Retail vacancies in northern and central New Jersey have fallen to their lowest level in more than four years, according to a new survey that suggests continued, but modest, progress in the state's commercial real estate market.
Paramus-based The Goldstein Group said the region's retail vacancy rate dropped to 7.2 percent at midyear — the survey is through June 30 — a 0.6 percent improvement from year end 2012. It marks the lowest total since early 2009.
Goldstein Group President Chuck Lanyard said the latest data show steady improvement in New Jersey commercial real estate since the crash of 2008 and 2009. Plus, the state is better off relative to many states still suffering vacancy rates of 10 to 12 percent.
"You can't call it robust, but fortunately it is showing some real, good signs," Lanyard said. "We're in better position than most states, and because New Jersey's demographics are so densely populated, we tend to make comebacks quicker."
But Lanyard said many retailers are still deferring commitments until they see evidence of a more sustainable recovery. Other headwinds include difficulty obtaining financing and gridlock in Washington.
"One thing is certain: Despite the roadblocks, good quality retail spaces are leasing up briskly, and the desirable retail locations will soon be at a premium," Lanyard said.
The survey, based on 4,250 properties and more than 100 million square feet in northern and central New Jersey, ranks the strongest and weakest submarkets. The strongest:
Route 3 — Clifton, with 2.3 percent vacancy.
Route 17 — Rochelle Park-Rutherford, 2.6 percent.
Route 1 — Woodbridge-Edison, 3.7 percent.
Route 37 — Toms River, 4 percent.
Route 17 — Ramsey-Mahwah, 4.7 percent.
Route 18 — East Brunswick, 11.9 percent.
Route 10 — Livingston-East Hanover, 11.3 percent.
Route 17 — Paramus, 10.5 percent.
Route 35 — Shrewsbury-Ocean, 10.4 percent.
Route 46 — Totowa/Fairfield, 8.7 percent.
Most leasing activity is driven by demand for shops of about 1,000 to 1,500 square feet in size, Lanyard said, though big-box retailers are taking advantage of favorable market conditions and rental rates.