MARLTON, NJ—Continuing a trend first notedduring the second quarter, the Southern New Jersey commercial realestate market appears to be shifting from recovery to growth,according to the latest analysis by Wolf Commercial RealEstate.

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The firm's third quarter market report finds mostly positivetrends during the third quarter. The CRE market continued buildingupon positive trends seen in the previous quarters, with increasesin new leases and renewals, as well as further positive absorptionof vacant properties.

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“The market's fundamentals continue to strengthen, and it seemslike the economy has found its footing after a prolonged period ofrecovery,” says Jason Wolf, founder and principalof WCRE. “We're still a long way off frompre-recession levels, but hiring is up, office employment is up,and businesses are showing signs of expansion, all of which bodeswell for the commercial real estate market.”

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About 398,778 square feet of new office leases and renewals weresigned in Burlington, Camden, and Gloucester Counties during thesecond quarter, including several large spaces, ranging in sizefrom 6,000 to nearly 37,000 square feet.

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Expansions and new deals continued to pick up steam thisquarter, representing 54 percent of all transactions, an uptickfrom the 52 percent represented in the second quarter.

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Positive absorption for the quarter was approximately 137,366sf, an increase of more than 20 percent from the secondquarter.

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Finally, there are approximately 530,000 square feet of pendingdeals expected to close by the end of the year or early 2015. Whilethis is quite a large figure, four major pending transactionsaccount for about 300,000 square feet.

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The report noted that the prime 3M locations within BurlingtonCounty continue to outpace the rest of the region, and that thetightening of those areas is causing demand to shift towardvacancies in Camden County. This is a trend that has been underwayall year.

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Other office market highlights from the report:

  • The vacancy rate for the third quarter was 14.2%.
  • Average rents for class A and B product continue to show strongsupport in the range of $10.00-$14.00 per square foot triple-net,or $21.00-$24.00 per square foot gross, with an overall marketaverage showing strong support in the $10.00-$12.00 per square foottriple-net, or $20.00-$22.00 per square foot gross. This isessentially unchanged from the previous quarter.
  • New lease activity for Q3 is in the range of approximately215,794 square feet of new deals and approximately 182,984 squarefeet of renewals and/or expansions. Both figures representincreases over the previous quarter.
  • All of the major private owners and REITS reported a noticeableslowdown in prospect activity for the quarter, though this may havebeen attributable to the expected summer slowdown.

WCRE also reported on the local retail market,where Southern New Jersey seems to have bounced back from a slowspring. Highlights from the retail section of the reportinclude:

  • Retail sales figures for the region were buoyed by an increasein tourism, which helped maintain slight growth.
  • Overall retail vacancy in the tri-county area is at 15.1%,which is down about half a point from the second quarter. This is aparticularly good sign, as vacancy had been ticking up for thefirst half of the year.
  • Class A retail product rental rates continue to show strongsupport in the range of $30.00-$40.00 per square foot triple-net,which is essentially unchanged from the previous severalquarters.
  • Class B product shows support in the range of $15.00-$25.00 persquare foot triple-net, which is also unchanged.

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Steve Lubetkin

Steve Lubetkin is the New Jersey and Philadelphia editor for GlobeSt.com. He is currently filling in covering Chicago and Midwest markets until a new permanent editor is named. He previously filled in covering Atlanta. Steve’s journalism background includes print and broadcast reporting for NJ news organizations. His audio and video work for GlobeSt.com has been honored by the Garden State Journalists Association, and he has also been recognized for video by the New Jersey Chapter of the Society of Professional Journalists. He has produced audio podcasts on CRE topics for the NAR Commercial Division and the CCIM Institute. Steve has also served (from August 2017 to March 2018) as national broadcast news correspondent for CEOReport.com, a news website focused on practical advice for senior executives in small- and medium-sized companies. Steve also reports on-camera and covers conferences for NJSpotlight.com, a public policy news coverage website focused on New Jersey government and industry; and for clients of StateBroadcastNews.com, a division of The Lubetkin Media Companies LLC. Steve has been the computer columnist for the Jewish Community Voice of Southern New Jersey, since 1996. Steve is co-author, with Toronto-based podcasting pioneer Donna Papacosta, of the book, The Business of Podcasting: How to Take Your Podcasting Passion from the Personal to the Professional. You can email Steve at [email protected].