In the second quarter, Northern and Central New Jersey experienced a surge in industrial leasing while office leasing saw a slowdown, according to Cushman & Wakefield’s latest report. The industrial market witnessed 5.8 million square feet (msf) of new leases, marking an 11.2% increase from the previous year despite an overall vacancy rate rise to 7.6%. This growth was largely driven by strong demand for Class A industrial properties which recorded positive net absorption of 1.4 msf.
On the other hand, office leasing activity declined with no new leases or renewals over 100,000 sf this quarter resulting in a high vacancy rate of 23.2%. Despite consolidations and rising sublease space levels, there is still a preference for high-quality office spaces among tenants.
According to John Obeid, senior research manager at Cushman & Wakefield,”The robustness of the industrial market remains evident through its strong leasing activity and significant construction completions.” He further added that although there has been an influx of new space leading to higher vacancy rates overall,the Class A segment continues to perform well with positive net absorption indicating sustained demand for top-notch logistics properties.
This article was originally published on Connect CRE website.
