10B — July 2023 — Southern New Jersey — M id A tlantic Real Estate Journal
www.marej.com
S outhern N ew J ersey
Key indicators show signs of trouble, yet the metro is outperforming peer markets WCRE Second Quarter 2023 Report: SNJ & Philly Markets See Mixed Results
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about 46% of all deals for the three counties - both of which are increases. Prospecting re- mains on track, with a pipeline of approximately 350,000 s/f of pending lease deals expected to close in the near term. Other office market high- lights from the report: • Overall vacancy in the mar - ket is now approximately 16.2%, a slight increase over the previous quarter. • The area’s office leasing mar - ket, though faring better than most other top metro areas, is still reeling, at an all-time high of 49.2 million s/f available for
metro area was still second in vacancy and availability among all the top markets, showing relative strength.” In the second quarter there were approximately 213,173 s/f of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester). This is a de- crease of about 15.6% over the previous quarter. The slight quarter-over-quarter increase posted in Q1 may have been an exception, as leasing activity dropped steadily during 2022. New tenant leases comprised approximately 98,649 s/f, or
continuing worry about a pos- sible recession have left their mark. Although office sales improved significantly over the previous quarter, leasing has dropped, and there is still far too much available space. In- dustrial, though still strong, is showing hints of vulnerability after years of runaway growth. “This quarter, there was plenty of news for both the glass-half-full and the glass-half-empty schools of thought.” said Jason Wolf , founder and managing princi- pal of WCRE . “For example, office leasing dropped, but the
lease in the second quarter. • Total cost and s/f of completed sales increased significantly over Q1, with $37,552,400, in completed sales comprising 263,584 s/f. • Average rents for Class A & B product remain unchanged, 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 are essentially unchanged and have hovered near this range for more than a year. WCRE has expanded into southeastern Pennsylvania, and the firm's quarterly reports in- clude a section on transactions, rates, and news from Philadel- phia and the suburbs. High- lights from the second quarter in Pennsylvania include: • Despite net absorption of neg - ative 2.8 million s/f for the past 12 months, Philadelphia’s office leasing market faces a long road ahead. Still, the metro area’s office vacancy rate of 10.7% for Q2 is the second lowest among the top 15 markets. • The industrial sector in Phila - delphia has shown signs that it may begin to cool off, but it’s been on such a hot streak that it still leads all sectors. Over the past 12 months, industrial saw net absorption of 6.9 million s/f even as 16.7 million new s/f was delivered to the market. Rent growth dropped but was still a healthy 11.4%. • Retail has shown particu - lar resiliency in the region, especially in the suburbs. Average retail net absorption in Philadelphia stood at 1 mil- lion s/f for the 12 months just concluded. Retail vacancy for Philadelphia held steady at 4.4% for the quarter. WCRE also reports on the Southern New Jersey retail market. Retail highlights from the report include: • Retail vacancy in Camden County posted another im- provement, to 6.6%, while av- erage rents jumped, to $16.18/ sf NNN. • Burlington County retail vacancy stayed essentially un- changed, at 7.2%, while average rents ticked up a few cents, to the range of $16.12/sf NNN. • Gloucester County retail vacancy, after improving more than a point from Q4 to Q1, is back up to 10.7%, with average rents jumping more than a dol- lar, to $18.05/sf NNN. MAREJ
ARLTON, NJ — Commercial real estate brokerage
WCRE re- ported in its analysis of the second quarter that the mea- sures taken to bring in- flation under control have
Jason Wolf
significantly impacted the commercial real estate sector, too. Inflation has been trend- ing downward, but higher in- terest rates, tighter credit, and
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