PARSIPPANY, NJ-Northern and central New Jersey's office vacancy rate declined declined slightly from the first quarter to 24.2%at mid-year, according to Jones Lang LaSalle.
The vacancy rate was 25% one year ago by JLL's accounting. The company cited an uptick in demand for vacant suburban office buildings presenting redevelopment
opportunities:
- Memorial Sloan-Kettering Cancer Center acquisition of the former Lucent Technologies building at 480 Red Hill Road in Middletown to convert it to a cancer treatment and data center.
- Somerset Development's redevelopment of the former 1.7 million-square-foot Bell Laboratories property in Holmdel into a mixed-use town center.
- Lam Cloud Management's lease of 495,000 square feet building at 1 Continental Drive in Cranbury , which is being converted into a high-tech data center after being vacant for four years.
“The removal of these buildings from the inventory base caused the Monmouth County overall vacancy rate to plummet from nearly 42% at year-end 2012 to less than 24% in mid-2013,” JLL noted in its most recent market report.
The real estate firm noted optimistically that “vacant buildings considered functionally obsolete by today's office users are likely to remain on the radar screen for potential medical, mixed-use, multi-family or assisted living conversions.”
Leasing velocity remained “constrained” during the first half of 2013 compared to the first half of 2012, however, JLL reported.
“After posting less than 1.7 million square feet of leasing transactions during the first quarter of the year, an additional 1.5 million square feet was completed three months later,” according to JLL's calculations. That compares to 5 million square feet leased during the first half of 2012.
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