2019-07-12_DTZ戴德梁行_Office_Q2_2019_Northern_New_Jersey_2页_439kb

MarketBeat Summary: Northern New Jersey Office Market Q2 2019

Core Content Overview

This report provides an analysis of the Northern New Jersey office market for the second quarter of 2019, highlighting economic indicators, market fundamentals, and key transactions. It is published by Cushman & Wakefield, a leading global real estate services firm.

Economic Indicators

• NNJ Employment: Remained stable at 1.6 million jobs in Q2 2019, compared to Q2 2018.
• NNJ Unemployment: Decreased to 3.9%, a notable improvement from 4.2% in Q2 2018.
• U.S. Unemployment: Continued to decline to 3.6%, marking a trend of lower unemployment nationally.
• Office-Using Industries: Professional and business services showed healthy annual job growth, while financial services experienced a decline of 2.4%.

Market Overview

• Vacancy Rate: Overall vacancy rate dropped to 18.3%, the lowest since year-end 2012, with a 150-bp decrease from Q2 2018.
• Class A Vacancy: Fell to 21.5%, the lowest since year-end 2017, reflecting a "flight to quality" by tenants.
• Net Absorption: Positive net absorption continued, with 266,490 sf absorbed in Q2 2019, contributing to a year-to-date total of 297,212 sf.
• Leasing Activity: Exceeded 1.0 million sf for the fifth consecutive quarter, with a year-to-date total of 2.4 million sf, up 14.3% from midyear 2018.
• Rental Rates: Average asking rent increased to $31.50 psf, reaching an all-time high. Class A asking rent climbed to $36.23 psf, up 17.8% over the last four years.
• Submarket Performance:
  • Bergen County: Vacancy rate at 14.5%, with strong leasing activity and high Class A rent.
  • Newark: Vacancy rate at 15.8%, with significant leasing activity and high Class A rent.
  • Parsippany: Vacancy rate at 28.9%, showing mixed performance in leasing activity.
  • Meadowlands: Vacancy rate increased to 17.5% due to a large sublease space entering the market.
  • Morris County: Vacancy rate at 23.6%, with notable negative net absorption.
  • Hudson Waterfront: Vacancy rate at 17.7%, with slight positive net absorption.

Outlook

• The Northern New Jersey market is expected to remain stable in the second half of 2019.
• Strong demand in key submarkets like Newark, the Waterfront, and Morris County is anticipated.
• Asking rents for quality space are projected to rise further, especially in submarkets with limited supply.
• The anticipated leasing activity should help offset the upcoming vacancies in the Meadowlands and Morris County.
• Speculative developments in Hoboken, Kearny, and Montclair are the only ones left in the region.

Key Lease Transactions Q2 2019

• 3 Gateway Center, Newark: 80,697 sf leased to ICE.
• 225 Minnisink Road, Totowa: 60,000 sf leased to St. Joseph's Health.
• 461 From Road, Paramus: 58,180 sf subleased to SK Life Sciences.
• 7 Sylvan Way, Parsippany: 53,220 sf expansion by Ferrero Foods.

Key Sales Transactions Q2 2019

• Portfolio Sale: 100 Kimball Drive, 6 Sylvan Way, 30 Lanidex Plaza, 100 Tice Boulevard: 652,765 sf sold for $93.6 million ($143 psf) to The Blackstone Group and Signature Acquisitions.
• 1200 Wall Street West, Lyndhurst: 187,916 sf sold for $9.25 million ($49 psf) to Link Industrial Properties.
• 320-321 University Avenue, Newark: 147,406 sf sold for $26 million ($176 psf) to Essex County Government.
• 155 Tice Boulevard, Woodcliff Lake: 118,100 sf sold for $36 million ($305 psf) to Sheila Properties.

Contact Information

• Cushman & Wakefield
  1 Meadowlands Plaza
  7th Floor
  East Rutherford, NJ 07073
  Website: cushmanwakefield.com
  Jason Price, Director: Tel: +1 201 508 5208 | Email: jason.price@cushwake.com
  Christa DiLalo, Associate Director: Tel: +1 201 508 5286 | Email: christa.dilalo@cushwake.com

About Cushman & Wakefield

• A global real estate services firm with 51,000 employees across 400 offices in 70 countries.
• Revenue in 2018 reached $8.2 billion, spanning core services such as property management, leasing, and capital markets.
• The report is based on reliable sources and may contain errors or omissions, presented without warranty.