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Industrial Market Trends Trigger Warning Lights

NEWARK-With space give-backs outpacing demand, the word best describing the marketplace right now is 'stalled.'

By Eric Peterson | Updated on July 29, 2008

NEWARK-Consolidations are outpacing demand, and following an uptick in demand that led to more than two million sf being absorbed in Q1, moderating leasing velocity combined with additional space generated by those consolidations and restructuring has triggered red warning lights on the North and Central Jersey industrial market’s dashboard. In a word, the market has “stalled.”

That’s the word from Grubb & Ellis’ Q2 market report, authored by Stephen Jenco, VP-client services manager in the firm’s Fairfield, NJ office. Since Q1, the market decelerated in the wake of more than 3.1 million sf of negative net absorption in Q2, the largest volume of negative absorption in a single quarter since Q2 of 2005.

Andrew Siemsen, associate director in the Edison office of Cushman & Wakefield, agrees, to a degree. “The lack of velocity in the New Jersey leasing market appears to be limited to the big-box product,” he says. “But activity under 100,000 sf remains relatively stable this year.”

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