New Jersey office market shows signs of weakness despite a handful of large deals

As New Jersey entered its second full quarter under the shadow of the COVID-19 pandemic, uncertainty surrounding future demand for office space persisted. Select leasing and sales transactions in the pipeline before the pandemic closed during the third quarter after months of stagnation, driven by lower net effective rents, greater lease flexibility and more favorable terms. Marking the region’s largest lease since 2016, pharmaceutical company Eisai closed a 332,818-square-foot (sf) deal to relocate to 200 Metro Boulevard in Prism Capital Partners’ ON3 redevelopment. Additionally, Mack-Cali closed their $160 million, 10-building sale of suburban offices to a joint venture led by Onyx Equities, the second large portfolio trade between the landlords since 2017, while AIG closed the sale of a 471,000-sf Metropark office tower in the Middlesex submarket to Opal Holdings for $140 million.

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