PARAMUS, NJ–The overall vacancy rate for retail property in northern and central New Jersey dipped to 7.69% in the first half of the year, according to a new survey of 22 retail corridors by The Goldstein Group.
At the start of the year, the rate was 7.9%, down from 8 % at mid-year 2011. (Previously, the rate was 8.1% for a solid year, following a peak of 8.2 percent in mid-2009.) Retailers continue to absorb space at a healthy clip, according to the survey. It noted that 20 set up shop for the first time in the state in the first six months of this year.
Overall, though, “It is still a ‘tenants’ market,’” notes Chuck Lanyard, president of Paramus-based Goldstein. “Opportunistic retailers are leasing at attractive rental rates and securing locations not available in years, taking advantage of market conditions.”
Along Route 3 in Clifton, only 1.6% of available space is currently vacant, and on Route 17 in the Rochelle Park-Rutherford area, just 2.3%. According to the survey, other areas with the lowest vacancy rates are Woodbridge-Edison with 4.1% and Ramsey-Mahwah with 4.5%; Route 22 in Union/Springfield, 5.2%; Route 37 in Toms River, 5.4%; and North Brunswick/Lawrence Township, 5.7%.
There was a flurry of leasing activity at the beginning of the year along both Route 3 and Route 4 in Paramus, which now has only 6.3 % of space available. “Larger blocks of space are virtually nonexistent in these markets,” says Lanyard.
A total of more than 1.9 million square feet was leased in the first half, according to Goldstein’s report, which puts the retail real estate market on track to beat last year’s total 3 million square feet. Leasing has risen steadily since 2008, when it totaled 2.5 million square feet.
The only market area in the survey that showed a higher rate than the national average for retail property of 13.5% was East Brunswick along Route 18, where it was 17.5%.
With market conditions improving and several markets leased up, the Goldstein report noted, a healthy amount of new construction is now underway – totaling more than 676,000 square feet.
New construction and redevelopment projects are moving forward in Mahwah, Toms River, Sayreville, New Milford, Randolph, Cedar Knolls, Montvale, Fort Lee, Parsippany, and Teterboro.
Most leasing activity was in the 1,000-5,000-square-foot range. On the other hand, big-box retailers such as Walmart, Target, Burlington Coat, Wegmans, Whole Foods, and Home Goods, as well as several national gyms opened new stores. Retailers such as furniture stores, dollar stores, and buffet restaurants were also actively leasing, according to Lanyard
“The recovery of the retail market in New Jersey is continuing at a slow, but steady pace with solid growth in leasing activity and decreasing vacancies,” says Lanyard. “We expect this moderate pace of growth to continue into the balance of the year as much of the recession’s impact on the retail marketplace is appearing to be behind us.”
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