Avison Young: N.J. office market continues to be sought after by health care, medical office occupiers

Avison Young’s Q1 2023 New Jersey Office Report shows that New Jersey continues to be highly sought after by health care and medical office occupiers, as they have leased nearly half a million square feet in the first quarter of the year.

Elsewhere, the market continues to be tenant-friendly as occupiers look to condense their footprints and developers continue to seek risk-averse projects, such as pre-leased development assignments, across New Jersey.

Among the key takeaways is data showing that there is a 28% drop in deliveries compared with an eight-year average, net absorption reaffirms occupier desire to condense space, and health care occupiers are leading the charge in leasing activity.

Negative net absorption represented 0.07% as a share of inventory in the first quarter of 2023. The market remains in favor of tenants, despite landlords holding rents largely steady. Often, companies opt to downsize space and more efficiently plan for condensed physical footprints as the market transitions in favor of the tenant.

Nearly a half-million square feet has been leased in the first quarter of the year as health care-focused occupiers continue to drive leasing activity. New Jersey has been a fertile ground for medical innovation for 150 years, hosting many of the largest global health care companies within the state.