Harborside in Jersey City — Courtesy: Veris Residential Inc.
By Joshua Burd
The Hudson waterfront office market took a key step forward in early 2022, recording its strongest quarter in more than three years amid several notable deals.
Those are among the findings of new market research by Newmark, which cited the impact of a 130,000-square-foot lease by Collectors Holdings Inc., a sports memorabilia and authentication company, at Harborside 3 in Jersey City. The submarket also benefited from transactions by creative studio MALKA and BlueVine, a financial technology company, which subleased a combined 35,000 square feet at the city’s 30 Montgomery St.
The activity and a slowdown in new availabilities fueled 248,780 square feet in positive net absorption, or overall gains in occupied space, Newmark found, in a submarket that has stumbled in recent years despite its prized location. The gains also stood out in an overall office market that saw incremental growth but was otherwise muted in Q1.
“Tenant leasing activity in the northern New Jersey office market was steady throughout the first quarter of 2022,” Colin Hyde, Newmark’s research manager in the region, wrote in the market report. He noted that availability showed little change, remaining at 26.3 percent for the past nine months, as asking rents remained stable with a 1 percent increase over the past year, to $30.15 per square foot, while landlords continued to expand concession packages.
“On March 7, New Jersey’s public health emergency was officially lifted, which is expected to coincide with a gradual return to the office,” Hyde added. “(However), many employers will retain adopted remote and hybrid work strategies, delaying a full recovery.”
The research also pointed to a mixed bag of activity across the region, including moves by key tenants to downsize. Among them was Siemens, which took 68,000 square feet at 200 Wood Ave. South in Metropark for a significant space reduction from a nearby location. Kumon also downsized when it took 21,651 square feet at 301 Route 17 North in Rutherford, relocating from Ridgefield Park.
“As the shedding of space continues, small and midsized deals are expected to chip away at the large block availabilities weighing down the market,” Hyde wrote. The report also cited a decline in sublease space, thanks in part to a short-term, 123,000-square-foot commitment at 103 JFK Parkway in Short Hills by Fiserv Inc. and Samsung North America’s nearly 58,000-square-foot deal at 55 Challenger Road in Ridgefield Park.
Notably, investment sales volume for office buildings jumped to $1.1 billion in Q1, New Jersey’s highest such total in two years. The Hudson waterfront also led the way in that regard, thanks in part to the $300 million sale of 70 Hudson St. in Jersey City.