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Lease Expiration No Longer Driving Deals

ISELIN, NJ-Office availability rates showed little movement in Q1 thanks, in part, to sluggish private sector growth.

By Alyson Grala | Updated on June 02, 2009

ISELIN, NJ-The dance between landlords and tenants shifted during the first quarter, with tenants opting to renew or restructure their leases well in advance of their lease expirations, according to Studley’s Q1 Northern and Central New Jersey office report. The study found little change in availability rates, with the state’s overall rate standing at 18.9%, down 0.4% from the previous quarter but up by 1% from the same time last year. Meanwhile, the class A availability rate–19.4%–posted a drop of 0.6% for the quarter but a gain of 1% for the year.

“Basically, in New Jersey what’s happened is that people are playing musical chairs. Some people grow, some shrink and some move,” Colliers Houston & Co. president David Houston tells GlobeSt.com, adding that the market has been flat for 18 years and counting.

Part of the problem, according to Jim W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, is that the state hasn’t created one net new private sector job since 2001. “All of our job growth has been in the government, which is why our taxes are terrible,” Houston adds. “Unless you get a substantial increase in private sector jobs, you’re not going to work down this inventory.”

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