In New Jersey, office supply far outweighs demand for that space.
The Garden State’s office availability rate in the first quarter climbed to 21.6 percent, up 4 percentage points compared to the same time last year, according to a report from Avison Young New Jersey.
“Absorption continues to be negative for the third quarter in a row, a trend that reflects the tremendous effect the pandemic has had on the sector,” said Jeff Heller, the brokerage’s principal and managing director.
The jump in availability has driven prices down slightly, with office rents in the first quarter going for $29.38 per square foot, down $0.27 compared to a year ago.
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Major transactions during the first quarter include Mallinckrodt Pharmaceuticals’ 102,000-square-foot sublease in the Perryville Corporate Park at 53 Frontage Road in Hampton. St. Joseph’s Medical added 80,000 square feet at 169 Minnisink Road in Totowa, making its total footprint at 140,000 square feet.
In the office investment sales arena, Liberty Properties, an Opal Holdings Group affiliate, acquired Mack-Cali Realty’s four-building Metropark complex in Edison and Iselin for $254 million. The 946,000-square-foot property consists of 99 and 101 Wood Avenue South and 333 and 343 Thornall Street, and is more than 90 percent leased, according to Mack-Cali.
The industrial sector had the opposite problem: shrinking vacancy. But warehouse vacancy rates appeared to have bottomed out in the first quarter at 2.5 percent, which is the same rate as a year ago, according to Avison Young.
After experiencing eight consecutive months of positive absorption, the rent for industrial properties in the first quarter rose to $10.03 per square foot, a 14.3 percent year-over-year jump.
Major industrial leases in the first quarter include Bob’s Discount Furniture’s 622,230-square-foot lease at 150 Old New Brunswick Road in Piscataway. In addition, Lincoln Equities Group announced UPS would lease 880,000 square feet at its planned industrial park at the former Military Ocean Terminal in Bayonne.