South Jersey Commercial Real Estate Market Moves from Recovery to Growth

research information graphicContinuing a trend first noted in the second quarter, the South Jersey commercial real estate market appears to be transitioning from recovery to growth, according to a new quarterly analysis from Wolf Commercial Real Estate, the foremost South Jersey commercial real estate broker that specializes in Southern New Jersey commercial real estate listings and services.

The firm’s third quarter 2014 analysis of the South Jersey commercial real estate market found mostly positive trends in the quarter, mirroring trends noted in the previous quarter, specifically increases in new leases and renewals and further positive absorption of vacant properties, including unoccupied South Jersey office space.

Approximately 398,778 square feet of new leases and renewals for Southern New Jersey office space were executed in Burlington, Camden, and Gloucester counties during the second quarter, including several large spaces, ranging in size from 6,000 to nearly 37,000 square feet. Expansions and new deals for South Jersey office space continued to pick up steam in the third quarter, representing 54 percent of all transactions, up from 52 percent in the second quarter.  Positive absorption for the third quarter was approximately 137,366 square feet, an increase of more than 20 percent from the second quarter.  Finally, approximately 530,000 square feet of pending deals are anticipated to close by the end of 2014 or in early 2015.  Four of these pending transactions account for about 300,000 square feet.

“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.”

The third quarter report noted that the prime 3M locations in Burlington County continued to outpace the remainder of the region, and that the tightening of those areas is causing demand to shift toward vacancies for Southern New Jersey office space in Camden County, a trend that has been underway all year.

Other report highlights for the South Jersey office space market include:

— The vacancy rate for Southern New Jersey office space for the third quarter stood at 14.2 percent.

— Average rents for South Jersey office space remained unchanged from the previous quarter with Class A & B product seeing 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 for Southern New Jersey office space in the third quarter increased from the previous quarter with approximately 215,794 square feet of new deals and approximately 182,984 square feet of renewals and/or expansions.

— The report’s only unfavorable trend in the South Jersey office space market was a report by all major private owners and REITS of a noticeable slowdown in prospect activity in the third quarter, although this may be attributable to the usual summer slowdown.

In the market for South Jersey retail space, the Wolf Commercial Real Estate report found that the area appears to have bounced back from a slow spring.  Highlights of the findings on the retail sector of the South Jersey commercial real estate market include:

— Increased tourism buoyed retail sales figures for the region, helping to maintain slight growth.

— Overall vacancies for South Jersey retail space in the tri-county area stood at 15.1 percent, down about half a point from the previous quarter — an especially good sign since the vacancy rate had been rising during the first half of 2014.

— Rental rates for Class A South Jersey retail space maintained strong support in the range of $30.00-$40.00/sf NNN, essentially unchanged from the previous several quarters.

— Class B product rental rates also were unchanged with support in the range of $15.00-$25.00/sf NNN.

The South Jersey commercial real estate market report is based on research conducted by Wolf Commercial Real Estate, a South Jersey commercial real estate brokerage firm specializing in Southern New Jersey commercial real estate listings and services, and includes snapshots of the South Jersey office space, South Jersey medical space and South Jersey retail space markets, as well as 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 broker with expertise in Southern New Jersey commercial real estate listings and services.

For more information about South Jersey office space or any South Jersey commercial properties, please contact Jason Wolf (856-857-6301; jason.wolf@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 leading South Jersey commercial real estate brokerage firm.

Wolf Commercial Real Estate is the premier 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.