Northern New Jersey Market Shines While Central Slows, According to Q3 Cassidy Turley Industrial Report

On Oct 17, 2014

Chatham-based Cassidy Turley, a commercial real estate services provider in the U.S., released the Third Quarter Industrial Market Snapshot for New Jersey, noting the industrial market has been vital to economic growth in the state with employment in the manufacturing sector up by approximately 1,500 jobs year over year.

After three consecutive quarters of negative absorption, Northern NJ recorded 118,139 square feet of positive absorption, while vacancy declined 10 basis points to 8.0 percent. Asking rents rose from $6.09 per square foot to $6.19 per square foot. Strong leasing activity in the Meadowlands and Passaic submarkets accounted for much of the improvement during the third quarter with vacancy declining 50 and 70 basis points, respectively. On the other hand, Continental Terminals and Hartz Mountain Pet Products vacated space in Jersey City led to a 190 basis point increase in vacancy in the Hudson Waterfront submarket to 11.3 percent.

Central NJ slowed slightly with 65,535 square feet of negative absorption, as vacancy jumped 80 basis points to 7.3 percent due to several large spaces becoming available. Asking rents declined marginally from $5.40 per square foot to $5.35 quarter over quarter. Several move-outs and downsizing in the Exit 12 and Exit 8A submarkets were contributing factors to the downturn during the third quarter. Exit 12 vacancy rose to 16.4 percent, and Exit 8A experienced a 30 basis point increase. Alternatively, the Exit 9 submarket performed exceptionally well with 564,828 positive square feet of absorption posted in the third quarter. Despite the recent downward trend, vacancy was still 20 basis points lower in Central NJ than it was a year ago, and with the exception of the second quarter, asking rents are the highest they have been since the end of 2009.

“Despite the sluggish activity in Central New Jersey, the industrial market has played a strong role in the recovering state economy,”  said Laurence Casey, Senior Vice President of Cassidy Turley. “As employment increases over the next few years, we can expect to see a growing demand for industrial space and users seeking to take advantage of  favorable market conditions.”

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