Retailers Like Cheaper Rents in Bergen

HACKENSACK, NJ-Bergen County retails are seizing on the opportunities presented by declining rental rates so far this year, says NAI James E. Hanson in its new market overview report.

Since the fourth quarter of 2012, average retail rental rates in Bergen County have declined by $2.78 per square foot.  The report draws a direct line between that fact and the absorption of 97,324 square feet of retail space from the market in the first half of the year.

In the last part of 2012, there was negative absorption of 6,316 square feet. William C. Hanson, president of the Hackensack-based firm said the vacancy rate was 6.9% at the end of 2012 and has dipped to 6.3%.

“We anticipate that rental rates will continue to decline throughout the remainder of 2013 and into 2014, driving even more interest from retailers that are looking to expand,” Hanson said. “Bergen County continues to be New Jersey's shopping mecca.”

There was a total of 135,153 square feet of lease transactions completed so far this year, with gyms, personal service companies and new food retailers leading the growth activity.

Gyms that recently opened the county include:

•  Lifetime Fitness, leasing a 130,000-square-foot facility at 295 W. Grand Avenue in Montvale
•  Equinox,  leasing 30,000 square feet at 774 Route 17 North in Paramus.

The personal service company Hand and Stone is currently seeking a Bergen location for its rapidly expanding franchise,  the report says, and several food retailers - including Bareburger and Shake Shack  - have plans to expand into the county. 

According to the report, there is currently about 800,000 square feet of retail space available. There are six larger blocks of space available, ranging from 32,000 square feet at Ramsey Square in Ramsey to  64,730 square feet at Paramus Towne Square in Paramus.

NAI Hanson also reported:

• The largest retail leases completed in Bergen County to date was Ulta Cosmetics' 28,000-square-foot lease in Ramsey.
• The amount of vacant sublease space has slightly trended upwards,  to 14,169 square feet currently.
• There were six retail center trades in 2013, totaling 115,689 square feet and nearly $50 million in sales volume. The average price ranged from $250 to $350 per square foot, and cap rates were 6-to-7%.