RETAIL VACANCIES RISE TO 5.7% IN NORTHERN NJ AND TO 6.6% IN CENTRAL NJ, ACCORDING TO R.J. BRUNELLI & CO.
OLD BRIDGE, N.J. — Retail vacancies are on the rise along major shopping corridors in Northern and Central New Jersey, according to an interim survey conducted last month by R.J. Brunelli & Co., creating what the firm calls “rare expansion opportunities” in prime properties for national retail and restaurant companies desiring to make a splash in the densely populated state.
Breaking with its 19-year tradition of conducting its annual retail vacancy study in January and February, the Old Bridge-based retail real estate brokerage surveyed Northern and Central New Jersey’s ten retail corridors in November to determine the impact of the worldwide financial crisis and deepening recession on vacancies. In Northern New Jersey, the retail vacancy rate increased from 3.6% earlier this year to 5.7%, while the vacancy factor in the Central market jumped from 4.7% to 6.6%.
The firm’s study reviewed shopping centers and freestanding buildings exceeding 2,000 square feet, including freestanding restaurants and auto service facilities. Enclosed regional malls and centers under construction or redevelopment were excluded from the survey. Corridors covered in the Northern region were State Highways 4, 10, 17, 22, 23 and 46/3, and certain intersecting arteries in Bergen, Essex, Morris, Passaic, Somerset and Union counties The Central region’s study area included State Highways 1, 9, 18 and 35 in Mercer, Middlesex and Monmouth counties, and a small section of Ocean County.
Commenting on the latest findings, Richard J. Brunelli, President of the firm, said: “We began to notice a sharp increase in vacant stores earlier in 2008, especially in the home furnishings categories, where sales volumes were adversely impacted by the deep housing recession. As the months passed and the worldwide financial crisis hit in September, chains such as Domain and Linen’s ‘N Things declared bankruptcy, followed recently by Circuit City.”
The November study found that some retail corridors have been more adversely impacted than others. In particular, Route 18 in East Brunswick took the most severe hit from closures of a number of big boxes, driving its vacancy rate from 7.3% in early 2008 to 13.0% today. With more bankruptcies widely expected to be announced in early 2009, the firm forecasts that vacancy rates on many of both regions’ roadways should climb to their highest levels since it began the annual survey process in 1989.
“Despite the gloom, there is a silver lining to those clouds,” Mr. Brunelli continued. “New Jersey is the most densely populated, best educated state with the highest income levels in the nation. The current recession will not change these market demographics. Although many national retailers have set their expansion plans on hold, a number still recognize that, for the first time in years in market areas such as Northern and Central New Jersey, there are now space opportunities in exceptional shopping centers where vacancies are rarely found. It takes vision and courage to see beyond the current economic blight. Retailers and restaurateurs who have the ability to take advantage of this unique market, where prime spaces are available at ‘discounted’ rental rates, will look back on early 2009 years from now, delighted they took advantage of rare expansion opportunities in some of the best trade areas in the nation in the worst of times.”
For additional information on the firm’s services, contact Richard Brunelli, president, R.J. Brunelli & Co., Inc., 400 Perrine Road, Suite 405, Old Bridge, N.J. 08857. Telephone is (732) 721-5800.
Press contacts: At R.J. Brunelli & Co., Inc., Richard J. Brunelli, president, (732) 721-5800; at Parness & Associates Public Relations, Bill Parness or Lisa Kreda (732) 290-0121