PARSIPPANY, NJ-The New Jersey office market vacancy rate dropped 0.8% to 25.6% during the third quarter according to new research by Jones Lang LaSalle. Although the drop is slight, it represents the most significant decline in overall vacancy since the first quarter of 2005.

The state’s third quarter vacancy rate is the lowest in five consecutive quarters and indicates that there is less than 40 million square feet of office space available. This may point to the market hitting bottom and stabilizing in the future. “This vacancy rate drop is due to a combination of factors: a decline in new product being placed on the market, robust leasing activity and several transactions by large users purchasing buildings for their own use,” stated Dan Loughlin, managing director at JLL. “Year-to-date leasing activity is well ahead of last year’s pace, another key positive indicator,” he tells GlobeSt.com. “However, vacancy levels are not anticipated to decrease significantly until New Jersey experiences consistent job growth.”

While New Jersey’s statewide vacancy rate was 25.6% during the third quarter, in the northern part of the state it fell to 22.4% from 22.8%, while the rate in Central New Jersey remained unchanged at 31.8%. When a handful of the market’s largest blocks of space, which cannot accommodate most tenants' requirements today are eliminated from the vacancy rate, New Jersey office vacancy declines several percentage points to 23.1%.