The pace of investment sales among North Jersey office buildings has slowed in the past year, thanks in part to local job growth that's causing owners to think twice about selling their assets, according to research by Marcus & Millichap Real Estate Investment Services.
Listings have become limited over the past 12 months, causing sales velocity to fall about 7 percent in the six-county region tracked by the brokerage firm. The decline comes as the median price for office building trades rose 47 percent during the period.
Researchers noted velocity picked up late last year ahead of the increase in the federal tax on capital gains, but said trading may have fallen off because owners now seek to benefit from business growth in North Jersey — about 5,160 office-using jobs were created in the six counties during the past 12 months. That's a 1.1 percent increase year over year, though total employment is still below the pre-recession peak.
Marcus & Millichap, which has offices in Elmwood Park, also predicted office-using employment in the region would rise by 12,000 jobs. Still, vacancy among class A buildings rose 1.6 percent, to 22.5 percent, in the past year, while class B and C vacancy ticked up slightly, to 17.8 percent.
The brokerage firm's report covers Bergen, Hudson, Passaic, Essex, Morris and Union counties.
Aside from lower sales velocity in 2013, the area's office market seems to be recording fewer splashy deals than in recent years. Only a handful of trades have grabbed headlines this year in North Jersey, including Hartz Mountain Industries' $56 million sale of a Secaucus building and the April sale of a Morris Township property for $71 million.