Central NJ office market 'less slugglish'.

While not exactly roaring back to life, Princeton's office market has appeared less sluggish during the closing months of 2003, according to Vincent Marano, COO, National Business Parks.

Now, with full approvals in hand for a new 5-building addition to College Park at Princeton Forrestal Center, National Business Parks is poised to take full advantage of economic recovery as it evolves.

Over the third quarter, Marano reported heightened leasing activity at College Park with several tenants taking larger space and renewing long-term leases.

Among them, SES Americom, the largest provider of satellite services in the country, renewed a 110,000-square-foot lease of its headquarters space and Michael Baker, Jr. Inc., an international engineering company and New Jersey Educational Facilities Authority each signed long-term leases for additional space. Uniquely in the region, Princeton is a self-generating market where deals tend to remain in the market. And with the dearth of new construction here for more than two years, there has been some positive absorption of space primarily from trade ups as firms move from Class B space to Class A quarters.

Area rents are now averaging in the mid $20's, down about $5 to $7 from two years ago. A flight to quality has been obvious, and going forward, the gap between well-located, well-managed buildings will widen.

National Business Park's largest block of available space is 44,000 square-feet at 103 College Road East, a building once occupied in its entirety by Merrill Lynch, and now our primary leasing focus. The Class A building, which fronts on Route 1, has been thoroughly remodeled to include granite-floored lobbies, updated public spaces and sophisticated HVAC systems.

Although optimistic going into a new year, Marano said there remains some concern for the kind of economic recovery that could translate into an office market bonanza.

"With companies continuing to tighten budgets through large-scale layoffs, and sending jobs overseas for lower labor costs, a great deal of insecurity remains among American consumers. Being employed is their single largest factor in deciding to buy," he said.

"And if consumers, who now account for two-thirds of the economy, rein in their spending, recovery will sputter to a halt. For the real estate industry, if there is less demand for product, there are fewer requirements for office space for the makers of those products."