Protected by high land prices and fierce opposition to new, the northern New Jersey retail market continues to post a healthy performance in 2007. The combined vacancy rate in Bergen and Hudson counties will fall 30 basis points by the end of this year, to 4.4 percent, reports Marcus & Millichap Real Estate Investment Services. Rents will climb 3.9 percent to $26.13 per square foot. Retail sales are expected to rise 3 percent.
Big-box retailers continue to flood the market, while banks and drugstores battle it out for the smaller parcels of land, according to Hackensack, N.J.-basedfirm NAI James E. Hanson. Land prices in the area currently range from $650,000 per acre to $2 million per acre.
The area's main saving grace, however, might be a limited supply of new product. Only 800,000 square feet of retail will be added to the market this year, half the amount delivered in 2006. Northern New Jersey's exhaustive building regulations make new development extremely difficult, the Marcus & Millichap report points out.