Economy
- July: According to the Labor Department, the US labor markets continued its long march back from the recession with steady job–215,000. On average, employers have now added 235,000 jobs per month, over the past three months. Average earnings for the private sector workers rose five cents
in July to $24.99. - August: China’s economic struggles have threatened to undermine the US economy. Oil opened below $40 per barrel and cheaper import costs sparked concerns about low inflation. The Fear Index VIX spiked above 50 in August, for the first time since 2009, when it hit a dizzying 80.
- September: State unemployment trended in a positive direction to 5.1%.
- The Federal Reserve kept interest rates unchanged amid worries about weak global growth.
- Unemployment headed below 5% and the ten year treasury fell below 2%.
- Growing uncertainty regarding the global outlook continued to be in stark contrast to the strengthening performance of the US economy.
Office
- A steady appetite to upgrade tenant space into class A facilities impacted the positive absorption in a few of the NJ markets. The Parsippany region, one of the principal winners this quarter, leased 125,445 SF at 10 Sylvan Way for Zoetis’ global headquarters and Western World Insurance Group
took 87,410 SF at 300 Kimball Drive. - Despite the slow recovery, the asking rents have increased slightly due to steady job growth.
- According to the Bureau of Labor Statistics, the labor force was positive in the financial (0.5%), education & health services (2%), leisure & hospitality (2.3%) and other services (4%).
- The majority of leasing activity was contributed by the sectors in Life Sciences, Banking and Financial and Business Services.
Retail
- The retail net absorption was moderate with a positive 799,863 SF and over the past four quarters, the market has seen an overall decrease in the vacancy rat, it is currently at 5.3%, reports Costar.
Industrial
- The NJ Industrial market continues to strengthen as asking rents trended higher, sale prices improved and availability declined due to the tightening demand and increased urgency for space.
- The dwindling supply has acted as a catalyst for new development (2.36MSF), mainly on a speculative basis, demonstrating developers bullish position on the NJ industrial market.
- Total containers loads increased 7.6% year over year.
- E-Commerce continued to fuel the drive for demand, to date Amazon has over 3MSF in NJ.
- The American Dream Project received a tax break of $390M which is +/-20 % of the total project cost. The project includes 2.3MSF of retail space and +/-350KSF amusement space.
