EAST RUTHERFORD—With the first three months of 2012 “in the books,” Cushman & Wakefield Inc. last week hosted a webinar examining New Jersey’s economic progress, office and industrial real estate conditions, and capital markets performance. Presenters included Gualberto “Gil” Medina, executive managing director, New Jersey; Ken McCarthy, senior managing director, New York Area Research; and Gary Gabriel, executive vice president, Metropolitan Area Capital Markets Group.

Medina spoke generally about where New Jersey’s economy has been and where it is going, citing the important correlation between regional economic and real estate performance. “People tend to focus on the setbacks of the past decade,” he noted. “Yet despite the fact that New Jersey is one of the smallest states, it has been and remains a leader in terms of its economy.”

Medina noted that, among other bragging rights, New Jersey has the country’s seventh-largest economy in terms of GDP; it is the fourth “smartest” state, as measured by education level; and is ranked seventh in GDP per capita, making it one of the country’s wealthiest states. Additionally, the Garden State remains a leader in several key sectors, including technology, chemicals, pharmaceuticals, machinery, electronic equipment, and processed foods.

Job growth presents the state’s biggest current challenge, according to Medina. New Jersey’s jobless rate remained unchanged at 9 percent. That eclipses the national rate for February of 8.3 percent. However, New Jersey employment is moving up at a well-sustained rate. “During the first two months of 2012 alone, New Jersey created more than half the number of jobs it did during all of last year,” Medina noted.

McCarthy, who discussed commercial real estate fundamentals, noted that office vacancy rates in the New Jersey have remained relatively constant. The Class A vacancy rose 0.9 percentage points during the first three months of 2012 to 21.5 percent, while class B vacancy fell slightly to 18.0 percent, a 0.3 percentage point drop since the end of 2011.

“On the other hand, direct average asking rental rates in the office sector continue to slowly increase as a result of a cautious confidence in the modest and gradual recovery of the economy and the New Jersey market,” McCarthy noted. The first quarter of 2012 saw a $0.47 per sq. ft. year-over-year increase in average asking rents to $25.06 per sq. ft. Class A asking rents saw an even larger year-over-year increase, rising $0.61 per sq. ft. since the first quarter of 2011, to a current $27.38 per sq. ft.

Gabriel noted that New Jersey’s $1.5 billion in office sales volume represented an increase of 10 percent over 2010 volume and 120 percent over 2009 volume.

So far in 2012, approximately $600 million in office investment sales have closed or are under contract in New Jersey. “We expect to see an okay year, with $1 billion in total trades projected. However, investors will remain very selective with their interest," said Gabriel.