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Office, Industrial A Mixed Bag in Q1

EAST RUTHERFORD, NJ-However, 'a three-consecutive-month decline in New Jersey unemployment through February and considerable changes in the structure of the overall economy are promising,' says Cushman & Wakefield's Medina.

By Alyson Grala | Updated on April 15, 2010

EAST RUTHERFORD, NJ-Cushman & Wakefield, Inc.’s first quarter market research findings provide a mixed–yet increasingly upbeat–picture of New Jersey’s office and industrial performance, according to Gil Medina, executive managing director of the commercial real estate services firm. The Northern New Jersey office market is showing early positive signs, while Central New Jersey continues to struggle. On a more encouraging note, industrial fundamentals are proving to be fairly robust throughout the state.

“The major indicator for a true national fiscal recovery will be a monthly trend in positive job growth and declining unemployment rates,” Medina notes. “That said, a three-consecutive-month decline in New Jersey unemployment through February and considerable changes in the structure of the overall economy are promising. Yet companies need to expand, rather than consolidate, for the upswing to truly take hold for our industry.”

The overall office vacancy rate in Northern New Jersey, now 16.4%, represents a 0.5% decline since year-end 2009 and the lowest rate since first quarter 2009. At the same time, the overall weighted average asking rental rate dropped by $0.23 per square foot from the end of last year to a current $25.79 per square foot. “Office leasing in most northern markets maintained some resiliency, with Morris County leading the way and Bergen County close on its heels,” Medina tells GlobeSt.com. In the largest lease of the quarter, Medco Health Services, a pharmacy benefit management company, took a full-building, 142,500-square-foot sublease at 225 Summit Ave. in Montvale. Additionally, United Parcel Service leased 118,000 square feet at 1655 Valley Rd. in Wayne. In Morris Township, at 445 South St., Travelers Insurance Company secured 105,000 square feet and Covanta Energy Corporation signed on for 104,839 square feet.

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