Northern New Jersey Office Market Report
Suburban Mid-Tier Office Demand Bolsters Market As Some Premium Leases Are Reevaluated
Class B/C office performance helps stabilize broader sector. Leasing activity continued at a tempered pace during the first three months of 2021 as some major office tenants looked to sublet space, including PSE&G, Mallinckrodt Pharmaceuticals and ADP. While rapid vaccine deployment is helping to resolve the health crisis, the future of dispersed working is still somewhat unclear, affecting office space needs. Most tenant departures have been in the less affordable Class A segment, where buildings tend to be less accessible in a socially distanced manner. Suburban Class B and C properties, which represent a large portion of local inventory, have been more resilient, posting rent growth amid a smaller hike to vacancy. Less foot traffic congestion and proximity to where many employees live make these offices well suited for firms that adopt a flexible work schedule.