In Central New Jersey, a total of 2 million square feet was absorbed between April 1 and June 30; that compares to negative absorption of 1.2 million square feet in the first quarter. At Exit 7A submarket, the vacancy rate plummeted by 41% — which JLL said indicated significant leases are pending and space will be coming off the market in the near future.

“The Turnpike industrial corridor, being such an attractive location for tenants to conduct warehousing and distribution operations, predictably fared well as virtually every submarket — the Port, Meadowlands, Exit 12, Exit 10, Exit 9, Exit 8A, Exit 7A and Exit 6 — experienced positive absorption in the second quarter,” said JLL managing director Rob Kossar.

The Port area vacancy rate tightened to 6.3 %and the Exit 10 submarket vacancy was down to 5.8 %. Kossar called the low rates “a promising sign of things to come throughout the New Jersey industrial market,” and suggested that speculative and build-to-suit construction could be on the horizon.

“The Port submarket already has almost one million square feet of new industrial space coming online by the end of 2014, and we expect this figure to continue to grow as more developers capitalize on tenants’ desire to be as close to the port as possible,” says Kossar in a release.

In addition, the JLL director cited Amazon.com’s stated interest in building two 1.2-million-square-foot industrial facilities in New Jersey, saying it may be “leading the charge” for that type of development in the central part of the state.

New Jersey appeals to e-commerce retailers because of its location within a two-hour drive of a customer base of approximately 30 million people, Kossar said. There is scare existing Class A big-box space available in the state, but development sites are scattered in central Jersey, he says.

“Demand to locate e-commerce centers here should pick up thanks to a number of factors such as the state’s willingness to accommodate these companies, the shrinking of big-box retail, an outstanding labor market and a prime location,” he adds.

Other highlights from the Q2 report include:

• Northern New Jersey’s vacancy rate dipped slightly to 7.9 %, from 8.1 % in Q1. In central New Jersey, overall vacancy was 9.5 % compared to 10.3 % in Q1.
• The average asking rents in New Jersey were $4.97, up six cents from the first quarter.