New Jersey Office Market
Vacancy rates have remained elevated due to older office buildings sitting vacant while occupiers continue a flight to quality towards newer and recently optimized buildings. Leasing activity in the market improved, reaching 2.5 MSF during the second quarter of 2024 and increasing by 13.6% year over year. However, this is still comparatively lower than quarterly activity reported over the last 17 years. Class A assets continue to capture significant space commitments, highlighted by Fidelity Investments 184,341 SF renewal at 499 Washington Boulevard and Regeneron’s 157,546 SF deal at 300 Warren Corporate Center Drive Overall asking rents were $31.30/SF during the second quarter of 2024, while the year over year decrease was minimal, at 0.6%. It’s expected that asking rents will continue to be elevated throughout 2024 even with softening tenant demand, as landlords offer more attractive concessions.
New Jersey Industrial Market
The vacancy rate increased by 90 basis points quarter over quarter to 5.3% in the second quarter of 2024, with supply continuing to outpace demand since 2023. This substantial shift has been driven by a slowdown in leasing activity and an increase in available space with robust deliveries since 2023. A slowdown in leasing activity, muted tenant demand, and large blocks of space coming to the market contributed to the negative 550,000 SF of quarterly net absorption. Industrial average asking rents in Northern and Central New Jersey reached a new historic high of $17.01/SF during the second quarter of 2024, increasing by 9.5% year over year. The increase in rent can be linked to the new construction that has been introduced to the market, with a focus on highly efficient, top-tier Class A spaces that command the highest rental rates.
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