New Jersey Office Figures Q3 2023

October 9, 2023 5 Minute Read

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The economic headwinds facing the office sector caused a pullback during Q3, slowing office leasing activity to 839,000 sq. ft.—32% below the five-year quarterly average. Renewal volume spiked during the quarter, which is typical during periods of economic uncertainty. Average asking rent remained flat at $31.77 per sq. ft., while available supply increased. New blocks of space contributed to 288,000 sq. ft. of negative absorption, pushing the availability rate up 20 bps quarter-over-quarter to 25.0%. While most headline stats skewed negative during Q3, there were some green shoots regarding supply in the market. Improved sublet leasing volume and tenants re-occupying sublease space caused a 3.2% quarterly decline in available sublease space. The New Jersey office market continued to experience the removal of obsolete office stock through conversion and demolition for alternative use. Year-to- date, there was 2.6 million sq. ft. of space removed from office inventory, which has helped curb supply amid this period of transition within the office sector. The elevated interest rate environment remains top-of-mind for owners and occupiers alike, as impacts to building value, increased costs to refinance maturing loans and the ability to fund tenant improvements has created another hurdle keeping deal flow muted.