With a little help from the state's revamped business incentives, a few New Jersey suburbs have seen bumps in office leasing in recent months, according to a new second-quarter analysis by the brokerage firm Avison Young.
Researchers from the firm’s Morristown office pointed to increased activity and a handful of large deals in suburban submarkets in northern New Jersey during the quarter, including MorrisCounty. However, the firm also noted that large blocks of space were coming onto the market in other sections of the state, particularly in Central Jersey.
MorrisCounty was among the suburbs to record “large-scale absorption” during the quarter, Avison Young said, driven by last year’s Economic Opportunity Act that strengthened the state’s business and development subsidies. The activity includes a deal last month by Automatic Switch Co., which acquired a 250,589-square-foot vacant office building in FlorhamPark after mulling a move to North Carolina.
The firm in 2012 was awarded a $9.1 million tax credit from the Economic Development Authority, according to a news release. Emergency Medical Associates, Atlantic Health and FM Global also signed deals in MorrisCounty during Q2, bringing vacancy down to 27.7 percent from 31.4 percent a year earlier.
Jeffrey Heller, Avison Young’s managing director in New Jersey, said companies are taking advantage of “unprecedented incentives” offered under the EOA.
“Whereas activity in previous quarters was largely focused on the state’s urban centers, increased leasing in the suburbs during the second quarter clearly demonstrates the far-reaching effectiveness of these incentives,” Heller said in a prepared statement.
Overall vacancy increased slightly to 21.3 percent from 21 percent, and the positive news was tempered by several large spaces that hit the market in Central Jersey, Avison Young said. That includes Avaya’s former 300,000-square-foot headquarters in Bernards, which the telecom company sold last year, and the 330,000-square-foot space in Pennington that was recently vacated by Merrill Lynch.
In the Metropark submarket in Edison and Woodbridge, 153,000 square feet became available as JP Morgan expands its regional hub in Jersey City, the brokerage firm said.
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