Commercial real estate brokerage WCRE reported in its analysis of the second quarter that the Southern New Jersey and Southeastern Pennsylvania markets are cautiously entering the post-pandemic recovery. Although there are still lingering issues, commercial real estate appears to be rebounding along with the broader economy.
So said Jason Wolf, founder and managing principal of WCRE, a commercial real estate brokerage firm that cover the South Jersey and Philly-area markets.
“Fundamentals are tracking in a positive direction, and while various challenges remain, conditions are in place that point to a return to pre-pandemic CRE performance,” he said.
There were approximately 233,544 square feet of new leases and renewals executed in the three counties surveyed (Burlington, Camden and Gloucester). And while this figure is not indicative of a rebound, it marks the return of net positive absorption, Wolf said.
New tenant leases comprised approximately 123,358 square feet, or about 53% of all deals for the three counties. During the previous quarter, this figure was only 8% of the total.
Office market highlights in South Jersey:
- Overall vacancy in the market is now approximately 13.6 percent, virtually unchanged from the previous quarter, and holding steady two points higher than at this point last year;
- The sales market picked up momentum, with 1,257,385 square feet actively on the market or under agreement;
- Average rents for Class A & B product remain unchanged, as they continue to show strong support in the range of $10-$15/sf NNN or $20-$25/sf gross for the deals completed during the quarter. These averages have hovered near this range for more than a year.
Retail market highlights in South Jersey:
- The Consumer Confidence Index has been rising steadily since it turned around in February.
- Retail vacancy in Camden County jumped more than three points to 14.3 percent after posting a large increase in the middle of 2020. While average rents rose more than one dollar, in the range of $12.86/sf NNN.
- Burlington County retail vacancy dropped to 9.6 percent, an improvement of more than three quarters of a point. But it is still well above 7.6 percent, where it stood a year ago. Average rents increased slightly, to the range of $14.59/sf NNN.
- Gloucester County saw another quarterly increase, to 16.5 after increasing throughout last year, with average rents virtually unchanged in the range of $14.08/sf NNN.