The cost of office space in New Jersey just keeps going up.
Asking rents in the Garden State have climbed steadily over the past two years and are now closing in on record highs, hitting $26.86 per square foot in the third quarter, just a few cents lower than the state’s record of $26.90 from 2001’s second quarter, according to the Wall Street Journal.
Data from the real-estate services firm Transwestern found that asking rents rose in New Jersey during eight out of the past nine quarters, and third-quarter rents went up from the prior year in 16 out of 21 submarkets, with some of the top regions including the Hudson waterfront and Newark. The vacancy rate in the state dropped as well, falling from 15.5 percent in the third quarter of last year to 14.8 percent in this year’s third quarter.
The office market in New Jersey has had a slow recovery since the financial crisis in 2008, but tenants have lately been willing to pay higher prices for spaces in good locations that investors are renovating with amenities ranging from beach volleyball courts to yoga studios. Several low-rent office buildings have also been converted to residential or mixed-use projects and taken off the market.
The Real Deal took an in depth look at the New Jersey real estate market over the summer that included a ranking of the biggest office leases in the northern part of the state from May 2016 to April 2017. Pharmaceutical giant Allergan’s 431,495-square-foot lease at 5 Giralda Farms in Madison topped the list. [WSJ] – Eddie Small