“The strongest demand is for large, modern Class A space,” says Monahan, adding that by “large” he means 600,000 square feet or more. “Even taking into account the space under construction and proposed construction, the development pipeline for buildings that size is very limited.”

Indeed, Monahan referred to a “scarcity.”

He says that there are quite a few companies actively seeking buildings in the 600,000-square-feet-plus range, but there are less than a handful available.

“What we are seeing now is some developers and users, when they can't find a building large enough in the right location, they are considering maximizing cubic footage versus square footage,” Monahan says. By that, he basically means: higher ceilings.

Monahan says his Saddle-Brook-based company is in discussions with two tenants who would consider committing to a developer's proposal for a building with 40-foot ceilings – compared to the modern standard of 30-foot heights – if the location suits them. Mainly, that type of demand is for sites anywhere in northern New Jersey, where less developable space is available, he says.

For medium-sized properties, there is also high demand bumping up against limited availability, according to Monahan's CBRE colleague Scott Belfer. He counts more than 20 companies that are searching for 300,000 square feet or more.

During the third quarter, there was positive absorption of 1.08 million square feet of space on the New Jersey market, CBRE reports. That included Brooklyn-based Dynamic Marketing's lease of a 396,510-square-foot warehouse in Hamilton Township.

The central NJ industrial market is continuing to outperform northern NJ, accounting for 63% of new leasing in the quarter and 70% of renewals.