Snapshot Finds Little Change in NJ Ind. Market, But Outlook is Promising According to Cassidy Turley
TEANECK, N.J. (MAY 3, 2012) – Though the statistics for New Jersey’s industrial market may sound familiar, with Central New Jersey leading the way and Northern New Jersey posting modest results, there are a few encouraging signs on the horizon, according to recently released first-quarter Industrial Market Snapshots from Cassidy Turley, a leading commercial real estate services provider in the U.S.
“In Central New Jersey, current market conditions are putting the area on the map from the investors who were sitting on the sidelines waiting for the market to bottom out,” saidDouglas Bansbach, Senior Vice President, Principal, for Cassidy Turley.“This market is quite attractive with increasing leasing and sales velocity coupled with decreasing availabilities. And it becomes even more attractive when you consider future projections and see the possibilities with increased port traffic requiring more space.”
As to be expected, newer, high-quality buildings will continue to capture the majority of demand and outperform older facilities with investors and tenants alike. Despite there being no deliveries in the first quarter, the recent uptick in leasing activity in Central New Jersey has encouraged speculative development for the first time in a number of years, added Bansbach.
Despite a slight increase in vacancy in the first quarter of 2012, the Central New Jersey industrial market is still experiencing accelerated leasing velocity, with the overall vacancy rate dipping below double digits for the first time since the first quarter of 2009.
The Exit 8A submarket was the star of the quarter with 1.461 million of positive net demand that brought the vacancy rate down to 13.0 percent from 15.5 percent in the previous quarter. This submarket has now experienced eight quarters of consecutive positive absorption and the vacancy rate is currently 8.3 percent less than its peak of 21.3 percent in the third quarter of 2009.
“Most of these transactions were big-box leases from mostly data/logistics and food product companies who were locking in value pricing,” said Howard Weinberg, Senior Vice President, Principal for Cassidy Turley. “Tenants see the same advantages as the investors---the abundance of upgraded product selection, competitive values, and easy transportation access. We are on the path to seeing anincrease in rental rates and a drop in overall landlord concessions.”
The overall vacancy rate for Central New Jersey was 8.8 percent and the average asking rental rate fell slightly by 4 cents to $4.28 per square in the first quarter of 2012. Vacancy levels are inching closer to the 10-year historical average of 8.2 percent, indicating that the market has reached a state of equilibrium, noted Weinberg.
The Northern New Jersey Industrial market experienced a modest amount of positive net absorption in the first quarter of 2012 with the Meadowlands submarket being the best performer with 642,826 square feet of net positive absorption. The overall vacancy rate remained at 7.7 percent, the same rate for the past three quarters. Average asking rates for industrial space remained relatively flat in the first quarter of 2012, declining slightly by $0.07 to $5.60 per square foot.
Noteworthy industrial transactions during the first quarter included:
- Donna Karan’s 197,000-square-foot lease at 400 Commerce Boulevard in the Meadowlands submarket
- Petco’s 781,300-square-foot deal at 257 Prospect Plains Road
- Record Time Storage 172,498-square-foot lease at 51 Commerce Drive
Click here to download Cassidy Turley’s New Jersey Industrial Q1 2012 Market Reports.
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider with more than 3,600 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. Cassidy Turley enhances its global service delivery outside of North America through a partnership with GVA, giving clients access to commercial real estate professionals in 65 international markets. Please visit www.cassidyturley.comfor more information about Cassidy Turley.