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Open Office Space at 6-Year High
Wednesday, July 08, 2009 11:58 AM


(Source: The Record - Hackensack, New Jersey)trackingBy Andrew Tangel, The Record, Hackensack, N.J.

Jul. 8--Bergen County's availability rate for all classes of office space climbed to 24.3 percent in the second quarter from 20.8 percent in the first period, as that rate for northern and central New Jersey reached its highest level in six years, according to newly released commercial real estate data.

Companies continued to downsize operations in the second quarter, vacating or subleasing offices in North Jersey, as the recession dragged on.

Notably, 410,000 square feet of space in a three-story Englewood Cliffs building now occupied solely by Citigroup was put on the market for lease. A Citigroup spokeswoman said the company has no plans "in the near future" to vacate or sublease the check-processing facility. She would not elaborate and could not explain a four-week-old listing for all of the building's space with CoStar, a provider of commercial real estate data. Employees with CB Richard Ellis, the brokerage firm representing the building, either declined to comment or did not respond to requests for information.

"Any turnaround is really going to be tied to the economy," said Stephen Jenco, a researcher with Grubb & Ellis, which has offices in Fairfield. "Companies have to be making money to be hiring more employees."

New Jersey's jobless rate has risen to a 17-year high of 8.8 percent, and the state has lost nearly 65,000 jobs this year.

Including the Citigroup building, the availability rate for all classes of office space in the eastern Bergen County submarket rose to 35 percent in the second quarter, up from 24 percent in the first quarter. (Availability rates are similar to vacancy rates but include space available for lease but perhaps still occupied.)

Nearly half of the higher-end Class A office space in eastern Bergen County -- 45.3 percent -- was available for lease in the second quarter, according to the Grubb & Ellis data. In the first quarter, 30 percent of Class A office space in that part of the county was available for lease.

Grubb & Ellis classifies the eastern Bergen County submarket as the area encompassing Cliffside Park, Edgewater, Englewood, Englewood Cliffs, Fort Lee, Leonia, Palisades Park, Ridgefield Park and Tenafly.

In northern and central New Jersey, companies put about 2 million square feet of office space on the market in the second quarter. That is the largest amount since the fourth quarter of 2001 after the 9/11 terrorist attacks, Jenco said.




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