Pharma leases help improve commercial vacancy rate

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An uptick in leasing activity in the Princeton and Route 78 submarkets helped New Jersey record its third straight quarter of positive absorption for office space, marking the first three-quarter string of growth in that sector since 2007, according a new report from Jones Lang LaSalle.

An uptick in leasing activity in the Princeton and Route 78 submarkets helped New Jersey record its third straight quarter of positive absorption for office space, marking the first three-quarter string of growth in that sector since 2007, according a new report from Jones Lang LaSalle.

The third-quarter report said leasing in those markets was driven by pharmaceutical and life sciences companies, including two of the three firms that signed deals for more than 100,000 square feet in the quarter. They were Novo Nordisk, which is moving to a 700,000-square-foot office at 800 Scudders Mill Road, Plainsboro; and Lifecell Corp., which leased 117,937 square feet at 95 Corporate Drive, Bridgewater.

Pharmaceutical firms accounted for more than half of the activity in the three-month period, according to the report, which includes data on northern and central New Jersey. Other notable deals included Qualcomm Flarion Technologies renewing its 125,472-square-foot lease at 500 Somerset Corporate Blvd., in Bridgewater.

“Year-to-date, (pharmaceutical firms) have made up almost one-third of leasing, while financial services, manufacturing and communications firms also helped propel 2011 transaction volume thus far,” the report said.

The Princeton, I-78, Central Bergen and Route 24 submarkets were seeing “some signs of improvement,” but the report gave a mixed view of statewide activity in the quarter, pointing to other segments such as the Meadowlands and Parsippany that saw available space rise.

The majority of absorbed space occurred within higher-quality Class A buildings, the report said, pointing to a continued flight to quality for most firms. Total Class A and B vacancy remained at about 39.6 million square feet, or 25.3 percent, through the end of September.