Upticks in new leasing activity helped the South Jersey office market turn in another strong performance in the second quarter, according to a new market report by a Voorhees-based brokerage firm.
The company, WCRE, recorded about 540,000 square feet of office leasing activity from April through June, according to a news release. That total, which includes about 185,000 square feet of new deals, marks an 80 percent jump from the first quarter and a 20 percent uptick from the same period last year.
The activity followed a promising first quarter in which some 300,000 square feet of leasing activity took place in the market, which includes about 16 million square feet of class A and B space in Burlington, Camden and Gloucester counties. And in last year's fourth quarter, the market saw an unexpected bump despite concerns about Hurricane Sandy and the economy.
In the report, WCRE said health care, computer services, insurance and defense contracting were among several sectors that helped drive the market in the second quarter. The report listed well-known South Jersey tenants like Cooper Health, Lockheed Martin, Subaru and Sun Bank among those who signed leases during the period.
"Several of the fundamentals needed for a sustained return to growth are either steadily gaining strength or are already in place," said Jason Wolf, founder and principal of WCRE, in a prepared statement. He added, however, that the market still has vacant space to absorb — class A and B office vacancy rates in South Jersey are still around 18 percent.
That includes large chunks of vacant space in northern Camden County, which saw additional space hit the market with the expiration of Lockheed Martin's 81,500-square-foot lease in Cherry Hill, the report said. The study also noted a weak appetite for office construction outside build-to-suit opportunities, pointing to Subaru of America's search for 250,000 square feet that is "causing fierce competition between Philadelphia and Cherry Hill."
Reporter Joshua Burd is @JoshBurdNJ on Twitter.