HASBROUCK HEIGHTS, NJ-Industrial space was leased at a “staggering” pace in the powerhouse markets at Exits 7A and 8A of the New Jersey Turnpike and interest was “feverish” in the Meadowlands so far this year, reports Jones Lang LaSalle. Based on those results, the firm predicts rents will rise and concessions will be reduced overall this year in the state.
The vacancy rate decreased sharply in central New Jersey, and decreased in both northern and central Jersey. In the north, it was down .6 % to stand at 8.1 %. The rate was down 8.6 % in the central part of the state, winding up at 10.2 percent
In the month of March alone, according to the report, more than 2.1 million square feet of space was absorbed in the central Jersey markets along the Turnpike. JLL says: At Exit 8A, the amount of space available tightened by 22% in the first quarter of 2012 compared to Q1 of 2011. At Exit 7A, there was 17 % less space available.
“To complete so many deals of this magnitude in such a short time frame is evidence of both the quality of these properties and their exceptional location,” says David Knee, Jones Lang LaSalle’s managing director in a statement for the report to be issued Monday. “We anticipate that due to this high level of absorption, developers will start to consider increasing speculative development in this market. Heightened activity like this is an encouraging sign that companies are planning for the future and want to capitalize on the current market conditions to secure favorable terms.”
In the Meadowlands during the first quarter, small and medium-sized tenants frenetically toured the available sites, and there was an “overwhelming increase in net absorption of 920,000 square feet,” says the JLL report.
The Port areas did not perform nearly as well, the firm’s report notes. However, market specialists generally predict that activity will be less during the waiting period for the completion of the widening of the Panama Canal. The Port Authority of New York & New Jersey is now anticipating that the Bayonne Bridge in New Jersey can be raised to accommodate larger ships coming from Panama by 2014, under a new program to expedite federal authorization of such major projects. When approvals are final, JLL noted, that will spur activity by developers and prospective tenants within the Port and the port-related submarkets.
State incentive programs helped spur leasing activity in the first quarter, including the new Grow New Jersey tax incentive. Four projects totaling $541.5 million were awarded Grow New Jersey incentives in April.
Investment activity was slower in the first quarter than at the end of last year, says the report. The only notable investment transaction in the state occurred in March: CenterPoint Properties’ sale and leaseback transaction with ASA Apple for its new 256,000 square foot facility in Carteret.
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