RUTHERFORD, NJ-If you’ve been crowing about the real estate recovery in New Jersey, maybe it’s time to slow down a bit--office and industrial space in the state saw negative absorption rise, according to Newmark Knight Frank's first quarter reports on the sectors.
The market availability rate for office space in the state was 19% at the end of Q1 2011, up from 18.8% at year-end 2010, and 18.5% at the end of Q1 2010. The report says that the New Jersey office market experienced negative 407,962 square feet of net absorption, “reversing the positive gains that began at the end of last year.” The market posted total negative net absorption total for all of 2010 at 448,400 square feet and finished the year on a positive note with 265,026 square feet of net absorption in Q4, according to the report.
Both Northern and Central New Jersey saw negative absorption. Central New Jersey reported negative absorption of 303,248 sf, with a total availability rate of 27.4%. Northern New Jersey reported negative absorption of 104,714 sf, with a total availability rate of 22.4%.
The news wasn’t all bad. The average asking rent for office space in New Jersey was $24.91 per square foot at the end of Q1, up 1.1% from the $24.65 per square foot at the end of 2010, and slightly above the $24.88 per square foot average one year ago. In Central New Jersey, the average asking rent was $23.96 per square foot, with the total average asking rent in Northern New Jersey at $25.96 per square foot.
Notable lease transactions during the quarter include Quality Technology Services taking nearly 128,000 square feet at 95 Christopher Columbus Dr. in Jersey City; Advanced Health Media’s 124,000 square feet at 420 Mountain Ave. in Berkeley Heights; and Verizon Wireless’ 100,000 square feet at 180 Washington Valley Rd. in Bedminster.
The industrial market also saw continued rough conditions to start the year, Newmark reported. “Following a rocky 2010 in which a net total of 267,225 square feet of positive absorption took place, which included a net total of 2.6 million square feet in the fourth quarter, the market took a step backward in the first quarter of 2011, with negative 723,070 square feet of net absorption,” the report says.
However, Bergen County saw 407,264 square feet of positive net absorption, with the availability rate improving to 16.1% from 17.3% in Q4 2010, and 16.6% from Q1 2010. Asking rents also improved, to $6.36 per square foot, from $6.33 per square foot at the end of 2010.
Notable leases included I/O Data Center’s 830,0000-square-foot deal at 3003 Woodbridge Ave. in Edison; Colorate Plastics Co.’s 330,000-square-foot lease at 101 Railroad Rd. in Ridgefield; and JFC International’s 55 Wildcat Way in Linden.
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