Brokerage in the field of commercial real estate WCRE reported in his second quarter analysis that Markets in Southern New Jersey and Southeastern Pennsylvania are cautiously entering the post-pandemic recovery period. While the problems are still unresolved, commercial real estate appears to be recovering along with the broader economy.
So said Jason Wolfe, founder and managing director of WCRE, a commercial real estate brokerage firm that operates in the South Jersey and Philadelphia markets.
“The fundamentals are moving in a positive direction, and while various challenges remain, conditions exist that indicate a return to pre-pandemic CRE levels,” he said.
In the three counties surveyed (Burlington, Camden, and Gloucester), approximately 233,544 square feet of new leases and renewals were concluded. While this figure is not indicative of a recovery, it does mark the return of net positive takeover, Wolf said.
New tenant leases were approximately 123,358 square feet, or about 53% of all deals in the three counties. In the previous quarter, this figure was only 8% of the total.
Key Features of the South Jersey Office Market:
- The total vacancy rate in the market is now about 13.6 percent, almost unchanged from the previous quarter, and is consistently two points higher than it was at this point last year;
- The sales market was gaining momentum: 1,257,385 square feet are actively marketed or as agreed;
- Average rental rates for Class A and B products remain unchanged as they continue to show strong support in the $ 10 to $ 15 per NNN square foot or $ 20 to $ 25 per gross square foot for transactions completed during the quarter. These averages have hovered around this range for over a year.
Highlights of the South Jersey retail market:
- The consumer confidence index has been growing steadily since its change in February.
- Retail vacancy in Camden County jumped more than three points to 14.3 percent, following significant growth in mid-2020. While the average rents rose by more than one dollar, in the range of $ 12.86 per NNN square foot.
- Burlington County retail vacancy fell to 9.6%, up three quarters. But it is still well above the 7.6 percent it was a year ago. Average rents increased slightly to $ 14.59 per NNN square foot.
- Gloucester County saw another quarterly rise to 16.5 after rising last year, with average rents virtually unchanged at $ 14.08 per NNN square foot.