Princeton Office Market to experience Class A Space Shortage
Mercer Oak Presents Princeton Office Market Report
Princeton, NJ – Over 160 Real Estate professionals from the Princeton Market gathered on Tuesday January 28 at the Hyatt Regency to discuss the 2014 Real Estate Forecast.
Mercer Oak’s Aubrey Haines presented The Princeton Office Market Report and Forecast. Haines highlighted Mercer County’s below average unemployment rate (5.3%, compared to a national 7.3%), a lull in new Class A construction and a healthy absorption rate as key indicators to suggest that there will be a leaner building inventory in the market, creating upward pressure on Class A rental rates. Mercer Oak’s research indicates a possible shortage of Class A Office space in the next 3 years, a phenomenon not witnessed since 1995.
Haines also spoke of a trend towards newer, healthier work environments. “New construction will be the predominant means of satisfying corporate growth in the Princeton market over the next 5 years. The average building in Princeton is 24 years old… Many companies are looking at the health and welfare of their employees as a way to attract and maintain the best and brightest workforce. New building design techniques employ green and health oriented strategies. Since employee costs are typically 85% of an office tenant’s cost structure and real estate is typically 10%, a 1% increase in productivity can justify a significant investment in real estate… We anticipate that this trend will accelerate as the economic picture in Princeton continues to brighten.”
The event was hosted by the Princeton Regional Chamber of Commerce’s REBA (Real Estate Business Alliance) and included a panel discussion from Judson Henderson of Callaway Henderson, Aubrey Haines of Mercer Oak Realty and Paul Anastos of Mortgage Master, Inc., and was moderated by Tom Gates, also of Mortgage Master, Inc.
Princeton Office Market Report Available here: Princeton Office Market Report
The Times of Trenton covers the event here: Strong Mercer County real estate market bolstered by low unemployment rate, experts say