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By Evelyn LeeThe statewide vacancy rate was 4.7 percent at the end of the first quarter, up 80 basis points from the fourth quarter of 2008, the report said. With New Jersey projected to lose 105,000 jobs in 2009, waning apartment demand will cause vacancy to rise by 150 basis points to 5.4 percent this year, according to the firm. Through March, the recession has claimed more than 130,000 jobs in New Jersey, dating back to December 2007.
The new report said that statewide asking rents slipped 0.8 percent and effective rents retreated 1.2 percent during the first quarter, and are expected to decline 2.1 percent and 3.0 percent in 2009 to $1,280 a month and $1,229 a month, respectively. This year, concessions exceeded 4 percent of asking rents for the first time since 2003, according to Marcus & Millichap.
Meanwhile, the firm forecast nearly 2,250 new rental units to be added to the state’s apartment inventory in 2009, up from 1,950 units last year, the firm said. Much of the new supply will come from the 544-unit Alexan at Bayonne Bay, due to be finished during the second quarter; and the 244-unit Bristol Station, in Carteret, expected to be delivered by midyear. No South Jersey projects are slated to come online before the year’s end; the 317-unit Abitare Apartment Homes, in Voorhees currently is under construction and scheduled to be completed in fourth-quarter 2010.
Despite the recession, several apartment projects totaling more than 3,800 units are being planned in the state — although start dates for construction have not yet been determined, the report said.
The lack of credit availability has caused the number of apartment building sales to fall 21 percent in the past 12 months, the report said. Still, strong investment demand for apartment assets bumped up the median price by 4 percent to $82,778 per unit, and may delay a significant rise in capitalization rates — percentages used to determine the value of a property based on its annual net income — which currently average between 6 percent and 6.5 percent for Class A properties in New Jersey.
E-mail to elee@njbiz.com
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