A recent study by Parsippany-based research firm Jones Lang LaSalle shows that talk of the state’s continuing economic stress is far from academic. According to the study, which charts the state’s employment picture and office space occupancy over the first three months of 2008, New Jersey has lost 1,700 jobs and seen a sharp increase in office space vacancies so far this year.
The increase in office space vacancies around New Jersey hits central New Jersey particularly hard as a region. Overall, the state has seen a 22.8-percent rise in vacancies since January 1, while central New Jersey shows a 26-percent rise in vacancies. of the state, over the first three months of 2008. offers concrete proof of the state’s continuing economic woes. Nearly 23-percent of Princeton’s available 18,114,322 offices are vacant, according to the study.
The study also states that the investment market continues to slip in light of the $2.5 billion in sales of office properties in February, nearly half January’s total. Sales in February show a 95-percents drop from last year and were the lowest monthly totals recorded since 2003. So far, such sales accounted for only $6.8 billion, compared to the $68 billion the market had generated by this point in 2007.
Current market trends fly in the face of a general upswing throughout 2007. Vacancy rates have increased every month so far this year, as have asking rents in central New Jersey, where the average per-square-foot cost for office space was $23.97, up 26 cents per square foot since January. Landlords, however, are aggressively seeking tenants and are offering greater incentives and accepting lower prices in order to fill space, the report states. Central New Jersey’s asking rents are more than a dollar below the state’s overall asking rent average.
March’s largest real estate transaction was the acquisition of 112,000 square feet of office space at 23 Orchard Road by New Brunswick-based pharmaceutical giant Johnson & Johnson. The terms of the deal were not disclosed, though average asking rents in the Princeton area were $25.14 as of the end of March. Healthcare firm Aetna, also leased space in the Princeton market in March, taking 41,766 square feet at 3 Independence Way. It was the month’s second-largest transaction.