Retail vacancy rate in central New Jersey at six-year low
Old Bridge, N.J.--An improved picture in both ‘big-box’ and smaller store spaces combined to push the retail vacancy rate along central New Jersey’s major shopping corridors to a six-year low of 7.6% from 9.8% in 2013, according to the latest study by R.J. Brunelli & Co. Looking back over the past 10 years, the 2014 figure compared with the high of 10.5% in 2011 and low of 3.4% in 2006.
In all, the Old Bridge-based retail real estate brokerage’s 25th annual study of the central New Jersey market found 2.33 million square feet of vacancies in the 30.94 million square feet of space reviewed along State Highways 1, 9, 18 and 35 in Mercer, Middlesex and Monmouth counties, and a small section of Ocean County.
The region’s most heavily retailed road, Route 35, experienced the steepest decline in vacancies, followed by Routes 9 and 1, while Route 18 showed a slight increase.
The study found availabilities in 180 of the 815 sites visited throughout the region during this year’s third quarter. As in the past, R.J. Brunelli’s study evaluates shopping centers and freestanding buildings exceeding 2,000 square feet—including restaurants, auto service facilities and vacant auto dealerships whose location and configuration makes them viable for retail use. Regional malls and centers under construction or in the early or mid-stages of major redevelopment are excluded.
The improvement in the two regions was triggered by a significant number of new leases that accounted for more than 3.4 million square feet during the past 12 months, according to the firm’s research. Big-box chains doing multiple deals across the two regions’ corridors included Nordstrom Rack (Routes 10, 1 and 35); Hobby Lobby (Routes 1, 9 and 46); and Big Lots (Routes 10, 1 and 35). Smaller-space operators with multiple deals along the corridors were led by R.J. Brunelli client Dollar Tree (five locations), followed by Jersey Mike’s, Med Express and Tiger Shulman martial arts (each with four).
“While empty big-boxes continued to be absorbed in central New Jersey during 2014, one interesting development was the steeper reduction in smaller-store vacancies,” said Richard J. Brunelli, president of the firm. “This contrasted sharply with what we saw in northern New Jersey, where a very strong reduction in big-box vacancies was partially offset by rising vacancies in smaller spaces,” he noted. In all, the big-box share of total vacancies on the central corridors slipped to 34.1% from 36.9% in 2013.