(Read more on the industrial market.)
EAST RUTHERFORD, NJ-Despite a slight cool-down in industrial tenant movement and investor activity during the summer months, the New Jersey market for industrial property is still fairly healthy, according to Cushman & Wakefield's Q3 statistics. And while the velocity of leasing activity slowed from the first half of the year, available industrial product, which currently totals 46.1 million sf in Northern and Central New Jersey actually declined slightly.
More than 5.2 million sf of leases were signed over the summer, with the most popular destinations being Middlesex and Hudson counties. Still, new space coming on the market could change things a bit. “Overall vacancy rates are likely to rise in Central New Jersey if the roughly four million sf of speculative development expected for delivery by 2008 is not absorbed,” says Gil Medina, executive managing director of Cushman & Wakefield of New Jersey, East Rutherford. He adds that, “activity in the northern part of the state will continue to center around the ports.
“Notably, the Port Authority officially approved the sale of Maher Terminals Inc.'s 600-acre port operations at Port Elizabeth to Deutsche Asset Management's Rreef Infrastructure, who agreed to invest at least $114 million in capital improvements,” Medina notes. Middlesex County saw 43% of the summer months' activity, according to C&W. Deals in excess of 100,000 sf were struck by Pro Tape & Specialties, Just Packaging, Recall Trucking, Kreilkamp Trucking Inc. and VSE Corp. KMM Telecommunications signed the largest lease, for 209,000 sf in Edison. Nearly one million sf was leased in Hudson County, which received commitments from AFL Web Printing, Iron Mountain Information Management Inc., Contract Furniture Transport and Yellow Roadway Corp.
In addition to the space absorption numbers, Cushman & Wakefield also found that average rental rates increased slightly market-wide to $6.56 per sf, up from $6.44 per sf at the same time last year. And Q3 found significant available space also added to the market, as two projects located in Cranbury totaling 517,000 sf were completed over the summer. They included a 277,000-sf flex building at 2 Clark Dr. and a 240,000-sf warehouse/distribution facility on Costco Drive.
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