JLL’s second-quarter office report found good news and bad news for that real estate sector in North and Central Jersey.
On one hand, subleasing space is growing as companies anticipate continued remote work by employees, the real estate firm said. On the other hand, leasing activity did inch higher during the quarter.
Sublease space reached 7.7 million square feet as of midyear, JLL said, which was up from 6.4 million square feet earlier in the year and at its highest level since the end of 2003. However, subleases accounted for just over 18% of available office space, well off the record 40% in 2002.
The overall vacancy rate in the region reached 27.3%, up from 26.4% in the first quarter. However, excluding sublease space, the direct vacancy rate was only 10 points higher, at 22.3%.
Tenant requirements were up 10% from the end of 2020, however, with nearly 4.5 million square feet of requirements in the market. And about 2 million square feet of deals were signed in the second quarter, the highest volume since the third quarter of 2020.
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