Forecast bright for New Jersey office space

Experts are predicting strong growth in New Jersey's commercial real estate sector.

Hurricane Sandy was the most destructive storm in the Atlantic in 2012. Parts of New Jersey were ravaged by the natural disaster, triggering major concerns pertaining to the viability of commercial real estate in the area.

But those concerns are starting to fade. New Jersey is lifting itself from its post-recession hole as the office sector is starting to turn the corner.

"Everyone wants to know if Sandy impacted buildings but at the end of the day there's still a need to be close to [New York City]," Kyle Schmidt, a broker specializing in industrial sales with Cushman & Wakefield, told The Wall Street Journal.

Kevin Thorpe, the chief economist at Cassidy Turley, told The Star-Ledger that the outlook is bright for New Jersey.

"The fundamentals of economy look very solid," Thorpe said. "It's getting easier to see how something more robust could be forming."

Thorpe's forecast for the a recovery is a sunny one. He predicts the odds of continued growth at 84 percent, attributing job growth as a major component for his faith in the turn around.

"The future is brightening without question in New Jersey and I'm not the only one saying this," he continued.

Despite unemployment rates in the Garden State sitting above the national average, most of the state's major metropolitan areas are adding jobs at a faster rate than the rest of the nation. New Jersey created nearly 50,000 net jobs in 2012 and appears on pace for 76,000 new jobs in 2013, according to The Star-Ledger.

Demand for office space rising
According to Thorpe, New Jersey office vacancies are down to about 15 percent, which is the first improvement since the vacancy apex was hit last year.

Thorpe called the nation's overall demand for office space "subpar" over the course of the recovery, but New Jersey office space has grown each month for more than a year.

The North and Central jersey markets for office space are in the nation's top 10 for demand.

Sales of industrial properties 100,000 square feet or larger went over $1 billion from the start of the year through the middle of September, according to Cushman & Wakefield, as cited by The Wall Street Journal. That's a 64 percent increase from 2012.

The National Association of Realtors (NAR) anticipates vacancy rates to decline nationwide between 0.2 and 0.6 percent in the office, retail and industrial markets from now until August 2014.

"Rising international trade is boosting demand for warehouse space," said Lawrence Yun, the chief economist for NAR.

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