Cresa NJ Releases Fourth-Quarter Tenant's Guide Report

RUTHERFORD—Cresa NJ—North/Central, a division of Cresa, LLC, released its fourth quarter 2011 market report, “The Tenant’s Guide.” The report cited several factors that indicate economic stabilization in 2012, with continued negative effects for the real estate sector.

Though there were indications of good news for the national economy—such as a 1.8 percent increase in national GDP to 3.25 percent and a decrease in unemployment to 8.6 percent—the report noted that it may have been temporary, citing inventory restocking and workers withdrawing from the workforce, neither of which indicate true growth.

Total Space Leased
*Both the Class A and Class B office sectors saw dismal numbers in total space leased.
*Class A space totaled 1.15 million sq. ft.leased in the fourth quarter—the lowest in more than a decade.
*Class B fared worse at 458,000 sq. ft. leased—the lowest in more than 15 years.

Class A Office
*Sublet vacancy rate for Class A space remained fairly constant for the last two years.
*Total vacancy rate saw a slight decrease from 16.5 percent to 16.4 percent.
*The average rental rate continued to decline—by 20 cents per-square-foot—to $26.32, from $26.52 in the third quarter.

Class B Office
*The total vacancy rate for Class B office space rose above 16 percent for the first time in more than 16 years, to 16.2 percent in the fourth quarter.
*The amount of space being marketed continued to approach 20 percent.
*Class B space also saw a negative net absorption of 437,000 sq. ft., three times the amount in the third quarter and the 12th consecutive negative quarter.

*The vacancy rate decreased from 9.2 percent to 9.1 percent.
*The average rental rate increased for the first time in three years, from $5.13 to $5.20.

Despite signs of increased weakness in the fourth quarter, the change was not significant enough to alter forecasts for a stabilized economic market in 2012. Given the historical lag time between job creation and real estate demand, the weak real estate market is expected to continue for some time.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.