NEW JERSEY—Commercial real estate in Central New Jersey—with the exception of office leasing—is off to a sluggish start in the first quarter of 2012, according to a report from Cushman & Wakefield. The company’s office and industrial research findings indicate that while tenant and investment activity remains modest, market fundamentals are steady and showing signs of improvement.
Office Market Recap
According to Cushman & Wakefield’s research, a 31.2 percent decrease in Northern New Jersey office leasing was realized, totaling 932,447 sq. ft. during the first quarter of 2012.
In Central New Jersey, however, the picture is a bit brighter; office leasing activity increased by 29.5 percent totaling 964,088 sq. ft.
Statewide, investment sales dipped with just four office transactions being closed during the first four months of this year.
The report states that direct average asking rental rates continued to rise during the first quarter in Northern New Jersey, climbing $0.07 per sq. ft. year-over-year and $0.28 per sq. ft. since the end of 2011 to a current $26.09 per sq. ft. The overall office vacancy rate in the northern counties rose just 0.1 percentage point since last quarter to 18.0 percent. In Central New Jersey, the overall vacancy rate fell a full percentage point year-over-year to a current 20.2. The direct average asking rental rate rose to $23.96 per sq. ft., up $0.42 since the end of 2011.
Industrial Market Recap
Decreasing in industrial space leasing activity was also cited in the report.
Nearly 4.6M sq. ft. in industrial leasing in Northern and Central New Jersey represented an 18.8 percent year-over-year decrease. Investment activity involving existing product totaled 1.6M sq. ft., representing a 44.4 percent drop in year-over-year volume.
Statewide, the industrial vacancy rate increased by 0.2 percentage points during the first quarter of 2012, for an overall rate of 9.8 percent.
The direct average asking rental rate for industrial remained steady since end of 2011 at $5.62 per sq. ft.