EAST RUTHERFORD, NJ-“Rebound.” Cushman & Wakefield is actually using the word - although qualifying it with “potential” - in its third-quarter report on the office market for northern and central New Jersey's 11 counties.
Quarterly leasing activity hit the two million-square-foot mark for the first time since the beginning of 2012, reported the company's East Rutherford-based Research Services Team.
Year-to-date leasing activity topped 5.7 million square feet, a 13.2% increase over the same period a year ago:
- In the five northern counties, about 2.9 million square feet was leased so far this year.
- In the six central counties, 2.8 million square feet leased in 2013.
“Based on the year-to-date numbers, the New Jersey office market is on pace to record its second-highest annual total leasing volume in the past five years,” said Kimberly Brennan, C&W's senior managing director.
She said the recent pace of job growth numbers in New Jersey has been “promising,” and that is what is generating the uptick in the office market.
C&W researchers cited the most active industry sectors for Q3 as being healthcare, computer services and technology, and pharmaceutical/life sciences.
In northern NJ, the Morris County Route 10/24 corridor had the most leasing activity, with more than 320,000 square feet taken in the quarter.
In southern NJ's Middlesex County, the Woodbridge/Edison submarket saw its most active quarter in 18 months. About 185,000 square feet was leased, much of in around Metropark.
The overall state vacancy rate fell only slightly -by 0.7% - in Q3, bringing it to 19.1%. C&W notes that the temporary removal of the 2-million-square-foot former Bell Labs site in Holmdel from the statistics while it is being redeveloped and repositioned had some effect on the vacancy rate.
Overall asking rents edged higher during the last three months, fueled by the increased demand, according to C&W. The 11-county average rose to $25.81 per square foot, up 5.3% from a year ago. Researchers said the addition of higher-priced space on the Hudson Waterfront and a heated-up Class B office market accounted for the increase.
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