EAST RUTHERFORD, NJ–The industrial real estate market is off to a muscular start this year, with stronger market statistics in every category for the first quarter, according to Cushman & Wakefield‘s researchers.
Leasing activity was up and so were rental rates, while vacancies declined.
“New Jersey posted its highest quarterly leasing total since the second quarter of 2011, with 6.4 million square feet of transactions completed during the first three months of 2014,” said Kimberly Brennan, the company’s NJ market leader.
She said there were 19 deals for 100,000 square feet or more, including these:
- Home Depot taking 470,000 square feet in Edison
- Hyundai, 309,000 square feet, in South Brunswick
- Port Logistics Group, 154,000 square feet, in Secaucus.
All major submarkets along the NJ Turnpike had increased leasing quarter-over-quarter, C&W reported. The Meadowlands, Lower I-287, and NJ Turnpike Exit 8A each had more than 1 million square feet of leases signed.
In northern New Jersey the vacancy rate edged downward ever so slightly, to 7.9% from 8% at year-end 2013. There was 800,000 square feet of overall net absorption.
Central NJ, though, saw overall vacancy fall by 0.3% to 8.2%, with nearly 2 million square feet of absorption. Three Turnpike area submarkets made discernible progress. Central NJ’s Lower 287 area saw vacancy drop by three full points, to 6.4%; Exit 7A dropped from 8.1% to 6.6% and the Meadowlands from 9.6% to 8.6%.
Most of the space absorption came courtesy of the warehouse/distribution sector, Brennan said, with vacancy for those facilities falling 0.5% during the first three months of the year. Both northern and central Jersey now have warehouse/distribution vacancy rates below 8%, Brennan said.
C&W reported weighted average rents rose above the $6 per-square-foot mark for the first time since early 2009. “Within the warehouse/distribution sector, the average rental rate has risen by 4.8% since one year ago,” Brennan added.
The Lower 287 submarket had the biggest increase, $0.42 per square foot.