OFFICE MARKET TRENDS Hudson Waterfront and the Secaucus region saw several important milestones contributing to office recovery in 2024. Both markets generated positive net absorption for the full year, and are beginning to see vacancy rates decline from historic highs. Class A product in Hudson Waterfront is beginning to stabilize after large-scale consolidations from financial services occupiers over the past several years, and is currently poised to recover on the back of a broad recovery of the New York City office market. The Meadowlands also generated positive net absorption in 2025 as downsizing activity has largely abated. While product in this submarket is not seeing migration from other areas, a lower denominator of inventory through conversions and redevelopments aims to support existing product. Most of the latest leasing activity was being driven by smallersized transactions, which had been a recurring trend in the state’s office market during the past few years. Leases in excess of 100,000 s.f. were elusive during Q4. Instead, more than 60% of signed deals were in the 10,000-s.f. to 25,000s.f. range. The legal services sector was responsible for much of the Q4 demand, accounting for nearly 40% of signed leases. Furthermore, three out of the five largest leases during Q4 involved law firms. This activity was often being driven by relocations from outdated spaces to higher-end facilities. Capitalizing on multimillion-dollar renovations at 7 Giralda Farms in Madison, Riker Danzig LLP leased 45,500 s.f. at the NEW JERSEY (HUDSON WATERFRONT AND THE MEADOWLANDS) • Vacancy rates in Hudson Waterfront and the Meadowlands plateaued in 2024 and began to decline in the second half of the year, reaching 30.2% at yearend, a decline of 60 basis points from peak levels in Q2 2024. • Legal services was the most active sector during the final three months of 2024, as law firms were responsible for nearly 40% of signed leases. • Further stabilization of the state’s office sublease pipeline will help to maintain downward pressures on the vacancy rate in the coming year. Overall market statistics Forecast 2024 net absorption (s.f.) 506,668 Under construction (s.f.) 374,318 Total vacancy (%) 26.6% Sublease vacancy (s.f.) 7,906,370 Asking rent ($ p.s.f.) $30.74 Concessions Stable building. The law firm will be moving from its long-time home at Headquarters Plaza in Morristown. Kelley Drye & Warren LLP also leased 16,000 s.f. at 7 Giralda Farms in late 2024. OUTLOOK Continuing stabilization of the state’s office sublease pipeline, combined with increased tenant requirements, will help maintain downward pressures on the vacancy rate in the coming year. After corporate restructurings boosted Class A office sublease space to nearly 7.9 million s.f. in mid-2023, the supply had since trended lower to 7.1 million s.f. by yearend 2024. While New Jersey’s Class A overall vacancy rate was above 30%, the direct vacancy rate was under 24%. With 38 million s.f. of expiring leases in the next three years and just over 300,000 s.f. available in the pipeline or recent developments, New Jersey will experience among the highest renewal rates in the country over the near term. MUST'S SUBMARKETS Net absorption and overall vacancy rates Gross leasing activity Rental rates and going-in yields CBD Class A cap rate (%) Cap rate Asking rent 1.0 0.5 0.0 -0.5 -1.0 -1.5 9% 8% 7% 6% 5% 4% 3% 35% 30% 25% 20% 15% 10% 5% 0% $48 $45 $42 $39 $36 $33 $30 $27 $24 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2010 2014 2018 2012 2016 2020 2022 2024 Net absorption (m.s.f.) Total vacancy (%) Rest of New Jersey Hudson Waterfront & Meadowlands 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 4.0M 5.9M 5.8M 4.9M 5.8M 3.8M 4.7M 5.0M 4.6M 5.3M 0.9M 1.8M 0.6M 1.4M 1.5M 1.0M 0.4M 0.7M 0.6M 1.4M ANNUAL REPORT 2024 | 45
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