NORTHEAST SNAPSHOT, JULY 2007

New Jersey Shore Office Market

Glick

Cautious optimism is the general feeling among brokers and developers in the Monmouth County office market. The presence of a skilled workforce and the area’s proximity to major highways has many believing that companies are seeing the New Jersey Shore as an ideal location to conduct business.

New Jersey Shore’s office market has witnessed several development trends recently. A demand for new construction has increased, as tenants have come to realize that occupying space in a brand new facility costs the same as renewing their leases in Class A or B facilities. Newer buildings can sell better efficiencies than their dated competition, a major plus for developers and their brokers.

Another trend is the still growing demand for medical arts buildings, as long as the building is situated in the right location. The development location trends of 2006 are holding true into 2007, as towns located along the Garden State Parkway that have easy access to major highways throughout their communities are seeing a majority of the new projects. In addition to the medical sector absorbing a majority of the space on the New Jersey Shore, the office market is seeing a fair amount of activity from the financial service industry, such as accountants and insurance and mortgage companies.

The New Jersey Shore will see several new projects come online in the upcoming months. Sheldon Gross Realty is nearing completion of the Wall Professional Arts Building, located at the corner of Route 34 and Belmar Boulevard in Wall Township. Marathon Data Systems has leased 12,075 square feet — the entire second floor — and the company has leases out on all of the first floor. Construction will also begin soon on Wall Business Center, a 290,000-square-foot mixed-use corporate park. The first phase will consist of a 56,000-square-foot office building and a 67,000-square-foot flex building.

Class A rental rates on the New Jersey Shore are ranging from $22 per square foot/year + te to $36 per square foot/year + te. Office tenants, such as Eastern Title, which leased more than 13,000 square feet in the Meridian Center at Two Industrial Way West in Eatontown, will benefit from the New Jersey Shore’s great location, brand-new construction and reasonable rental rates. The combination of these factors makes developers, brokers and others involved in the New Jersey office market optimistic about the market’s performance heading into the second half of 2007.

— Jonathan M. Glick is senior vice president at Sheldon Gross Realty in West Orange, New Jersey.


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