Two Greentree Center in Marlton — Courtesy: Wolf Commercial Real Estate
By Joshua Burd
The southern New Jersey office market saw modest gains to start the year, recording nearly 375,000 square feet of leasing volume in the region’s three most active counties.
According to a new report by Wolf Commercial Real Estate, the first-quarter activity in Burlington, Camden and Gloucester counties amounted to a 10 percent increase over transaction volume from the fourth quarter of 2018. The roughly 373,362 square feet of leasing activity tracked by the firm was split evenly between new leases and renewals.
The top deals of Q1 included Comcast Corp.’s 83,500-square-foot renewal at 112 West Park Drive in Mount Laurel, followed by Marlin Leasing’s 59,000-square-foot renewal at 300-302 Fellowship Road in Mount Laurel, WCRE found. The top new leases came from BET, which took 18,876 square feet at Two Greentree Center in Marlton, and ECI Software Solutions, which committed to 17,000 square feet at 2000 Midlantic Drive.
WCRE, which is based in Marlton, also pointed to a healthy pipeline of pending deals.
“Prospecting activity seems to be on track, with a pipeline of approximately 350,000 square feet of pending lease deals expected to close in the near term,” the firm wrote in its Q1 report. “We have surveyed all the major owners in the market, and the feedback has been that small- to midsized tenants and prospects continue to show signs of growth, and there is still an overall emphasis on cautious optimism that we have observed for several quarters.”
The core industries of health care, government services, legal, education, insurance, technology and financial services led the way in terms of activity, WCRE said. In addition to the prime “3M” locations in Burlington County — which include Mount Laurel, Marlton and Moorestown — the firm noted that Camden County continues its recovery in the office market.
Specifically, the county is seeing a significant volume of recently executed larger deals along with pending transactions and ownership changes on the horizon. Vacancy in Camden County dropped to 11.1 percent for the quarter, which is down by 40 basis points at the end of 2018.
Overall vacancy in the three counties ended Q1 at around 11.6 percent, which is 65 basis points higher than the previous quarter. WCRE also found that average gross rents for Class A and B buildings have held steady, ranging from $20 to $25 per square foot for deals completed during the quarter.
“We’ve been in this cycle for several years at this point, with steady growth supported by strong fundamentals,” said Jason Wolf, founder and managing principal of WCRE. “The financial markets and political climate have been somewhat less predictable, but commercial real estate has performed very reliably, and we believe will continue to do so.”