The asking rate for industrial space in North/Central Jersey reached $10.09 per square foot in the second quarter, the first time the region’s average asking rate has reached double digits, according to NAI James E. Hanson’s quarterly Industrial Market Report.
The ask is an increase of $1.19 per square foot since the same time last year.
The report, which details leasing and sales data for key industrial submarkets in the region, also showcases sustained record-high pricing throughout the state, with double-digit price-per-square-foot rates in several key submarkets — with the Meadowlands market leading the pack at $13.22 a square foot.
This, of course, is contingent upon finding space. Nearly every new, large-scale project delivered in 2021 across the market is already 100% leased to companies such as Amazon, Crate & Barrel and FedEx. There are 12,109,077 square feet under construction right now in the region, and it can be expected that most of that is already spoken for.
The New Jersey Turnpike submarkets continue to have the state’s lowest vacancy rates, with the Exit 8A submarket standing at 0.3% availability and the Exits 10/12 submarket at 0.7% availability.
Among other notes from the report:
- Compared with a year prior, the overall asking rates are up $1.19 per square foot, and compared to two years prior, rates are up $1.44 per square foot. In the last year, that is around a 13% increase, considerably higher than the increase in the year prior.
- Hudson County, at $13.32 per square foot, and Bergen County, at $11.21 per square foot, continue to lead the way in average asking rates. Those make a lot of sense owing to their proximity to New York City. Tales of New York City’s demise might have been exaggerated, since it is clear that e-commerce and distribution tenants continue to want to be there long-term.
- Exit 7A (Robbinsville/Windsor area), while standing at 4.1% vacancy, is a bit higher than the other Turnpike markets closer to New York City. They are Top 3 in the region for rentable building area under construction, at 1,683,845 square feet, only behind the Ports and Exit 10/12 submarkets. The Exit 7A market has also seen pricing go up $2.27 per square foot since Q2 2020, to $7.95 per square foot, further reinforcing the idea that this market is primed for a continued development explosion.
- The Route 46/23/3 (Wayne/Clifton area) Corridor at $10.33 is also an outlier, with asking rates up $1.99 since Q2 2020. A lot of this boils down to the increasing emergence of secondary markets in northern New Jersey as space dries up or gets unaffordable in places closer to New York City.
Click here for the complete report.
