HASBROUCK HEIGHTS, NJ-Jones Lang LaSalle’s third quarter industrial market report found that, despite a 20% reduction in the number of industrial leasing transactions in the third quarter of 2010 compared with the same period in 2009, New Jersey’s industrial market is showing signs of stabilization. The market has experienced relatively little change in average asking rents and vacancy rates from the previous quarter.
The overall vacancy rate for New Jersey was 13.4% at the end of Q3 2010, largely unchanged from the 13% vacancy rate at the end of Q2 2010. The vacancy rate at the end of Q3 2009 was 12.4%. Average asking rents in New Jersey were $5.11 at the end of Q3 2010, compared to $5.08 at the end of Q2 2010. Average asking rents in Northern New Jersey were $5.78 at the end of Q3 2010, and $4.32 in Central New Jersey, relatively unchanged from Q2 2010.
The research also reports a significant increase in port activity, with overall container volumes increasing by 21% from August 2009 to August 2010. Early indicators may point to the market finally hitting bottom.
“We’re seeing a continued trend of large users leaving the Northern New Jersey market for less expensive and more modern facilities located in the central region of the state,” says Rob Kossar, managing director at Jones Lang LaSalle. “The sweet spot for Northern New Jersey is for lease transactions in the 10,000-square-foot to 40,000-square-foot range, which are in high demand by the food and beverage industries to service the greater metropolitan area. With port activity increasing, this will keep demand steady for Northern New Jersey.”
Kossar adds that the central part of the state remains very attractive for mid-to-large size tenants, including third-party logistics and apparel-related companies, especially in facilities located off of Turnpike exits 8A and 7A, because of the pricing differential with Northern New Jersey and the large stock of class A modern industrial space.
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