NAI James E. Hanson Releases Third Quarter 2017 Northern & Central New Jersey Industrial Market Report
Report Highlights Strong Demand and Activity in Northern and Western New Jersey Industrial Markets
Hackensack, N.J. (November 13, 2017) – NAI James E. Hanson, a leading New Jersey-based full-service independent commercial real estate firm, released its 3Q 2017 Northern and Central New Jersey Industrial Market Report detailing leasing and sales data for key industrial submarkets.
The northern and central New Jersey industrial market’s leasing velocity continued into 3Q with over 6.4 million square feet leased in 3Q alone, an increase of almost one million square feet from 2Q 2017. Sales volume also saw a marked increase from 2Q 2017 with over $573 million in sales volume during 3Q, an increase of $22 million from 2Q 2017. The average sales price per square foot continues its march towards triple digits at $81.66 psf for the quarter, an increase of $26.66 psf from last year’s 3Q number.
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%, down from 4.5% in the last quarter. There was also a corresponding increase in asking rents up to $7.45 psf, rising $0.24 psf from last quarter and $1.02 psf from 3Q 2016.
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 psf increase from last quarter and a $1.62 psf increase from 3Q 2016. Northern Bergen County saw a rise of $0.12 psf from last quarter and has seen an increase of $1.70 psf 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% for 8A and 3.9% 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 Partner’s 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.
“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.”
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