Route 22 Retail Vacancy Rate Among Lowest in the Area

Despite the recession, the number of retail vacancies along the Union/Springfield corridor of Route 22 is on the decline. This information comes on the heels of a study conducted by the Goldstein Group, a commercial real estate brokerage company in Paramus.

The firm recently completed its mid-year survey of the retail market place in Central and Northern New Jersey. The report covered 4,250 properties along 22 retail corridors.

Completed this past July, the study lists the Union/Springfield stretch of Route 22 among the retail markets with the lowest vacancy rate. The study did surveys up to July of this year.

"Route 22 will always be a strong corridor," said Chuck Lanyard, President of the Goldstein Group. "It's the first major place for people coming out of Newark and Hillside. It's desirable because it has center island retail. That's not something you see nationwide."

In the study, the firm surveyed 168 properties along the Union/Springfield section of Route 22. When combined, the square footage of the stores totaled 3,925,067. Of that amount, 185, 617 square feet of retail space presently remains vacant. The current vacancy rate for the area is 4.73 percent. That number is down from 4.83 percent  recorded last December, and 5.42 percent in July of 2009. The percentage of vacancies was as high as 6.34 in December of 2008.

The Goldstein report also showed that 48,860 square feet of property has been leased so far this year. Of that, 5,215 square feet is currently under construction.

Also highlighted in the study is the fact that major retail chain and restaurants are looking for and purchasing sites along Route 22 and other major thoroughfares in North and Central Jersey. Chains such as Chipotle (located in Rt. 22's center island), Christmas Tree Shops, AJ Wright, Walmart, 7-Eleven and others are opening up a number of new locations throughout the region.

Many landlords are tailoring their rents to meet the new market. "The Route 22 corridor presents a great opportunity for retailers," said Lanyard. "Between 65,000 to 70,000 cars run down that highway every day."

Other highways listed with the lowest vacancy rates were the North Brunswick/Lawrence Township corridor on U.S Highway 1 in Middlesex County; Route 17's Ramsey/Mahwah corridor; and Route 17's Rochelle Park and Rutherford corridor. The arteries with the highest vacancy rates included Route 10's Livingston/East Hanover corridor with a 12.93% vacancy rate (up from 9.39% in December of 2009) and Route 18's East Brunswick Corridor 14.14% (down from 16.41% in December of last year).

The Scotch Plains/Bridgewater section of Route 22 is up as well. The vacancy rate in that area is currently at 9.22%. That's up from 8.56% cited last December.

As part of the bigger picture, The Goldstein Group's report determined that as of July, there was a 8.16% vacancy rate throughout Central and Northern parts of the state.  The rate was 8.11% in January of this year and 8.16% in July of 2009.

According the Lanyard, NJ continues to remain one of the strongest retail markets in the northeast. Other states, however, are reporting retail vacancy rates anywhere from 12% to 15%. In an issued press release, he stated that landlords are helping the process by reducing rents for existing tenants and making concessions for new ones.

While a number of chains have and continue to file bankruptcy or close stores, the latest numbers show cause for a positive outlook. "The buyers who are active are the ones looking for great rates from the spaces available," Lanyard said. "There's a real entrepreneurial spirit by people out there who are risk takers."