HACKENSACK, NJ— The northern and central New Jersey industrial market's leasing velocity continued into the third quarter, with more than 6.4 million square feet leased in the quarter alone, an increase of almost one million square feet from the second quarter of 2017, according to research by NAI James E. Hanson.
Sales volume also saw a marked increase from the second quarter, with more than $573 million in third quarter sales volume, an increase of $22 million from the prior period. The average sales price per square foot continues its march towards triple digits at $81.66 per square foot for the quarter, an increase of $26.66 per square foot from last year's third quarter number.
“As the costs to enter into New Jersey's most easterly markets continue to increase, we are seeing a continued western and southern shift in demand and, subsequently, investment,” said Scott Perkins, SIOR, CCIM, senior vice president and chairman of NAI Hanson's Industrial Council. “Developers continue to see better opportunities for return on their investments along the corridors of New Jersey's main highway arteries. This shift aligns with the continued search for budget-friendly and accessible spaces beyond the pricier Meadowlands markets, particularly in the Essex, Morris, Sussex and Warren markets. Our industrial team at NAI James E. Hanson looks forward to continuing to leverage our decades of experience in each of these emerging industrial markets on behalf of our clients into the fourth quarter and beyond.”
The heightened demand and limited new supply arriving throughout northern and central New Jersey market saw vacancy rates continue their decrease with the overall industrial vacancy rate standing at 4.2 percent, down from 4.5 percent in the last quarter. There was also a corresponding increase in asking rents up to $7.45 per square foot, rising $0.24 per square foot from last quarter and $1.02 per square foot from last year's third quarter.
Most notably, continued high prices in the Meadowlands and central Bergen County markets have led to outlying submarkets in Essex, Morris, Sussex and Warren counties seeing heightened leasing and sales activity. The Ports submarket that includes Port Newark and Elizabeth and Bayonne saw a $1.02 per square foot increase from last quarter and a $1.62 per square foot increase from third quarter 2016. Northern Bergen County saw a rise of $0.12 per square foot from last quarter and has seen an increase of $1.70 per square foot since the same time last year. The Route 46/23/3 corridor, Morris and Sussex/Warren submarkets each saw increases in asking rents from last quarter as industrial users continue to search for accessible markets with lower barriers to entry.
Further south, the Exit 8A and 10/12 on the New Jersey Turnpike submarkets continue to boast some of the lowest vacancy rates in the state at 2.1 percent for 8A and 3.9 percent for 10/12. Investors and developers are capitalizing on the low vacancy rates with over 7.4 million square feet of industrial space proposed or currently under construction including Clarion Partners' 1.3 million-square-foot project in Cranbury and Heller Industrial Park's proposed 1.3 million-square-foot project in South Brunswick, which are among some of the largest projects in the state.
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Steve Lubetkin
Steve Lubetkin is the New Jersey and Philadelphia editor for GlobeSt.com. He is currently filling in covering Chicago and Midwest markets until a new permanent editor is named. He previously filled in covering Atlanta. Steve’s journalism background includes print and broadcast reporting for NJ news organizations. His audio and video work for GlobeSt.com has been honored by the Garden State Journalists Association, and he has also been recognized for video by the New Jersey Chapter of the Society of Professional Journalists. He has produced audio podcasts on CRE topics for the NAR Commercial Division and the CCIM Institute. Steve has also served (from August 2017 to March 2018) as national broadcast news correspondent for CEOReport.com, a news website focused on practical advice for senior executives in small- and medium-sized companies. Steve also reports on-camera and covers conferences for NJSpotlight.com, a public policy news coverage website focused on New Jersey government and industry; and for clients of StateBroadcastNews.com, a division of The Lubetkin Media Companies LLC. Steve has been the computer columnist for the Jewish Community Voice of Southern New Jersey, since 1996. Steve is co-author, with Toronto-based podcasting pioneer Donna Papacosta, of the book, The Business of Podcasting: How to Take Your Podcasting Passion from the Personal to the Professional. You can email Steve at [email protected].
