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Office Rental Rates On the Rise (Slightly)

PARSIPPANY, NJ-In addition, sublease space dipped in the last three months by almost one million square feet.

By Alyson Grala | Updated on July 16, 2010

PARSIPPANY, NJ-New research by Jones Lang LaSalle found that New Jersey’s office market is very active in numerous sectors, with more than two million square feet of leases signed during the second quarter, and, for the first time in more than two years, an increase in asking rental rates–up 13 cents per square foot. Additionally, available sublease space dipped in the last three months by almost one million square feet.

However, vacancy in the New Jersey market continued to rise by 0.2% during the three-month period, in part due to five blocks of new space–each in excess of 100,000 square feet–that were placed on the market, bringing the overall vacancy rate to its highest level in history. “Despite the slight increase in the vacancy rate, the increase in rental rates combined with the dip in available sublease space are both healthy signs for the market,” says Dan Loughlin, managing director at Jones Lang LaSalle. “While we are still in the midst of a tenant’s market, companies are increasingly realizing that the market is beginning to level out.” Still, the overall office vacancy rate at the end of the second quarter was 26.4%, an increase from 26.2% last quarter.

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