CBRE GROUP INC. MARKETVIEW REPORT: New Jersey Office Market Experiences Positive Third Quarter Activity
SADDLE BROOK, N.J. (December 18, 2013) –The New Jersey office market closed the third quarter with 1.7 million square feet of new leasing activity, a 72% increase over the same quarter last year, according to CBRE Group, Inc.’s 3Q’13New Jersey Office MarketView Report.
The office market has made vast improvements at the close of the third quarter, with 1,016,301 sq. ft. of positive net absorption. This marks the highest volume of absorption since Q3 2006 and only the third time in the past 10 years when net absorption exceeded one million sq. ft. Robust market activity and the reduction of big block availability contributed to the increased positive absorption in Q3 2013.
“We aren’t seeing very many large blocks of space of more than 100,000 square feet hitting the market, as many companies who occupy theses spaces are actually renewing their leases,” said Joe Sarno, executive vice president, CBRE New Jersey. “Clearly New Jersey is once again becoming a very business friendly state as renewals accounted for roughly 40 percent of the leasing activity this quarter. In fact, this is a trend that has continued to grow since 2008. Prior, renewals only made up 20 percent of all leasing activity.”
The Meadowlands submarket recorded the highest leasing volume with 233,566 sq. ft., followed by the Princeton submarket with 248,055 sq. ft. Central New Jersey posted its highest quarterly leasing velocity in this quarter, with the help of Berlitz International’s 78,296-sq.-ft. transaction at 7 Roszel Road in West Windsor. AT&T renewed 245,833 square feet for its Piscataway offices while URS renewed its 234,000 sq. ft. lease at 510 Carnegie Center in West Windsor.
The overall availability rate dropped below 21% for the first time since Q1 2009. While a welcome trend in the market, it is anticipated that there will be a high volume of new office availabilities in the coming quarters. Submarkets with the lowest availability rate included: Route 17 Corridor at 9.2%, Montvale/Woodcliff Lake at 11.4%, and Princeton at 11.8%.
“Governor Chris Christie recently signed the Economic Opportunity Act of 2013, which reestablished the State’s incentives program to attract new business and promote growth within the state,” said Greg Barkan, senior vice president, CBRE New Jersey. “This program has the potential to boost demand and offset the negative impact of companies consolidating or relocating to smaller space.”
Mr. Barkan also noted that the adaptive reuse trend continues to gain momentum as tenants continue to focus on space efficiency, evidenced by the 2.97 million sq. ft. of net absorption so far this year.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.