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FirstService Williams: Q2 Office Vacancies Rise

PARSIPPANY, NJ-As tenants renew to lock in favorable rental rates, office availabilities in the state continue to rise, reports FirstService Williams.

By Maria Wood | Updated on July 02, 2009

PARSIPPANY, NJ-Lease renewals by tenants looking to lock in favorable rental rates has failed to offset consolidations among firms as they adjust their office space needs following layoffs. That has led, according to a second-quarter report from FirstService Williams, to a jump in statewide office vacancies to 22.6% from 20.8% in Q1.

That latest number is the highest it’s been since the fourth quarter of 2004. Seven of the 10 counties included in the FSW survey saw availabilities rise. Sublease space as a percentage of the total market, meanwhile, climbed slightly to 21%, up from 20.4% in Q1. However, that is a decrease from a year ago when the rate stood at 23.2%.

Matt Dolly, managing director of research and marketing for FSW, tells GlobeSt.com that the rise in vacancies is due to the market adjusting to lower employment levels following corporate layoffs. “The commercial market doesn’t react until nine to 12 months afterward,” he says. “A firm reduces its employees, then it evaluates its space needs and then it may consolidate. That’s when the space goes on the market. It takes some time.”

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