2C — June 27 - July 10, 2014 — Mid-Year Review — 1 -( % 80%28-'
Real Estate Journal
O FFICE M ARKET
By William O’Keefe, Cassidy Turley The peaks, valleys and everything in EHWZHHQ1HZ-HUVH\·V2IÀFH0DUNHW
t this point in the year, real estate ex- ecutives tend to take
is up, particularly within class A assets in Northern NJ. Could it be attributed to an improving economy, a revamped Grow NJ As- sistance Program, corporate confidence or a combination of it all? Hard to say, but it’s happening regardless. The eds/meds, biotech, technology and financial sectors are steadily growing and are key market driv- ers, while flight-to-quality, across all industry sectors, continues. Conversely, we are seeing consolidations and M&A activity, both lead-
ing to less office space be- ing leased. Although many companies continue to take advantage of the Grow NJ Assistance Program, large companies are still relo- cating out of New Jersey to more business-friendly states. This pushing and pulling of the market makes New Jersey seem as if it’s in a contradicting identity crisis, with increases and decreases in vacancy rates happening simultaneously within different submarkets. So far this year, our team (comprised of myself, Ray-
mond Trevisan and Kelsey Nakamura) has completed approximately 300,000 s/f in office leases between North- ern and Central New Jersey. The team has served as tenant representative for eight transactions totaling 140,000 s/f, ranging in size from 3,000 s/f up to 67,000 s/f in submarkets spanning from Princeton to Newark. The tenant roster includes prestigious law firms like Lewis Brisbois, to young pharmaceutical companies like Essential Pharmaceu- ticals.
We represented the owner in at least ten transactions totaling over 154,500 s/f ranging in scale from just over 2,000 s/f up to 41,000 s/f. The tenants involved in these transactions were from varied industries and included Techno-Comp, The North Highland Company, Apruzzese, MindTree Con- sulting and EarthCam. As a result, we brought two prop- erties to 100% occupancy, a third property up to 90%, and leased and relocated a growing technology tenant to another. There is a point to these remarks besides heralding the successes of our team. They reinforce the fact that leasing velocity is on the rise. However, that activity is across the market with multiple factors in flux, making the role of commer- cial real estate broker and industry knowledge even more critical to the success of our clients. Reflective of the overall market, the proportion of deals we’ve done with tenants from the technology sector has begun to outpace more established industries. While some in- dustries are still rightsiz- ing to accommodate the shifting workplace trends, we’ve worked with several technology companies as they more than double their square footage. With space needs and size requirements constantly changing, there’s an incredible amount of op- portunity and equal chance for major missteps. Tenants are continuing to gravitate to more open and modern floor plans and moving away f rom the i r traditional corner offices. Owners are responding to these demands by reposition- ing and renovating existing office stock into smaller, flexible spaces with attrac- tive amenities like exercise facilities, cafeterias, col- laboration areas and outdoor spaces. For many companies, these amenities have become a necessity. The keys to success have not changed much; research driven approaches, total transparency and a true un- derstanding of client needs, will always be en vogue. However, additional nuances exist today more than in continued on page 3C
a step back to t ry and f i gur e ou t e m e r g i n g trends, pre- di ct where the industry i s heading a n d s t a y ahead of an
always-changing environ- ment. While it’s difficult to speculate, there’s little doubt that deals have been closing and leasing activity
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