Q2 2019

NORTHERN NEW JERSEY

MARKET
IN
MINUTES
Savills Research

Availability tightens, even as leasing KEY STATISTICS y-o-y

velocity slows Q2 2018 Q2 2019 Change

Inventory 145.8 MSF 145.7 MSF

Availability in the Northern New Jersey Market ended the second quarter at 22.9%,
a 370-basis-point decrease year over year. Demand in existing product is strong, Availability Rate 26.6% 22.9%
as Class B and C space contributed greatly to the decline. Availability for Class B
Asking Rental Rate $28.08 $29.06
and C product declined 710 basis points over the same period, now at 17.5%. In the
largest lease of the quarter, biotechnology company Genmab committed to 90,000 Class A Asking Rental Rate $29.17 $30.17
square feet (sf) at 777 Scudders Mill Road, in Princeton. It was the only lease
Quarterly Leasing Activity 2.1 MSF 1.4 MSF
greater than 50,000 sf to be signed in the quarter. With fewer large transactions,
quarterly activity dropped to 1.4 million square feet, the lowest level seen in the
past five quarters. ASKING RENT TRENDS
Overall Asking Rent Class A Asking Rent
$40.00
Tenant options still plentiful with numerous large-block
availabilities $30.17
Tenants seeking large blocks of space, those 100,000 sf and greater, have $30.00
plentiful options throughout the market. Currently, there are more than 60
$29.06
buildings that have blocks of 100,000 sf or greater available for occupancy $ / SF

$20.00
within the next 12 months. The largest space to come to the market this quarter
was a significant sublease listing at 200 Plaza Drive in Secaucus, where the entire
250,000-sf building is available. The building is just one of 15 blocks of sublease $10.00
space on the market in this size range. Others include 300 Somerset Corporate
Boulevard, a 310,000-sf building in Bridgewater and AECOM’s 234,000-square-
$0.00
foot block at 510 Carnegie Center in Princeton. Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019

Notable sales activity continues through mid-year AVAILABILITY TRENDS

Several notable office sales transactions were seen in the suburban markets 40.0%
Overall Availability Class A Availability

throughout the second quarter. The largest sale of the quarter occurred in
the Brunswick submarket as 1 Tower Center Boulevard sold for $38.0 million.
30.0%
Boston Properties sold the 417,000-sf property to American Equity Partners, the
24.5%
building was 39.0% leased at the time and considered a non-core asset by Boston
Properties. Other notable sales included 445 South Street, a 320,000-sf Class A 20.0% 22.9%

office building in the Morristown submarket. The property was 93.0% leased at
sale and the price was undisclosed.
10.0%

0.0%
Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019

LEASING ACTIVITY
Outlook Quarterly Leasing Activity 5-Year Quarterly Average
5.0
• A lull in leasing activity raises concern as demand should be 4.5
stronger given relatively tenant-favorable market conditions 4.0
and numerous opportunities within the market
Square feet (millions)

3.5
3.0
• Large-building sales continue to support of long-term
2.5
interest and investment in the Northern New Jersey market
2.0
• The remainder of 2019 will closely watched for large tenant 1.5
activity and new office groundbreakings to signal sustained 1.0
strength throughout the region 0.5
0.0
Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019
 Northern New Jersey Market in Minutes - Q2 2019

MAJOR TRANSACTIONS

91.9% 22.7% 48.0%

of major transactions were new market of large transactions occurred in the Biotechnology and healthcare
entrants, expansions or relocations West Bergen submarket represented 48.0% of major
transactions

Tenant Square feet Address Transaction type Submarket Industry

Genmab 90,000 777 Scudders Mill Road New Princeton Biotechnology

Whole Foods 47,398 286 Washington Street Relocation Waterfront Retail

Health Monitor Network 46,800 11 Philips Parkway Relocation West Bergen Healthcare

DeCotiis, FitzPatrick, Cole &

42,000 61 S Paramus Road Relocation West Bergen Legal Services
Giblin LLP

Matheson Tri Gas 35,000 3 Mountainview Road Relocation I-78 Chemical

Celldex Therapeutics 33,363 53 Frontage Road Renewal I-78 Healthcare

For more information,
McManimon, Scotland &
31,904 75 Livingston Avenue Expansion Suburban Essex Legal Services
please contact us:
Baumann, LLC

Ericsson 29,705 1 Centennial Avenue Relocation Middlesex Telecommunications

Savills
The Meadows
Air Liquide 29,320 3040 US Highway 22 Relocation I-78 Chemical 201 Route 17 North,
Suite 902
Nature's Bounty 28,745 180 Park Avenue New Morris Healthcare Rutherford, NJ 07070
+1 201 556 9700

Source Savills Research

Thomas R. Carragher
Executive Vice President
tcarragher@savills.us
AVAILABILITY RATE COMPARISON RENTAL RATE COMPARISON ($/SF)
Northern New Jersey Submarkets Northern New Jersey Submarkets Gregg K. Najarian
Executive Vice President
Monmouth 16.7%
gnajarian@savills.us
Waterfront $43.75

Waterfront 18.2% Urban Essex $29.31

Lesley Kamnitzer
Route 22 19.0% NNJ Overall $29.06 Senior Research Manager
East Bergen 19.0%
lkamnitzer@savills.us
Morris $28.98

Middlesex 20.1% East Bergen $28.60

About Savills Inc.
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West Bergen 21.5% Monmouth $27.15 integrated teams of consultants and
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Meadowlands 22.3% Suburban Essex $27.14
estate. With services in tenant
Princeton 22.8% representation, workforce and
I-78 $26.89
incentives strategy, workplace
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Morris 29.8% Wayne $24.31

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Unless otherwise noted, all rents quoted throughout this report are average asking gross (full service) rents per square foot (psf). Statistics are calculated using
both direct and sublease information. Current and historical availability and rent data are subject to change due to changes in inventory.

The information in this report is obtained from sources deemed reliable, but no representation is made as to the accuracy thereof. Unless otherwise noted,
source for data is Savills research.

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