HACKENSACK, NJ—NAI James E. Hanson says vacancies declined about 0.4 percent and rents rose about 37 cents per square foot for Meadowlands industrials during the final two quarters of 2014 vs. the second half of 2013.

With an average asking rent of $6.46 per square foot, a 7.3 percent vacancy rate and net absorption of 588,758 square feet, the Meadowlands remains the most sought-after Industrial submarket in Northern and Central New Jersey, the Hanson survey says. During the second half of 2014, 80 leases for spaces exceeding 20,000 square feet were signed. Over course of the entire year, more than 4.7 square feet were leased.

E-commerce is a strong driver of the activity, Thomas A. Vetter SIOR, a vice president at Hanson, tells GlobeSt.com exclusively. He described working with a Chinese bedding manufacturer seeking to open its first US facility in late 2013.

“They signed a lease for 20,000 square feet, and by December of that same year, I get a call, 'Tom, we need twice the space,'” he says. “We moved them around the corner into 50,000 square feet, and it was all because they were off on their projections for the e-commerce business. That's how significant the impact was.”

Some older Meadowlands industrials are doing well by attracting e-commerce businesses that don't need the higher ceilings of modern warehouses, Vetter says.

“I've got exclusives that range in ceiling height from 14 feet up to 32 feet, and again, because the product is essentially coming in and going right out, you don't need to rack it 36-foot clear,” he says. “It's totally different from the Middlesex market. Product doesn't stay.”

On the sales side, investors continue to look very favorably upon the submarket's long-term prospects to generate yield. Over the final six months of last year, more than 24 properties changed hands, including the sale of five-building, 172,000 square foot portfolio. NAI Hanson's industrial team of Vetter and Jeff DeMagistris, SIOR brokered the deal. The two brokers also facilitated 32 lease transactions in 2014 comprising approximately 900,000 square feet.

“The Meadowlands industrial submarket is unique in both its central location, which is near one of the world's most important ports and several of the East Coast's most significant highways,” says Vetter. “With the continued emergence of e-commerce, the declining price of gasoline and overall economic growth, we expect that supply will remain tight in this global logistics hub.”