Survey Says Retail Vacancy Rates Rising in Central New Jersey
September 19, 2013
While a recent report detailed industrial vacancy rates in Southern New Jersey at a five-year low, the news on retail space in the central part of the state was less rosy. A R.J. Brunelli & Co. LLC survey concluded that the rate of total retail vacancies in that part of the state actually rose nearly a percentage point this year, to 9.8 percent.
In a press release dated Sept. 10, Brunelli announced the results of its survey, which analyzed more than 30 million square feet of retail space, and held a mixture of positive and negative news. While the region boasted an improvement in occupancy of “big box” stores, which the survey defined at 20,000 square feet or greater, that uptick was more than swallowed up by the closure of a significant number of small stores. Vacancy rates had spiked substantially since hitting a low of 3.4 percent in 2006, climbing to a high of 10.5 percent in 2011 before dropping to 9.1 percent last year.
The big box market received boosts from Oklahoma-based arts and crafts superstore Hobby Lobby, which opened its first New Jersey location in a 61,400 square foot space in Marlboro. A second store, located in Lawrenceville, is slated to open in October. Additionally, home improvement giant Lowe’s opened the first of its Lowe’s Express concept stores in a 49,500 square foot space in Wall Township. Both the Lowe’s Express and the Marlboro Hobby Lobby were former Pathmark supermarkets. The area’s last two former Borders bookstores were also filled during the period, with DSW Shoes occupying one store in Eatontown, and Buy Buy Baby filling the other, near Princeton.
The State Route 35 corridor witnessed the worst performance, as the survey found a vacancy rate of 13 percent, an all-time high for the area. The Route 35 corridor’s poor performance was largely the result of small stores, which continue to close in large numbers. The situation for small stores in central New Jersey mirrored those to the north: namely, unprofitable stores closing as their leases expire and other business owners or franchisees’ inability to move into those spaces due to a lack of bank financing.
Richard J. Brunelli, president of the firm, opined that, until banks begin lending more freely, the vacancy rates for smaller spaces would likely remain high across central New Jersey. “Until the economy improves and banks genuinely start to loosen the spigots, it will be difficult to make much of a dent in the small store inventory.”
The current economy for commercial space is a mixture of positive and negative signs, creating a premium on making extremely wise and prudent decisions, both by landlords and tenants, when it comes to consummating a new lease. To ensure that your next lease is the best for your interests, get in touch with the real estate attorneys at Samuel C. Berger, P.C. Our New Jersey real estate attorneys can help guide you through the process of negotiating and completing a commercial lease that will make your business competitive while properly protecting you legally. Reach us online or call (201) 587-1500 or (212) 380-8117.
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Photo Credit: Michael Rivera at Wikimedia Commons.