17
Overall vacancy rate
The overall transit hub market (which includes urban and
suburban hubs) had been defined by lower vacancy rates
and higher rental rates compared to the suburban New
Jersey office market during the past several years. While the
suburban office market vacancy rate declined 50 basis points
from 2016 to less than 26.0 percent in 2017, this vacancy rate
remained more than six percentage points above the 19.5
percent vacancy rate posted in the transit hub markets. The
withdrawal of several blocks of space from the market, rather
than increased tenant requirements, contributed to the lower
suburban vacancy rate.
A closer look at the overall transit hub market revealed that the
urban and suburban hubs navigated divergent courses during
the past year. The urban transit hub market (which includes
Hoboken/Jersey City, Newark and Trenton) vacancy rate
slipped 30 basis points from 2016 to 19.7 percent in 2017. The
lower vacancy rate was traced to an uptick in demand within
the Hoboken/Jersey City market, where Tory Burch leased
93,000 square feet at 499 Washington Boulevard in Jersey City
and L’Oréal USA absorbed 60,000 square feet at 111 Town
Square Place, also in Jersey City.
In contrast to the lower urban transit hub vacancy rate, the
suburban transit hub market (which includes Metropark,
Morristown, Princeton and Summit) vacancy rate approached
19.0 percent compared to less than 17.0 percent in 2016.
Additional availabilities in the Metropark and Princeton
submarkets boosted the suburban transit hub vacancy
rate higher.
Meanwhile, newer office buildings housed in transit hub markets
posted the lowest vacancy rates, as tenants have sought modern
work environments for their operations. Buildings completed or
extensively renovated since 2000 boasted a vacancy rate of only
15.4 percent in 2017. The only new construction underway in the
transit hub markets consisted of a former industrial building at
Ironside Newark being converted into 402,530 square feet of office
and retail space.
30.0%
27.5%
27.2%
25.9%
25.0%
20.0%
19.9%
19.7%
19.5%
18.7%
18.8%
17.5%
18.4%
16.9%
16.7%
15.0%
10.0%
2013
2014
Overall Transit Hub Market
2015
Urban Transit Hubs
2016
Suburban Transit Hubs
Suburban NJ
2017