Northern and Central New Jersey recorded 8.2 million square feet of leasing activity during the second quarter, the fourth-highest figure on record, according to CBRE’s Q2 2021 New Jersey Industrial MarketView.
As a result, the state’s availability rate for all classes dropped to a historic low of 5%, 50 basis points below the previous quarter and 100 bps year-over-year.
Overall average asking rents for Class A industrial space ended the second quarter at $13.45 per SF – an incredible 28.3% increase from Q1 2021. Net absorption was also strong during Q2 2021, posting a positive 4.4 million SF.
According to the report, demand for industrial space leasing was mixed between new construction (pre-leasing accounted for 1.7 million SF) and large blocks of space on the market. As a result, leasing activity, which includes new leases and expansions, was 34% higher than the five-year quarterly average.
“New Jersey’s industrial market continues to break records as demand shows no signs of slowing,” CBRE Vice President Larry Schiffenhaus said. “The market posted the fourth-highest leasing activity on record, strong net absorption and climbing rents — all signs of an extremely robust and healthy market.”
Industrial leasing activity in New Jersey was dominated by several large new lease transactions, including:
- A 607,279 SF commitment by OMLog’s at 1000 Rand Blvd. in Phillipsburg;
- A 480,740 SF lease by World Distribution Services at 500 Linden Logistics Way in Linden;
- A 539,077 SF transaction by Dream on Me at 47 Veronica Ave. in Somerset.
Seven new industrial facilities were completed in New Jersey during the second quarter, totaling 2.2 million SF. It was 98% pre-leased prior to completion.
Currently, there are 44 properties under construction across the state totaling over 13.6 million SF, 28% of which is pre-leased.