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Third-quarter leasing activity shows NJ office market may finally be on the rebound

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With a burst of third-quarter leasing activity, New Jersey's office market is showing signs of a long-awaited rebound.

Those are the findings of a new report from Cushman & Wakefield's East Rutherford office. The brokerage found that from July through September, quarterly leasing activity in northern and central New Jersey topped 2 million square feet for the first time in since the early 2012.

Researchers at the firm also said year-to-date leasing activity has exceeded 5.7 million square feet, up 13 percent from the same point last year. The activity has been split about evenly between the state's five northern and six southern counties.

"Recent job growth has been promising, and that is being reflected in the office market activity that we are seeing," Kimberly Brennan, senior managing director of Cushman & Wakefield, said in a prepared statement. She noted the state is on pace to record its second-highest annual total leasing volume over the past five years.

Overall vacancy fell 0.7 percentage points from the second to third quarters, to 19.1 percent, the firm said in its report. Cushman attributed the drop to increased demand and the removal of the former Bell Labs office complex in Holmdel from the state's office inventory; the building is being repurposed in a project that began last month.

The report found momentum in several North Jersey submarkets such as Route 10/24 and Parsippany, but also pockets of concern. In Hudson County, new blocks of space outpaced demand in the third quarter, leaving the vacancy rate at 14.6 percent.

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