The News: New Jersey Ready for Rebound?
- Apr 14, 2009
The New Jersey office market is seeing signs of increased tenant activity in the first quarter of 2009, according to two market watchers. The clouds have not all cleared, certainly, as FirstService Williams reported that the New Jersey office availability rate increased slightly to 21.4 percent from last year’s first-quarter figure of 20.5 percent and from 21.2 percent at the end of 2008. Year-over-year availability in Northern New Jersey increased from 18.8 percent to 19.7 percent, and in Central New Jersey it grew from 23 percent to 23.8 percent.But, upticks in office cycles usually begin with increased tenant activity, and Matt Dolly, managing director of research and marketing for FirstService Williams’ New Jersey office, said tenants are exploring the market, in some cases to lock in favorable lease rates on a long-term basis.And other reasons for cautious optimism exist. New Jersey’s office market represents an array of industries and is not overly weighted with financial services firms, which have suffered the most during the economic downturn, said Jeff Schotz, executive managing officer in the same office. “Financial firms are not the primary anchors at many of our office buildings.” New Jersey’s office sector does host many pharmaceutical and other healthcare firms, and that industry has fared better than many others in the downturn, Dolly noted.The state’s economic development team had in the past worked behind the scenes to persuade corporations to relocate from Manhattan and other nearby areas, but Gov. Jon Corzine and his economic team have been open and upfront in their campaign to attract corporations to the Garden State, Schotz said, recently introducing the Urban Transit Hub Tax Credit Plan to encourage business investment around transit centers in nine cities. Schotz noted that cities like Newark and Hoboken, both of which have major rail stations, could enjoy significant benefits.Dolly acknowledged that unemployment in New Jersey is escalating, having reached 8.2 percent in February, just above the national rate of 8.1 percent. But he noted that job growth in the state has been fairly restrained since the 2001 recession and thus employers might not have to cut jobs as deeply as during past downturns.“Real estate used to be about location, location, location,” Schotz said. “Now, it’s all about jobs, jobs, jobs.”