The Southern New Jersey commercial real estate market continues to emerge solidly from the havoc caused by the Great Recession, but significant South Jersey office space vacancies and the possibility of rising interest rates may provide challenges for the future of the Southern New Jersey office space market, according to a new quarterly market analysis issued by Wolf Commercial Real Estate (WCRE), a leading Southern New Jersey and Philadelphia commercial real estate brokerage firm that specializes in South Jersey and Philadelphia commercial real estate services.

Approximately 540,000 square feet of new lease deals and renewals for Southern New Jersey commercial real estate were executed during the second quarter, and about 35 percent, or some 185,000 square feet of the total, comprised new deals, according to WCRE’s quarterly Southern New Jersey Office and Retail Market Update, which is now in its second year.  The jump in Southern New Jersey professional office space and retail space activity was one of several positive developments noted in the report.

“Several of the fundamentals needed for a sustained return to growth are either steadily gaining strength or are already in place,” said Jason Wolf, founder and principal of Wolf Commercial Real Estate, a South Jersey and Philly commercial real estate broker that specializes in Southern New Jersey and Philadelphia commercial real estate listings. “However, this market still must absorb much more of its vacant space.”

The report on South Jersey commercial real estate activity notes that the stock market closed Q2 up 12 percent on the year – its best first half of a year since 1999 – and that unemployment rates both in New Jersey and nationwide continue to fall, while South Jersey office space rental rates have stabilized and continue to rise, and Southern New Jersey retail space rental rates were rising for the first time in five years.  Still, according to WCRE, vacancy rates in the office market for Class A and B product remain in the range of 18-19 percent.

Amid all the good news for the South Jersey office space market, the report finds a possible indicator that inflation may be on the horizon, noting the sharp rise in the 10-Year Treasury yield through May and June and the effect that could have on interest rates in both the Southern New Jersey and Philly commercial real estate markets.

“If interest rates go up, our borrowing costs go up, which will have an effect on pricing and cap rates,” according to the report from Wolf Commercial Real Estate, a Southern New Jersey and Philly commercial real estate brokerage firm that specializes in South Jersey and Philly commercial real estate listings.

WCRE’s research includes snapshots of the Southern New Jersey professional office space and retail space markets and details on the major deals being consummated or planned in the Southern New Jersey commercial real estate market.

Among the South Jersey professional office space highlights from the report:

— Positive absorption for the second quarter was in the range of 185,000+/-sf of new deals and/or expansions in South Jersey commercial real estate. This is a 20 percent increase over the second quarter of 2012, and an astonishing 80 percent gain over the first quarter of this year.

—  Average rents for Class A & B product remained at or above the improved level they reached last year, continuing to show strong support in the range of $10-$14.00/sf NNN with an overall market average of $11.00/sf NNN for the Southern New Jersey office space deals completed during the quarter.

— Healthcare, computer services, insurance, defense contracting, consulting, engineering, and finance companies all were very active in the South Jersey office space market during the second quarter.

South Jersey retail space highlights from the report include:

— Retail landlords are experiencing increased rental rates for Southern New Jersey retail space for the first time since 2008.

— Overall South Jersey retail space vacancy has fallen to 15% and the Southern New Jersey retail space market has stabilized. Community and lifestyle shopping centers have much less vacancy than neighborhood and strip shopping centers.

— Average rents for upscale lifestyle centers in the Southern New Jersey retail space market continue to show strong support in the range of $30-$40.00/sf NNN, and average rents for neighborhood and strip shopping centers remain in the range of $15-$23/sf NNN.

The full report, including details about several key deals, is available upon request from Wolf Commercial Real Estate, a South Jersey commercial real estate brokerage firm that specializes in South Jersey and Philly commercial real estate listings.

For more information about South Jersey or Philadelphia office space or about any other Southern New Jersey or Philadelphia commercial real estate listings, please contact Jason Wolf (215-799-6900-office; 215-588-8800-cell; jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Southern New Jersey and Philadelphia commercial real estate broker that provides South Jersey and Philly commercial real estate services.

As real estate brokerage and advisory experts that specialize in Southern New Jersey and Philadelphia commercial real estate services, the team at our South Jersey and Philly commercial real estate brokerage firm provides ongoing detailed information to our clients and prospects to help them achieve their real estate goals. At WCRE, our South Jersey and Philly commercial real estate services encompass the highest quality of service, proven expertise, and a total commitment to client-focused relationships.

Learn more about WCRE, a Southern New Jersey and Philadelphia commercial real estate brokerage firm that specializes in Southern New Jersey and Philadelphia commercial real estate services, online at www.wolfcre.com, on Twitter @WCRE1, LinkedIn and on Facebook at Wolf Commercial Real Estate, LLC. Visit our blog page at www.phillyofficespace.com https://phillyofficespace.com/.

WCRE is a leading Southern New Jersey and Philadelphia commercial real estate broker that provides a full range of Southern New Jersey and Philadelphia commercial real estate services, marketing commercial offices, medical properties, industrial properties, land properties and retail buildings for buyers, tenants, investors and sellers.  Please visit our websites for information about Southern New Jersey office space, Philadelphia office space and other commercial real estate services or for information about South Jersey and Philadelphia commercial real estate listings for office space, retail space, medical space, industrial space or land for sale or lease from this South Jersey and Philly commercial real estate broker.