New Jersey office building vacancy rates remain high, more than five years after the COVID-19 pandemic emptied offices in the state and across the country.
Many buildings, especially older, so-called “Class B” buildings, remain vacant or sparsely filled as employees continue to work remotely at least part of the time.
The office vacancy rate in New Jersey is at 23%, up from roughly 16% pre-pandemic. But those numbers don’t tell the full story, said James Hughes, a professor of urban planning and policy development at Rutgers University.
By 1990, 80% of all the office space built in New Jersey had been completed, Hughes said. But just a few years later, the dawn of the internet would begin to render much of that real estate obsolete.
“Today that office inventory is between 44 and 34 years of age. All the stuff built then was before the internet, before mobile technology,” Hughes said. “A lot of it was cheaply built. So now we have the aging, obsolete suburban inventory that we have to deal with today.”
Later, younger generations of office workers preferred to work in cities, and office buildings in walkable, urban areas with public transportation became more desirable than suburban office parks.
Even in 2012, “we had a suburban office problem” with increasing vacancy rates in New Jersey, Hughes said. Less than a decade later, the pandemic hit, and “it was basically gas on the fire.”