2020 ends with declining office demand as the pandemic's effects linger

The Northern New Jersey office market continued to feel the sluggish effects of COVID-19 during the fourth quarter. While the government began distributing vaccines, mass-inoculation and herd immunity remain a few quarters into the future and decision-makers are reticent about long-term office plans. With office tenants still largely operating remotely and a potential long-term shift towards more flexible work scenarios, demand for office space was muted as many office space decisions were further delayed or scaled back. Leasing activity dropped by 47.2% during the fourth quarter to 1.1 million square feet (msf), the lowest quarterly total since Q1 2017. Annual leasing volume was down 26.1% from 2019 as total activity fell from 7.7 msf to 5.7 msf. With Bristol Myers Squibb’s 118,100-square-foot (sf) new lease at 9 Roszel Road in the Princeton submarket, the pharmaceutical industry led fourth quarter demand, accounting for 35.6% of total leasing, followed by financial services and insurance sector tenants at 32.4%.

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