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Demolitions/conversions reduce office inventory and vacancy rate

• With the Northern and Central New Jersey overall vacancy rate ranging near 25.0 percent for the past six years, the demolition or conversion of older, vacant buildings to alternative uses made headlines in the office market during the first quarter.

• More than 1.7 million square feet of office space was taken out of the state’s inventory base in early 2018. The removal of these buildings exerted downward pressures on the overall vacancy rate, which declined 20 basis points from year-end 2017 to 23.9 percent. The vacancy rate had not been below 24.0 percent since early 2009.

• Nearly 40.0 percent of the 1.7 million square feet of office space removed from the inventory was located in the Parsippany submarket. Among the largest facilities taken out of the Parsippany inventory were two buildings totaling nearly 290,000 square feet at 1515 Route 10. The buildings are expected to be demolished to make way for a new mixed-use project planned by Stanbery Development.

Source: JLL Research

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