nj 2015 year in review

© Cushman & Wakefield | 1

New Jersey 2015 Year in ReviewEconomic, Office, Industrial


Market Share


C&W #1 for both Tenant and Landlord Representation during the year (by SF leased)

2015 Office Market Share (leases 10,000 sf +)

C&W, 35.2%

CBRE10.2%JLL

10.0%Savills Studley

5.0%

NGKF4.4%

Colliers2.8%

Other (<2%)32.4%

Tenant Rep Landlord Rep

C&W, 25.5%

CBRE14.5%

JLL8.1%

NGKF6.4%

Colliers, 2.6%

Transwestern2.1%

Other 40.8%


New Leases 100,000 SF +

2015 Industrial Market Share

JLL, 31.3%

CBRE, 26.4%

C&W21.7%

Resource Realty2.0%

Bussel Realty, 1.6% Other

17.0%

Landlord Rep

C&W, 29.0%

JLL8.6%

CBRE4.5%

Team Resources

SBWE, 4.2%NGKF, 3.1%

Colliers, 3.1%

Other/Unknown47.5%

Tenant Rep

79 Deals Completed 100,000 sf + during 2015 (60% of total volume)C&W Involved in 27 of those


Economy


1990 vs 2015

New Jersey Employment by Industry – then and now

Source: U.S. Bureau of Labor Statistics

Manufacturing15.7%

Professional & Business Svcs

13.0%

Information3.6%

Retail13.0%Government

17.1%

Leisure & Hospitality

8.0%

Education & Health Svcs

10.8%

Trade, Transportation,

& Utilities11.7%

Financial7.0%

Trade, Transportation

& Utilities21.7%

Education & Health Svcs

16.2%

Professional & Business Svcs

15.7%

Government15.6%

Leisure & Hospitality

8.6%

Financial Activities

6.1%

Manufacturing6.1%

Other4.3%

Construction3.9%

Information1.9%

1990

2015


New Jersey unemployment finally almost even with the national rate

New Jersey vs. U.S. Unemployment Rate

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

Perce

nt of

Labo

r For

ce

National Recessions US Rate NJ Rate



As of December 2015

Jobs Recovered Since Trough


22.1%

19.1%

16.4%

15.6%

15.0%

14.7%

14.5%

13.7%

13.7%

13.1%

12.5%

12.5%

12.3%

12.1%

12.1%

11.7%

10.6%

10.5%

10.5%

10.5%

10.0% 9.9

%9.6

%9.5

%9.3

%9.0

%8.7

%8.2

%7.6

%7.5

%7.3

%7.3

%6.9

%6.9

%6.7

%6.7

%6.4

%6.4

%6.4

%5.6

%5.6

%5.5

%5.4

%5.3

%5.3

%4.6

%4.4

%3.6

%3.5

%3.2

%1.5

%

0%

5%

10%

15%

20%

25%

New Jersey: 5.4%, #43


2015 Was The Best Year Since 2000

Annual Change in New Jersey Private Sector Employment


-200

-150

-100

-50

0

50

100

Thou

sand

s of P

erso

ns


Recent office-using employment gains finally spur vacancy decline

New Jersey Office-Using Employment vs. Vacancy

15.0%

16.0%

17.0%

18.0%

19.0%

20.0%

21.0%

900

910

920

930

940

950

960

970

980

990

1,000

Thou

sand

s of P

erso

ns

Office Using Employment Vacancy Rate


127,900 more jobs anticipated through 2017

New Jersey Employment Forecast

Source: U.S. Bureau of Labor Statistics, Moody’s Analytics

3,800

3,850

3,900

3,950

4,000

4,050

4,100

4,150

4,200

4,250

4,300

Thou

sand

s of P

erso

ns


New Jersey Office Market


4Q 2015 Statistics and Highlights


18.7% VACANCY

Lowest Since 2011

2.0M SF OVERALL NET ABSORPTIONHighest since 2001

10.9M SF NEW LEASING ACTIVITYHighest in 10 Years

$26.15 AVG RENTAL RATE

1.7% YOY Rise

4 CONSECUTIVE QUARTERS

Of Positive Net Absorption

34.2% INCREASE IN LEASING

Compared to 2014


Overall Vacancy vs. Average Direct Asking Rents


6.0%

10.0%

14.0%

18.0%

22.0%

26.0%

$20.00

$22.00

$24.00

$26.00

$28.00

$30.00

NNJ Direct Rental CNJ Direct Rental NNJ Overall Vacancy CNJ Overall Vacancy


Class A Average Direct Asking Rents


$29.48$29.94

$28.39

$24.00

$25.00

$26.00

$27.00

$28.00

$29.00

$30.00

$31.00

$32.00

New Jersey Total Northern NJ Central NJ


Historical Overall Net Absorption


-5,000,000

-4,000,000

-3,000,000

-2,000,000

-1,000,000

0

1,000,000

2,000,000

3,000,000

New Jersey Total Northern NJ Central NJ


Year-Over-Year Vacancy Rates by Submarket


10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%2014 2015


Historical Gross Leasing Activity


0

2

4

6

8

10

12

Squa

re F

eet (

Millio

ns)

10.9Verizon’s 1.35 msf

sale/leaseback

10 year Average – 8.55 MSF


2015 Leasing Activity by Submarket


I-7823%

Bergen County13%

Waterfront12%

Parsippany8%

Woodbridge/Edison7%

Princeton/Rt 17%

I-280 Corridor5%

Route 10/244%

Meadowlands3%

Other18%

10.9M SFTOTAL


2015 Leasing by Industry


Communications, 14.7%

Pharmaceutical, 11.0%

Information Technology, 10.5%

Finance, 10.4%

Insurance, 6.1%Business Services, 4.9%

Other, 42.4%


Northern and CentralNew Jersey Industrial Market


4Q 2015 Statistics

Northern and Central New Jersey

6.4% VACANCY

15-Year Low

12.5M SF OVERALL NET ABSORPTION

All-Time High

27.2M SF NEW LEASING ACTIVITY

Highest This Century

$6.06 PSF AVERAGEW/D ASKING

RENTAL RATEHighest Since 2000

11 SPECULATIVE DELIVERIES DURING 2015

Totaling 3.5M SF

BUILDINGS CURRENTLY UNDER

CONSTRUCTIONTotaling 4.0M SF


Warehouse Overall Vacancy Rates vs. Rental Rates


$5.22

$5.15

$5.11

$5.11

$5.03

$4.95

$4.93 $4.98

$5.01 $5.06

$5.05 $5.10 $5

.20

$5.18

$5.20 $5.26 $5

.45 $5.61

$5.56

$5.60 $5.68 $5.73 $5

.97 $6.06

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Rental Rates Overall Vacancy Rate


New Leasing Activity


6.92 6.312.31 2.93

5.66 5.03 5.33 6.49 5.99

5.77

2.63

3.724.36

6.555.20 5.32

6.01 6.00

5.30

3.82

2.452.90

5.68

4.125.15

5.91 6.93

5.18

4.30

5.15 2.57

5.50

3.34

5.09

4.61

8.24

0

5

10

15

20

25

30

Q1 Q2 Q3 Q4

17.717.1

13.6

23.423.2

21.323.0

27.2

12.8


New Leasing Activity by Major Submarket


0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

2014 2015


2015 Leasing by Size Range


9.8%

11.4%

19.9%

35.7%

16.8%

6.5%

<25,000

25-49,999

50-99,999

100-249,999

250-499,999

500,000+


Overall Net Absorption


4,817

,415

-3,80

2,538

6,229

,634

-3,58

5,516

-145

,571

4,611

,633

-3,32

3,930

148,6

63

-13,4

86,71

5

-8,53

9,196

6,426

,886 2,6

66,43

8

8,669

,264

11,72

6,660

12,52

5,538

-14,000,000

-9,000,000

-4,000,000

1,000,000

6,000,000

11,000,000


Overall Net Absorption by Major Submarket (2014 vs. 2015)


1.3 1.2

1.5 1.5

-0.05

3.3

1.2

0.8

2.1

1.92.1

-0.06

0.9

1.9

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

2014 2015

Squa

re F

eet (

Millio

ns)

Meadowlands Port Region Lower 287 Exit 9 Exit 8A Exit 7A Upper 287


Overall Net Absorption vs. Construction Completions


-8.5

6.4

2.7

8.7

11.712.5

0.4 0.9 1.42.3

7.3

3.5 4.0

-10.0

-5.0

0.0

5.0

10.0

15.0

Squa

re F

eet (

Millio

ns)

Overall Absorption New Construction Deliveries

nj 2015 year in review

Real Estate