PARSIPPANY, NJ—Bolstered by unabated demand and new development, New Jersey's industrial market saw its average rental rate continue to skyrocket during the second quarter, eclipsing the $7 level for the first time ever, according to Transwestern's Second-Quarter 2017 Industrial Market Report.
At $7.26 per square foot, the average asking rent is up 15 percent from a year ago, and $2 per square foot higher than it was five years ago. The $7 level was broken in 15 of the 25 submarkets Transwestern examined, and four submarkets even recorded asking rents above $8 per square foot during the second quarter.
Absorption slowed slightly during the quarter, dipping below one million square feet for the first time in three years, mostly due to a lack of quality available inventory. However, it was the 17th consecutive quarter with positive net absorption. Furthermore, while vacancy improved only slightly during the quarter, the year-over-year vacancy rate dropped by more than 100 basis points for the fifth consecutive quarter – the longest such streak since 1999.
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