PARSIPPANY, NJ-The recovery continues for Class A office space in New Jersey, which posted the lowest vacancy and highest net absorption rate since before the 2008 economic meltdown, according to Jones Lang LaSalle’s fourth quarter report.
Class A vacancy fell for the third straight quarter to 23.3%, the lowest level since mid-2008, while net absorption for the year totaled more than 1.5 million square feet, the highest yearly total since 2007.
“Everyone feels the worst is behind us,” JLL senior vice president Shawn Straka tells GlobeSt.com. “They’re trading up to Class A space, and making their footprint more efficient.”
Occupancy at Class B space, on the other hand, remained flat. The statewide total vacancy rate for Class A and B space was 24.9%, compared to 25.3% in the third quarter.
Submarkets experiencing strong leasing velocity in the fourth quarter were the Parkway Corridor, Route 78 and Central Bergen County, while the Hudson Waterfront and Newark/Elizabeth markets though strong have slowed a bit as space became more expensive, the report says. The average asking rents throughout the state rose slightly to $23.85 per square foot in the fourth quarter, compared with at $23.74 in the third quarter. Average rents in Central New Jersey were $22.44 per square foot, while rents in Northern New Jersey were $24.97 per square foot.
This could be the sign of a sustained recovery, Straka adds. “As this continues through 2012 and beyond, available space will decrease,” even if the US Presidential election delays some activity for psychological reasons, he says. “Businesses still have to make deals. I hope this is the start.”
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