North and Central New Jersey office market leasing showed signs of slowing down in the second quarter after a solid start to the year, according to Colliers International’s New Jersey Office 2Q 2019 Market Snapshot report.
The report said total leasing activity fell 22% quarter-over-quarter to 1.9 million square feet, the lowest quarterly total since 2008.
There was little movement in overall market fundamentals, Colliers found, as the availability rate stayed unchanged from last quarter at 19% and the asking rent increased $0.07 per-square-foot to $26.39 per-square-foot.
The life sciences sector remained hot, however, in an otherwise dull quarter, with IQVIA consolidating its operations to 115,000 square feet at 77 Corporate Drive in Bridgewater and biotech firm Genmab relocating to 90,070 square feet at 777 Scudders Mill Road in Plainsboro.
Northern New Jersey
While North Jersey’s office market has slightly improved over the last three years, corporate moves and mergers slowed it down, Colliers said.
Net absorption was negative (341,667 square feet) for the first time in four quarters due to slow leasing activity and new large availabilities in the Route 46/23/3 and Meadowlands submarket.
Leasing activity totaled 838,544 square feet, the lowest figure since 2008.
The availability rate increased 50 basis points from last quarter to 19.6%.
The average asking rent increased this quarter, up $0.64 per-square-foot year-over-year to $27.53 per-square-foot. The increase, Colliers said, is from higher priced available space in Jersey City and Short Hills.
Central New Jersey
Unlike North Jersey, the middle of the state saw favorable market conditions in the second quarter, demonstrated by positive net absorption of 383,739 square feet.
Leasing activity improved this quarter, totaling 1.1 million square feet, with the East I-78 submarket accounting for 41.4% of new deals. Other notable deals in the submarket include:
- Matheson Tri-Gas leasing 35,000 square feet at 3 Mountainview Road in Warren;
- ReadyCap Lending subleasing 21,238 square feet at 200 Connell Drive in Berkeley Heights.
Strong demand allowed for availability to drop to 18.3%, an improvement of 40 basis points from the previous quarter, but unchanged year-over-year.
The average asking rent was stable at $25.61 per-square-foot, basically unchanged from $25.62 per-square-foot last year.