The first three months of the year have seen activity picking up in the commercial lease market, continuing a trend of decreased vacancy in the state that started in 2011.
According to the year-end survey put out today by The Goldstein Group, vacancy rates decreased to 7.9 percent in northern and central New Jersey at the end of last year, the lowest rates since January 2009.
Jason Pierson, president of Pierson Commercial Real Estate said fitness and food companies are leading the way in leasing.
“There’s a lot of activity, it seems everyone is very positive about the market in general, and there’s a lot of locals and regionals that are looking now,” Pierson said. “There’s less concessions being given by landlords … and I think you’re going to see market rates increasing due to the increased level of competition. But I’ve also seen it takes longer to get deals done.”
Pierson said fitness centers that lease from 3,000 to 15,000 square feet are the most active searchers for space. Included in the fitness mix are wellness centers, sponsored by hospitals. Pierson said Robert Wood Johnson and CentraState hospital systems are among the most active in opening these facilities in Central Jersey.
Among restaurants, fast-food chains such as White Castle and Wendy’s are actively looking to lease in the state, as well as multiple fast-casual burger chains and sit down restaurants like Bonefish Grill and Red Robin.
According to the Goldstein survey, decreasing new construction has helped steady the vacancy rate, while national retailers like Home Goods, Harbor Freight & Tool and Hobby Lobby are entering the state.
Goldstein also reported an increase in the number of doctors and dentists opening locations in shopping centers. Earlier this month, Valley Health System opened a new urgent care facility in a Wayne shopping center.
“In Central Jersey you’re not seeing it as much — it’s more northern New Jersey, and they’re in-filling a lot of larger spaces,” Pierson said, adding that rehabilitation services also are in the leasing market.