Northern and central New Jersey’s industrial sector made a comeback during the third quarter, according to CBRE’s Q3 2023 New Jersey Industrial Figures report. The market saw 5.5 million square feet of leasing activity in Q3, a 31% quarterly increase and 19% above the figure recorded at the same time last year. Average asking rents remained steady at $19.61 and $15.99 per square foot for Class A and Class B/C properties, respectively.
An increasing supply of vacant and available newly built space, along with higher financing costs, further hampered new construction starts. Just two projects commenced during the quarter, totaling 242,000 square feet — equating to the lowest volume of construction starts since 2015.
“Despite the headwinds and consumer spending showing a modest decline in Q3, potentially hindering new leasing demand in the short term, the New Jersey industrial market continues to be a bright spot,” Thomas Monahan, vice chairman, CBRE, said. “While we may face additional challenges through the end of the year, we do expect an uptick in leasing activity from a diverse group of tenants including (third-party) logistics, retail/wholesale, food service and health/medical.”
The Q3 bounceback was due to leasing within the 50,000- to 100,000-square-foot range, where the number of deals increased 47% quarterly. Among the largest deals signed during the quarter were Fabuwood Cabinetry’s 197,000-square-foot lease at 300 Linden Logistics Center and Weida Freight System’s 188,000-square-foot commitment at 400 Salt Meadow Road in Carteret.
Robust leases were also signed with owners of smaller, newly completed industrial properties. Tenants with smaller requirements included Scentbird’s 100,000-square-foot full building lease at 401 Cottontail Lane in Somerset and T3 Systems’ 54,000-square-foot full building lease at 600 Cabot Drive in Hamilton.