New Jersey Office Market
The vacancy rate increased by 100 basis points to 20.1% in the first quarter of 2024, driven by an influx of large blocks of newly vacant space. Leasing activity in the first quarter of 2024 slowed, reaching 2.4 million SF;which is still 18.7% below the output from the first quarter of 2023. Class A assets continue to capture significant space commitments despite the impact of hybrid work. The under-construction pipeline remained at 572,147 SF during the first quarter of 2024, while construction is underway at M Station West in Morristown. The 260,000-SF property at 100 Morris St. is set to deliver in the second half of 2025. Absorption in the first quarter of 2024 totaled negative 776,304 SF.
New Jersey Industrial Market
The vacancy rate increased by 140 basis points year over year to 4.4% in the first quarter of 2024. This substantial shift has been driven by a slowdown in leasing activity and an increase in available space. First quarter deliveries surpassed 2.5 million SF as the construction pipeline remains healthy with over 12.8 million SF currently under construction. 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 asking rents reached $16.83/SF during the first quarter of 2024 as year-over-year rent growth was 17.1%. 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.
Download New Jersey Industrial Market 1Q24