Bright Spots, Opportunities & Challenges for New Jersey’s Commercial Real Estate
With the seasons changing (perhaps one of my favorite times of year in New Jersey), there’s another aspect of this month that I always look forward to – new trends worth tracking, the end of the third quarter pushing us into the final stretch of the year and the release of market reports from nearly every major brokerage.
In general, I’m pretty bullish on New Jersey – after all, there’s a lot to love about the Garden State. But beyond our beautiful beaches, a plethora of diners and restaurants, and a wide variety of arts and entertainment just a short drive away, here are some real estate market bright spots, opportunities and roadblocks that caught my attention:
Office market showing encouraging signs
The office market has struggled to find its footing even several years now post-COVID, but in Q3 – a flurry of large deals is providing a glimmer of hope. According to CBRE’s Northern & Central New Jersey Q3 market report, Class A properties are continuing to outperform the rest – accounting for 91% of all leasing activity. It’s worth noting that these assets are appealing to tenants for a variety of factors including prime locations, amenities, vibrant environments and quality workspaces.
Colliers also noted that prominent headquarters relocations, including Samsung to Englewood Cliffs and Unilever to Hoboken, contributed to a stable third quarter.
The industrial market is still humming
Rising vacancy rates are coming with new construction delivery, but demand remains strong – according to a NAI James E. Hanson’s Q3 Industrial market report. This quarter tends to be the slowest part of the year, but year-over-year leasing activity was up this quarter as a result of several large deals.
One trend worth watching as we look ahead to the start of the new year will be the dockworkers strike, which is suspended until January 15, but could resume and bring major economic impacts to the industrial sector should it become prolonged.
Retailers are getting creative
Retail is another sector that was impacted greatly by the pandemic, but the economy and inflation are also factors that have influenced buyer preferences and spending. Experiential retail has continued to breathe life into brick-and-mortar, but in order to succeed – retailers are finding they need to be persistently creative. That’s exactly what’s happening with pop-up retailer Spirit Halloween stores.
Known as a superstore for Halloween decorations, costumes, props and accessories, Spirit is not getting into the Christmas spirit with the launch of Christmas stores in key markets. A flagship Spirit Christmas store in May’s Landing, New Jersey, will be the first to open on October 18 and will test a new model for this pop-up retailer. Only time will tell if this strategy will prove to be successful, but I’ll be happily watching to see if any of these will make their way up to North Jersey.
Market analysis key to CRE communications
What data are you tracking? And are there any trends in this quarter that you find exciting? Reach out to us at hello@violetpr.com to continue this discussion!
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Amanda Ferraro is a Senior Account Manager at Violet PR. Highly skilled in media strategy and client relations, Amanda currently drives success for Violet’s real estate and economic development clients with a focus on the Northeast region.