NJ TRANSIT HUB PERSPECTIVE | SUMMER 2018

2017 RBA Total Available Space ( sf )

Overall Vacancy Rate

Overall Avg . Asking Rental Rate

% Rent Change From 2016

Overall Transit Hub Market 43,607,524 8,489,792 19.5 % $ 31.92 -1.7 % Urban Transit Hub * 32,470,241 6,405,066 19.7 % $ 32.43 -1.1 % Suburban Transit Hubs ** 11,137,283 2,084,726 18.7 % $ 29.75 -2.1 % Suburban New Jersey *** 117,020,934 30,312,267 25.9 % $ 24.95 -4.1 % 2016 RBA Total Available Space ( sf ) Overall Vacancy Rate Overall Avg . Asking Rental Rate Overall Transit Hub Market 43,562,524 8,371,892 19.2 % $ 32.46 Urban Transit Hub * 32,470,241 6,506,042 20.0 % $ 32.78 Suburban Transit Hubs ** 11,092,283 1,865,850 16.8 % $ 30.38 Suburban New Jersey *** 116,308,668 30,763,636 26.4 % $ 26.02

Yellow signals remained in effect for several of the Northern and Central New Jersey transit hub markets during 2017 as the combination of additional vacancies and downshifting leasing velocity exerted upward pressures on vacancy rates . Since bottoming out below 17.0 percent in 2015 , the overall transit hub vacancy rate ticked higher for the next two years . By the end of 2017 , the transit hub vacancy rate had reached 19.5 percent , which represented a 30 basis point increase from 2016 .

Diminished office tenant requirements overshadowed the transit hub markets in 2017 . After averaging more than 3.0 million square feet of leasing transactions per year from 2014 through 2016 , less than 2.0 million square feet of deals were signed in the transit markets during 2017 . This was a nearly 42.0 percent decline in activity from 2016 .

30 %

* 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

Against the backdrop of the higher vacancy rate witnessed in the Northern and Central New Jersey transit hub market , average asking rental rates slipped from nearly $ 32.50 per square foot in 2016 to less than $ 32.00 per square foot one year later . With the exception of Morristown , Newark and New Brunswick , the remaining five transit hub markets registered lower year-over-year asking rents .

Despite the higher transit hub vacancy rate seen in 2017 , green signals are expected to return as companies pursue office space options in proximity to walkable amenity-rich areas and with access to mass-transit options for their workforces and clients . Among the comments being voiced by office occupiers spanning a broad spectrum of business sectors is the desire to locate their operations near millennials and with access to mass transportation .

Overall Vacancy Rates 2016 vs 2017 $ 35 Overall Asking Rental Rates 2016 vs 2017

Overall Transit Hub Market Urban Transit Hubs Suburban Transit Hubs Suburban NJ