Jones Lang LaSalle


Industry Insider: Commercial space moving, new construction and all
Tuesday, March 28, 2006

On the surface, the first- quarter numbers on northern New Jersey's commercial real estate market paint the picture of a static business.

Available space dropped just .43 percent from last quarter, according to the latest research from CB Richard Ellis, the state's largest real estate brokerage. Also, average rent climbed a scant 13 cents, or about seven one-thousandths of a percent.

But dig a little, and the numbers begin to portray a steadily re bounding economy, since activity on the office market is often a bellwether for the economy as a whole.

About 930,000 square feet of newly constructed space is on the market, representing the first significant development in five years. Real estate executives are encouraged the market could absorb that much additional space without a significant increase in the availabil ity rate.

Also, while no building owner is going to be able to retire to Tahiti on a 13-cent quarter-over-quarter rent increase, it represents the fifth consecutive quarter of rising average rents in the market.

"We've had rental growth in most markets except the 287 corri dor," said Geoff Schubert, senior vice president of CBRE. "Deals are getting done."

Average rents are up 62 cents from last year at this time.

"The premium Class A space is going," Schubert added. "So the Class B and B-minus space that has been available for 18 months to two years is starting to lease, too."

-- Matthew Futterman