NAI DiLeo-Bram: At $270M, Union County had highest volume of retail, office and industrial transactions in H1

Commercial real estate activity saw the bulk of active trade within the northern and central New Jersey submarkets, according to the half-year market snapshot released by Woodbridge-based NAI DiLeo-Bram & Co.

In fact, Union County had the highest volume of retail, office and industrial transactions during this period, topping off at $270 million.

According to the NAIDB 2023 Summer Capital Markets report, Union is the only county surpassing its five-year average volume. There were 24 trades, the largest of which was a $187 million sale of Merck’s campus to Onyx Equities. Merck plans to relocate its headquarters over time to a new campus in Rahway.

David Simon. (File photo)

“Transactions are still being completed, especially among industrial assets, despite increasing interest rates,” NAIDB Chief Operating Officer David Simon said. “In terms of the office sector, there were three transactions above the $20-plus-million mark during the first half of 2023. Meanwhile, the retail sector remained relatively static and the volume was comparable to 2021. Last year, retail had a boost from a number of larger property trades that, in turn, elevated the overall volume.”

The NAIDB 2023 Summer Capital Markets Snapshot focuses on northern and central New Jersey across the seven counties that the firm tracks. These include Morris, Essex, Union, Middlesex, Somerset, Mercer and Hunterdon. Overall, across this geographic cohort, there were 111 total trades and $1.386 billion in total sales volume. This marked an increase in the number of transactions, but a decrease in the total volume in comparison to the first half of last year.

NAIDB details the following for the industrial, office and retail sectors in Central and Northern New Jersey:

  • Industrial: This property category continues to trade at record-high prices per square foot. Prices have increased to an average $265 per square foot, a 34% increase year-over-year. For industrial buildings over 100,000 square feet specifically, the average price is $220 per square foot, equating to a 42% increase YOY. Industrial accounts for 60%-plus of the sales volume across the region associated with an aggregate volume of 45 trades and $860.5 million in transactions.
  • Office: Taking the second-place slot for transaction volume, office secured 22% of the transaction volume for H1 2023. As compared to YOY, this sector had an increase in the number of trades (33), although there was a drop-off in aggregate value ($306.1 million) and price per square foot ($223).
  • Retail: This property sector recorded 16% of the sales volume within the state’s northern and central markets for H1 2023, dropping YOY from $444 million to $220 million. This aligns with volume seen in 2021 and is in part attributed to the fact that last year’s volume was increased by a few larger property trades over $40 million each.