2019-07-12_DTZ戴德梁行_Office_Q1_2019_Central_New_Jersey_2页_431kb

Central New Jersey Office Market Q1 2019 Summary

Core Content

This report provides an overview of the office market in Central New Jersey for the first quarter of 2019, highlighting economic indicators, market performance, key lease and sales transactions, and future outlook.

Main Economic Indicators

• NJ Employment: Remained stable at 4.2 million in Q1 2019, with the private sector showing a 0.9% annual increase.
• NJ Unemployment: Declined to 4.0%, indicating a healthy local economy.
• U.S. Unemployment: Continued to decline to 3.8%.
• Office Market Trends:
  • Vacancy Rate: Dropped to 15.8%, the lowest since year-end 2016.
  • Net Absorption (YTD): Increased by 342,000 sf, up from -452,000 sf in Q1 2018.
  • Average Asking Rent: Rose slightly to $26.49 psf/year, with a small decline from $26.75 psf in Q4 2018.

Market Overview

• Submarket Performance:
  • Monmouth County and Woodbridge/Edison achieved historical vacancy lows.
  • I-78 Corridor and Princeton/Route 1 Corridor saw the most significant vacancy reductions, down 80 bps and 70 bps respectively from year-end 2018.
  • Overall Net Absorption: 341,843 sf in Q1 2019, with 849,294 sf of YTD leasing activity.
  • Class A Vacancy: Lowest in Woodbridge/Edison at 11.9%, with $35.94 psf as the highest average asking rent.
• Leasing Activity:
  • Total Leasing Activity: 849,294 sf, up 35.9% from Q1 2018.
  • Major Sectors: Legal services, pharmaceutical, and technology industries drove most of the leasing activity.
  • Lease Size:
    • Large Leases (10,000 sf+): 81.3% were signed in Class A assets.
    • Small Leases: Accounted for 45.8% of all activity, with more balanced distribution across building classes.
  • Renewals: Strong, with 400,000 sf of tenants extending their leases.

Key Lease Transactions

Key Sales Transactions

Outlook

• Occupancy Fluctuations: Expected throughout 2019 due to anticipated new supply and demand.
• Key Submarkets:
  • I-78 Corridor and Princeton/Route 1 Corridor may face large vacancies.
  • Mid-sized Leases: Likely to transact, and some large tenants may move in before the end of 2019.
• Demand Drivers: Life sciences and technology companies are expected to continue driving demand, attracted by the region's geographic location and skilled workforce.

About Cushman & Wakefield

• Global Presence: Operates in 70 countries with 51,000 employees across 400 offices.
• Revenue: Reached $8.2 billion in 2018.
• Contact Information:
  • Jason Price, Director: +1 201 508 5208 | jason.price@cushwake.com
  • Christa DiLalo, Associate Director: +1 201 508 5286 | christa.dilalo@cushwake.com
• Office Location: 1 Meadowlands Plaza, 7th Floor, East Rutherford, NJ 07073.

Disclaimer

• The information in this report is gathered from multiple sources and may contain errors or omissions.
• No warranty or representation is made regarding the accuracy of the data.