New Jersey Office Market Poses Dichotomy

A recent report from Yardi Matrix highlights the dichotomy facing New Jersey office investors and landlords: in many ways growth is slowing, but there are also pockets of submarkets that are bucking the wider trends. On one hand, transaction volume dropped almost 50% last year compared to 2017; on the other, the state's unemployment rate dropped to a historic low of 4%. On one hand, office development remained slow across the market with 325,000 square feet delivered in 2018. On the other hand, the pipeline is significantly more robust than it was in 2017 when no new major projects were added. Yardi Matrix also notes that the average vacancy for office space, now topping 20%, has effectively pumped the brakes on most new development activity, as the market finds its footing. The report does deliver some uniformly good news however: there are pockets of growth in some key submarkets. "With close proximity to Manhattan, the Hudson Waterfront South submarket continued to experience strong demand for modern, well-amenitized space," Yardi Matrix writes. "Upscale suburban areas also fared well, with properties in the Millburn submarket commanding the highest asking prices across the metro, at nearly $47 per square foot." Check out the slideshow above for more Yardi Matrix data on the New Jersey market.