New Jersey’s industrial market is continuing to break records in the second quarter of 2019, according to CBRE’s Q2 2019 New Jersey Industrial MarketView report.
The report said the strength of the overall market was best demonstrated by the continued rise in rents, with deals nearing $13 per-square-foot in North Jersey and $10.50 per-square-foot in Central Jersey – well above the average asking rates.
The market also experienced a 20 basis point drop in availability rate when compared to the first quarter, ending the quarter at 6.2% – the lowest rate seen in the state’s industrial market since the first quarter of 2005.
Leasing activity of 6.7 million square feet in the second quarter, although the highest second quarter result since 2001, was slightly lower than the 6.9 million square feet posted in the first quarter of 2019, CBRE found.
The report showed net absorption at 3.6 million square feet, which was 900,000-square-feet below the first quarter. However, this was the 10th consecutive quarter with a positive result.
The quarter ended with seven buildings delivered to the market, bringing 2.1 million square feet of new industrial space to the area, CBRE said. About 45% of the new product was pre-leased upon delivery and more than 6.7 million square feet is currently under construction across 20 buildings.
“As market fundamentals remain incredibly strong, although fluctuating, New Jersey’s industrial market continued to break records with higher asking rents and very low availabilities for quality product,” Mindy Lissner, executive vice president, CBRE, said. “Given New Jersey’s central location, at the epicenter of the Northeast distribution corridor, and strong demand by e-commerce and logistics users, the market is poised to remain robust for the foreseeable future.”
Third-party logistics providers dominated the second quarter leasing, taking up more than 41% of the activity. Food and beverage was the next industry, at 18.5%, and e-commerce coming in at third with 12.5%.