VOORHEES, NJ – While overall office real estate vacancy rates remain stuck where they have been for all of four years now in southern New Jersey – 20 % or higher – a new report from Wolf Commercial Real Estate notes an uptick in rental rates.
Rental rates have increased on average from $7-to-$9 per square foot to the $11-to-$13 per-square-foot range, according to a year-to-date report from the Voorhees-based company.
“Even with the high vacancy rates, great locations are performing well and causing rents to increase,” says Wolf’s new report, adding: “This is now starting to trickle into the markets with struggling vacancies.”
Nonetheless, it remains a tenants’ market, the company said. Tenants in the market for 10,000-40,000 square feet who are considering a “flight-to-quality” have ample opportunity to negotiate on rent for Class A space, Wolf notes. The stubbornly high vacancy rate continues to enable all tenants to negotiate for better lease terms.
“Even with slow economic recovery underway, this pattern is expected to continue until the market sees significant positive absorption and a better jobs outlook,” the company said in an analysis.
Wolf surveyed availabilities at class A and B buildings with up to 100,000 square feet in Cherry Hill, Marlton, Moorestown, Mount Laurel, Pennsauken and Voorhees. Overall, Mt. Laurel had the most space available of any of these communities, with almost 50 offices of 10,000 square feet or less currently on the market, along with a significant supply of larger offices.
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