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Demand for NJ space heightens us rents remain flat.

New Jersey's office market continued to reflect robust good health through the third quarter of 1999, with 1.21 million square feet leased, bringing the year's totals to more than 5 million square feet leased statewide. And while brisk demand continued in most major submarkets, for the first time this year, average asking rents remained a flat, but respectable, $23.60 per square foot.

These were among the findings reported in Insignia/ESG'S Third Quarter 1999 New Jersey Office Review, a detailed analysis of the 20 geographic submarkets that comprise the Northern and Central markets. The report tracks activity in 699 office buildings totaling 141.5 million square feet of space.

The state's leasing velocity continues to be led by the New Jersey waterfront, which accounted for 790,000 square-feet of the state's total 1.21 million square feet leased for the quarter. These figures were undoubtedly helped by the Insurance Services lease of nearly 400,000 square feet of space at 545 Washington Boulevard in Jersey City. The waterfront also boasted one of the state's most healthy absorption rates with 780,000 square feet, compared to the statewide average of 661,338 square feet.

Heightened leasing was also recorded in the Montvale/Woodcliff Lake, Parsippany and Route 287/78 submarkets as a result of several substantial transactions. These included the Sony Electronics lease of 148,824 square feet at 155 Tice Boulevard in Woodcliff Lake; the AIG lease of 70,000 square feet at 9 Entin Road in Parsippany; and the Hoechst Marion Roussel lease of 94,194 square feet at Route 202/206 in Bedminster.

Availability rates for the quarter averaged 12.39 percent, a slight increase over 1998's third quarter 11.59 percent. Individual submarkets ranged from Western Route 78, where less than 1 percent of existing space is available, to Route 23/Paterson/Wayne, where 28.06 percent remains uncommitted.

Although average asking rents, steadily on the rise for most of the decade, remained fixed at $23.60, this is nevertheless a substantial increase from 1998's third quarter average of $22.70. The Chatham/Millburn/Short Hills market, with a rate of $33.57 per square foot, remains the most expensive place to rent an office in New Jersey. Other high-end submarkets are the Waterfront, with average rents of $28.61 and Princeton at $27.38.

Last year, Insignia/ESG's New Jersey operations handled more than 3 million square feet of tenant representation, lease agencies and disposition assignments, and managed more than 2.8 million square feet of New Jersey commercial property.
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Publication:Real Estate Weekly
Article Type:Brief Article
Geographic Code:1U2NJ
Date:Oct 27, 1999
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