IRR-Coastal New Jersey Mid-Year Viewpoint 2015 Local Market Report - Office
Like most other markets in the country, the Coastal, NJ office market has been negatively influenced by the recession over the past several years. This, coupled with anemic employment growth in the region has caused a stagnating effect on rental rates. In addition, specific to the Monmouth County submarket, the closing of Fort Monmouth continues to have an impact on the market creating large blocks of vacant space in the Monmouth East submarket. While this space has been slowly absorbing, vacancy remains relatively high within this submarket.
Similarly, the contraction in the casino gaming industry has created several larger blocks of vacant space in the mainland Atlantic County market. The medical office sector remains the bright spot with some build-to-suit projects being completed primarily associated with the hospital expansions at AtlantiCare and Shore Memorial in the Atlantic County market. The end of 2014 saw the completion of Phase I of the CommVault Project located on a portion of the Former Fort Monmouth property in Eatontown, Monmouth County. The first phase of this high-tech office complex included the construction of a 280,000 square foot Class A office. Eventual build-out will total over 650,000 square feet. Aside from this project, there has been limited new inventory added to the market, consisting mainly of smaller buildings in the 20,000 to 40,000 square foot class which are substantially pre-leased. There is limited, if any, speculative office development occurring in the region. The market continues to be favorable for tenants with evidence of leasing concessions, generous tenant improvement allowances, and limited rental increases. We do not expect any material changes in the office market in the short term due to the limited population growth expected and the relatively high unemployment rate. The office market remains in the initial stages of recovery
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.