The speaker is Dan Frankel, a principal of Newmark JGT of New Jersey, based here. The firm also has an office in Rutherford, NJ. "In fact," Frankel continues, "the industrial market in the state continues to be one of the strongest in the country."
In fact, one offshoot of the September 11 tragedy has been an increase in demand for industrial space, especially in the northern part of the state. "A number of companies began looking for disaster recovery and data center space," Frankel explains. "This space is typically abandoned or outdated industrial facilities that are converted into high-tech space."
Another trend in the market, according to Frankel, is a lack of small industrial space. "While there is inventory of large bulk warehouse space throughout the state," he explains, "tenants looking for smaller space units are having a tough time fulfilling this requirement. That has, in turn, kept the pressure on rents."
And in general, industrial rents remain stable, he reports. Indeed, "the slight correction in rents has actually created enhanced opportunities for tenants. With the industrial market having most likely reached the floor regarding rents, it's a great time for tenants to be entering the market. In fact, we've seen demand increase substantially of late."
Much of that demand continues to come from product-related services as the Garden State cements its role in the warehousing/distribution and logistics categories. And because that involves products turned out by a wide variety of manufacturing categories, "that means we're not vulnerable to any one industry bringing the whole market down," Frankel explains.
Finally, "new construction remains light. Despite the overall size of the industrial market in New Jersey," Frankel continues, "the amount of spec construction has been extremely limited. Over the past three years, only eight million sf has been built speculatively here," he concludes. "That has kept rents stable, demand strong and vacancies in check."
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