According to CBRE, New Jersey’s office market remained steady in the second quarter of 2019, despite lackluster leasing activity. Among the bright spots was the 359,100 square feet of net absorption, a turnaround of approximately 510,000 square feet from the previous quarter. As a result, net absorption for the first half of 2019 now stands at a positive 209,000 square feet.
In addition to positive net absorption, the availability rate and the average asking lease rate also improved during Q2 2019. In fact, the market’s availability rate fell 20 basis points (bps) quarter-over-quarter to 19.9% – the first time it has dipped below 20 percent since Q4 2008. Additionally, both the overall average asking lease rate and the Class A rate increased by $0.25-per-square-feet quarter-over-quarter. At $43.79-per-square-feet, the Waterfront submarket again posted the highest average of any submarket, but remained flat compared with the preceding quarter.
In contrast, leasing activity was down quarter-over-quarter by roughly 307,000 square feet, to 1.2 million square feet. Major leases in the second quarter included a 90,697-square-foot new lease by General Services Administration at 3 Gateway Center in Newark and a 62,795 square foot lease by Bohler Engineering at 30 Independence Boulevard in Warren Township.
“The New Jersey office remained steady in the second quarter when looking at the availability, asking rents and net absorption metrics,” said Ed DaCosta, executive vice president, CBRE. “Given strong market fundamentals and an unemployment rate of just 3.8% – the lowest recorded since April 2001 – we anticipate that the office market will continue to post positive results through the end of the year.”
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