The South Jersey commercial real estate market experienced an overall strong year in 2015, but ended the fourth quarter on a note of caution with a mixed bag of results that hinted at a slow-down in the market even as gradual improvement and expansion continued and bellwether companies remained active, according to the latest quarterly market report from Wolf Commercial Real Estate, a premier South Jersey commercial real estate brokerage firm with expertise in Southern New Jersey commercial real estate listings and services including South Jersey office space and South Jersey retail space.
The fourth quarter’s mixed results can be traced in part to the Fed’s recent decision to raise interest rates for the first time in nearly a decade, and/or to the volatility in the financial markets.
Positive news in the fourth-quarter analysis included several large leases and renewals above 40,000 SF, indications of a greater level of new construction for the first time in years, and the emergence of new investors in the market.
On the downside, approximately 384,906 square feet of new leases and renewals were executed in the three counties surveyed, a decline of +/- 20 percent in comparison to the fourth quarter 2014. This slower pace of transactions was accompanied by a decrease in prospecting, with about 250,000 square feet of lease transactions in the pipeline and expected to close in the near term.
Despite the decline in transactions, positive absorption in the South Jersey commercial real estate market continued, representing approximately 130,202 square feet of total activity. Vacancy rates also continued to improve.
“2015 was a strong year for our market, although we began to see more caution amid the optimism during the fourth quarter,” said Jason Wolf, founder and managing principal of Wolf Commercial Real Estate, a South Jersey commercial real estate broker that specializes in Southern New Jersey commercial real estate listings and services. “The question for 2016 will be whether our market has rebounded to a point where it can ride out some short-term changes and remain strong.”
Other highlights from the quarterly report on the South Jersey office space market:
- The vacancy rate in the Southern New Jersey office space market scored a major improvement over a year ago as overall vacancies continue to drop, currently down to approximately 11.6%.
- Average rents for Class A & B product in the South Jersey office space market maintained strong support in the range of $10.00-$14.00/sf NNN or $21.00-$25.00/sf gross for transactions completed in the fourth quarter 2015.
- Moderate leasing and prospect activity was reported by all of the major private owners and REITS for the fourth quarter. With Burlington County vacancies tightening up, the Southern New Jersey office space market is seeing many larger vacancy opportunities shifting toward Camden County, which is not controlled by these ownership entities.
In the Southern New Jersey retail market, the fourth quarter report from Wolf Commercial Real Estate, a South Jersey commercial real estate broker, found more mixed results. Highlights from the report’s section on the South Jersey retail space market include:
- Overall vacancy in Southern New Jersey retail space in the three-county area stood at about 10.53%, a slight increase from the year before, but significant improvement from year-end 2012, when it was in the 17-18% range.
- Class A retail product rental rates in the South Jersey retail space market remained in the range of $30.00-$40.00/sf NNN.
- Although retail sales growth in our area has slowed its pace, nationwide retail sales have increased, resulting in many planned expansions and store openings in the Southern New Jersey retail space market this year and in the future.
The full quarterly report on the South Jersey commercial real estate market and the Philadelphia real estate market is available upon request from Wolf Commercial Real Estate.
For more information about South Jersey office space, South Jersey retail space or any South Jersey commercial properties, please contact Jason Wolf (856-857-6301; email@example.com), Scott Seligman (856-857-6305; firstname.lastname@example.org) or Christopher Henderson (856-857-6337; email@example.com) at Wolf Commercial Real Estate, a South Jersey commercial real estate brokerage firm that specializes in Southern New Jersey commercial real estate listings and services, including Southern New Jersey office space and Southern New Jersey retail space.
Wolf Commercial Real Estate is a leading 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.