Hackensack-based NAI James E. Hanson, a commercial real estate firm, recently released its 1Q 2018 Northern and Central New Jersey Industrial Market Report, which details leasing and sales data in northern and central New Jersey.
The report indicated there is a high demand for industrial space in North and Central Jersey, with low supply rates driving the price for available space. The area saw more than 5 million square feet leased and over 2.9 million square feet absorbed in the first quarter of 2018. For much of the areas industrial market, vacancy rates are at 3.5 percent, a decrease of 0.2 percent from the previous quarter.
The current asking rate for the entire submarket is $7.70 per square-foot, up $0.38 per square-foot from the fourth quarter of last year. The Meadowlands submarket is the top among asking rates price, at $9.27 per square foot, up from $8.20 in the first quarter of 2017. Additionally, Exit 10/12 is at $8.14, an increase of $0.98 from the first quarter of last year.
The Turnpike industrial submarket is hovering around 100 percent occupancy, with Exit 8A at 1.3 percent, down from 2.4 percent compared to last year; Exit 9 at 1.6 percent, down from 3.3 percent; and Exit 10/12 at 2.3 percent, down from 2.9 percent.
“There are few industrial markets in the United States that have shown the quarter-over-quarter consistency and level of activity of the northern and central New Jersey industrial market. With limited opportunities for development in many of the most active submarkets in the region, particularly those along the Turnpike, near the Port and in the Central Bergen area, and rapidly increasing prices for land, the most desirable locations have become affordable only for the largest companies,” said Kristen Jost, research director for NAI James E. Hanson.
In secondary markets, Hunterdon County is up to $8.23 per square-foot, an increase of $3.03 per square-foot from the first quarter of 2017. The Warren and Sussex submarket has shown a decrease in its vacancy rate, down from 13.1 percent at this time last year to 6.3 percent in the first quarter of 2018. There’s about 1 million square feet of new space under construction in Phillipsburg slated for completion in the first quarter of 2019. The Essex submarket is at $8.22 per square-foot, an increase of $1.92 per square-foot from the same time last year.
“… We are seeing many developers look to the north, west and south to find more favorable investment opportunities. Similarly, many medium and smaller tenants are beginning to look to the less pricey yet accessible markets along Interstates 78, 80 and 287 for leasing opportunities and we expect those markets to continue their strong momentum throughout 2018,” Jost said.
In sales, the report indicates several large portfolio deals drove much of the $500 million in sales volume for the first quarter of this year. It indicates the sales price for industrial products is continuing to move upward with a price per square-foot at $81.82, an increase of $2 from the same time last year.
The biggest transaction this quarter was The Blackstone Group’s $1.8 billion industrial portfolio purchase from Cabot Properties. It included 14 properties in New Jersey, Chicago, Dallas, Baltimore/D.C., Los Angeles and South Florida. There was approximately 945,000 square feet sold in New Jersey, including 100 Corporate Drive, Mahwah; 200 Corporate Drive, Mahwah; 750 Corporate Drive, Mahwah; 1595 MaCarthur Blvd., Mahwah; 320 State Route 17, Mahwah; 8 Thornton Road, Oakland; 1 Wiley Drive, Franklin; and 2303 Center Square Road, Swedesboro.