13
Morristown
Limited Class A vacancies in downtown Morristown have
encouraged developers to unveil new construction endeavors.
The Silverman Group is planning onSouth, which would involve
adding 110,000 square feet of new office space above existing retail
storefronts at 54-80 South Street and 10 Pine Street. A 290-space
private automated parking garage is also proposed at the site. A
joint venture between Prism Capital Partners, The Hampshire Cos.
and Gramercy Property Trust has received approvals to add two
12,000-square-foot floors onto an existing office building at 21 South
Street. When completed, the structure will consist of a six-story
70,000-square-foot Class A building. In addition, SJP Properties has
proposed developing two office buildings totaling approximately
340,000 square feet, as part of a redevelopment project called M
Station at Morristown.
Net new supply
sf
Morristown is located approximately 30 miles west of
Manhattan and is the county seat for Morris County. Passenger
rail service is accessible via the Morristown Station and
Convent Station on New Jersey Transit’s Morris & Essex
Morristown line. Most of the office buildings in the Morristown
transit hub market are located in proximity to the Morristown
Station, with buildings on Madison Avenue being near
Convent Station. After slipping below 11.0 percent in 2018, the
Morristown overall vacancy rate changed course and eclipsed
13.0 percent in mid-year 2019, as availabilities edged tenant
requirements. The higher overall vacancy rate was attributed
to additional Class B office availabilities, including more than
12,740 square feet of direct space marketed at 163 Madison
Avenue - Morristown Plaza 2. The Morristown Class A vacancy
rate remained below 10.0 percent, which was the lowest Class
A vacancy rate among the suburban transit hub markets.
Notable deals recently inked in this submarket included
Alvogen Pharma US’ leasing of 84,610 square feet at 44
Whippany Road. Melinta Therapeutics, Keller Williams Realty
and Orloff, Lowenbach, Stifelman & Siegel also collectively
absorbed more than 52,220 square feet at this Class A building,
which had undergone a $7.0 million capital improvement
program in 2017. The Morristown average asking Class A
rental rate approached $31.70 per square foot in mid-2019,
compared to less than $29.40 per square foot at year-end 2018.
Net absorption
total vacancy
18.0%
300,000
200,000
16.0%
100,000
14.0%
0
12.0%
-100,000
-200,000
2015
2016
2017
2018
Mid-2019
10.0%
Summit
With an office inventory base consisting of six buildings totaling
less than 400,000 square feet of rentable space, Summit is the
smallest transit hub market in Northern and Central New Jersey.
Nearly three-quarters of this inventory consisted of Class A office
buildings. Because of its small size, the submarket is susceptible
to dramatic fluctuations in its vacancy rate. This was evident
during the past six months, as the Summit overall vacancy rate
climbed from one percent at year-end 2018 to nearly 8.0 percent
at mid-2019. Yet, this market maintained the lowest overall
vacancy rate among the suburban transit hub markets. The higher
vacancy rate was attributed to 11,000 square feet of direct space
available at 535 Springfield Avenue, while 13,560 square feet
was marketed for sublease at 25 Deforest Avenue. These blocks
represented the largest availabilities in Summit.
Net new supply
Located in Union County, Summit sits approximately 20 miles
west of Manhattan. Summit is also one of the most affluent towns
in New Jersey, boasting a per capita income of more than $75,820
in 2019. Routes 24 and 124 run along the eastern boundary of
Summit, while Interstate 78 runs along the southern portion. New
Jersey Transit’s Morristown Line and Gladstone Branch merge at
Summit station, which provides passenger rail service to Hoboken
Terminal or New York Penn Station.
Net absorption
total vacancy
80,000
25.0%
60,000
20.0%
40,000
15.0%
20,000
10.0%
0
5.0%
-20,000
-40,000
2015
2016
2017
2018
Mid-2019
0.0%