CHATHAM, NJ−In an unaccustomed wrinkle, northern New Jersey's industrial market saw negative absorption of 1.6 million square feet in the first quarter, Cassidy Turley reports in its new Market Snapshot. Still the market is performing well and various submarkets showed improved fundamentals.
Fruthermore, central Jersey had 1.5 million square fet of positive absorption, according to CT's analysts.
CT, based in Chatham, cites “macro-economic events” it says caused the vacancy rate to rise to 12.2% in Q1. For one, JLL started marketing the 1.9-million-square-foot Roche campus in Clifton/Nutley, a property that is sizable enough to affect the overall rate in northern NJ, notes CT's report.
In the Meadowlands submarket, though, vacancy dipped to 10.4% from 12.6% and in Union County, vacancy was down 4% quarter over quarter.
Asking rents didn't budge in the northern part of the state, remaining at $6.13 per square foot.
In central NJ, vacancy dipped to 12% compared to Q1 2013, and asking rents increased to $5.15 per square foot from $5 in Q1 2013.
The NJ Turnpike Exit 7A and Exit 10 submarkets outperformed the rest of central Jersey with 808,046 and 1.45 million feet of positive absorption, respectively. Availability rates declined drastically within these two submarkets year-over-year. Exit 7A availability dropped to 8.8% during Q1 from 18.9% inQ1 last year. The Exit 10 vacancy rate went down to 7.5% from 13.3% a year ago.
Vacancy will increase slightly during the next six months as new inventory is delivered to the market, CT predicts. On the other hand, several deals fpr more than 200,000 square feet may offset the uptick in inventory.
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