CBRE on Thursday released its fourth-quarter 2022 figures for the northern and central New Jersey industrial markets, which closed the year on a high note, with a record-low availability rate of 4.1%, 6.1 million square feet of positive absorption and 19.9 million square feet in total leasing activity.
During Q4, leasing totaled 5.36 million square feet and positive net absorption of 2.5 million square feet. Northern and central New Jersey’s Class A average industrial rents ended the year at $19.02 per square foot, up 3.4% from the prior quarter and 8% year-over-year.
However, the delivery of two large Class A buildings in central New Jersey without preleasing caused the market’s Class A availability rate to climb 70 basis points. Annual leasing was down 22% compared to 2021 due to fears of an economic recession and lack of quality industrial space available to meet tenants’ needs.
“While New Jersey’s industrial market remained strong in 2022, fears of a recession, climbing interest rates and an overall market unease started to create headwinds by the end of the year,” Thomas Monahan, a vice chairman at CBRE, said. “One indicator of this is the market’s overall absorption. While the market recorded its 24th consecutive quarter of occupancy growth as 2.48 million square feet was absorbed in Q4, it was a figure 7.6% below the five-year quarterly average of 2.69 million square feet. Despite the quarter’s improved net absorption, 2022’s total was only 6.1 million square feet, the lowest annual total since 2017.”
Northern New Jersey posted 1.78 million square feet in total leasing during Q4 2022, up 45% from the previous quarter. The Meadowlands submarket led the way with two leases totaling more than 100,000 square feet, the largest of which was Goffa USA’s 109,000-square-foot commitment at 50 Broad St. in Secaucus.
Leasing activity in central New Jersey was also up during Q4, jumping 5.9% from Q3. The Exit 8A submarket recorded the largest leasing total of 1.4 million square feet, with the Home Depot inking a 1.28 million-square-foot lease at 904 Cranbury South River Road. The Route 287/Exit 10 submarket had the second-highest leasing total for Q4 at 858,000 square feet, due to a flurry of sizable leases, including JD.com’s 318,000-square-foot prelease at 245 Mountain Ave. in Middlesex, GMI Trading’s 124,000-square-foot commitment at 125 Helen St. in South Plainfield, and CEVA Logistics’ 95,000-square-foot lease at 266 Old New Brunswick Road.