South Jersey’s market not quite as bleak as it had been
8/15/2014 | Real Estate Blog
South Jersey is doing better, and it may even be doing well. Terrific, however, is a ways off, according to a local commercial real estate broker. We are talking about office space, and research from the broker’s firm shows that Burlington, Camden and Gloucester counties seem to be putting more distance between current conditions and the region’s miserable condition during the recession.
Two years ago, vacancy rates were hovering around 20 percent. During the first quarter of 2014, vacancies came in at 14.5 percent. The data for halfway through the year shows another drop, this time to 13.6 percent. Again, not exactly burning up the real estate listings, but movement in the right direction and a good sign for the future.
In the past, the South Jersey and Philadelphia markets have complemented one another. South Jersey does not offer businesses a wide variety when it comes to office space. Philly boasts a mix of Class A, B and C space, as well as industrial space farther out from Center City. South Jersey has a fairly uniform inventory of low-rise 100,000 square-foot office buildings.
Tenants in South Jersey tend to stay put, adjusting their square footage as the economy changes. These businesses laid people off during the recession; now, they are beginning to hire again, and vacancy rates are declining as a result. Growth seems to be centered in healthcare, finance and technology companies.
The research found a correlation between low vacancy rates and proximity to the New Jersey Turnpike and Interstate 295. As a result, Camden County is at a disadvantage, and the vacancy rate apparently reflects that. One real estate professional says, though, that Camden County has a solid supply of available office space. Burlington County may be doing better, but the county will soon run out of desirable space, and businesses will look to Camden County as their next best option.
Overall, then, there is progress. We may not see pre-recession occupancy levels for a long time, but we are closer than we were last year at this time.
Source: NJBiz.com, “South Jersey is finally seeing an upturn in its office real estate market,” Joshua Burd, Aug. 12, 2014