EAST RUTHERFORD, NJ-The recovery of the national industrial market is far outstripped by that of the Garden State, according to Cushman & Wakefield’s first quarter overview.
Northern and Central New Jersey leasing activity in the sector rose 62.6% over Q1of last year, from 2.6 million square feet in 2010 to 4.7 million square feet in 2011. The US industrial market saw 68.0 million square feet of activity in Q1, up 12.5% from 60.4 million square feet in the year-ago quarter.
“Industrial leasing activity in the Garden State has steadily increased over the past several months and is expected to continue on a positive trajectory,” notes Gualberto “Gil” Medina, C&W’s executive managing director in New Jersey, in a statement. “An uptick in renewal activity is expected, as tenants continue looking to restructure leases in order to take advantage of the market. Specific industries – primarily retail, shipping and logistics – will continue to keep leasing activity alive in areas such as Exit 8A and the Port Region, which have proven to be the nucleus of industrial activity here.”
As good as the New Jersey statistics are, it was not the market with the largest increases in leasing activity. Long Island, NY saw a 172% rise, followed by Suburban Maryland (up 118.8%) and Silicon Valley, CA (up 65.1%).
New Jersey also outperformed the nation in vacancy declines. In Northern and Central New Jersey, the first quarter vacancy rate was 10.5%, a 0.7% point decrease from 11.2% at the end of 2010. The national vacancy rate declined to 10.2% at the end of Q1, a 0.1 percentage point decrease from 10.3% at year-end 2010. The largest vacancy drops were reported by the Inland Empire in CA, Jacksonville, FL., and Hartford, CT.
Overall absorption was positive 7.7 million square feet at the end of Q1 for the US, up from negative 15.8 million square feet at this time last year. Overall absorption has returned to a positive status in Northern and Central New Jersey as well, registering 1.7 million square feet at the end of the first quarter, up from negative 4.6 million square feet one year ago.
“Leasing activity has returned to levels we haven’t seen since pre-recession,” says Jim Dieter, executive vice president and head of US Industrial Brokerage. “With this strong rebound in demand, coupled with declining supply, the US industrial market is steadily making its way towards recovery.”
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