Retail Real Estate Market in Northern & Central NJ Sees Biggest Drop in Retail Vacancy in Over 4 Years
VACANCY RATE DROPS OVER ½ PERCENT IN 6 MONTHS
22 RETAIL CORRIDORS, TOTALING OVER 4,250 PROPERTIES SURVEYED
PARAMUS, NJ (OCTOBER 21, 2013) – The retail vacancy rate has dropped over a half percent according to the results of The Goldstein Group’s midyear survey of 22 retail corridors in Northern and Central New Jersey. The survey, the most extensive retail vacancy report for New Jersey, totals over 4,250 properties and over 100 million square feet of retail space. The retail vacancy rate dropped to 7.2 percent, a .6 percent decrease from what we saw in the 2012 year end report. Retailers – both existing and new retailers coming to New Jersey for the first time – continue to absorb retail space. This improvement is especially significant considering the average retail vacancy rates across the country are still in the 10-12% range.
“This is the lowest retail vacancy percentage we’ve seen in the Northern and Central New Jersey markets in over 4 years,” noted Chuck Lanyard, President of The Goldstein Group. “To have this number drop in a matter of six months provides an indication that our economy is improving, although very cautiously.”
Strongest & Weakest Submarkets
The strongest retail markets with the lowest availability rates include: Route 3 - Clifton (2.27%); Route 17 – Rochelle Park-Rutherford (2.64%); Route 1 – Woodbridge-Edison (3.72%); Route 37 – Toms River (4%); Route 17 – Ramsey/Mahwah (4.7%).
Markets with the highest vacancy rates include: Route 18 – East Brunswick (11.9%); Route 10 – Livingston-East Hanover (11.3%); Route 17 – Paramus (10.53%); Route 35 – Shrewsbury-Ocean (10.35%); Route 46 – Totowa/Fairfield (8.73%).
“There was a substantial increase in leasing activity through midyear of 2013 with several markets having minimal space available in corridors such as the Clifton Route 3 and Rochelle Park/Rutherford Route 17 markets,” said Lanyard. “The Route 18 East Brunswick market alone dropped from 18.3% to 11.9%, a 6.4% decrease in retail vacancy within the span of 6 months. With the opportunities that have come up along the various retail highways, new to New Jersey retailers/restaurants such as Hobby Lobby, Gold & Williams Furniture, Brio Restaurants, Garbanzo Mediterranean Grill, Noodles & Co. Restaurant, Potbelly, Shake Shack Restaurant, Title Boxing, Seansons 52 Restaurant and numerous others have opened, or will soon open new locations throughout the state. Well established retailers that continue to expand in the state include Home Goods, Costco, Aldi, Advance Auto, Shop Rite, BJ’s Wholesale Club, TJ Maxx, Auto Zone, Joanne Fabrics, CVS, Walgreens, LA Fitness and 7-Eleven.”
Leasing velocity through midyear of 2013 totaled over 1.5 million s.f., with over 800,000 s.f. of space currently being built in various communities such as North Brunswick, Hanover, Newark, Old Bridge, North Plainfield, East Brunswick, Lodi, Wayne, Montvale, and West Windsor.
The Goldstein Group Vacancy Survey Matrix
The market is continuing to rise up from the downturn that hit retailers in 2008 and 2009. However, we still continue to see space become vacant due to closings throughout the state. Sears Auto, Baja Fresh, Bank of America, Blockbuster, Clearview Cinemas, PNC Bank, and Radio Shack have all closed locations recently and these vacated spaces are generating strong interest from retailers.
Active Retailers in the Marketplace
Leasing activity continues to be driven by retailers opening shops in the 1,000 to 5,000 s.f. range. However, we have seen a substantial increase in big box retailers taking advantage of favorable market conditions and rental rates. Examples of this include Big Lots and Bob’s Discount Furniture in Freehold, BJ’s Wholesale Club in North Brunswick, Costco in North Plainfield, DSW Shoes in Eatontown, Foodtown in Bloomfield, Hobby Lobby in Lawrenceville and Marlboro, Boscov in Woodbridge, LA Fitness in Paramus, Whole Foods in Marlboro, Lowe’s Express in Wall, Steinmart in Watchung, Shop Rite in Hazlet and Union, TJ Maxx in Totowa, and Home Goods in Lyndhurst. Also in the planning stages, a new Target is slated to open in late 2014 in North Brunswick.
Some medium box deals so far this year include: Bottom Dollar in East Windsor, Dollar Tree in Elmwood Park, Fresh Market in Bedminster, Harbor Freight in Hasbrouck Heights, Joann Fabrics in Riverdale, Key Foods in Newark/South Amboy, and Lord & Taylor Outlet in Shrewsbury.
Many retailers continue to expand in the very desirable NJ retail markets. Some of those include:
- Advance Auto
- Big Lots
- Auto Zone
- Blink Fitness
- Harbor Freight
- Pet Supplies Plus
- LA Fitness
- Dollar Tree
- Home Goods
- Dollar General
- Massage Envy
- Buddy’s Small Lots
- Sherwin Williams
Retail & Restaurant Trends
New Jersey’s long list of restaurant choices and eating establishments continued to grow as new restaurant concepts and established ones have opened or announced planned openings. Red Robin in Paramus and Secaucus. Chipotle in Lawrenceville and Toms River. Qdoba in Jersey City, Freehold and Livingston. Bahama Breeze in Toms River and West Windsor. Bare Burger in Edgewater and Hoboken. Smashburger has opened in Brick and North Brunswick. Brio in Lawrenceville. Garbanzo Mediterranean Grill in Florham Park. Chick Fil-A in Woodbridge. Noodles & Company in East Brunswick. Panera Bread in Clifton. Potbelly Sandwich in Paramus and Jersey City. Quaker Steak & Lube in Edison and Brick. Starbucks in Eatontown. Outback Steakhouse in Lawrenceville. Bonefish Grill in Lawrenceville.
Convenience stores are also continuing their expansions throughout New Jersey. 7-Eleven in Carlstadt, Edison, Hackensack, North Arlington and West New York. Wawa in Elizabeth, Woodbridge, Lodi and Ramsey. QuickChek in Wayne, Jefferson Township and Hanover.
Health and Wellness industry retailers continue to flourish in the Garden State. Blink Fitness in Union, Lodi, Parsippany and Jersey City. Crunch Fitness in Stanhope and Garwood. Equinox in Paramus. Planet Fitness in Hazlet and Freehold. Retro Fitness in East Windsor. Nobody Denied Fitness opened in Morristown. Life Time Fitness in Montvale. Equinox in Paramus. Hackensack UMC Fitness & Wellness in Maywood.
“The recovery of the retail market in New Jersey is continuing to grow at a fairly good pace,” noted Lanyard. “These numbers confirm that the retail climate is improving. Road blocks to a faster recovery have been reluctance from some retailers to wait for a more sustained improvement. That coupled with the continued difficulty of securing the much needed financing to fund retailers along with the current U.S. Congress fiscal issues, will continue to be a deterrent to rapid retail growth as we saw before the recession. One thing is certain despite the roadblocks, good quality retail spaces are leasing up briskly and the desirable retail locations will soon be at a premium.”
About The Goldstein Group
The Goldstein Group, New Jersey’s leading full-service commercial real estate brokerage firm, specializes in owner representation, retailer representation, investment sales and management services. The firm, founded in 1986, represents over 12,000,000 square feet of retail space and more than 50 national and regional retailers. The Company is the New Jersey member of the Retail Brokers Network. As an RBN affiliate, The Goldstein Group provides clients assistance throughout the United States with qualified retail specialists in over 75 offices in the United States and Canada.
For more information on the Retail Brokers Network, visit www.retailbrokersnetwork.com.
For more information, contact Chuck Lanyard at (201) 703-9700, extension 115 or visit the Company’s website at www.thegoldsteingroup.com.