Broker predicts retail rents have hit bottom
The picture for retail leasing in northern and central New Jersey continues to improve, boosted by a series of recent transactions in those regions going back to late last year, according to the brokerage firm Goldstein Group.
The Paramus-based firm this week reported more than a dozen leases from the past six months. The deals include major retailers like Enterprise Car Rental and Hollywood Tans, which each leased 2,100 square feet at Level 10 Plaza, in Hardyston, and Verizon, which leased 2,800 square feet at South Brunswick Square, in South Brunswick.
Goldstein Group President Chuck Lanyard said each transaction "had its own story, but basically they're going into the right locations, because the economy is definitely beginning to show some improvement." The common thread among them "is that the rents are really down nice and low," he said.
"It looks as if now this is as low as they're going to go, that landlords are now basically saying we've lowered the rents enough and we're not going to (lower rents) anymore, so you're wise to start grabbing these spaces," Lanyard said.
Lanyard's firm also reported a 9,500-square-foot lease signed by Pearl Art, which took space on Route 17, in Paramus. He said the deal was an expansion, another source of cautious optimism for the shopping center market.
Lanyard noted that the majority of transactions are still taking place in "primary markets with strong neighborhood centers and highway locations."
"We're finding that if you're a retail tenant and you're concerned about the success of opening up in today's world, you might as well be out on a highway with 60,000 cars a day rather than a downtown," Lanyard said. "I think eventually, as the highway locations get absorbed, people might look to the downtown more readily."
Retail landlords in central New Jersey have had to make concessions in recent years to retain, both along highways and in downtown areas, said Robert D. Prunetti, president and CEO of the Mercer Regional Chamber of Commerce. But he also believes the market in both areas has bottomed out, he said.
"I think many of them have renegotiated their terms and are dealing with terms that they can live with, both for the landlord and the retailers," Prunetti said. "I think we've leveled off, and hopefully now the trend is going to start to swing back upward."