Here’s the biggest takeaway from Colliers’ Year End 2022 Industrial Big Box Research & Forecast Report for Greater Philadelphia and Southern New Jersey: Due to newly delivered and available supply, 2023 is forecasted to be a record year for transactions and absorption, with 10.6 million square feet and 13.2 million square feet, respectively.
The report, prepared by Colliers and Michael Golarz, the firm’s executive vice president in charge of the region, covered the Turnpike submarkets in Burlington and Southern New Jersey, offering the following data points:
- Vacancy for Greater Philadelphia rose slightly over the previous year, ending at 5.1%, up from 2.7% year-end 2021. Vacancy in Burlington remained consistent with the previous year at 5.7%, and vacancy decreased to 1.5% in Southern New Jersey. Vacancy for the region rose slightly, to 4.4%.
- Although vacancy rose slightly, the region continues to see substantial upward momentum on asking rents: 47%, 21% and 34% year-over-year for Greater Philadelphia, Burlington and Southern New Jersey, respectively. Landlords continue to be bullish on rental rate growth, although additional supply will hit the market in 2023.
- The year closed with 1.17 million square feet of new occupier transactions in the region, bringing the total for the year to 9.3 million square feet. This number exceeded the record year in 2020, when there was 8.6 million square feet of new occupier transactions.
- The year in 2022 ended with 18.5 million square feet under construction and 6.6 million square feet of deliveries, which represents a 45% increase in market size.
- In Greater Philadelphia, 7.03 million square feet is under construction, with 3.34 million square feet pre-leased. Burlington and Southern New Jersey have 11.5 million square feet under construction with no preleasing activity.