Developers of office space in the Garden State have always been a tough breed, but the challenges they are facing in 2024 are considerable.  As we hit the three-year mark since the Pandemic began, most business owners are finally viewing Covid 19 from the rearview mirror. The results as the dust begins to settle are mixed where we find that there are some Landlords that have been able to thrive and others that are struggling to survive.  

Many of the larger office tenants in NJ have been actively consolidating to fewer locations across the State while many others have reluctantly been forced to reduce their footprint due to work from home and hybrid office models where folks are only coming in several days a week.

In some markets we have seen a major reduction in the demand for office space, causing all kinds of problems.  As vacancies rise, there are pressures coming from Lenders on those Landlords that are unable to meet performance levels, some who are struggling to meet their mortgage payments in the face of rising interest rates.  As we have pointed out in previous issues, across the State there are many office buildings in weak markets that are slated for demolition and repurposing to Industrial and Residential where the zoning and the economics permit.

In the face of all this negative news, we should point out that there are still many markets with strong Landlords that will be able to weather the storm quite well.

There are also many tenants that are back in the office and growing.  That’s right growing. The issue for tenants who must negotiate new and renewing office leases in the market today is to identify — who are the winners? — and who are the losers?  There can be real exposure for office tenants if their landlord is unable to perform, particularly in a new lease where construction is involved.  

So, who can you trust to provide solid unbiased advice in the face of this turmoil?  We at Dickstein Real Estate Services are tenant advisors with more than 25 years of experience representing Tenants and Buyers of corporate office and industrial space.  Why not give us a call to find out why, at Dickstein Real Estate Services, Our Difference Is Your Advantage®.

Regards,

Lawrence Dickstein

Dickstein Real Estate Services

908-704-3500 ext. 11

[email protected]