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News release


New Jersey’s Class A Vacancy Rate Falls to Lowest Level Since 2008, According to Jones Lang LaSalle Report

Slow recovery still sees highest annual net absorption total since 2007

PARSIPPANY, N.J. Jan. 9, 2012 — Despite being in the midst of a slow recovery, the New Jersey office market is showing a few encouraging signs, with Class A space leading the way, according to new research from Jones Lang LaSalle. In the fourth quarter of 2011, the Class A vacancy rate fell for the third straight quarter to 23.3 percent — the lowest level since mid-2008.

As the flight-to-quality trend continues, leasing activity in the fourth quarter was driven mostly by Class A transactions, and was led by the financial services, manufacturing, educational services and pharmaceutical sectors. In comparison, Class B space remained relatively flat throughout the second half of the year. Net absorption for 2011 totaled more than 1.5 million square feet, which was the highest yearly total since 2007. 

“When you look at the year in full, we do see a number of hopeful signs such as overall leasing activity being up by more than six percent and the positive absorption rate total, but true recovery will not happen overnight,” said Jones Lang LaSalle Managing Director Dan Loughlin. “These numbers serve as a reflection of where the New Jersey office market stands now and what challenges and opportunities we face in 2012.”

Large deals — more than 100,000 square feet — drove activity throughout the year. However, according to Jones Lang LaSalle, the majority of the deals did not have a long-term positive effect on absorption.

“Most of the large deals completed in 2011 consisted of renewals, new construction or firms downsizing into more efficient space at new addresses,” Loughlin explains.
Submarkets experiencing strong leasing velocity in the fourth quarter were the Parkway Corridor, Route 78 and Central Bergen, while the Hudson Waterfront and Newark/Elizabeth markets both “hit bumps in the road,” as space became more expensive.

Fourth quarter highlights include:
  • The statewide total vacancy rate for Class A and B space was 24.9 percent, compared to 25.3 percent during the third quarter. In Northern New Jersey, it was 23 percent, while the rate in Central New Jersey was 27.7 percent. 
  • Noteworthy fourth-quarter lease transactions include Realogy relocating to 280,700 square feet at 175 Park Avenue in Madison; Church and Dwight leasing 250,000 square feet at 300 and 400 Princeton South in Ewing; and Deutsche Bank AG signing a 204,515-square-foot renewal at Two Gatehall Drive in Parsippany. 
  • Sales activity in the fourth quarter was dominated by two trophy properties in Jersey City changing hands and bringing the year-to-date sales total there to more than $1 billion. The two transactions included the sale of 525 Washington Boulevard for $377.5 million and 10 Exchange Place trading for $285.5 million. 
  • The average asking rents throughout the state rose slightly to $23.85 per square foot in the fourth quarter, compared with at $23.74 in the third quarter. Average rents in Central New Jersey were $22.44, while rents in Northern New Jersey were $24.97.

Jones Lang LaSalle’s team of in-house research professionals compiles the office market report, which provides an extensive analysis of the New Jersey real estate office market.

In New Jersey, Jones Lang LaSalle is a leader in commercial real estate brokerage, project management and investment sales. Employing more than 600 of the region’s most respected industry experts, the firm offers Office and Industrial Brokerage, Tenant and Landlord Representation, Project and Development Services, Property Management, and Capital Markets services to its clients in New Jersey. The operations also serve as the local service provider for the firm’s global and national corporate clients that have a presence in New Jersey.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.9 billion of assets under management. For further information, please visit our website,