2019-07-12_DTZ戴德梁行_Office_Q2_2019_Central_New_Jersey_2页_428kb

MarketBeat Summary: Central New Jersey Office Market Q2 2019

Core Content Overview

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

Economic Indicators

• CNJ Employment: Increased from 1.4 million in Q2 2018 to 1.5 million in Q2 2019.
• CNJ Unemployment: Declined to 3.6% in Q2 2019, the lowest in recent history.
• U.S. Unemployment: Continued to decline, reaching 3.6% in Q2 2019.
• Vacancy Rate: Continued to decline modestly, reaching 15.5% in Q2 2019, down 100 basis points (bps) from Q2 2018.
• Net Absorption: Positive for the quarter, with 245,807 sf absorbed, and a year-to-date total of 591,051 sf.
• Leasing Activity: Year-to-date leasing activity reached 1.7 million sf, surpassing six of the last seven years' midyear totals.
• Average Asking Rent: Increased slightly to $26.42 psf in Q2 2019, with Class A rents at $29.32 psf.

Market Overview

Vacancy Trends

• Overall Vacancy Rate: 15.5% in Q2 2019.
• Class A Vacancy Rate: Declined 150 bps to 18.8%.
• Submarket Performance:
  • Princeton/Route 1 Corridor: Vacancy dropped 80 bps from Q1 2019.
  • I-78 Corridor: Vacancy dropped 60 bps.
  • Monmouth County: Vacancy improved to 8.1%.
  • Woodbridge/Edison: Vacancy improved to 11.7%.
  • Somerset County: Vacancy remained the highest at 19.9%.
  • Union County: Vacancy improved to 10.8%.

Leasing Activity

• Total Q2 Leasing Activity: 850,000 sf, contributing to a year-to-date total of 1.7 million sf.
• Industry Drivers:
  • Technology and pharmaceutical industries were the main drivers of demand.
  • I-78 Corridor had the most robust demand, with over 350,000 sf leased.
  • Princeton/Route 1 Corridor and Woodbridge/Edison also recorded strong leasing activity.
• Deal Size:
  • Small deals (10,000 sf or less) accounted for 40.0% of new leasing activity.
  • Class A assets absorbed 63.6% of the new leasing activity, indicating a continued "flight to quality."

Rental Rates

• Average Asking Rent: Declined slightly to $26.42 psf for all classes.
• Class A Rent: Remained stable at $29.32 psf, while the I-78 Corridor and Princeton/Route 1 Corridor had the highest average rents in the region.

Outlook

• Vacancy Trends: Expect a rise in vacancy rates in the coming months due to several substantial vacancies.
• Absorption: A handful of sizable deals are anticipated in the I-78 Corridor and Princeton/Route 1 Corridor, which may help offset negative absorption.
• Demand Drivers: Continued demand from insurance, life sciences, and technology firms is expected.

Key Lease Transactions Q2 2019

Key Sales Transactions Q2 2019

Contact Information

• Cushman & Wakefield
  1 Meadowlands Plaza
  7th Floor
  East Rutherford, NJ 07073
  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 leading global real estate services firm with 51,000 employees in 400 offices across 70 countries.
• Revenue in 2018: $8.2 billion across core services.
• Provides exceptional value for real estate occupants and owners.
• Information in this report is gathered from multiple sources and may contain errors or omissions. It is presented without warranty of accuracy.