Pharmaceutical, life sciences and innovation economy companies were the biggest drivers to New Jersey’s third quarter office activity, according to CBRE’s Q3 2018 office market report.
New leasing activity comprised approximately 1.8 million square feet, which was the second-highest third quarter recorded since 2012. Of this, 10 of the Top 20 leases were in the life sciences sector. In a deal arranged by CBRE, Teva Pharmaceuticals leased 345,000 square feet in Parsippany to serve as its new headquarters. This was the largest deal in the third quarter, CBRE said.
Overall, third quarter velocity of 2.6 million square feet was also the highest since the first quarter of 2017.
As a result of strong leasing activity, net absorption hit nearly 1 million square feet, the highest level since 2016. Most increases occurred in North Jersey, which recorded 900,000 square feet of net absorption in the third quarter. More specifically, the Parsippany submarket saw a total of 403,000 square feet of positive net absorption. In addition, the Waterfront submarket was strengthened by E*Trade’s 132,000 square feet renewal and expansion in Jersey City and Wal-Mart Digital’s 42,000-square-foot lease in Hoboken.
“New Jersey continued its rebound which began during the second quarter, with life sciences firms playing a major role in the market’s overall leasing activity,” Joseph Sarno Jr., executive vice president, CBRE, said. “As a result of this robust leasing, the availability rate fell by 70 basis points quarter-over-quarter to 20.5 percent, its lowest rate in the past four quarters. This is a trend we expect will continue through the end of the year.”
Average asking rents in the quarter were $26.34 per-square-foot, 13 cents lower than the second quarter but 37 cents above the same period last year.
To view the full report, click here.