According to CBRE’s Q1 2018 office market report, the New Jersey commercial real estate market remained flat, but renewals totaling more than one million sq. ft. buoyed the sector. The market’s overall good heath was due to limited new construction, tenants relocating to higher-quality office space and continued strong demand from the life sciences sector.
Total leasing activity reached 1.29 million sq. ft., compared to 1.45 million sq. ft. in Q4 2017 and 2.28 million sq. ft. in the first quarter a year ago.
Meanwhile, net absorption was up by more than 730,000 sq. ft. as compared to the fourth quarter of 2017 and availability exactly matched the five-year average.While Central New Jersey posted a very solid 534,400 sq. ft. of positive absorption, Northern New Jersey, which had several large, unleased buildings come online,registered a negative 260,700 sq. ft.
“Despite lackluster overall leasing activity during the first quarter of the year, the New Jersey office market did present a number of positive aspects that are providing optimism for the remainder of the year, including several large renewals,” notedEd DaCosta, executive vice president, CBRE. “Another real cause for optimism on the leasing front is in the form of several large deals that we are monitoring and which are on track to close in the second and third quarters of 2018.”
The average asking rent increased just $0.16 per sq. ft. in the first quarter. This brought the average rate to $26.24 per sq. ft. Year-over-year however, rents improved by $0.50 per sq. ft., an increase of 1.1 percent. The current rate also represents an increase of 111 basis points (bps) above the five-year average, an advance of 5.2 percent.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates) and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
