New Jersey’s office market didn’t change much in the second quarter, despite a lack of leasing activity, according to CBRE‘s Q2 2019 office report.
The report found net absorption was positive for the third consecutive quarter ending the second quarter at 359,100 square feet. This reflected a turnaround of approximately 510,000 square feet from the first quarter of 2019 and more than 550,000 square feet from the same quarter last year, CBRE said. As a result, net absorption in the first half of the year was a positive 209,000 square feet.
The availability rate and the average asking lease rate improved in Q2, CBRE said.
The availability rate fell by 20 basis points quarter-over-quarter to 19.9%. This is the first time it has dipped below 20% since Q4 2008, CBRE said. Additionally, the overall asking lease rate as well as the Class A rate increased by $0.25 per-square-foot quarter-over-quarter. At the same time, the vacancy rate fell below 17% for the first time since Q3 2017, ending the quarter at 16.8%.
Leasing activity was down by about 307,000 square feet to 1.2 million square feet, almost 630,000 square feet less than the 1.9 million square feet leased in Q2 2019. Major leases in Q2 included General Services Administration leasing 90,679 square feet at 3 Gateway Center in Newark and Bohler Engineering leasing 62,795 square feet at 30 Independence Blvd. in Warren Township.
“The New Jersey office remained steady in the second quarter when looking at the availability, asking rents and net absorption metrics,” Ed DaCosta, executive vice president, CBRE, said. “Given strong market fundamentals and an unemployment rate of just 3.8 percent – the lowest recorded since April 2001 – we anticipate that the office market will continue to post positive results through the end of the year.”
