Easing restrictions, renewals spark strongest demand in three quarters

As vaccination rates rise and COVID-19 cases drop, the ease in pandemic restrictions has led some occupiers to execute return-to-office plans, resulting in steady increases in physical occupancy. Hints of normalcy unleashed some pent-up demand (caused by delayed leasing decisions during the pandemic), contributing to an 11.6% quarterly increase in leasing activity. With 1.9 million square feet (msf) leased, the second quarter was the strongest since Q3 2020, and leasing activity is up 46.6% over the past year. Renewals and expansions accounted for the majority of transactions, representing 62.8% of volume. Among largest leases signed were Atlantic Health System's 553,000-sf renewal and expansion at 435, 465 and 475 South Street in the Morris submarket and QualCare, Inc.'s 145,430-sf renewal at 30 Knightsbridge Road in the Middlesex submarket. Another bright spot for the market was WebMd’s 101,117-sf lease at 2 Gateway Center in Newark’s Urban Essex submarket. The health information provider is relocating from Manhattan, bringing 600 to 700 jobs to the market.

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