Cassidy Turley Sees Turnaround in Central New Jersey Industrial Market as Northern New Jersey Market
While the industrial market in Central New Jersey experienced increased leasing velocity, the Northern New Jersey market had relatively sluggish results, according to recently released fourth-quarter Industrial Market Snapshots from Cassidy Turley, a leading commercial real estate services provider in the U.S.
“The dramatic turnaround in Central New Jersey is paving the way for recovery and was marked by improved leasing, a decline in the vacancy rate and sizable transactions,” saidDouglas Bansbach, Senior Vice President, Principal, for Cassidy Turley.“This positive environment has encouraged the consideration of speculative development for the first time in years.”
The vacancy rate in Central New Jersey fell to 9.1 percent in the fourth quarter from 9.4 percent in the third quarter, marking three consecutive quarters of positive absorption. The average asking rental rate fell slightly by three cents over the quarter and 27 cents year over year, reported at $4.33 per square feet in the fourth quarter. For the year, the market had more than 3.5 million square feet of positive absorption.
The Exit 8A submarket was a star performer with leasing activity that amounted to 490,423 square of positive demand in the fourth quarter and 1.5 million square feet for the year. Data/logistics sectors and food products companies accounted for a significant amount of activity.
In Northern New Jersey, leasing activity remained sluggish in the fourth quarter as the vacancy rate rose slightly to 7.9 percent with negative 460,347 square feet of net absorption.
The Port/Airport submarket maintains the lowest vacancy rate in Northern New Jersey of 3.8 percent and reported more than 280,000 square feet of positive absorption in 2011. Union County was the best performer in the fourth quarter with more than 109,000 square feet of positive absorption and a total net absorption of 470,498 square feet for 2011.
One positive sign of future market improvement is that the average asking rental rate actually rose in the fourth quarter to $5.66 per square foot from $5.62 in the third quarter.
“This indicates that asking prices have bottomed out and landlords and tenants are closing the gap between perceived market values,” said Howard Weinberg, Senior Vice President, Principal for Cassidy Turley. “The Port of New York and New Jersey will be a hotbed of activity over the next few years as increased demand and investment will fuel expansion by warehouse users and generate job growth in the area. The effort to raise the Bayonne Bridge to accommodate the Panama Canal expansion will be a true market driver when completed.”
Notable industrial transactions during the fourth quarter of 2011 included:
- Cooperfriedman Electric Supply signed a deal for 269,369 square feet at 1 Matrix Drive in the Exit 8A submarket.
- Also in the Exit 8A submarket, Propack Data leased of 225,220 square feet at 11 Commerce Court.
- In Union County, there was the full-building lease of 197,815 square feet at 1441 Chestnut Avenue in Hillside.
- In the Exit 10 submarket, ICW Limited, a commodities warehouse/logistics company leases 154,000 square feet at 2170 Lincoln Highway.
Click here to download Cassidy Turley’s New Jersey Industrial Q4 2011 Market Reports.
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider with more than 3,400 professionals in more than 60 offices nationwide. The company represents a wide range of clients—from small businesses to Fortune 500 companies, from local non-profits to major institutions. The firm completed transactions valued at $18 billion in 2010, manages 455 million square feet on behalf of private, institutional and corporate clients and supports more than 25,000 domestic corporate services locations. Cassidy Turley serves owners, investors and occupiers with a full spectrum of integrated commercial real estate services—including capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. In 2010, the firm enhanced its global service delivery outside of North America through its partnership with GVA. Please visit www.cassidyturley.comfor more information about Cassidy Turley.