New Jersey commercial real estate market still strong.
According to Stanley Simon, SIOR, chief executive officer of Newmark JGT, "While there has clearly been a slowdown in the economy, which began before the Sept. 11 tragedy, the commercial real estate market's fundamentals still remain strong, and in fact, have created opportunities for tenants, investors, developers, and service providers." Simon points to the lack of new spec development, a more balanced market for tenants, and moderate price adjustments as key factors n the market's underlying strength.
"The slowdown in the national economy and depressed corporate earnings have hit the New Jersey commercial real estate market during this first three quarters of 2001," he said. "However, these effects have not been dramatic, and pale in comparison to the downturn of the mid 1990's and late 1980's. In fact, the correction in the economy has created a more balanced commercial real estate market for tenants who are finding it easier to relocate or expand within the state."
According to Newmark JGT, the trends in the office market in New Jersey in 2001 have been reflected in a moderate decline in average asking rental rates. Meanwhile, the overall vacancy rate has increased due to the negative absorption of more than 2 million SF of space in the New Jersey market, which can be attributed to new sublease space returned as a result of corporate restructuring. Of the more than 20 million SF of office space available, nearly 25% is sublease space. The vacancy rate for space on the market from landlords is well under 10%, a comparatively sound vacancy rate for a suburban office market the size of New Jersey.
Leasing activity in the New Jersey office market remained moderate despite an increase in availability. As the market continues to experience negative absorption, available space has increased by more than 2 million SF. The increase in space continues to be largely due to new sublease space that became available from companies that disposed of underutilized space resulting from layoffs. More than one million SF of sublet space has been absorbed, mainly on the Hudson waterfront, causing the vacancy rates to fall as a result of the demand created by the events of Sept. 11. However, this mount of space absorbed is still relatively small in comparison to the total sublet availability in the state.
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|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Dec 12, 2001|
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