6B — January 13 - 26, 2017 — Southern New Jersey — M id A tlantic
Real Estate Journal
S outhern N ew J ersey
ARLTON, NJ — Commer c i a l rea l es tate brokerage Fundamentals are strong, and elements are in place for a period of sustained growth WCRE Fourth Quarter Report: Southern NJ gains strength, but pauses due to uncertainties M
the market, and good eco- nomic news has been easy to find this quarter. But still, we didn't see many bold, decisive transactions as 2016 gave way to 2017,” said Jason Wolf , founder and managing princi- pal of WCRE. There were approximately 388,987 s/f of new leases and renewals executed in the three counties surveyed (Burling- ton, Camden and Gloucester), which represents an increase of 6.5% compared with the third quarter. Prospecting activity was unchanged com- pared to the previous quar- ter, with about 250,000 s/f
of lease deals in the pipeline and expected to close in the near term. Still, the trend of positive absorption continued, making up approximately 127,149 s/f of total activity. Vacancy rates posted slight increases, and one major REIT put its entire area portfolio up for sale as the year wound down. Other office market high- lights from the report: •Overall vacancy in the market is now approximately 10.85%. •Average rents for class A & B product continue to show strong support in the range
of $10.00-$14.50/sf NNN or $20.00-$24.50/sf gross for the deals completed during the quarter. This is essentially unchanged from the previous two quarters. •All of the major private owners and REITS showed moderate leasing and prospect activity for the quarter – with Burlington County vacancies tightening up, many larger vacancy opportunities are also shifting towards Camden County, which is not controlled by these ownership entities. •New Jersey’s unemploy- ment rate moved down to 4.9%, and the national rate is
now at 4.6%. 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 fourth quarter in Pennsylva- nia include: •Although the presidential election threw the market into a holding pattern, Phila- delphia and the surrounding suburbs continue to demon- strate favorable demand in both leasing and sales activity throughout all asset classes. •Most investors appear posi- tive with regard to real estate in the months ahead. Despite the most recent increase in interest rates and anticipated increases over the next 12 months, capitalization rates are forecasted to increase, but at a much slower pace. •The appetite for core center city office inventory is signifi- cantly strong, while suburban office space is still lagging behind in both rental growth and occupancy. •There is significant multi- family inventory under con- struction or proposed for Center City, but some finan- cial institutions are second guessing the depth of the market for additional units, and have demonstrated less involvement on several high profile development projects. In addition, although many apartment projects have in- dicated limited increases in rental growth, rental rates still remain extremely strong and occupancy levels, while decreasing 1%-2% over the last 12 months, are anticipated to remain flat for the coming months. WCRE also reported on the Southern New Jersey retail market, noting an especially solid holiday shopping season. Highlights from the retail sec- tion of the report include: •Overall retail sales and spending were up significantly over last year, and consumer confidence is up, as well. •Retail vacancy in Camden County stood at 11.4%, with average rents in the range of $12.20/sf NNN. •Retail vacancy in Burling- ton County stood at 10.4%, with average rents in the range of $13.15/sf NNN. •Retail vacancy in Glouces- ter County stood at 6.4%, with average rents in the range of $12.01sf NNN. n
WCRE r e - ported in its latest quar- terly analy- sis that al- though the S o u t h e r n New Jersey market has proven resil-
ient, key players seem to be in wait-and-see mode in the wake of the Brexit vote and the US presidential election. “We see the potential for tremendous performance by
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