Q1 market report finds Garden State office vacancies at 12-year low

Cushman & Wakefield’s first quarter office market report for Northern New Jersey showed sustained office leasing, new development and pricing. GlobeSt, citing data from the real estate services firm last week, noted that North Jersey absorbed more than 2 million square feet year-over-year, leading to the region’s lowest vacancy rate in 12 years. Cushman & Wakefield found that vacancy dropped to 17.3 percent, a 30 basis point drop since the end of 2018. The Morristown, Meadowlands and I-78 corridor submarkets topped the list for the highest year-over-year vacancy drops. Cushman & Wakefield’s New Jersey market leader Andrew Judd said in the report that “mid-sized deals (20,000 to 60,000 square feet) drove 30 percent of new deal activity in the first quarter. Deal volume thus far in 2019 has been diverse, with the life sciences, legal services, retail and wholesale, and manufacturing industries leading the way.” The report found that the Morristown submarket and Bergen County were tops in net absorption at 187,344 square feet and 147,910 square feet, respectively. Despite posting -6,556 square feet in net absorption during the first quarter, Cushman & Wakefield found that the Hudson County market priced the highest asking rates in both Class A office product ($35.82) and all office assets ($43.60). Third-party logistics and e-commerce tenants continued to dominate the industrial market, according to Cushman & Wakefield. Another North Jersey market report recently released by Newmark Knight Frank found that life sciences firms were responsible for an increase in first quarter office leasing activity. [GlobeSt]