SADDLE BROOK, NJ−Northern Jersey's office market has - at last - in the first quarter of this year showed signs of stabilizing on a path back to health, CBRE Group concludes in its new MarketView Report. GlobeSt.com was given an EXCLUSIVE first look at the NJ report.
The northern part of the state posted positive net absorption for only the second time in the past seven quarters, CBRE notes. A nice chunk of available space was eaten up - 517,000 square feet - and it wasn't just a particular submarket showing improvement.
“We're seeing positive absorption in areas where it hasn't been too common in recent years, as well as in areas that have been on a positive path for a while now,” says Jeremy Neuer, an executive in the Saddle Brook office.
Only six of 20 state submarkets posted negative net absorption in the first quarter of this year. That is compared with the same period in 2011, when more than half the submarkets gained instead of lost available space.
Leasing velocity spiked in March, providing a strong finish to the quarter that CBRE attributes mostly to the impact of new Grow NJ incentives. It cites Thomson Reuters' and Forbes Media's commitment to move employees across the river after being approved for tax incentives under the amped-up program. Also, Sandoz signed for a new headquarters lease in Princeton after being awarded the incentives.
Remy deVarenne of CBRE highlights how Grow NJ is providing a quick boost to the economic picture: “From the three large transactions that we saw in March alone, 292 jobs were retained and 870 were created.”
The Q1 report does not leave out the hard facts about the length and breadth of the office market's pain and suffering, or suggest that good health is imminent, despite the positive spin.
Over the past five years, it notes, the annual availability rate has hovered above 21%. “Although market activity shows improvement, new space continues to become available, offsetting any considerable reductions in available space,” it says.
In Q1 this year, three blocks of space greater than 100,000 square feet were added to the available inventory in northern New Jersey:
- 186,440 square feet at 499 Washington Blvd. at Newport in Jersey City, where Forbes will relocate
- 175,000 square feet at 200 Kimball Dr. in Parsippany and
- 118,251 square feet at 121 Chanlon Rd. in New Providence
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