PARSIPPANY, NJ-The statewide vacancy rate for office space increased slightly to 25.4% in the first quarter of 2012, with just a handful of lease deals, according to new research from Jones Lang LaSalle. Still, more tenants were in the marketplace looking to the future, JLL says.
Sean Straka, a senior vice-president tells GlobeSt.com: “We saw more tenants doing site tours and looking to take advantage of the lower rents available” than in Q4 2011 or the same period a year ago. “We think that means we are heading in the right direction.”
This was nowhere near as bracing an assessment as JLL gave for the industrial market in a new report. It called tour activity in the Meadowlands, in particular, “feverish,” and noted numerous transactions that led to net absorption of 920,000 square feet.
There was net absorption of just over 145,000 square feet of office space in the first three months, JLL’s report said. The vacancy rate was up from 24.9 % in the previous quarter. In northern New Jersey, it stood at 23.6 %, and in central Jersey it was 28.2%.
The average asking rents throughout the state did rise 22 cents a square foot to $24.07 in the first quarter, however, Straka notes. There were several significant leases by pharmaceutical firms and also 150,000 in leases by law firms, both adding up to reasons for at least a modicum of optimism, Straka says.
The 150,000 square feet of space leased to law firms was more than was leased in the first half of 2010 and 2011 combined, according to JLL’s new data. “They scaled back and held off on hiring for a couple of years,” Straka says. “I think now we are starting to see a little growth.” In one case cited in JLL’s report, Parker, Ibrahim, & Berg took 30,055 square feet of new space in Somerset.
Meanwhile, JLL cited only a few significant sales in the quarter, including:
- Cole Real Estate Investments purchase of Eight Sylvan Way, a 176,062-square-foot, Class A property in Parsippany for $53 million. The seller was Hampshire Companies.
- RMA of New Jersey’s purchase of 140 Allen Road, a 65,000-square-foot, Class B property in Basking Ridge, from SJP Properties for $7.8 million.
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