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Return-to-office, labor shifts, and vacancy rates drive New Jersey office market dynamics in Q3 2022
October 6, 2022
Avison Young releases its Q3 2022 New Jersey Office Market Insights Report
Morristown, NJ –Avison Young today released its Third Quarter 2022 Office Market Report for New Jersey. The report highlights that collaborative industries are driving return-to-office (RTO) efforts, the shifting labor dynamics due to current economic conditions, and that a slowdown in leasing velocity and increased vacancy rates are putting debt “at risk.” Though asking rents decreased slightly quarter-over-quarter at $27.76 per square-foot (sf) on average, high-quality product continues to display more resilience to the pricing downturn.
“It comes as no surprise that those companies who have traditionally relied on more in-person interaction, like those in healthcare, finance, and life sciences, for instance, are driving the bulk of leasing activity across New Jersey” said Jeff Heller, Principal and Managing Director of the firm’s City office. “Those choosing to stay in place, especially in the technology sector, however, are consolidating and returning space back to market. This quarter, we’ve reported that over two million-sf of office space has been given back.”
Additionally, the Report indicates that as more space is being given back and vacancy rates rise, special servicers are helping owners with heavily leveraged assets with debts tied commonly to unsecured loans manage their remaining cash flows. Vacancy rates have risen only 0.6% quarter-over-quarter and are being kept in balance due to steady drops in inventory, as nearly one million-sf of office space has come off the market quarter-over-quarter.
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Download 2022 Q3 New Jersey Office Market Report here.
Nathan Reyna, Media Relations & Content Specialist, Northeast: +1.917.877.1697
Jeff Heller, Principal & Managing Director, Morristown: +1.973.699.4987