According to CBRE, New Jersey’s industrial sector continued to break records during the second quarter of 2019.The market’s overall strength was best exemplified by the continued rise in rents, with transactions approaching $13.00 per-sq.-ft. in Northern New Jersey and $10.50 per sq. ft. in Central New Jersey, well above average asking rates. As the majority of newer product is offered without a published asking rent, the spread between average asking rents and actual taking rents will continue to expand.
In addition, the market experienced a 20 basis points (bps) drop quarter-over-quarter to 6.2 percent - the lowest rate seen in the New Jersey industrial market since Q1 2005.
Leasing activity of 6.7 million sq. ft., while robust and the highest ever recorded for a second quarter since CBRE began tracking the market in 2001, was slightly lower than the 6.9 million sq. ft. posted in Q1 2019. Net absorption, at 3.6 million sq. ft., ended more than 900,000 sq. ft. below the first quarter, but marked the 10th consecutive quarter with a positive result.
The second quarter ended with seven buildings added to inventory, bringing 2.1 million sq. ft. of new industrial space to the market. Interestingly, over 45 percent of the new product was pre-leased upon delivery.
“As market fundamentals remain incredibly strong, although fluctuating, New Jersey’s industrial market continued to break records with higher asking rents and very low availabilities for quality product,” saidMindy Lissner, Executive Vice President, CBRE. “Given New Jersey’s central location, at the epicenter of the Northeast distribution corridor, and strong demand by e-commerce and logistics users, the market is poised to remain robust for the foreseeable future.”
During the second quarter, third party logistics companies had a dominant 41 percent share of new leases in the market. Major leases included a 611,320-sq.-ft. renewal by Geodis Logistics at 1 Costco Way in Monroe Township; a 382,596-sq.-ft. new lease by Corbion at 700 Union Boulevard in Totowa; and a 333,059-sq.-ft. renewal by Menlo Logisticsat 24 Englehard Drive in Monroe Township.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
