New Jersey office market report
2022 Q3 quarterly report
Strong negative absorption reflects a market with many businesses choosing to close their physical space in favor of a virtual environment. On the other hand, those who are choosing to stay in place are condensing their existing footprint. Amid an increase in vacancy rates and slowing leasing velocity due to deteriorating economic conditions, a growing number of owners may struggle to carry heavily leveraged assets with financing tied commonly to unsecured loans. This is expected to impact owners, lenders and occupiers alike.
Space gives backs continue as just over two million-sf of office space has returned to the market this quarter. This trend has further exasperated the large delta between occupier demand and an ever-increasing supply of space.
Direct Asking Rent
Asking rents decreased slightly quarter-over-quarter. Top quality product continues to display more resilience to the pricing downturn then other lower quality assets.
Availabilities have increased just over 200,000 sf quarter-over-quarter, as a growing number of office stock comes off the market permanently, therefore keeping availabilities in equilibrium.
Vacancy rates have risen about 0.6% quarter-over-quarter, a metric being kept in balance due to the inventory drop that is also steadily occurring.
Sale volume has slowed down significantly throughout the year with $1.6 B of $2.2 B total sale volume taking place in Q1 2022. This slow down could be due rising rates and repricing occurring, among other reasons, as the office market continues to decline.
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Get in-depth office market reports and insights from commercial real estate experts in the Greater New Jersey area. Avison Young advisors look at New Jersey commercial real estate activities and the latest New Jersey statistics to provide you expert market research on New Jersey's office properties.
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