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Negative Absorption Trumps Increased Leasing Activity

SADDLE BROOK, NJ-Consolidations drove the office leasing market in Q1, as availability rates continued to climb.

By Alyson Grala | Updated on May 19, 2010

SADDLE BROOK, NJ-The New Jersey office market’s availability rate continued to climb upward during the first quarter of 2010, despite increased leasing activity, as consolidations and renewals accounted for much of the leasing activity that did occur, finds CB Richard Ellis’ first quarter 2010 New Jersey office report.

“An increasing number of companies have taken advantage of the opportunity to control operating costs by right-sizing, and they negotiated their new terms during the most favorable tenant’s market yet,” says Jeff Hipschman, senior managing director for CB Richard Ellis. “Despite a six-cent increase in asking rates over Q4 2009 figures, to $24.44, taking rates are still trending 19% lower than asking rates. Thus, while transactions picked up, the fact that occupiers shifted to smaller footprints resulted in fewer square feet occupied overall.”

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