The South Jersey commercial real estate market appears to be shifting from recovery mode to growth, according to new third quarter report issued by Wolf Commercial Real Estate, a leading South Jersey commercial real estate brokerage firm with expertise in Southern New Jersey commercial real estate listings and services.
The third quarter findings were a continuation of the mostly positive trends found in the second quarter, the company’s report said, noting that the South Jersey commercial real estate market experienced increases in new leases and renewals, as well as further positive absorption of vacant properties, including unoccupied South Jersey retail space.
In the second quarter, Burlington, Camden, and Gloucester counties saw approximately 398,778 square feet of new leases and renewals executed for South Jersey commercial properties, including Southern New Jersey retail space. Among the new deals and renewals in the second quarter were several major deals in sizes ranging from 6,000 to nearly 37,000 square feet.
The third quarter saw expansions and new deals for South Jersey commercial properties, including South Jersey retail space, continue to accelerate, representing 54 percent of all transactions, up 2 percent from the previous quarter. Positive absorption for the third quarter increased more than 20 percent from the second quarter, reaching approximately 137,366 square feet. Roughly 530,000 square feet of pending transactions were projected to close by year’s end or in early 2015. About 300,000 square feet of the pending deals are from four transactions alone.
“The market’s fundamentals continue to strengthen, and it seems like the economy has found its footing after a prolonged period of recovery,” said Jason Wolf, founder and principal of Wolf Commercial Real Estate. “We’re still a long way off from pre-recession levels, but hiring is up, office employment is up, and businesses are showing signs of expansion, all of which bodes well for the South Jersey commercial real estate market.”
Prime 3M locations in Burlington County continued to outpace other areas of the region, and tightening in those areas is prompting demand to shift toward vacancies in Camden County, a year-long continuing trend, the report said.
The Southern New Jersey retail space market bounced back from a slow spring, the quarterly analysis found. Highlights from the South Jersey commercial real estate market’s retail sector include:
— A rise in tourism bolstered regional retail sales figures, which helped maintain slight growth.
— The tri-county area’s overall South Jersey retail space vacancies dropped about half a point to 15.1 percent from the second quarter. This decrease was a particularly good sign because the vacancy rate increased throughout the first half of the year.
— Rental rates for Class A Southern New Jersey retail space were effectively unchanged from several previous quarters, showing strong support in the range of $30.00-$40.00/sf NNN.
— Rental rates for Class B product in the South Jersey retail space sector also remained steady from the previous quarter, with support in the range of $15.00-$25.00/sf NNN.
Highlights in the report for South Jersey office space include:
— The third quarter vacancy rate was 14.2 percent.
— Average rental rates for South Jersey office space remained stable with Class A & B product showing strong support in the range of $10.00-$14.00/sf NNN or $21.00-$24.00/sf gross and the overall market average showing strong support in the range of $10.00-$12.00/sf NNN or $20.00-$22.00/sf gross.
— New lease activity in the third quarter increased with approximately 215,794 square feet of new deals and approximately 182,984 square feet of renewals and/or expansions.
— A clear slowdown in prospect activity reported by all major private owners and REITS was the only negative trend in the third quarter report, but this trend ma be a seasonal anomaly caused by the expected summer slowdown.
The South Jersey commercial real estate market report is based on research conducted by Wolf Commercial Real Estate, a South Jersey commercial real estate broker with expertise in Southern New Jersey commercial real estate listings and services, and includes snapshots of the markets for South Jersey office space, South Jersey medical space and South Jersey retail space, along with details on the major deals being consummated or planned.
The full report is available upon request from Wolf Commercial Real Estate, a South Jersey commercial real estate brokerage firm specializing in Southern New Jersey commercial real estate listings and services.
For more information about South Jersey retail space or any South Jersey commercial properties, please contact Jason Wolf (856-857-6301; jason.wolf@wolfcre.com), Leor Hemo (856-857-6302; leor.hemo@wolfcre.com), Christina Del Duca (856-857-6304; christina.delduca@wolfcre.com), Todd Levin (856-857-6319; todd.levin@wolfcre.com), Scott Seligman (856-857-6305; scott.seligman@wolfcre.com) or Christopher Henderson (856-857-6337; chris.henderson@wolfcre.com) at Wolf Commercial Real Estate, a premier South Jersey commercial real estate broker.
Wolf Commercial Real Estate is the foremost South Jersey commercial real estate broker that provides a full range of Southern New Jersey commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other South Jersey commercial properties for buyers, tenants, investors and sellers. Please visit our websites for a full listing of South Jersey commercial properties for lease or sale through our South Jersey commercial real estate brokerage firm.
