New Jersey’s industrial real estate market racked up its 20th consecutive quarter of positive net absorption, Transwestern said in its First-Quarter 2018 Industrial Market Report.
The real estate services firm said in the report that demand steadily outpaced supply in the sector, which has tightened every year since 2010. The quarter saw 2.8 million square feet of net absorption, the second-highest level since Q3 2016, Transwestern added. That followed a near-record 5.3 million square feet of net absorption in the previous quarter.
Middlesex County recorded the quarter’s four largest transactions. The county has accounted for nearly 7 million square feet of absorption over the past 12 months, Transwestern said, and now has 7.6 million square feet of new product under development.
“Middlesex County has really stood out as the center of the New Jersey industrial boom,” Managing Director Jeffrey Furey said in a prepared statement. “Moreover, recognizing the lucrative opportunities here, the development sector has responded by setting in motion a substantial pipeline of new construction.”
Three of the deals involved logistics firms:
- XPO Logistics, which took 470,000 square feet in Dayton in the New Jersey Turnpike Exit 8A submarket;
- US Elogistics Services, which took 340,900 square feet in South Brunswick in the Exit 8A submarket;
- 4PX, which took 354,250 square feet in Perth Amboy’s ePort Logistics Center in the Exit 11/Garden State Parkway submarket.
Overall industrial vacancy is at 4.1 percent statewide, the third-straight record-low quarter. Rents are averaging $7.74 per square foot, the ninth-straight record-high quarter.
“With vacancy at record lows and rents at record highs, the New Jersey industrial sector is an undisputedly healthy market,” New Jersey Research Director Matthew Dolly said in a statement.
Not all the news was good, however.
“While several indicators provide a continuing sense of optimism, such as high consumer confidence, healthy employment levels and record-high container volume at American ports,” Dolly said, “two sources of concern are a relative paucity of truck drivers and construction workers, as well as rumblings over a potential trade war with China.”