By Joshua Burd
The office market may be facing a new normal, but tenants in the life sciences, health care and technology sectors are best-positioned to drive demand in the wake of COVID-19.
A recent report by Newmark Knight Frank said as much, as the impact of the pandemic and social distancing measures becomes increasingly clear. The firm’s northern New Jersey research team noted that tenant demand has slowed dramatically since the start of the crisis, but some occupiers are faring better than others as their services remain in high demand.
To that end, many essential companies are hiring despite record unemployment across the broader economy. The researchers pointed to New Jersey’s COVID-19 jobs portal, which as of late April showed more than 56,000 open positions across 789 companies.
Amazon led the way with 3,400 open positions in the Garden State.
“While many of the posted positions are not desk jobs, the continued hiring speaks to the financial health of businesses in certain industries — many of which occupy significant office space in northern New Jersey,” Mark Russo, research manager, and Colin Hyde, research analyst, wrote in the report. They noted, for instance, that Walmart eCommerce, or Jet.com, which leases its corporate headquarters in Hoboken, had posted 1,000 positions at the time.
Longstanding office trends, including higher employee density and an emphasis on shared amenity spaces, will be disrupted by the need to practice social distancing and maintain sanitized work spaces. But NKF said the companies currently hiring in New Jersey speak to the occupier types that are most likely to increase their footprints in the wake of the pandemic.
For instance, the firm said life sciences tenants make up the second-largest share of recent leasing activity in North Jersey, accounting for 16 percent since 2017, and that the state is home to more than 3,200 companies in the sector. What’s more, health care providers have leased 1.7 million square feet of office space in northern and central New Jersey over the past three years.
The report also pointed to the expansion of tech companies such as Audible, which is based in Newark, and the growing demand for the IT and consulting services of Teaneck-based Cognizant. The tech sector has accounted for only 9.3 percent of leasing going back to 2017, NKF said, but such companies are growing with the demand for connectivity and entertainment from home.