According to CBRE’s Q2 2018 office market report, the New Jersey commercial real estate market rebounded from a lackluster first quarter. Leasing velocity was up in both Central and Northern New Jersey with five new leases of more than 125,000 sq. ft. driving activity.
The largest lease for the quarter was Polo Ralph Lauren’s 255,017-sq.-ft. deal at 100 Metro Boulevard in Nutley. Total leasing activity for the second quarter reached 1.9 million sq. ft., a 66.5% increase quarter-over-quarter and 6.4% higher than the five-year average.
In contrast, net absorption had a reversal of fortunes. During the second quarter, New Jersey posted 193,000 sq. ft. of negative absorption, after recording positive net absorption in four of the five previous quarters. Year-to-date net absorption stands at a negative 85,000 sq. ft. Central New Jersey posted negative absorption of 139,000 sq. ft., while Northern New Jersey registered negative 54,000 sq. ft.
“New Jersey rebounded nicely during the second quarter of the year, with large tenants either inking new leases or renewing their space commitments throughout the state,” said Rémy deVarenne Jr., senior vice president, CBRE. “In addition, national companies such as Mars Wrigley and Teva Pharmaceutical are coming to New Jersey from other states bringing new jobs and economic vitality to the region. As we predicted in our first quarter report, there is real optimism for the remainder of the year especially on the leasing front, as several large deals that we are monitoring are on track to close in the third quarter of 2018.”
The average asking rent increased both quarter-over-quarter and year-over-year during the second quarter. As a result, the average asking rent was $26.47 per sq. ft., a 1.6% increase over the same period last year.
On the investment sales front, office properties traded at a slower pace during the second quarter of 2018. Only 13 new transactions were recorded, which is a significant drop from the 30 sales tallied in the first quarter of the year. As a result, total sales volume in the quarter was $79.6 million, a stark difference from the $481.6 million in sales during the first quarter.
To access more business news, visit NJB News NowRelated Articles: