacted the economy. Still, quarterly CRE performance indicators showed some positive news, even as the effects of the crisis began taking hold. Vacancy rates across every property type remained low, and the sales market stayed active. “In the face of global calam- ity, and under severe but nec- essary restrictions, the CRE market in our area showed strong fundamentals and re- siliency,” said Jason Wolf , founder and managing princi- pal of WCRE. “The performance was a mixed bag, but we saw suf- ficient reasons for optimism.” There were approximately 277,716 s/f of new leases and renewals executed in the three counties surveyed (Burling- ton, Camden and Gloucester), which was a drop of 26% from the previous quarter. New tenant leases comprised ap- proximately 129,569 s/f, or approximately 46.7% of all deals for the three counties surveyed. To help compare Q2 2020 vs Q2 2019, there were approximately 286,707 s/f of new leases and renew- als executed during the same time period a year ago, Other office market highlights from the report: • Overall vacancy in the market is now approximately 11.5%, which is a slight uptick from the previous quarter, but still not far off from a 20-year low. • 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/ s/f NNN or $20.00-$25.00/s/f gross for the deals completed during the quarter. These av- erages have hovered near this range for more than a year.
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