2019-07-12_DTZ戴德梁行_Office_Q4_2018_Northern_New_Jersey_2页_436kb

MARKETBEAT Summary: Northern New Jersey Office Market Q4 2018

Core Content

The Northern New Jersey Office Market in Q4 2018 showed signs of improvement, with positive net absorption and a decline in vacancy rates, despite some submarkets facing challenges. The report provides a detailed overview of the economic and market indicators, key lease and sales transactions, and the outlook for the coming year.

Economic Indicators

• New Jersey Unemployment Rate: Dropped to 4.0%, the lowest since June 2001, a 70-basis point decline from 2017.
• Private Sector Employment: Increased by 62,000 jobs since Q4 2017.
• Professional and Business Services: Recorded a 3.2% rise in employment, contributing to the office market improvements.
• Financial Services and Information Sectors: Experienced job losses throughout 2018.

Market Overview

• Leasing Activity: Remained healthy, resulting in 292,185 sf of net absorption for the year.
• Vacancy Rate: Declined by 100 bps in the second half of 2018 to 18.8%, slightly above the year-end 2017 level.
• Submarket Performance:
  • Bergen County: Net absorption of 182,977 sf, vacancy rate of 16.0%.
  • Hudson Waterfront: Strong performance with 155,481 sf of net absorption, vacancy rate of 17.8%.
  • Morris County: Net absorption of 409,091 sf, vacancy rate of 24.2%.
  • Parsippany: Net absorption of -128,981 sf, vacancy rate of 28.9%, affected by a large 186,000-sf sublease.
  • Newark: Net absorption of 45,347 sf, vacancy rate of 16.5%.
  • Meadowlands: Net absorption of -25,401 sf, vacancy rate of 17.3%.
  • Morristown: Net absorption of 35,684 sf, vacancy rate of 19.8%.
• Average Asking Rent: Increased to $31.09 psf/year in Q4 2018, with Class A rents reaching a record high of $35.95 psf/year.
• Under Construction: Rose to 1.0M sf in Q4 2018, up from 890k sf in Q4 2017.

Key Lease Transactions

Key Sales Transactions

Outlook

• Occupancy Levels: Rebounded in some areas but increased in vacancy rates in others due to large corporate dispositions outpacing new leasing.
• Market Stability: Most segments are expected to stabilize, with healthy leasing activity anticipated in 2019.
• Premium Assets: Highly amenitized and upgraded properties are expected to outperform outdated office buildings, given the tight labor market.
• Vacancy Rates: Should remain stable due to repurposing of older, obsolete office stock.
• Demand: Expected to remain steady, with notable transactions anticipated to close in Q1 2019 and continued touring activity by mid-sized and large corporations.

Contact Information

• Cushman & Wakefield:
  Address: 1 Meadowlands Plaza, 7th Floor, East Rutherford, NJ 07073
  Website: cushmanwakefield.com
  Contact:
  • 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 leading global real estate services firm.
• 48,000 employees across 400 offices in 70 countries.
• Revenue in 2017: $6.9 billion.
• Provides services in property, facilities, project management, leasing, capital markets, valuation, and others.
• The report is based on reliable sources, though it may contain errors or omissions and is presented without warranty.