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ISELIN, NJ-The office market in Northern and Central New Jersey remained flat during Q1, according to a report by Studley Inc. Absorption was generally steady, but slow, with the exception being the Hudson waterfront market, which saw some sizeable block removed from the market by tenants migrating across the river from Downtown Manhattan.

“Fueled by a tightening Lower Manhattan market, the waterfront remains one of the state’s strongest markets,” says Philip Lipper, corporate managing director in Studley’s Central New Jersey office here. “A strong Dow bodes well for the waterfront because a strong Wall Street also makes for a strong Hudson Street in Jersey City, a key office address within the submarket.”

On the development side, activity doesn’t necessarily reflect demand, according to Studley. One example is the Princeton submarket, which has historically been overbuilt and currently has 10 buildings under construction despite a high 16% class A availability rate. On the flip side, the Hudson waterfront has a million sf on the boards but little under construction despite a 13.7% availability.

“Those projects will not break ground until a major tenant commits to leasing,” Lipper says. And in a macro sense, “New Jersey is locked in the throes of a problematic economy,” he says. “Now more than ever, New Jersey’s office submarkets are linked to the prosperity of the New York economy. To emerge as an independently viable economy, the government must implement measures to dramatically improve the business-friendliness of the state’s tax structure.”

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