Office market defies predictions.

To quote fellow New Jerseyan, Yogi Berra 'It's hard to make a prediction, especially if it's about the future,' and this year, with so many uncertainties surrounding the national economy and the state's office market, the crystal ball seems a bit cloudy.

The Princeton office market is holding its own with space in existing buildings being absorbed in good order. Rents for these buildings are now in the mid $20's and there is no free rent. New buildings, with rents above $30 per s/f, however, are meeting market resistance. Some 620,000 s/f of space in three new buildings have come on stream this year and only about 5,000 s/f have been spoken for.

There is a wait and see attitude in the market. It's no longer a function of the war in Iraq or interest rates, but as if businesses are in idle waiting for an economic slump. It may be that Washington's lame duck mentality has spread. In all likelihood, it will take about 2 to 3 years and a new administration to turn things around.

College Park is at the 95% occupancy mark and we are focusing our efforts on the leasing program for 400 College Road East, a 72,000 s/f building formerly occupied by a multi-national financial information company and considered one of the most technologically sophisticated buildings in Princeton. Not surprisingly, there is major interest in this building, which can be a once-in-a lifetime opportunity.

Looking ahead, we feel the economy will exert upward pressure on rents so that ,by year's end, space in existing buildings will be pushing the $30 mark. Faced with escalating costs of construction material, utilities and labor, landlords have no other option. So for companies looking for new or larger quarters, there is no time like the present.

Within the year, we plan to break ground on the first phase of College Park 2, a 5-building office/research complex containing 345,000 s/f on a 31-acre site adjacent to the College Park campus. Also in hand are all approvals for College Park 3, a 4-building premier corporate office center to be built on a 47-acre site. Both new complexes are being developed on a build-to-suit basis. College Park is an 815,000 s/f complex fronting Rt.1.

By Vincent Marano, COO 

National Business Parks