Newmark Knight Frank (NKF) has announced its findings in its 4Q2017 office market analysis of Northern New Jersey, which confirms availability increased from 22.5% to 23.2% over the past 12 months. Despite high availability, there are bright spots in the market, including steady leasing activity of small/midsize spaces and suburban downtown assets trading for record pricing. Other key takeaways include:
- During 2017, the Northern New Jersey office market recorded the lowest annual net absorption in eight years
- A lack of large new leases combined with corporate consolidations caused an increase in availability over the past year
- Both Downtown Newark and the Roche redevelopment in Nutley are seeing strong tenant interest
Contrary to overall statistics, office availability in Newark has been steadily declining since 2014 and equates to 20.0% as of 4Q2017. In November, Mars Wrigley was approved for a $32-million Grow NJ award to incentivize a move to Newark, and the candy company is expected to lease 110,000 square feet at Ironside Newark, a 365,729-square-foot office development that began construction earlier in 2017, bringing approximately 483 jobs. In December, Beijeng Ideal Group purchased 1 Newark Center from Mack-Cali and The Praedium Group for $93.9 million.
At the rebranded former Roche Campus in Nutley, Ralph Lauren was approved for a $33.1-million Grow NJ award to lease 255,018 square feet. The move would create an estimated 250 new jobs and retain 518 at-risk jobs in the state.
“While availability has increased slightly in this market, high-level statistics mask the numerous upsides,” said Research Manager Mark Russo. “There is very low availability in suburban downtown areas, growing momentum in Newark’s Central Business District and a steady deal flow for small and medium-size leases.”
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