SOMERSET, NJ-The way Cassidy Turley sees it, the central New Jersey office market is actually looking pretty good lately – despite the lackluster overall performance by the office market in the state for 2012. In its Q4 report, the company cites positive absorption and a slight dip in vacancy, from 17% to 16.9% for central Jersey.
Different companies may define submarkets differently, they may use different methods of assessing vacancy and may emphasize different trends, sometimes producing sharp disparities in their market reports.
In this particular case, Somerset-based Cassidy Turley’s take on things contrasts sharply with Jones Lang LaSalle’s report last week that noted a higher availability rate in central New Jersey than in other parts of the state in 2012. JLL pegged the statewide overall office vacancy rate at 25.5% in Q4, and put central Jersey’s rate at 28.2% and northern Jersey’s rate at 23.7%.
Cassidy Turley reported 121,699 square feet of positive absorption in the central Jersey market. It compared that to its assessment that the northern Jersey market had negative absorption of 54,903 square feet.
“Hurricane Sandy (on Oct. 29) brought devastating damage to inventory and caused corporate setbacks through weeks of lost productivity across New Jersey,” during the quarter, noted Cassidy Turley’s managing principal Raymond Trevisan. “Yet these results for central New Jersey are encouraging, if not hopeful,” he said.
“The results also highlight the resolute strength and natural resilience of the office market in a number of the state’s key submarkets,” Trevisan said in a release.
He listed examples:
- Strong positive absorption in the Somerset-78 East submarket with a total of 296,339 square feet leased during the period. The submarket’s vacancy rate at year’s end was 13%. In one transaction, the Center 78 in Warren gained EMC Corp. as an anchor tenant taking 81,683 square feet.
- A flurry of leasing in the Woodbridge-Edison submarket. The 258,993-square-foot 111 Wood Avenue South in Iselin, which came to market less than two years ago, reached full occupancy with Eisner Ampner and Hatch Mott MacDonald each signing for more than 80,000 square feet.
The newly-built, 250,000-square-foot 500-600 Princeton South Corporate Center was completed. Church & Dwight, the household consumer products company, is set to move in by March.
There is very little other new construction under way in either the central or northern part of the state, other than a few 100% pre-leased, single-tenant buildings, such as Panasonic’s new headquarters going up in Newark.
Cassidy Turley’s office specialist Charles Parmelli said that improvement in the state’s employment picture in Q4 was “a good sign” for the commercial office market.
On the other hand, he said, “Corporate consolidations and a push toward more efficient office floor plans will continue to present challenges to substantial office space absorption in the short term.”