A Cushman & Wakefield report shows New Jersey ranked high among U.S. markets experiencing increased concessions in 2017.
“With unemployment below four percent, companies are focusing on making smart decisions about their space – decisions that keep their employees happy and engaged,” said Revathi Greenwood, Americas Head of Research at Cushman & Wakefield. “Landlords are playing a critical role as well, ensuring their buildings stay competitive with a good mix of amenities and affordable parking, and of course concessions where necessary to attract top tenants.”
The region’s 13.5 percent year-over-year jump is considerably larger than the national average and was outpaced only by San Jose, New York, San Francisco and Boston.
“Free rent grew from an average of $13 to $14 per square foot last year and TI (tenant improvement) allowances increased from $30 to $35,” New Jersey Research Director Jason Price said. “While vacancy rates are in line with historical norms, rental rate growth was strong during 2017; the rent uptick was partially propped up by the cost of concessions.”
In 2018, Price said free rent averages will likely remain stable while TI allowances may shrink.