Northern NJ's Office Market Continues Sluggish Pace in Q2

PARAMUS, NJ-As corporations continue to shed space and employees, Northern New Jersey’s office market registered a sluggish second quarter. A report from CresaPartners found that both rents and leasing activity slid downward in Q2.

In the class A sector, leasing volume tallied up to 950,000 square feet, down from 1.8 million square feet in Q1. Along with that decrease came a reduction in rents, which went from $27.13 a square foot in the first quarter to $26.98 at the close of Q2.

The class B segment didn’t fare much better. Approximately 460,000 square feet in that category was leased in Q2 versus 500,000 square feet in the previous quarter. Net absorption totaled 75,000 square feet, down from Q1′s tally of 140,000 square feet. Rents declined slightly, ending the second quarter at $21.71 a square foot, a nine-cent dive from Q1.

“There will continue to be an element of uncertainty in the market over the next few months, as the unemployment rate continues to increase and maturing loans prove difficult to refinance,” says Robert D. Rencarge, a senior advisor in CresaPartner’s office here, in a statement. “In addition, large corporations will be forced to dispose of significant excess capacity, and many small business owners will experience sustained financial distress, further depressing demand for office space.”