Office Forecast: Cloudy With Periods Of Rain

ELMWOOD PARK, NJ-A strong recovery cycle between 2003 and 2007, coupled with the absence of runaway building during the period, positioned the office sector to withstand the current downturn. But according to Marcus & Millichap’s just-released 2009 National Office Report, this will not prevent a sharp rise in vacancies in 2009 as the most extreme job losses in recent history impact the economy.

The beginning of the year will be especially challenging for operators in the Garden State, as more than 70% of all completions are scheduled to come online during the first half, says Michael Fasano, regional director of the New Jersey office.

Despite the inventory growth and slackening demand, the report indicates there will be some pockets of strength, such as Northern New Jersey’s Waterfront submarket. Tenants including law firms, insurance companies and boutique investment firms will target the area due to its more affordable rents than neighboring Manhattan.