NAI James E. Hanson released its 2Q 2017 Northern and Central New Jersey Industrial Market Report detailing leasing and sales data for key industrial submarkets.
The northern and central New Jersey industrial market saw a substantial increase in leasing with over 5.6 million square feet leased in 2Q alone, an increase of over 750,000 square feet from 1Q 2017. The heightened demand and limited new supply arriving in the market lead to a decrease in the overall vacancy rate to 4.5 percent and a $0.32 increase in asking rents per square-foot from the previous quarter. The region also saw over $541,000,000 in sales volume this quarter with an average price per square foot of $69.82.
Bergen County asking average rents continue their pursuit of double digits with Northern Bergen County attracting $8.61-per-square-foot and Central Bergen County attracting $8.36-per-square-foot. The Meadowlands is leading the state at $8.81-per-square-foot, an increase of $0.61 since last quarter and $1.55 since the same time last year.
With asking rates in the Bergen County markets rapidly rising and a limited supply of warehousing space, companies have looked elsewhere for quality opportunities. The Exit 8A submarket in Jamesburg and Cranbury saw the largest year to year rise in asking rates up to $6.78-per-square-foot, a jump of $1.54 from 2Q 2016 and $2.17 from 2Q 2015. The submarket also saw the state’s highest leasing activity with over 1,530,000 square feet leased in 2Q alone. Due to this leasing velocity, vacancy levels are also among the state’s lowest at 2.5 percent.
Increased demand in the Exit 8A submarkets has prompted several firms to undertake industrial development projects further west including a 2,200,000-square-foot project in Piscataway, a 930,000-square-foot project in Phillipsburg and a 700,000-square-foot project in Hillsborough.
“Demand for warehousing and distribution oriented industrial space continues to be driven by e-commerce users as well as firms looking for accessible spaces nearby large and rapidly growing population centers,” said Scott Perkins, SIOR, CCIM, senior vice president and chairman of NAI Hanson’s Industrial Council. “This demand has caused rents in the Bergen and northern part of the state to skyrocket while driving vacancy down substantially. As more firms are priced out of these markets, they will continue to search for acquisition and leasing opportunities in the next growth ring that includes Somerset County and further west along Route 78.”
NAI Hanson research team has also recently published additional 2Q Market Reports for Medical Office, Meadowlands Industrial and the Upper Parkway as well as an update on the redevelopment of Hackensack.Related Articles: