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New Jersey market still strong. (Insiders Outlook).

In contrast to other commercial real estate markets throughout the country, the New Jersey market remains relatively strong. While there are soft pockets in the marketplace, low vacancy rates, stable rents, and limited new construction are positive signs for the commercial real estate market to remain stable throughout New Jersey.

The first three quarters have shown continued demand and growth among the pharmaceutical, logistics, and insurance companies, coupled with little new development, has caused rental rates to remain steady. While the technology sector has been weak, most of the economy is still showing signs of growth.

One of the most exciting new development trends over the past year is the renaissance taking place in our state's urban areas. In cities like Newark, Harrison, Trenton, Bound Brook, Amboy, and, of course, the entire Hudson River waterfront, the developmental, political, and cultural communities have converged to push growth back to the urban market.

New construction projects are expenencing strong success with their pre-leasing efforts. A look throughout the state shows that there are very few spec office buildings remaining empty. Many developers are continuing to experience great success in redevelopment as well. These developments offer tenants virtually new space, with the advantages of modern construction at lower rental rates. This market should remain strong with potential new redevelopment sites still available. Older buildings are being upgraded in order to accommodate the technology needs of today's tenants, thereby making them more marketable. Most buildings are being re-wired for high-speed voice, data, and Internet usage, which makes them more attractive to new users.

Another factor keeping the market strong is the abundance of smaller users in the marketplace.

The slowdown in the technology and financial services sector has increased the amount of available sublets in the marketplace. While it has caused vacancies to rise substantially, this new offers tenants leasing opportunities, i.e., several large sublet transactions occurred in the wake of the recent tragic events in New York.

The future is very positive for New Jersey's real estate marketplace. The state's underlying strength lies in the diversity of its economy. With so many industries making up the marketplace, New Jersey has not been as deeply impacted by the "dot corn crash" as many other areas of the country. The underlying fundamentals, including a lack of new development, strong demand, and new markets being created, all point to continued growth in the market. New Jersey's strategic location between Washington, D.C./Philadelphia corridor, and New York, couples with its supply of developable projects, continues to fuel the growth of our office and industrial marketplace.
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Article Details
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Title Annotation:real estate
Author:Hanson, William C.
Publication:Real Estate Weekly
Article Type:Brief Article
Geographic Code:1U2NJ
Date:Dec 26, 2001
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