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Office leasing velocity down, but vacancy rate ticks lower in early 2018

• Leasing velocity remained constrained in the Northern and Central New Jersey office market as just over 1.3 million square feet of leases were completed in early 2018. This represented a 40.0 percent decline in activity from the same timeframe one year ago.

• Furthermore, most of the demand witnessed during the past year was generated by smaller-sized leases. This was evident during the first quarter by the lack of completed transactions larger than 100,000 square feet in size.

• Yet, the state’s overall vacancy rate slipped 20 basis points from year-end 2017 to 23.9 percent. The vacancy rate had not been below 24.0 percent in nine years. The removal of 1.7 million square feet of office product from the inventory base contributed to this decline.

• Looking ahead, an uptick in touring activity, combined with additional tenant requirements in the office market, could signal that demand will rebound in the coming quarters.

Source: JLL Research

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