Tenants play musical chairs.
Except in Jersey City and Newark where large blocks of Class A space are limited, the market has been essentially flat, lacking appreciable movement upward or downward in both availability and rental rates. As a result, the report states that tenants have been able to "pursue advantageous renewals or attractive alternatives."
"Some submarkets are experiencing a statistical increase in rental rates due to availability of higher-end product rather than as a result of a true increase in asking rents," said Philip Lipper, corporate managing director in Studley's Central New Jersey office.
"The only exception would be the Waterfront, where landlords continue to benefit from tenants fleeing a tightening Lower Manhattan market."
The Princeton submarket, where new speculative development offers tenants a wide array of options, underscores the pre-leasing challenge facing landlords today. In Princeton, only one of the six buildings currently under construction, all of which are larger than 100,000 square feet, has experienced significant pre-leasing activity.
The 140,000 s/f property at 902 Carnegie Center, scheduled for completion in the second quarter of 2007, remains only 6.7% pre-leased while two other large development projects nearby have not pre-leased any space.
"In order for the long term prospects of the New Jersey market to improve Governor Corzine and the legislature must reverse the current tax trend and make New Jersey more business friendly," said Lipper. "Only an improved overall state economy can imbue the office market with renewed vigor."
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|Publication:||Real Estate Weekly|
|Date:||Feb 28, 2007|
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