Real Estate

NJ Industrial Market Back on Track in Q4 2023

Northern and Central New Jersey’s industrial sector was back to its winning ways during the fourth quarter of 2023 after a slight lull earlier this year, according to CBRE’s Q4 2023 New Jersey Industrial Figures report.

The market saw 22.5 million sq. ft. of leasing activity during the year, on par with the record-breaking levels of 2022. Despite strong demand and leasing activity, the market’s vacancy was up 170 basis points (bps) as the result of more than 14 million sq. ft. of new product delivered to the market during the year. Northern and Central NJ’s Class A average asking rents ended Q4 virtually unchanged from prior quarters at $23.88 per-sq.-ft. and $18.05 per-sq.-ft., respectively.

“Despite facing some headwinds in Q2 and Q3, New Jersey’s industrial market showed great resiliency and closed the year with exceptional leasing activity and strong demand,” said Larry Schiffenhaus, Executive Vice President, CBRE. “While there is no threat to oversupply in the market, increased deliveries coupled with a decline in pre-leasing, vacancy increased to 4.5% but we still have a fundamentally strong market. As a result, developers curbed construction starts and land acquisition during 2023. The 10.2 million sq. ft. of space that broke ground in 2023 was 19% below last year’s level and 31% below 2021’s starts. This bodes well for the market.”

Q4 leasing was back with the number of new leases in the 100,000-200,000 sq.-ft. range more than doubling in the quarter to 13, while the number of new leases above 200,000 sq. ft. remained steady quarter-over-quarter. Among the largest deals in the market were Marc Fisher’s 608,000 sq. ft. renewal at 1240 South River Rd. in Cranbury and TFH Publications’ 550,000 sq.-ft. recommitment at 965 Cranbury South River Rd. in Monroe.

Sublease activity totaled 1.3 million sq. ft. in Q4, an increase of 20% quarter-over-quarter. Three of the quarter’s top five new leases were subleases: LC Logistics at 44 Station Road in Cranbury for 311,000 sq. ft.; 1 Stop Electronics Center at 1365 Lamberton Rd. for 233,000 sq. ft.; and Health Care Co. at 45 Patrick Ave in Edison for 215,000 sq. ft.

To access more business news, visit NJB News Now.

Related Articles: