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Published in U.S. 1 Newspaper on March 8, 2000. All rights reserved.
Real Estate: Aubrey Haines
A tight labor market might make bosses spruce up the
office, or move to better digs. No sense in having your best workers
snared by an offer from a company that lives in an office complex
with all the perks — why not move there yourself?
“In an environment of tight labor, companies are using top-quality
office space to attract the best talent,” says a report issued
by Aubrey Haines of Trammell Crow at 600 Alexander Park. His
survey of the Princeton office market shows that, of the 2 million
square feet of new construction, two-thirds is upscale Class A space.
(A Class A building is loosely defined as fairly new, with such amenities
as an onsite cafeteria, upscale trim, and state-of-the-art wiring,
and in a desirable location.
Leasing activity, Haines discovered, was 20 percent higher last year
than ever before, and here too, the Class A space dominated. Nearly
1.2 million square feet was leased in 1999, compared to 450,000 square
feet of Class B. Landlords with space that does not meet the standards
of Class A, he predicts, will be hard to fill up this year. Particularly
at risk is relet space in older buildings and Class B space that is
not located in the core of the Route One corridor.
But the overall leasing record for 2000 will not equal 1999 simply
because there is not as much available space.
The trend to upscale leasing is reflected in rental rates that rose
dramatically in the first half of last year. Averages for Class A
went up 7.1 percent last year, compared to Class B, which rose 3.9
percent. Class A’s average is $27.58 per square foot but new buildings
are leasing higher, and one building is above $30. The Class B rate
is $22.48.
The Trammell Crow survey predicts that “a couple of large availabilities
in an inferior location will put pressure on rental rates in the middle
range of the market.” The survey declines to specify just where
that might be. But, it warns, a tenant looking for 50,000 feet of
Class A space before the end of 2000 has only four options.
Nearly two-thirds of the 30 million square feet of office space in
the Princeton market is occupied by an owner, Haines has concluded.
That seems surprising until you think of the hundreds of small business
owners who got fed up with skyrocketing rents in the 1980s and bought
their own condo spaces. Then consider how many buildings in this territory
are occupied by such heavy hitters as Merrill Lynch and Bristol-Myers
Squibb. Then the figure of 18-million square feet of owner-occupied
space begins to make sense.
Top Of PageTelecom’s Equalizers
DSL and Asynchronous Transfer Mode (high-speed transmission
for voice, data, video and VPN applications) are two of the state-of-the-art
services that Bell Atlantic is now offering to businesses in the Middlesex
County area, says William Freeman, president of Bell Atlantic.
“Small and medium-sized businesses will have the same capabilities
as large businesses,” says Freeman, who will be speaking on “The
Changing Landscape of Telecommunications: How It Will Impact Your
Business,” on Monday, March 13, at 4:30 p.m. at the Middlesex
Chamber meeting at St. Peters’s University Hospital. Call 732-821-1700.
Cost: $35
A North Plainfield native, Freeman joined New Jersey Bell when he
graduated with an economics major from Drew University, Class of 1974;
he also has an MBA from Rutgers. In 1987 he was appointed director
of external affairs at Bell Atlantic Network Services. In 1989 as
a Presidential Exchange Fellow he worked in the federal General Accounting
Office in the trade, energy, and finance group. He was president and
CEO of Bell Atlantic-Washington D.C. from 1994 until April of 1998.
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