Middlesex County still the place to be - office real estate market in Middlesex County, New Jersey - Brief Article

New Jersey's Middlesex County office market has emerged as one of the state's hot spots at midyear 2000, with an estimated 1.1 million square feet in leasing during the first two quarters. Daily, we are seeing new requirements averaging 10,000 to 25,000 square feet from tenants in the telecommunications, software and web design, insurance and engineering fields.

The Woodbridge/Edison submarket, with 7.85 million square feet in inventory, has an overall vacancy rate of less than 10 percent -- down nearly three percentage points in the past 18 months. Within the Class A sector, which comprises more than 50 percent of the inventory in Woodbridge/Edison, the vacancy rate has dropped below 7 percent.

In Class A properties within Woodbridge and the Metropark area, spaces less than 5,000 square feet are virtually non-existent. Towne Corporate Centre in Edison has recently been repositioned for multi-tenant use, and has the submarket's largest block of available, contiguous Class A space -- 55,000 square feet. The property is already more than 70 percent leased, with active interest for the remaining space.

And, as space continues to tighten in traditionally-active submarkets like Woodbridge/Edison, we are beginning to see companies looking further south and west. As a result, historically high demand is being seen in other areas, particularly the predominantly Class B South Plainfield/Piscataway submarket.

Buildings like Southfield Center in South Plainfield are experiencing tremendous activity from expanding companies that cannot be accommodated in Woodbridge/Edison. This includes tenants already established in the region as well as those coming from North and South Jersey and out of state.

Should the market stay its course, we can expect to see an increase in new construction projects during the next 12 months. Already, developers like SIP Properties are considering breaking ground on speculative Class A projects. Within the Class B market, significant pre-leasing will still be required before any new construction commences. However, with the current level of demand, a 50 percent pre-lease at a Class B property is quite possible.

COPYRIGHT 2000 Hagedorn Publication
COPYRIGHT 2001 Gale Group