2014 Year In Review – Top Stories in Commercial Real Estate According to Industry-Thought Leaders at Lee & Associates, NJ
ELMWOOD PARK, NJ, JANUARY 14, 2015 – Throughout the past year, Lee & Associates, NJ, has monitored New Jersey’s commercial real estate market. Today, as the year recently ended, Elmwood Park-based Lee & Associates, NJ, announces the seven most significant commercial real estate stories in Northern New Jersey in 2014.
A sampling of the top commercial real estate stories include:
Port Newark Container Terminal (PNCT), Port Newark-Elizabeth - One of largest stories this year focuses on the prime water real estate in Newark bordering Elizabeth. Officials at PNCT are in the process of expanding and restructuring this strategic port, doubling the number of containers moving through the Terminal, creating more warehousing opportunities and commerce throughout New Jersey. With the new port rephrase supporting more than $36 billion in annual business income, New Jersey will continue to offer the largest concentration of warehouse and distribution space in the United States. This restructuring will dramatically impact the entire state of New Jersey and add significantly to economic growth.
State Steps In - The State of New Jersey is stepping in to assist with things moving forward, as well. Grow New Jersey was an initiative created to attract business to the state by offering businesses up to 10 years of tax credits for job creation. It was launched, in part, to counter similar efforts in New York, Pennsylvania and Connecticut. The program attracted a number of businesses to New Jersey in 2014, including Wenner Bread Products of Long Island, NY, which leased 301,600 square feet in New Brunswick. Wenner was represented by Lee & Associates.
Sluggish Employment Growth - Despite the state’s Grow New Jersey program, the slow employment growth rate has been a stubborn issue for Northern and Central New Jersey’s office market. In fact, a lack of good quality jobs has kept the high vacancy rate in the 14% range through Quarter 3 in 2014. The market has witnessed companies moving in and out of existing spaces throughout the region. After the movement, which can be likened to a “game of musical chairs,” the vacancy needle moved a small 50 basis points since the end of last year. Despite the lack luster market, there are some examples of business growth throughout the state, including the expansion of the law firm of Kozrya & Hartz, represented in relocation efforts by Michael Staskiewicz, Senior Vice President of Lee & Associates.
Shift in Workforce Environment Preferences - A big cause of the issue is the shift in workplace demographics. In 2014, Millennials finally outnumber Baby Boomers in the workplace, and they have their own ideas about what makes a desirable work environment. Urban areas typically offer the three things millennials crave: a 24/7 lifestyle, amenities and easy access to public transportation hubs. As a result, high quality office buildings near urban centers are active in all building classes. Suburban property owners are working to add Millennial-friendly improvements that allow workers to work, socialize and relax in a more open atmosphere.
Ecommerce- Driving a significant portion of the big box market, e-commerce has motivated developers to get new product off the ground to meet that demand. On the positive note, in the third quarter, 3.6 million square feet of new inventory was delivered to the market, more than the total for the first two quarters of 2014 combined.
Market Progress- The Northern New Jersey industrial market is improving and the levels are in line with other major metro areas. With declining vacancy, positive net absorption, increasing rents and development activity, this region shows promise. The third quarter 2014 ended with an 8.3% vacancy rate, down 10 basis points for the third straight quarter.
Rental Rates– By Quarter 3, the average asking rental rate for office space stood at $23.59 across all categories. In Q3, class A came in at $27.26, class B at $21.48 and class C settled at $19.21,and little changed as compared the previous quarter. There have been several significant build to suit transactions completed this year, including new facilities for Prudential and Panasonic.
As one of New Jersey’s fastest growing companies, Lee & Associates, NJ, continues to capitalize on the momentum we created throughout the Garden State. Our business and dealings span the majority of Northern and Central New Jersey, and are serviced through offices in Elmwood Park and Edison. Our local expertise, in-depth experience, analysis and intelligence are unparalleled. As key players in commercial real estate, we observed very interesting movements this past year and 2015 looks even more interesting,” explains Richard Marchisio, president, Lee & Associates, NJ.
About Lee & Associates
Celebrating more than 34 years of leadership excellence in commercial real estate, Lee & Associates is the largest broker-owned firm in the nation, with 51 locations across the nation including California, Arizona, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Maryland, Michigan, Missouri, Nevada, New Jersey, New York, South Carolina, Texas, and Wisconsin that house more than 750 brokers. Lee & Associates provides a wide range of specialized commercial real estate services.
New Jersey Division: As part of a unique and dynamic commercial real estate firm, Lee & Associates, New Jersey LLC, was developed to supply New Jersey and the New York City metropolitan area with highly qualified professionals delivering local expertise, a national reach and world-class results. They are a “one-stop shop” – a single point of contact operation which provides all of a client’s real estate needs in-house. From brokerage services, asset and property management, design and construction, they focus on clients’ specific requirements to achieve maximum results. In September 2014, they were named one of 50 fastest growing companies in New Jersey by NJBiz Magazine.
Additional information is available at www.lee-associates.com.
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