EAST RUTHERFORD, NJ—Large corporate relocations — driven mainly by state incentives and steady yet modest employment gains — propelled Northern and Central New Jersey into one of their best quarters of office leasing in recent history as vacant space tightened markedly in some market segments and particularly for class A space, according to Cushman & Wakefield's latest research.

“At 1.8 million square feet, the third quarter of 2016 boasted the highest amount of square footage absorbed in any one quarter in the Garden State in the past fifteen years,” says Andrew Judd, Cushman & Wakefield's New Jersey market leader. “The last two quarters combined have produced slightly more than 2.8 million square feet of net occupancy gains, as vacancy has fallen by 140 basis points since the first quarter. The demand for quality, class A space throughout the market was evident during the third quarter, as all of the occupancy gains were concentrated within class A product.”

The overall 3Q office vacancy rate (17.4 percent) was at its lowest point since year-end 2007, with Northern and Central New Jersey both having seen declines in available space since the close of 2014. During 3Q, the Meadowlands, Route 10/24 Corridor, Princeton/Route 1 Corridor, Monmouth County, and the Upper 287 submarkets each exceeded 100,000 square feet of net absorption due to robust demand. Of these submarkets, Route 10/24 (-670 basis points), Monmouth County (-360 basis points), Upper 287 Corridor (-310 basis points), and the Meadowlands (-250 basis points) recorded the most substantial improvements for vacancy rates.