According to Transwesternās Second-Quarter 2016 Office Market Report, the New Jersey office market has experienced year-over-year rent increases in 18 of its 21 submarkets. Average asking rents have climbed to more than $26 per square foot for the first time since 2008. Last quarter also marks the first time since 2012 that the market experienced four consecutive quarters of rent growth. Net absorption was also positive for the fourth time in the past five quarters.
In response to the tightening market, landlords are continuing to add significant amenities and conveniences, which, in many cases, are now considered necessities. In particular, mixed-use has become part of the office model in New Jersey, as developers are considering retail, entertainment and grocery options in order to promote foot traffic.
āLandlords in markets with high demand are raising asking rents, for the most part by 50 cents to $1 per square foot, but in some cases by as much as $3 per square foot,ā said Transwesternās New Jersey Research Director Matthew Dolly. āOwners with available capital continue to invest in and modernize facilities to add significant amenities and provide conveniences for tenants, that, for the most part, will pay for those premiums.ā
