SADDLE BROOK, NJ−The trends are running a bit at cross-purposes in the industrial market, according to CBRE‘s market experts, but the end result is excellent: The availability rate is down to 9.6%, the lowest level since 2008.
There are 21 projects totaling 9 million square feet under way in the state, on the other hand – 61% of them speculative, by CBRE’s calculation.
“It will be interesting to see what happens to the supply-and-demand balance as more than 4 million square feet of Class A space is expected to be delivered to the market by the end of 2014,” said CBRE’s Lou Belfer. “Demand for top-quality warehouses will need to remain strong in order for the market to maintain momentum.”
In the first quarter, 2.2 million square feet of space was absorbed from the market, CBRE says in its latest report. There was only “moderate” leasing velocity, though, observes the Saddle Brook-based firm in its analysis of Q1 activity: about 4.5 million square feet worth of deals.
While leasing was less robust than in previous quarters, asking rates increased and absorption was up. Several companies, such as Piramal Glass and Wenner Bread, made their entries into New Jersey’s industrial market, CBRE notes in its market report – and leasing in the Route 287/Exit 10 and 8A submarkets was strong.
“US warehouse goods have continued to increase quarterly since Q1 2010, and clearly New Jersey’s industrial market is benefiting from this trend,” said William Waxman, CBRE’s industrial specialist. “Activity at the port terminals also remains strong, with container traffic up 1.5% from January of 2013, which typically prompts growth for the surrounding industrial market.”
Two speculative construction projects were recently completed in Elizabeth, J.G. Petrucci‘s 571,000-square-foot project at 75 Mill Road and Clarion Partners‘ 277,244-square-foot building on Dowd Avenue.