Northern New Jersey Office Investment Forecast
Corporate Arrivals and Mild Pipeline Bolster Outlook;
Suburban Office Revival Varies By Locality
Stage set for steady upward growth. Contrasting many other regional markets, Northern New Jersey's office fundamentals remained relatively stable throughout the health crisis. At maximum, the local average asking rent fell just 1.3 percent below its immediate pre-pandemic level, and it is expected to surpass its previous peak by the end of this year. Solid fundamentals can be attributed in part to a comparatively restrained construction pipeline. After only 343,000 square feet of space was completed last year, delivery volume in 2022 is expected to remain under the trailing decade average, with 530,000 square feet finalized by the end of the fourth quarter. Meanwhile, office demand is buoyed by New Jersey's proactive tax incentive offerings, helping fuel a wave of corporate relocations and commitments to facility upgrades concentrated in the region's suburban core. Firms including Fiserv and Quest Diagnostics made agreements to significantly expand area offices and local headcounts, with Party City confirming a planned relocation to the market from its current campus in New York. Renewed interest in suburban stock is poised to benefit the metro, especially inland business districts away from the Hudson waterfront.