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Somerset a shining star in Northern, Central, NJ.

Somerset County was the focal point of market activity in the Central New Jersey office market over the first quarter of 1993 with leasing activity totalling 619,190 square feet -- more than three times the fourth quarter 1992 level.

Somerset County was home to the largest sales transaction of the quarter which occurred in Franklin Township. It's here that Merrill Lynch purchased and plans to occupy the 414-486-square-foot Somerset Grove I in Franklin Township. Somerset County now has the lowest vacancy rate of all the counties in Northern and Central New Jersey. In addition, these transactions have contributed to the diminishing supply of large blocks of Class-A available space along the 1-78 corridor.

AT&T was a big hitter in this market and demonstrated faith in Central New Jersey by leasing 350,000 square feet at Mount Airy Comers V & VI in its relocation from Parsippany and Bridgewater. Johnson & Johnson also grabbed a piece of the action and expanded from its headquarters in New Brunswick with its 93,000 square-foot lease at Mt. Bethel Corporate Center 11 in Warren Township.

In other counties, Bergen County once again remained Northern New Jersey's strongest market. The largest transaction of the quarter took place at the Oradell Corporate Center where Sony leased 83,000 square feet. Another sizable lease was transacted at 120 West Passaic Street in Rochelle Park where Electronic Data Systems leased a 52,000 square-foot data center.

Expansion from within Bergen County was widespread with Ernst & Young leasing 22,436 square feet at the Meadowlands Corporate Center in Lyndhurst and Cellular One leasing an additional 27,500 square feet at Mack Centre VII in Paramus. Polo also expanded within Copper Ridge in Lyndhurst leasing 50,000 square feet making Hartz Mountain's project 100 percent leased.

Rumors circulated that BMW and Mercedes-Benz, located in Woodcliff Lake and Montvale respectively, were closing up shop and heading to the Southeast. While BMW is planning to open up a plant in South Carolina and Mercedes-Benz is considering the same area, both companies have no intentions of moving their corporate headquarters out of the county.

As for new construction throughout Northern and Central New Jersey, there are two to report. In Morris County, completion of BASF Corporation's 630,000 square-foot Northeast regional corporate headquarters situated at the International Trade Zone in Mount Olive is expected in August 1994.

While in Union County, construction is to be completed this fall in Springfield on a build-to-suit for two law firms. These new construction projects are the only ones expected to be added to the market in the next year.

Although the first quarter of 1993 began with the inauguration of President Clinton and a renewed sense of confidence in the country, New Jersey is still feeling the crunch of hard economic times. The state's unemployment rate has climbed to 8.3 percent and employers still are not increasing their payrolls.

Employers' reluctance to hire may in part be due to the high cost of providing health care benefits. Many employers have opted to pay existing employees overtime rather than to provide expensive health care benefits to new employees. With President Clinton's health care reform proposal expected to be announced during the second quarter, corporate decision makers may soon be able to re-evaluate their payroll structure and better times may be ahead for the thousands out of work in our state.
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Title Annotation:Mid-Year Review & Forecast, Section I; Somerset County sees marked leasing activity in Central New Jersey office market
Author:Eisen, Donald P.
Publication:Real Estate Weekly
Article Type:Column
Date:Jun 23, 1993
Previous Article:Turn-key deals serve tenants and brokers.
Next Article:Creating new money sources in credit crisis.

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