Jones Lang LaSalle Finds Leasing Flat for New Jersey Office Market in First Quarter of 2012
Though recovery of New Jersey office market experiences slight bump in the road, absorption of office space continues to be fueled by pharmaceutical companies and law firms
PARSIPPANY, N.J. April 16, 2012— Modest improvements in the state’s employment landscape and overall economy did not significantly improve the office sector leasing activity in New Jersey during the first quarter of 2012, according to new research from Jones Lang LaSalle. However, there were a few encouraging signs such as an increase in site tour activity in recent months and more transactions involving pharmaceutical companies and law firms.
The 150,000 square feet of leases signed year-to-date by law firms exceeds the total for the first half of 2010 and 2011 combined. Some notable law firm leases during the first quarter included Carroll, McNulty & Kull LLC renewing at 120 Mountainview Boulevard in Basking Ridge for 38,600 square feet, and Parker, Ibrahim, & Berg signing on for 30,055 square feet at 270 Davidson Avenue in Somerset.
Continuing an ongoing trend, pharmaceutical companies leased the most space through the first quarter. Savient Pharmaceuticals leased 48,469 square feet at 200 Crossing Boulevard in Bridgewater, while Quintiles Transnational Corporation signed a 45,210-square-foot renewal at 10 Waterview Blvd in Parsippany.
“Though overall leasing was down in the first quarter, the numbers are comparable to the per quarter averages we’ve seen over the past two years,” said Jones Lang LaSalle Senior Vice President Shawn Straka.“We don’t anticipate seeing significant activity until after the elections in November. That being said, the increase in tour activity is indicitave of the fact that thereare more tenants actively in the marketplace now than there were at the close of 2011 and at this time last year. There are a number of companies looking to take advantage of the low cost and lease opportunitites. That bodes well for future leasing activity.”
The Parsippany, Route 78, and Route 24 submarkets experienced the highest amount of activity with renewals accounting for almost 40 percent of first-quarter activity. And while some large blocks of space were placed on the market in Princeton, Parsippany, Route 78 and along the Hudson Waterfront, the state’s vacancy rate is down 0.5 percentage since this time last year. Net absorption measured just over 145,000 square feet through the first three months of the year with submarkets such as Lower 287, Upper Bergen, Route 24, and the Meadowlands absorbing considerable amounts of space due to up-ticks in activity or lack of new product.
First quarter highlights include:
· The statewide total vacancy rate for Class A and B space was 25.4 percent, compared to 24.9 percent during the fourth quarter of 2011. In Northern New Jersey, it was 23.6 percent, while the rate in Central New Jersey was 28.2 percent.
· Sales activity slowed in the first quarter with just a handful of notable deals. Eight Sylvan Way, a 176,062-square-foot, Class A property in Parsippany, was sold by Hampshire Companies for $53 million to Cole Real Estate Investments, and 140 Allen Road, a 65,000-square-foot, Class B property in Basking Ridge, was sold by SJP Properties for $7.8 million to RMA of New Jersey.
· The average asking rents throughout the state rose to $24.07 per square foot in the first quarter, compared with $23.85 in the fourth quarter. The average rents in Central New Jersey were $22.5, while rents in Northern New Jersey were $25.18.
Jones Lang LaSalle’s team of in-house research professionals compiles the office market report, which provides an extensive analysis of the New Jersey real estate office market. To download the 2012 first quarter New Jersey office market highlights click here, and to download the 2012 first quarter New Jersey office market statistics click here.
In New Jersey, Jones Lang LaSalle is a leader in commercial real estate brokerage, project management and investment sales. Employing more than 600 of the region’s most respected industry experts, the firm offers Office and Industrial Brokerage, Tenant and Landlord Representation, Project and Development Services, Property Management, and Capital Markets services to its clients in New Jersey. The operations also serve as the local service provider for the firm’s global and national corporate clients that have a presence in New Jersey.
For more news, videos and research resources on Jones Lang LaSalle, please visit our U.S. media center Web page. Bookmark it here: http://www.us.am.joneslanglasalle.com/UnitedStates/EN-US/Pages/News.aspx
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.7 billion of assets under management. For further information, please visit our website,www.joneslanglasalle.com.