PARSIPPANY, NJ-Say goodbye to the renters’ market--but don’t think that New Jersey commercial real estate has turned in favor of the landlords yet, according to Colliers International New Jersey’s second quarter 2011 report.
A flat market, with transactions nearly on par with previous quarters, has led to a balance between tenant demands and landlord selectivity, the firm says. “There is still a lot of the office market sitting on the sidelines,” Matt Dolly, head of research for Colliers International New Jersey, tells GlobeSt.com. “And companies still are not hiring.”
The Hudson riverfront continues to do well, as do the Interstate 78 corridor and Princeton. Even so, Dolly says, “We’re not feeding off the Manhattan market they way we used to or would like to.”
The availability rate for Central New Jersey office space at the end of the second quarter was 20.7%, down from 21.1% year-over-year. Sublease space represents 13.3% of the total available space on the market, down from 13.9% in the last quarter; however, much of this is due to terms burning off and the space returning to landlords.
However, that has a positive aspect, Dolly says, as landlords won’t be competing with the lower prices of subleased space. “Landlords will have more control,” he says.
Business should start to pick up in the fourth quarter of this year, with momentum building in the first quarter of 2012, Dolly says. “There’s a ton of redevelopment out there, including in Newark and some of the other markets,” he observes. “There is no spec construction, which is a positive for existing landlords. They’re not making rash decisions, and that’s something developers should be applauded for.”
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