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Available space decreasing in New Jersey.

Over the past year, available office space in New Jersey has dropped nearly a full percentage point from 19.18 percent to 18.22 percent as of March of this year. This reflects a drop from 24.83 million square feet of space available last fall to 23.92 million square feet in the period covered by the most recent New Jersey Gordon Office Market Report.

"The combination of increased leasing velocity -- with Class 'A' space as the catalyst -- and virtually no new space coming onto the market is fueling the positive absorption," explained Edward S. Gordon/NJ Executive Director Thomas V. Bermingham. Some 2.5 million square feet of "A" space was absorbed in the past 12 months.

According to the 20-page report, Class "A" space has continued to absorb throughout the state to the point where 11 of the 21 markets in northern and central New Jersey have no blocks of 100, 000 and over available.

The story is quite different in the case of Class "B" and "C" space which exhibited a negative net absorption of 0. 9 million square feet.

The market segment with the highest availability rate was the Route 17 Corridor with 38.82 percent of its 3.46 million square feet available and Central Bergen with 26.92 percent of its 6.47 million square feet for lease. The Western Route 78 market shows all but 2.05 percent of its 1.46 million square feet leased.

When tallied by county, the Gordon Report shows Hunterdon as having the lowest availability rate at 2.05 percent of its 1.46 million square feet of existing space and Ocean County with the highest at 28 percent of its 0.30 million square feet available.

Asking rental rates averaged $19.69 per rentable square foot compared to $20.79 reported in the previous year's report. The highest average was reported on Western Route 78 at $33.00 and the lowest was in Middletown/Toms River at $17.24 per rentable square foot.

The current Gordon Office Market Report provides a spotlight on the Waterfront submarket which encompasses the towns of Jersey City, Hoboken, Weehawken, Bayonne and West New York. Its 24 buildings which total 9.4 million square feet of office space continues to have one of the highest availability rates of any market in the state at 26.8 percent. However, this rate is 7 percentage points lower than one year ago as a result of 630,000 square feet of absorption (accounting for 40 percent of the state as a whole) and leasing velocity totaling 970,000 square feet over the past 12 months (70 percent over the same period one year ago).

"The success in this market comes from its ability to attract tenants from Manhattan, particularly downtown," Bermingham explained. "Advantages include excellent transportation, aggressive economics and a significant effort on the part of the state Economic Development authorities."

Edward S. Gordon Company of New Jersey is an affiliate of New York City-based Edward S. Gordon Company, Inc.
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:New Jersey Gordon Office Market Report results as of March 1993
Publication:Real Estate Weekly
Date:Jul 21, 1993
Previous Article:Law firm leases.
Next Article:Investment exec says apartments healthiest.

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