A steady stream of leasing activity has continued in New Jersey's office market, causing vacancy to tick down in the second quarter despite the continued specter of large blocks of space.
Those are the findings of Cushman & Wakefield’s second-quarter market report, which said new deals pushed office vacancy down to 19.3 percent by the end of June. Vacancy at the end of Q1 stood at 19.7 percent, which was flat from the start of the quarter.
The movement came from positive absorption in both northern and central New Jersey submarkets, the brokerage firm said in a news release. The total amount of occupied space in the markets increased nearly 950,000 square feet, thanks largely to more than 1.8 million square feet of leasing activity during Q2.
“Large blocks of vacant space have continued to impact the office market, but our research indicates that as available space has dwindled, asking rents have held steady and new leasing activity remains healthy,” Kim Brennan, Cushman & Wakefield’s New Jersey market leader, said in a prepared statement.
In Central Jersey, the strongest performers were the “usual suspects” — Woodbridge/Edison, Princeton, the Interstate 78 corridor and Monmouth County — causing regional vacancy to inch lower, to 17.7 percent from 17.8 percent. Cushman said the activity was driven largely by smaller deals, such as Grant Thornton’s 31,288-square-foot lease in Metropark and First Choice Loan Systems’ 26,770-square-foot in lease in East Brunswick.
In North Jersey, only Morris County was the standout in Q2, recording nearly 700,000 square feet of positive absorption from volume in Parsippany and the Route 10/24 corridor, the firm said. Vacancy in the region fell to 20.4 percent from 21 percent.
Some of the county’s largest deals during the quarter were Merck’s 150,000-square-foot lease at 2 Giralda Farms and Maersk’s 70,000-square-foot signing at 180 Park Avenue in Florham Park. Meantime, FM Global relocated to 55,000 square feet at 300 Kimball Drive in Parsippany.
“The quarter-to-quarter and year-over-year vacancy rate comparisons are increasingly positive,” Brennan said. “As the economy continues to rebound, we expect that trend to continue.”
The firm noted that large blocks of space continue to loom on the horizon in New Jersey, but said there are “some notable deals in the pipeline in the coming months.”
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