As highlighted in the 2015 JLL digital Skyline report, theme #4 focuses on demand for Class B space in major markets in the United States and Canada. The demand for these properties in New Jersey, however, has not seen an increase so far this year. Currently, Class B office buildings account for 55.9% (712 buildings) of the market, followed by 38.6% for Class A (491 buildings) and 5.5% for Trophy (70 buildings).
The average asking rent for Class B space was $21.01 per square foot in Q2 2015. The vacancy rate has remained close to 25% for the past several quarters, and demand has remained unchanged.
Despite Class B buildings accounting for the greatest amount of office space in New Jersey, demand for Class A space in northern and central New Jersey has increased during the first half of 2015.
As featured in NJ Biz, JLL’s Stephen Jenco, director of suburban tri-state research, “recorded roughly 416,000 square feet in net absorption for the region, with nearly 60 percent of the activity resulting from Class A transactions.”
Find more details on tenant demand for Class A office space in New Jersey on JLL’s chart of the week below:
- After posting 331,000 square feet of positive net absorption earlier this year, a persistent appetite for Class A space translated into an additional 245,200 square feet being absorbed in the Northern and Central New Jersey office market during the second quarter.
- The Class A vacancy rate had slipped 20 basis points from year-end 2014 to 24.9 percent in mid-2015. The Class A vacancy rate has not been below 25.0 percent since the end of 2013.
- More than 90.0 percent of the 245,200 square feet absorbed in the Class A market during the second quarter was attributed to demand in the Hudson Waterfront, where New York Life Insurance leased 114,000 square feet at 30 Hudson Street in Jersey City.