Comparing markets
NJ TRANSIT HUB PERSPECTIVE | MID-YEAR 2019
Office market summary
RBA Total Available
Space (sf) Overall Vacancy
Rate Overall Avg. Asking
Rental Rate % Rent Change
From 2018
Overall Transit Hub Market 43,993,427 8,802,721 20.0% $34.53 0.3%
Urban Transit Hubs* 32,894,560 6,365,607 19.4% $36.42 1.5%
Suburban Transit Hubs** 11,098,867 2,437,114 22.0% $30.46 -0.7%
Suburban New Jersey*** 112,787,608 27,079,462 24.0% $25.50 0.4%
Mid-Year 2019
2018
RBA Total Available Space (sf) Overall Vacancy Rate Overall Avg. Asking Rental Rate
Overall Transit Hub Market 43,259,472 8,859,446 20.5% $34.41
Urban Transit Hubs* 32,160,605 6,482,364 20.2% $35.89
Suburban Transit Hubs** 11,098,867 2,377,082 21.4% $30.67
Suburban New Jersey*** 115,398,307 28,231,770 24.5% $25.41
* Urban Transit Hubs include Hoboken, Jersey City, New Brunswick, Newark and Trenton
** Suburban Transit Hubs include Edison, Iselin, Morristown, Princeton and Summit
*** Suburban New Jersey includes office submarkets located in the state’s suburban areas
Summary of analysis
Despite the strong headwinds generated by diminished leasing
volume seen in the Northern and Central New Jersey office
market during the past few years, the overall vacancy rate in the
state’s transit hub submarkets declined 50 basis points from year-
end 2018 to 20.0 percent in mid-2019. Smaller-sized transactions
exerted downward pressures on the transit hub vacancy rate.
Nearly 60.0 percent of the deals signed during the first half of
2019 were in the 10,000-square-foot to 25,000-square-foot range.
Class A office space was the product of choice for tenant
requirements in the transit hub markets. More than 95.0 percent
of the leases completed during the first half of 2019 were
concentrated in Class A buildings. The transit hub market Class A
vacancy rate subsequently declined from nearly 19.0 percent in
2018 to 18.3 percent. This was in contrast to the state’s suburban
office market’s Class A vacancy rate, which was above 26.0 percent
in mid-2019. Persistent demand for Class A space will maintain
upward pressures on rental rates. The transit hub average asking
Class A rental rate was nearly $38.50 per square foot compared to
less than $27.90 per square foot for the suburban market.
The Garden State’s transit hubs are expected to remain active as
office occupiers spanning a broad spectrum of business sectors
pursue space options in proximity to walkable amenities and
with access to mass-transit options for their employees. There
were approximately 2.6 million square feet of office requirements
navigating these markets in mid-2019. This represented an increase
from the 2.1 million square feet seen last year. Furthermore, there
were more than 10 requirements for space in excess of 100,000
square feet in the state’s transit hub markets.
Market trends
10%
2018
Mid-2019
Overall Transit Hub Market
$15
Urban Transit Hubs
2018
Suburban Transit Hubs
Mid-2019
Suburban NJ
$20
$25
15%
$30
$35
25%
20%
Overall Asking Rental Rates 2018 vs Mid-Year 2019
$40
Overall Vacancy Rates 2018 vs Mid-Year 2019
30%