New Jersey 3Q11 Ret.indd
The State of New Jersey
Third Quarter 2011
NEW JERSEY RETAILERS RESPONDING FAVORABLY TO RENT CUTS The New Jersey retail market will improve this year as renewed employment growth spurs retail sales, while elevated concessions attract national retailers to existing dark space. After adding 26,400 positions in the first half, private-sector employers will continue to create jobs in the final six months of the year, resulting in the first year of net payroll gains since 2007. With the addition of 15,000 positions, the professional and business services sector will provide the strongest growth, boosting discretionary income for thousands of households. Northern New Jersey will account for most of the white-collar job growth, especially Hudson and Bergen counties. As a result, national retailers such as Whole Foods and Wegmans have expanded in prime shopping corridors near Paramus, where elevated household incomes will support retail sales. In Central New Jersey, the recent bankruptcy of Blockbuster and Great Atlantic & Pacific Tea Co. added over 350,000 square feet of dark space to inventory, pushing vacancy to a peak of 8.7 percent at midyear. Tenants such as Burlington Coat Factory and Ashley Furniture, however, are capitalizing on favorable leasing incentives, inking deals for over 200,000 square feet in Monmouth, Ocean, and Middlesex counties, which will result in positive net absorption this year. Deal flow will remain steady in New Jersey as buyers target stabilized shopping centers, while investors looking for passive income acquire single-tenant properties. Buyers are moving into established areas of the state to acquire shopping centers with financially sound anchors. These properties typically clear the market in the 8 percent range, while nearby strip centers can change hands in the high-8-percent area, presenting upside potential for operators with a penchant for filling vacant space. Private buyers approaching retirement will target single-tenant properties in an effort to achieve higher yields than offered in the bond market or other investment vehicles. Buildings with national-credit tenants in affluent areas such as East Bergen County, Cherry Hill, and Edison will command returns in the 7 percent range.
2011 ANNUAL RETAIL FORECAST 0.9% increase in total employment
Employment: Employers will expand head counts by 0.9 percent this year, adding 35,300 jobs to the state, generating the largest annual gain since 2006. In 2010, 17,000 positions were axed.
1 million square feet will be completed
Construction: In 2011, retail development will remain below historical averages as builders complete 1 million square feet statewide, with 600,000 square feet slated for Northern New Jersey. Central New Jersey will receive 300,000 square feet, and Southern New Jersey will account for 100,000 square feet.
20 basis point decrease in vacancy
Vacancy: As developers complete the lowest amount of retail space on record and tenants capitalize on elevated concessions, statewide vacancy will decline 20 basis points to 7.5 percent. In the prior four quarters, vacancy held steady just below 8 percent.
0.6% increase in asking rents
Rents: Asking rents will climb 0.6 percent this year to a two-year high of $23.08 per square foot, and effective rents will grow 0.7 percent to $20.29 per square foot. In 2010, asking rents ticked down 0.1 percent, while effective rents decreased 0.8 percent.
ECONOMY ◆
Employment Trends Metro Area United States
Year-over-Year Change
4%
◆
2% 0% -2%
◆
-4%
07
08
09
10
11*
* Forecast Sources: Marcus & Millichap Research Services, BLS, Economy.com
◆
◆
Retail Completions
The New Jersey employment picture significantly improved in the first six months of 2011 as companies expanded payrolls by 0.7 percent, creating 26,400 positions. In the preceding two quarters, 24,600 workers were cut. The trade, transportation and utilities sector outperformed other major employment sectors in the first half, with the addition of 15,800 new positions, a 2 percent gain. Further, after losing nearly 17 percent of its jobs during the downturn, the construction industry hired 2,800 workers. Due to budgetary pressures, the government segment continued to shed jobs in the first two quarters, eliminating 7,600 spots, while the financial services sector cut 1.1 percent, or 2,900 jobs.
As job growth picked up and consumer confidence modestly improved, retail sales in New Jersey posted a sharp increase in the last year, climbing over 7 percent. In the previous 12 months, retail sales across the state decreased by 2 percent. Statewide, the unemployment rate inched up 10 basis points in the last year to the mid-9-percent range. Central New Jersey posted the lowest rate, averaging in the low-8-percent area, while unemployment was highest in Southern New Jersey at 11 percent. Northern New Jersey reported a jobless rate just above 9 percent.
Millions of Square Feet
4 ◆
3 2
CONSTRUCTION
1
◆
0
07
08
09
10
11*
* Forecast Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Reis, TWR
◆
◆
Vacancy Rate Trends Metro Area United States
12%
Vacancy Rate
10%
◆
8% 6% 4%
07
08
09
10
11*
* Forecast Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
page 2
Outlook: This year, employers in New Jersey will expand head counts by 0.9 percent, adding 35,300 jobs to the state, generating the largest annual gain since 2006. In 2010, 17,000 positions were axed.
◆
Over the last four quarters, developers completed more than 1.8 million square feet of retail space in the state, well below the five-year annual average of 2.7 million square feet. Inventory increased by 0.9 percent. Northern New Jersey received 865,000 square feet in the last four quarters, including the 400,000-square-foot Bayonne Crossing power center delivered in Hudson County. Additionally, 3.4 million square feet is currently under way in the region, while 2.3 million square feet remains in the planning pipeline. Construction output remained soft in Central New Jersey as 420,000 square feet came online in the region year over year, expanding supply levels by 0.5 percent. Another 2 million square feet is under construction in the area and 4.4 million square feet is planned. During the last 12 months, finished projects totaled nearly 520,000 square feet in Southern New Jersey, expanding inventory by 1.3 percent. Moreover, 165,000 square feet is under construction, while 3.6 million square feet has been proposed for the region. Outlook: In 2011, retail development will remain below historical averages as builders complete 1 million square feet statewide, with 600,000 square feet slated for Northern New Jersey. Central New Jersey will receive 300,000 square feet, and Southern New Jersey will account for just 100,000 square feet of the new space.
Marcus & Millichap
◆
Retail Research Report
VACANCY AND RENTS
◆
◆
◆
Despite muted construction activity year to date, vacancy in Central New Jersey rose 50 basis points to 8.7 percent as tenants gave up 440,000 square feet. Asking and effective rents, however, both ticked up 0.4 percent to $21.57 per square foot and $18.77 per square foot, respectively.
◆
◆
◆
◆
◆
0% -3% -6% -9%
07
08
09
10
11*
* Forecast Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Reis
Demand was weakest in Southern New Jersey, where vacancy jumped 60 basis points in the past six months to 9.6 percent, though, owners increased asking rents 0.1 percent to $17.95 per square foot. Effective rents held steady at $15.90 per square foot. Outlook: As development remains light and tenants capitalize on elevated concessions, statewide vacancy will decline 20 basis points in 2011 to 7.5 percent. Asking rents will climb 0.6 percent to $23.08 per square foot, and effective rents will grow 0.7 percent to $20.29 per square foot.
SALES TRENDS** ◆
Asking Rent Effective Rent
3% Year-over-Year Change
In Northern New Jersey, regionwide vacancy inched up 10 basis points to 6.8 percent in the first half. In order to stimulate leasing activity, operators clipped asking rents 0.8 percent to $26.84 per square foot, while effective rents also contracted 0.8 percent to $23.61 per square foot.
Rent Trends
Single-tenant investment activity in New Jersey tumbled by more than 30 percent during the last 12 months as investors pulled back. The median price for all asset types retreated 3 percent to $240 per square foot. Sales velocity in the multi-tenant sector spiked 60 percent in the last year as local buyers emerged to acquire strip centers below the $5 million benchmark. The median price increased over 7 percent to $162 per square foot as an influx of performing properties traded in that time.
Single-Tenant Sales Trends Median Price per Square Foot
◆
In the first half, the New Jersey retail vacancy rate peaked at 7.9 percent after climbing 20 basis points. In the same stretch, asking and effective rents each ticked down 0.1 percent to $22.93 per square foot and $20.13 per square foot, respectively.
$250 $200 $150 $100 $50
07
08
09
10
11*
* Trailing 12-Month Period Sources: Marcus & Millichap Research Services, CoStar Group, Inc., RCA
Single-tenant deal flow in Northern New Jersey decelerated by 30 percent over the last four quarters, however, the median price increased 8 percent to $283 per square foot. Multi-tenant transactions surged by 65 percent year over year, while the median price receded 8 percent to $170 per square foot. In Central New Jersey, single-tenant closings retreated by 24 percent in the most recent 12-month stretch as the median price rose nearly 13 percent to $247 per square foot. Based on a limited number of transactions, velocity for multi-tenant properties jumped 67 percent in the last year, while the median price spiked 56 percent to $176 per square foot. The number of single-tenant assets traded in Southern New Jersey decreased more than 40 percent year over year. The median price also plunged by 45 percent to $165 per square foot. In the multi-tenant arena, sales velocity remained relatively flat, whereas the median price dropped 24 percent to $98 per square foot. Outlook: REITs and institutions will take advantage of the favorable interest rate spreads and leverage rarely listed, top-tier shopping centers with a national grocery anchor in place. Performing properties in premier areas of New Jersey will command returns in the low-7-percent range.
Marcus & Millichap
◆
Retail Research Report
Multi-Tenant Sales Trends Median Price per Square Foot
◆
$250 $200 $150 $100 $50
07
08
09
10
11*
* Trailing 12-Month Period Sources: Marcus & Millichap Research Services, CoStar Group, Inc., RCA
** Data reflect a full 12-month period, calculated on a trailing 12-month basis by quarter.
page 3
CAPITAL MARKETS BY WILLIAM E. HUGHES, SENIOR VICE PRESIDENT, MARCUS & MILLICHAP CAPITAL CORPORATION ◆
Visit www.NationalRetailGroup.com or call:
Bill Rose National Director National Retail Group Tel: (858) 373-3100 [email protected]
◆
◆
◆
The yield on the 10-year Treasury hovered near 2 percent despite the S&P’s downgrading of U.S. debt, as investors flocked to safety amid extreme stock market volatility. In response, lenders have pushed out loan spreads by an average of 30 basis points to 50 basis points, with CMBS lenders pushing significantly wider. Nonetheless, borrowing costs remain low. In the first half of 2011, mortgage originations were up 60 percent when compared to the same period last year, driven by higher activity among national banks and CMBS lenders. The CMBS sector may lose momentum, however, as elevated credit spreads translate into less competitive rates. Funding for single-tenant assets with credit tenants will remain plentiful this year. All-in lending rates for drugstore assets currently fall in the high4-percent to mid-5-percent range, while loans for fast food and restaurant properties typically price 125 basis points to 175 basis points higher. In the multi-tenant sector, lenders will maintain their focus on high-quality centers in primary markets, though funding will remain available for Class B grocery- or drug-anchored centers with proven revenue streams. Deals under $10 million will again be dominated by local and regional banks, which typically offer three- to seven-year, fixed-rate recourse loans. In the $10 million to $20 million range, CMBS lenders and finance companies step into the picture, while deals over $20 million typically have access to a full spectrum of sources. On average, debt yields will hover in the 9 percent to 11 percent range, translating into LTVs of 60 percent to 75 percent.
CENTRAL JERSEY VACANCY RANKING Rank
Submarket
Vacancy Rate
Y-O-Y Basis Effective Y-O-Y Point Change Rents (psf) % Change
1
North Middlesex
4.2%
50
$19.68
2
Ocean
7.3%
80
$18.26
2.2%
3
West Monmouth
7.4%
90
$17.76
-0.3%
4
East Monmouth
7.6%
-30
$21.06
0.3%
5
Southeast Middlesex
9.3%
-40
$15.91
-0.9%
Research Associate Research Services
6
Southwest Middlesex
10.5%
190
$16.11
0.0%
7
Somerset
11.0%
150
$19.82
1.4%
For information on national retail trends, contact
8
Mercer
14.6%
230
$19.08
-0.2%
Prepared and edited by
Justin Britto
John Chang
Vice President, Research Services Tel: (602) 687-6700 ext. 6803 [email protected] New Jersey Office:
Michael Fasano
Regional Manager [email protected] River Drive Center 3 611 River Drive Fourth Floor Elmwood Park, New Jersey 07407 Tel: (201) 582-1000 Fax: (201) 582-1010 Price: $150 © Marcus & Millichap 2011 www.MarcusMillichap.com
NORTH JERSEY VACANCY RANKING Rank
Submarket
Vacancy Rate
0.3%
Y-O-Y Basis Effective Y-O-Y Point Change Rents (psf) % Change
1
North Bergen
2.3%
-50
$25.62
2
Passaic
5.7%
120
$23.50
-0.8%
3
North Morris
6.3%
-30
$22.38
-0.9%
4
South Bergen/West Bergen
6.8%
0
$26.96
0.5%
5
Essex
8.8%
80
$22.09
1.1%
6
Hudson
8.9%
0
$24.10
-0.7%
7
Union
9.0%
-110
$20.17
-0.3%
SOUTH JERSEY VACANCY RANKING Rank
Submarket
Vacancy Rate
-0.4%
Y-O-Y Basis Effective Y-O-Y Point Change Rents (psf) % Change
1
Burlington County
7.4%
-10
$19.44
-0.6%
2
Gloucester County
9.3%
-50
$12.87
-0.9%
3
Camden County
12.5%
40
$13.40
-0.2%
The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein. Note: Metro-level employment growth is calculated using seasonally adjusted quarterly averages. Sales data includes transactions valued at $500,000 and greater unless otherwise noted. Sources: Marcus & Millichap Research Services, Bureau of Labor Statistics, CoStar Group, Inc., Economy.com, National Association of Realtors, Real Capital Analytics, Reis, TWR/Dodge Pipeline, U.S. Census Bureau.
Third Quarter 2011
NEW JERSEY RETAILERS RESPONDING FAVORABLY TO RENT CUTS The New Jersey retail market will improve this year as renewed employment growth spurs retail sales, while elevated concessions attract national retailers to existing dark space. After adding 26,400 positions in the first half, private-sector employers will continue to create jobs in the final six months of the year, resulting in the first year of net payroll gains since 2007. With the addition of 15,000 positions, the professional and business services sector will provide the strongest growth, boosting discretionary income for thousands of households. Northern New Jersey will account for most of the white-collar job growth, especially Hudson and Bergen counties. As a result, national retailers such as Whole Foods and Wegmans have expanded in prime shopping corridors near Paramus, where elevated household incomes will support retail sales. In Central New Jersey, the recent bankruptcy of Blockbuster and Great Atlantic & Pacific Tea Co. added over 350,000 square feet of dark space to inventory, pushing vacancy to a peak of 8.7 percent at midyear. Tenants such as Burlington Coat Factory and Ashley Furniture, however, are capitalizing on favorable leasing incentives, inking deals for over 200,000 square feet in Monmouth, Ocean, and Middlesex counties, which will result in positive net absorption this year. Deal flow will remain steady in New Jersey as buyers target stabilized shopping centers, while investors looking for passive income acquire single-tenant properties. Buyers are moving into established areas of the state to acquire shopping centers with financially sound anchors. These properties typically clear the market in the 8 percent range, while nearby strip centers can change hands in the high-8-percent area, presenting upside potential for operators with a penchant for filling vacant space. Private buyers approaching retirement will target single-tenant properties in an effort to achieve higher yields than offered in the bond market or other investment vehicles. Buildings with national-credit tenants in affluent areas such as East Bergen County, Cherry Hill, and Edison will command returns in the 7 percent range.
2011 ANNUAL RETAIL FORECAST 0.9% increase in total employment
Employment: Employers will expand head counts by 0.9 percent this year, adding 35,300 jobs to the state, generating the largest annual gain since 2006. In 2010, 17,000 positions were axed.
1 million square feet will be completed
Construction: In 2011, retail development will remain below historical averages as builders complete 1 million square feet statewide, with 600,000 square feet slated for Northern New Jersey. Central New Jersey will receive 300,000 square feet, and Southern New Jersey will account for 100,000 square feet.
20 basis point decrease in vacancy
Vacancy: As developers complete the lowest amount of retail space on record and tenants capitalize on elevated concessions, statewide vacancy will decline 20 basis points to 7.5 percent. In the prior four quarters, vacancy held steady just below 8 percent.
0.6% increase in asking rents
Rents: Asking rents will climb 0.6 percent this year to a two-year high of $23.08 per square foot, and effective rents will grow 0.7 percent to $20.29 per square foot. In 2010, asking rents ticked down 0.1 percent, while effective rents decreased 0.8 percent.
ECONOMY ◆
Employment Trends Metro Area United States
Year-over-Year Change
4%
◆
2% 0% -2%
◆
-4%
07
08
09
10
11*
* Forecast Sources: Marcus & Millichap Research Services, BLS, Economy.com
◆
◆
Retail Completions
The New Jersey employment picture significantly improved in the first six months of 2011 as companies expanded payrolls by 0.7 percent, creating 26,400 positions. In the preceding two quarters, 24,600 workers were cut. The trade, transportation and utilities sector outperformed other major employment sectors in the first half, with the addition of 15,800 new positions, a 2 percent gain. Further, after losing nearly 17 percent of its jobs during the downturn, the construction industry hired 2,800 workers. Due to budgetary pressures, the government segment continued to shed jobs in the first two quarters, eliminating 7,600 spots, while the financial services sector cut 1.1 percent, or 2,900 jobs.
As job growth picked up and consumer confidence modestly improved, retail sales in New Jersey posted a sharp increase in the last year, climbing over 7 percent. In the previous 12 months, retail sales across the state decreased by 2 percent. Statewide, the unemployment rate inched up 10 basis points in the last year to the mid-9-percent range. Central New Jersey posted the lowest rate, averaging in the low-8-percent area, while unemployment was highest in Southern New Jersey at 11 percent. Northern New Jersey reported a jobless rate just above 9 percent.
Millions of Square Feet
4 ◆
3 2
CONSTRUCTION
1
◆
0
07
08
09
10
11*
* Forecast Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Reis, TWR
◆
◆
Vacancy Rate Trends Metro Area United States
12%
Vacancy Rate
10%
◆
8% 6% 4%
07
08
09
10
11*
* Forecast Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
page 2
Outlook: This year, employers in New Jersey will expand head counts by 0.9 percent, adding 35,300 jobs to the state, generating the largest annual gain since 2006. In 2010, 17,000 positions were axed.
◆
Over the last four quarters, developers completed more than 1.8 million square feet of retail space in the state, well below the five-year annual average of 2.7 million square feet. Inventory increased by 0.9 percent. Northern New Jersey received 865,000 square feet in the last four quarters, including the 400,000-square-foot Bayonne Crossing power center delivered in Hudson County. Additionally, 3.4 million square feet is currently under way in the region, while 2.3 million square feet remains in the planning pipeline. Construction output remained soft in Central New Jersey as 420,000 square feet came online in the region year over year, expanding supply levels by 0.5 percent. Another 2 million square feet is under construction in the area and 4.4 million square feet is planned. During the last 12 months, finished projects totaled nearly 520,000 square feet in Southern New Jersey, expanding inventory by 1.3 percent. Moreover, 165,000 square feet is under construction, while 3.6 million square feet has been proposed for the region. Outlook: In 2011, retail development will remain below historical averages as builders complete 1 million square feet statewide, with 600,000 square feet slated for Northern New Jersey. Central New Jersey will receive 300,000 square feet, and Southern New Jersey will account for just 100,000 square feet of the new space.
Marcus & Millichap
◆
Retail Research Report
VACANCY AND RENTS
◆
◆
◆
Despite muted construction activity year to date, vacancy in Central New Jersey rose 50 basis points to 8.7 percent as tenants gave up 440,000 square feet. Asking and effective rents, however, both ticked up 0.4 percent to $21.57 per square foot and $18.77 per square foot, respectively.
◆
◆
◆
◆
◆
0% -3% -6% -9%
07
08
09
10
11*
* Forecast Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Reis
Demand was weakest in Southern New Jersey, where vacancy jumped 60 basis points in the past six months to 9.6 percent, though, owners increased asking rents 0.1 percent to $17.95 per square foot. Effective rents held steady at $15.90 per square foot. Outlook: As development remains light and tenants capitalize on elevated concessions, statewide vacancy will decline 20 basis points in 2011 to 7.5 percent. Asking rents will climb 0.6 percent to $23.08 per square foot, and effective rents will grow 0.7 percent to $20.29 per square foot.
SALES TRENDS** ◆
Asking Rent Effective Rent
3% Year-over-Year Change
In Northern New Jersey, regionwide vacancy inched up 10 basis points to 6.8 percent in the first half. In order to stimulate leasing activity, operators clipped asking rents 0.8 percent to $26.84 per square foot, while effective rents also contracted 0.8 percent to $23.61 per square foot.
Rent Trends
Single-tenant investment activity in New Jersey tumbled by more than 30 percent during the last 12 months as investors pulled back. The median price for all asset types retreated 3 percent to $240 per square foot. Sales velocity in the multi-tenant sector spiked 60 percent in the last year as local buyers emerged to acquire strip centers below the $5 million benchmark. The median price increased over 7 percent to $162 per square foot as an influx of performing properties traded in that time.
Single-Tenant Sales Trends Median Price per Square Foot
◆
In the first half, the New Jersey retail vacancy rate peaked at 7.9 percent after climbing 20 basis points. In the same stretch, asking and effective rents each ticked down 0.1 percent to $22.93 per square foot and $20.13 per square foot, respectively.
$250 $200 $150 $100 $50
07
08
09
10
11*
* Trailing 12-Month Period Sources: Marcus & Millichap Research Services, CoStar Group, Inc., RCA
Single-tenant deal flow in Northern New Jersey decelerated by 30 percent over the last four quarters, however, the median price increased 8 percent to $283 per square foot. Multi-tenant transactions surged by 65 percent year over year, while the median price receded 8 percent to $170 per square foot. In Central New Jersey, single-tenant closings retreated by 24 percent in the most recent 12-month stretch as the median price rose nearly 13 percent to $247 per square foot. Based on a limited number of transactions, velocity for multi-tenant properties jumped 67 percent in the last year, while the median price spiked 56 percent to $176 per square foot. The number of single-tenant assets traded in Southern New Jersey decreased more than 40 percent year over year. The median price also plunged by 45 percent to $165 per square foot. In the multi-tenant arena, sales velocity remained relatively flat, whereas the median price dropped 24 percent to $98 per square foot. Outlook: REITs and institutions will take advantage of the favorable interest rate spreads and leverage rarely listed, top-tier shopping centers with a national grocery anchor in place. Performing properties in premier areas of New Jersey will command returns in the low-7-percent range.
Marcus & Millichap
◆
Retail Research Report
Multi-Tenant Sales Trends Median Price per Square Foot
◆
$250 $200 $150 $100 $50
07
08
09
10
11*
* Trailing 12-Month Period Sources: Marcus & Millichap Research Services, CoStar Group, Inc., RCA
** Data reflect a full 12-month period, calculated on a trailing 12-month basis by quarter.
page 3
CAPITAL MARKETS BY WILLIAM E. HUGHES, SENIOR VICE PRESIDENT, MARCUS & MILLICHAP CAPITAL CORPORATION ◆
Visit www.NationalRetailGroup.com or call:
Bill Rose National Director National Retail Group Tel: (858) 373-3100 [email protected]
◆
◆
◆
The yield on the 10-year Treasury hovered near 2 percent despite the S&P’s downgrading of U.S. debt, as investors flocked to safety amid extreme stock market volatility. In response, lenders have pushed out loan spreads by an average of 30 basis points to 50 basis points, with CMBS lenders pushing significantly wider. Nonetheless, borrowing costs remain low. In the first half of 2011, mortgage originations were up 60 percent when compared to the same period last year, driven by higher activity among national banks and CMBS lenders. The CMBS sector may lose momentum, however, as elevated credit spreads translate into less competitive rates. Funding for single-tenant assets with credit tenants will remain plentiful this year. All-in lending rates for drugstore assets currently fall in the high4-percent to mid-5-percent range, while loans for fast food and restaurant properties typically price 125 basis points to 175 basis points higher. In the multi-tenant sector, lenders will maintain their focus on high-quality centers in primary markets, though funding will remain available for Class B grocery- or drug-anchored centers with proven revenue streams. Deals under $10 million will again be dominated by local and regional banks, which typically offer three- to seven-year, fixed-rate recourse loans. In the $10 million to $20 million range, CMBS lenders and finance companies step into the picture, while deals over $20 million typically have access to a full spectrum of sources. On average, debt yields will hover in the 9 percent to 11 percent range, translating into LTVs of 60 percent to 75 percent.
CENTRAL JERSEY VACANCY RANKING Rank
Submarket
Vacancy Rate
Y-O-Y Basis Effective Y-O-Y Point Change Rents (psf) % Change
1
North Middlesex
4.2%
50
$19.68
2
Ocean
7.3%
80
$18.26
2.2%
3
West Monmouth
7.4%
90
$17.76
-0.3%
4
East Monmouth
7.6%
-30
$21.06
0.3%
5
Southeast Middlesex
9.3%
-40
$15.91
-0.9%
Research Associate Research Services
6
Southwest Middlesex
10.5%
190
$16.11
0.0%
7
Somerset
11.0%
150
$19.82
1.4%
For information on national retail trends, contact
8
Mercer
14.6%
230
$19.08
-0.2%
Prepared and edited by
Justin Britto
John Chang
Vice President, Research Services Tel: (602) 687-6700 ext. 6803 [email protected] New Jersey Office:
Michael Fasano
Regional Manager [email protected] River Drive Center 3 611 River Drive Fourth Floor Elmwood Park, New Jersey 07407 Tel: (201) 582-1000 Fax: (201) 582-1010 Price: $150 © Marcus & Millichap 2011 www.MarcusMillichap.com
NORTH JERSEY VACANCY RANKING Rank
Submarket
Vacancy Rate
0.3%
Y-O-Y Basis Effective Y-O-Y Point Change Rents (psf) % Change
1
North Bergen
2.3%
-50
$25.62
2
Passaic
5.7%
120
$23.50
-0.8%
3
North Morris
6.3%
-30
$22.38
-0.9%
4
South Bergen/West Bergen
6.8%
0
$26.96
0.5%
5
Essex
8.8%
80
$22.09
1.1%
6
Hudson
8.9%
0
$24.10
-0.7%
7
Union
9.0%
-110
$20.17
-0.3%
SOUTH JERSEY VACANCY RANKING Rank
Submarket
Vacancy Rate
-0.4%
Y-O-Y Basis Effective Y-O-Y Point Change Rents (psf) % Change
1
Burlington County
7.4%
-10
$19.44
-0.6%
2
Gloucester County
9.3%
-50
$12.87
-0.9%
3
Camden County
12.5%
40
$13.40
-0.2%
The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein. Note: Metro-level employment growth is calculated using seasonally adjusted quarterly averages. Sales data includes transactions valued at $500,000 and greater unless otherwise noted. Sources: Marcus & Millichap Research Services, Bureau of Labor Statistics, CoStar Group, Inc., Economy.com, National Association of Realtors, Real Capital Analytics, Reis, TWR/Dodge Pipeline, U.S. Census Bureau.
