Leasing velocity in North and Central Jersey improved slightly from the first quarter, even with deal volume being down nearly 50 percent compared to last year, according to a recent report by JLL.
JLL said New Jersey had about 1.6 million square feet of completed transactions in the second quarter of 2018, compared to 2 million square feet in the same quarter last year.
“Although most of the leasing activity was generated by smaller leases, a handful of transactions in excess of 100,000 square feet were recorded during the second quarter,” said Stephen Jenco, vice president and director of suburban tri-state office research. “Among the largest new deals was Integra LifeSciences Holding Corp.’s lease of the 167,000-square-foot 1100 Campus Road in Plainsboro. The global medical technology company received a $17.8 million state tax credit to relocate its operations within Middlesex County.”
North and Central Jersey’s office market had 540,660 square feet of negative net absorption in the second quarter. JLL said more than half (281,130 square feet) of the negative absorption came from vacancies in the Parsippany submarket, which is the largest volume of negative absorption in the areas Class A market. This boosted the Class A vacancy rate in Parsippany to above 34 percent compared to 31.5 percent earlier this year.
There was approximately 489,730 square feet of office space in various phases of development during the quarter, JLL said.
Other highlights from the second quarter include:
- Class A vacancy rate increased 50 basis points, rising to 25.9 percent from 25.4 percent in the previous quarter.
- The average asking Class A rental rate for direct space increased less than 1 percent from the first quarter to $30.35 per-square-foot.
- The Hudson Waterfont market maintained the highest Class A rent in the state of $44.90 per-square-foot.
- Metropark’s Class A market recorded the largest volume of positive net absorption in the state with 138,100 square feet.