CHATHAM, NJ–In its report on the first quarter office market, Cassidy Turley is emphatically upbeat about the impact a reported 6,300 new private sector jobs and a drop in unemployment to 7.4% is having, and will continue to have, in northern and central New Jersey.
“Confidence levels should boost in all sectors of the economy and create a promising outlook for all of 2014,” CT says in the report shared with GlobeSt.com.
The Chatham-based firm said its analysts found that vacancy rates declined to 24.6%, while asking rents rose to $29.36 in the first quarter. Other companies calculate the vacancy rates to be somewhat lower and report a slightly different average for asking rents, but have observed the same trends.
The Hudson Waterfront and Newark submarkets saw the biggest dips in vacancy, to 14.9% and 20.5% respectively, CT says.
According to CT’s managing principal in New Jersey, Raymond Trevison, “The uptick in leasing activity reflects the overall growth in the economy and suggests market fundamentals are gaining steam. We’ll see a steady continuation of the flight-to-quality trend that was so prevalent in 2013.”
Trevisan cited increased activity in the counties of Bergen, Morris and Essex in leasing of Class A properties, particularly among companies occupying more than 50,000 square feet. The northern NJ office market had 325,785 square feet of positive absorption, CT reported.
CT also chimed in with the general chorus in Q1 reports concerning a trend of repurposing older office properties in northern New Jersey that is expected to continue.
The central NJ office market showed signs of improvement with an increase in asking rents to $26.35, CT reported. Overall vacancy decreased slightly to 22%.
In the Monmouth submarket, though, vacancy dropped by 3.1% from the previous quarter, down to 13.3%. Vacancy also decreased in the Brunswick/Piscataway/I-287 submarket – but it was still at 32.3%.
“For the remainder of the year, central New Jersey will continue to see a flight-to-quality and increase in rental rates among Class A properties,” Trevisan says.