PARAMUS, NJ-According to The Goldstein Group’s year-end survey of 22 retail corridors in North and Central Jersey, the state’s retail vacancy rate dipped to 7.9% – the first drop below 8% since January 2009. This compares with a 13.9% average retail vacancy rate for the rest of the country, the survey notes.
The state’s vacancy rate has continued to inch downward for three years, as retailers – especially smaller retailers - moved to grab space at reduced rental rates in solid locations that had not available during boom years, Goldstein Group’s president, Chuck Lanyard, tells GlobeSt.com.
“What’s more, we know that since the survey was made, in the first quarter of this year, there has been considerable more space leased in highway areas,” says Lanyard. “Around Paramus, those areas are leasing up great.” The Goldstein Group annually surveys 4,250 properties offering a total of 98 million square feet.
Despite the closing of defunct retailers such as 6th Avenue Electronics, Syms/Filene’s Basement, Blockbuster, Einstein Moomjy, and Borders, the majority of New Jersey’s 22 retail submarkets saw decreases in vacancy rates, says Lanyard. Some submarkets have very little space available right now, including Route 3 in the Clifton area and Route 17 in Ramsey, he adds.
The retail submarkets with the lowest availability rates according to the new survey are Route 4/ Paramus with 6.4% vacancy, Route 46/ Parsippany-Rockaway with 5.8%, Route 1 /Woodbridge-Edison with 6.3%, and Route 37/ Toms River with 6.3%.
The retail corridor that had the highest vacancy rate at the end of 2011 was New Brunswick along Route 18, with 17.8% vacancy. Route 10 running through Livingston and East Hanover had a 12.9% retail vacancy rate.
In terms of the type of lease deals being made, the trend is toward fewer big-box stores and more specialty retailers gobbling up space, Lanyard says. Leasing is primarily dominated by retailers looking for less than 5,000 square feet, according to survey results.
“For the first time in years, retailers who have clamored to enter New Jersey but were unable due to higher rental and operating costs and are now considering
and opening stores in the state due to decreased rental rates and attractive leasing terms being offered by landlords,” says Lanyard. He named Hobby Lobby, JoAnn Fabrics, Lord & Taylor Home, The Tile Shop, and Harbor Freight & Tool as examples.
“Sometimes national tenants are not able to move as quickly,” he notes, “but some smaller retailers are getting some fantastic deals in great locations. As the market grows stronger and rents begin to increase, that window of opportunity is inevitably going to close.”
“There has not been a huge jump forward with the leasing market,” he adds, “and we don’t expect that for the next few years. However, we are seeing steady improvement in absorption, even with some of the bigger box locations,” he said, “and the overall retail landscape is definitely improving all the time.”
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
