For just the second time in nine quarters, demand stalled within the Southern New Jersey office market as a minimal 17,600 square feet of occupancy losses pushed vacancy up a negligible 10 basis points, as reported in Newmark Grubb Knight Frank’s Q2 2013, Southern N.J., office research report. This market’s exposure to federal contract dollars became apparent when Lockheed Martin’s move out of over 100,000 square feet of space in the Cherry Hill submarket was enough to erase gains by the business services sector over the past 90 days.
“Lockheed Martin’s downsizing in Cherry Hill was expected before sequestration took effect,” noted Joe Sklencar, Sr., senior managing director in Newmark Grubb Knight Frank’s Marlton, N.J. office. “So far, we do not expect federal cuts to precipitate into large-scale office occupancy loss in the near future. Stable demand growth and the repositioning of two vacant office buildings owned by Brandywine Realty Trust should push vacancy downward over the next year.”
Key statistics for the Southern N.J. office market during the second quarter of 2013 are as follows:
• Vacancy Rate: 17.3%
• Absorption: -17,622 SF
• Average Asking Rent: $20.99/SF, Full Service
• Class A Asking Rent: $24.38/SF, Full Service
Finally, while rising interest rates will most likely dampen the trend of increased occupancy by the financial services sector within this market, recently announced employment gains by the Philadelphia Federal Reserve Bank for office-occupying sectors in New Jersey should bode well for near-term tenancy gains.
To access the full Southern N.J. office report, visit www.ngkf.com/research.
To speak with a local market expert, please contact Mira Matic at email@example.com.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank (NGKF) is one of the world’s leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, NGKF employs more than 11,000 professionals, operating from more than 340 offices in established and emerging property markets on five continents.
With roots dating back to 1929, NGKF’s strong foundation makes it one of the most trusted names in commercial real estate. Its integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, NGKF serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.ngkf.com.
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