MARLTON, NJ–Southern New Jersey's commercial real estate market stayed warm enough to post a 26% increase in square feet leased year-over-year despite the second snowiest winter on record, according to Wolf Commercial Real Estate.
The region showed resilience after a slight slow-down in the fourth quarter,
Jason Wolf, founder and principal of the southern NJ firm, says all trends are drifting in the right direction: “We've seen vacancy rates continue their slow, steady declines, unemployment in New Jersey heading in the right direction, and locally we have seen big shifts by some of the largest corporate players.”
One “mega-deal,” for a 24-building office/flex portfolio, was consummated in the first quarter and another large group of assets came onto the market, WCRE notes. Liberty Property Trust sold its entire 1.2 million-square-foot portfolio in the region to Somerset Properties, and Brandywine Realty Trust listed five office buildings totaling 397,000 square feet.
There was a total of 397,141 square feet of new leases and renewals executed in the three counties surveyed. Expansions and new deals were abundant in Q1, accountin for 54% of all transactions.
There was net absorption of 123,750 square feet square feet, which was 20% better than in Q4 2013.
The report notes that many of the quarter's lease deals occurred in Burlington County, and that the tightening of the market there was causing demand to shift toward large vacancies in Camden County.
Other highlights from the report:
- Burlington County's office vacancy rate of 9.6% remained significantly lower than Camden's 19.3%, although both counties saw decreases of more than a point this quarter.
- All of the major private owners and REITS showed a significant increase in prospect inquiries for the quarter, and are all cautiously optimistic for 2014.
- Businesses that specialize in banking, consulting, government, information technology and financial services all were very active in southern NJ during Q1.
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