Positive Momentum Continues for New Jersey Industrial Market, According to CBRE
SADDLE BROOK, N.J. (November 9, 2012)– New Jersey’s industrial real estate market continued its overall positive momentum in the third quarter, highlighted by a number of new deals and longer-term commitments, according to findings in CBRE New Jersey’s Third Quarter 2012 New Jersey Industrial MarketView Report.
“With the market improving for Class A space, those tenants seeking such space are having a hard time finding the appropriate facilities,” said William Waxman, CBRE executive vice president. “There are only nine Class A properties with more than 200,000 square feet available, mostly concentrated at Exits 8A and 7A of the New Jersey Turnpike. There will be a lot of competition for these spaces in the coming months.”
The availability rate for New Jersey industrial properties dropped slightly to 10.1 percent. With continued healthy demand and positive absorption, availability could drop below double-digit numbers not seen since 2008. New Jersey’s industrial market has now seen eight quarters of positive absorption.
Leasing activity continued to be strong during the third quarter, with 5.47 million square feet leased. There has been a continued drop in renewal commitments, which only accounted for 15 percent of the total leasing compared to 2009 and 2010, when they averaged approximately 33 percent.
“Many of the three and five-year blends-and-extends signed between 2008 and 2010 are set to expire,” said James Tully, executive vice president. “The market should see a boost of activity due to this fact. This increase in demand will result in a tighter market with fewer opportunities as investors continue to view New Jersey as an attractive core market to expand their industrial portfolios.”
Messrs. Waxman and Tully agree that the upside to this level of competition is that the market will see an increase in new construction projects. Currently there are three projects totaling 1.16 million square feet being constructed on spec – two of which began this quarter. Several build-to-suit developments are also underway.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com.