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N.J. Office Leasing Surges, Industrial Availability Reaches Historic Lows

| October 21, 2016 | 0 Comments

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Parsippany, N.J., Oct. 21, 2016 – Northern and Central New Jersey office leasing surged during the third quarter, driven primarily by large new leases and signifying a return of confidence in the market, according to Colliers International Group Inc. (NASDAQ:CIGI, TSX:CIG). The global commercial real estate services firm released its third quarter 2016 Market Snapshots, which also report a 15th consecutive quarter of positive net absorption and continued rental rate growth in New Jersey’s industrial market.

OFFICE

Third-quarter leasing activity rose 29 percent to 4.3 million square feet, with 12 transactions over 100,000 square feet compared to seven in the first half of 2016. At 1.5 million square feet, tenant commitments in central New Jersey are up 27 percent from last year. Major transactions included iCims’ relocation to 101 Crawfords Corner Road in Holmdel and Mallinckrodt’s 155,000-square-foot consolidation at 1405/1425 Route 206 in Bedminster.

Leasing activity in northern New Jersey reached 2.9 million square feet, its highest quarterly total since the first quarter of 2002.

“The Grow NJ Assistance Program provided incentives for 11 out of the 16 transactions over 45,000 square feet in northern New Jersey,” said Colliers’ David A. Simon, SIOR, executive managing director and New Jersey market leader. “These incentives led multiple tenants to relocate their headquarters in New Jersey. Most notable are Allergan’s lease of 431,495 square feet at 5 Giralda Farms in Madison, and EY’s relocation of nearly 1,000 employees from Manhattan to a new 169,228-square-foot space at 121 River Street in Hoboken.”

Net absorption remained positive at 1.5 million square feet and the availability rate fell to 20 percent, the lowest recorded rate since the second quarter of 2009. New transactions helped lower the availability rate in northern New Jersey to 21.0 percent, and the rate in the central counties dropped to 18.4 percent.

Colliers also reported that the average asking rent closed the third quarter at $26.23 per square foot, nearing its 2008 peak rate of $26.72 per square foot. Rates in the northern counties rose for the fifth consecutive quarter, reaching $26.91 per square foot, compared to the central New Jersey average of $25.41 per square foot.

INDUSTRIAL

The third quarter marked the 15th consecutive quarter of positive net absorption and continued rental rate growth in New Jersey’s industrial market. With 2.1 million square feet of net absorption this quarter, the availability rate in northern New Jersey reached historic lows. In central New Jersey the rate remains at historic lows, down 60 basis points quarter-over-quarter to 6.2 percent.

“Increased demand for Class A space by industrial users continued to spur new construction this quarter, as 10 projects totaling 3.2 million square feet broke ground,” noted John Obeid, senior director, Tri-State Suburban Research for Colliers.

As space remained tight, particularly in the Port and Meadowlands submarkets, leasing activity in northern New Jersey fell 12.2 percent quarter-over-quarter to 4.0 million square feet. The majority of activity occurred in the Meadowlands submarket, where ZT Group International’s 178,867-square-foot renewal at 40-50 Seaview Drive in Secaucus comprised the bulk of the activity. Despite the slowdown in leasing activity, the availability rate closed the third quarter at 7.9 percent, an improvement of 260 basis points from the prior year.

According to Colliers, Class A leasing activity in central New Jersey totaled 2.8 million square feet during the third quarter and accounted for 45 percent of the 6.3 million square feet leased. Exit 8A was once again the focal point of activity, with 2.3 million square feet of tenant commitments.

Overall, strong leasing activity coupled with a dearth of quality available industrial space drove third quarter average asking rents to a record high of $6.18 per square foot, up 10.8 percent from last year.

 

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About Colliers International Group

Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is an industry leading global real estate services company with more than 16,000 skilled professionals operating in 66 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting.

Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals’ Global Outsourcing for 11 consecutive years, more than any other real estate services firm.

For the latest news from Colliers, visit Colliers.com or follow us on Twitter: @Colliers and LinkedIn. To see the latest news on Colliers International in New York, follow @Colliers_NYC and Twitter.

 

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Category: Colliers International New Jersey, News Releases, Newswire: Latest News

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