10B — September 13 - 26, 2013 — New Jersey — Mid Atlantic Real Estate Journal
N orthern N ew J ersey
LD BRIDGE, NJ — Thanks to absorptions of numerous empty Conducted during the second quarter of this year R.J. Brunelli annual survey finds vacancy rate on Northern NJ retail corridors edges down to 8.1% O study, the region’s vacancy factor remained stuck above the 8.0% mark for each of the last four years.
shopping centers and free- standing buildings exceeding 2,000 s/f along State Hwys. 4, 10, 17, 22, 23 and 46/3, and certain intersecting arteries in Bergen, Essex, Morris, Passaic, Somerset and Union counties. Freestanding restau- rants, auto service facilities and auto dealerships are also included, while enclosed re- gional malls and centers under construction or redevelopment are excluded. “Despite the progress shown on the hard-hit Rte. 22 cor- ridor, northern New Jersey has yet to recover from the effects of the rash of big-box retail bankruptcies that began
to elevate vacancies in 2009 when the rate jumped to 6.6% from 3.6% the prior year,” said Richard Brunelli , president of the firm. “Long one of the top-performing retail real estate markets in the nation, the northern region boasted a vacancy rate of just 3% or less in less in three of the last 10 years after hitting an unheard of low of 2% in 2003. Our lat- est study found that big-box vacancies have stabilized as health clubs and retailers looking to expand their foot- print in the region led to net absorption over the past year. But we’re also seeing rising vacancies in small store space.
Small chains and mom and pops continue to struggle to get financing for new locations or start-up ventures. Mean- while, marginal operators unwilling to try to make a go of it in a tough economy are shutting their doors as leases expire.” The 2013 survey found that vacancies in the region’s big- box stores exceeding 20,000 s/f declined to 1.06 million s/f, or 45.7% of total empty space, from 1.09 million s/f, or 46.7%, in 2012. Approximately 772,207 s/f, or 73%, of this year’s empty big box space came from stores that re- mained vacant since the firm’s 2012 survey and, in many cases, from 2011 and before. Indeed, spaces lingering on the market for at least three years totaled 612,700 s/f, or 58% of the region’s big-box inven- tory. These include locations formerly operated by Circuit City, Linens ‘N Things, Office Depot, Home Depot Expo, Bor- ders, and Pathmark. “During this past year, we saw some positive develop- ments in particular with big-boxes left over from the Border’s bankruptcy and The Great Atlantic & Pacific Tea Co.’s selective closures of un- der-performing Pathmarks,” Brunelli noted. “Among the four Pathmarks that were still available along the corridors in our 2012 survey, two have since been absorbed by Costco and ShopRite on Rte. 22, leav- ing the pair along Rte. 10 in play. Similarly, of the four re- maining Borders locations, the spaces on Rte.s 17 and 23 have been leased to DSWShoes and Jo-Ann Fabrics, respectively, with stores on Rte.s 10 and 22 still available.” Among the four big-box spaces aggregating 120,000 s/f along Rte.s 10, 17 and 22 that were thrown onto the market in the 2012 survey from the bankruptcies of Sixth Ave. Electronics, Syms and Einstein Moomjy, only 20,000 s/f has been spoken for, with growing local chain Buddy’s Small Lots taking the for- mer Einstein location on Rte. 10 in Whippany. A smaller (19,500 s/f) former Sixth Ave. space on Rte. 10 in Livings- ton was leased by growing national chain The Tile Shop, which also took approximately 23,000 s/f of the long-vacant, 32,300 s/f Circuit City on Rte. 22 in North Plainfield. n
big-box spac- es on Rte. 22, the vacancy rate in retail p r o p e r t i e s along north- e r n N e w Jersey’s six major shop- ping corr i -
In its annual study of the six-county northern New Jer- sey market, the Old Bridge- based retail brokerage firm found 2.40 million s/f of vacan- cies in the 29.50 million s/f of space examined along the six corridors, with availabilities seen in 176 of the 909 proper- ties reviewed. This compared with 2.33 million s/f of vacan- cies in 28.34 million s/f of space in the 2012 study. Conducted during the sec- ond quarter of this year, R.J. Brunelli’s 2013 study reviewed
dors inched down to 8.1% from a high of 8.2% a year ago, according to the latest survey by R.J. Brunelli & Co., LLC. With Rte. 23 the only other highway to show an improve- ment from the firm’s 2012
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