Page 7 - RENJ Aug2021
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OFFICE VACANCY GROWS, DESPITE IMPROVED OUTLOOK IN NEW JERSEY
back or backfilled a combined 207,000 square feet of sublease space at 480 Washington Blvd. in Jersey City and 101 John F. Kennedy Parkway in Short Hills, respectively.
A separate report by JLL found that
a growing number of tenants are searching for office space in New Jersey, providing a reason for optimism even
as vacancy continued to climb heading into the summer. The firm tracked nearly 4.5 million square feet of tenant requirements in northern and central New Jersey at midyear, up roughly 10 percent from the end of 2020, while completed leasing activity also ticked up during the second quarter, to some 1.9 million square feet.
The improvement helped balance other
REALESTATENJTM 5 indicators in the report, which centered
largely on the pandemic’s continued impact on the state’s office sector.
“With many companies putting their long-term real estate decisions on the backburn-
er during the
COVID-19 pan-
demic, increased
vaccination rates
and lifting of oc-
cupancy restric-
tions are helping
set the stage for
pent-up demand
to gain traction during the second half of the year,” JLL’s Stephen Jenco wrote in the firm’s latest New Jersey Office Insight report.
The amount of available office space in New Jersey grew further in the second quarter, despite leases by technology and life sciences tenants and signs of improvement on the horizon.
A new report by Newmark said as much, finding that the amount of occupied office space in northern New Jersey fell for the sixth consecutive quarter leading into midyear. Notably, more than 900,000 square feet of additional sublease space hit the market over the three-month period, continuing a trend that was especially evident in the first quarter.
The findings tempered some of the report’s more positive observations.
“Tenant activity is steadily picking up in the northern New Jersey office market
million square feet heading into midyear, up 62.5 percent from the start of 2020, Newmark said. Some new additions include a 215,000-square-foot space listed by Allergan at 5 Giralda Farms in Madison, which represents half of the space that the pharmaceutical company leased in 2016, along with a 116,000 square-foot availability at 77 Corporate Drive in Bridgewater by IQVIA.
The report, fortunately, indicated that the amount of sublease space on the market may be peaking. The research team cited moves during Q2 by Citibank and Dun & Bradstreet, which pulled
Stephen Jenco
12.+ MSF Completed or Under Development Across the Northeast Region Since 2015
One Gatehall Drive, Suite 201 Parsippany, NJ 07054
T 973-998-9890
2020
| | | |
Mark Russo
as companies reopen workplaces following
the lifting of COVID-19 restrictions
in June,” the Newmark team of Mark Russo and
Colin Hyde wrote in the report. “While the demand outlook is improving, current conditions continue to favor tenants with availability at a record-high of 26.4 percent, up 50 basis points from last quarter.”
The researchers said tenants in the technology, life sciences, health care and education sectors, which fared relatively well during the pandemic, dominated recent activity. That was reflected by WebMD’s 101,000-square-foot lease at
2 Gateway Center in Newark, which represented the largest new lease of the quarter and the largest new tenant to land at Gateway Center since a group led by Onyx Equities purchased and set out to overhaul the complex in early 2019.
Life sciences firm Infinity BiologiX signed the second-largest new lease
of Q2 with a 98,000-square-foot commitment at 30 Knightsbridge Road in Piscataway, Newmark found. The report noted the company has been partnering with Rutgers University to create a COVID-19 saliva test, while the lease contributed to the 139,164 square feet of positive net absorption in the Piscataway and Interstate 287 submarket, the region’s highest such total for the quarter.
Still, the amount of sublease space on the market in North Jersey grew to 9
