New Jersey Industrial Market Ranks No. 5 in Nation
A report released by CBRE found that the vacancy rate for the Central and Northern New Jersey market for the 6.3 million square feet of new construction last year, stood at just 22.2% at the end of 2019.
SADDLE BROOK, NJ—The strength of the Central and Northern New Jersey industrial market that saw the absorption of newly constructed space last year that approached 80% led to the market’s ranking in the top five in the US.
A report released by CBRE found that the vacancy rate for the Central and Northern New Jersey market for the 6.3 million square feet of new construction last year, stood at just 22.2% at the end of 2019.
Kansas City topped all US markets with more than 4 million square feet of new development with a 7.3% vacancy for the 4.4 million square feet added; followed by Miami at 12.4%. vacancy for the 5 million square feet of new construction; Baltimore came in at number three with a 13% rate for the 7.4 million square feet and Greenville, SC’s 18.7% rate for the 4.2 million square feet added gave that market a number four ranking.
“As New Jersey’s industrial market continues to break leasing and rental rate records, new developments are being snapped up by space users at a rapid pace,” says Thomas Monahan, vice chairman. CBRE. “While the development pipeline remained robust with 28 buildings and 10.3 million square feet currently under construction, the demand for high quality product is far outpacing supply.”
On a national perspective, developers completed construction of 289 million square feet of industrial and logistics real estate in the U.S. last year, but strong demand led to only 39% of the construction space was available by the end of 2019.
Deliveries outpaced the 255 million square feet of new absorption, but with robust leasing from occupiers, especially ecommerce and retail firms that often require modern building design and amenities, supply and demand dynamics remain healthy. A vacancy rate of less than 50% is considered healthy for newly delivered industrial properties, the CBRE report notes.
The industrial sector has begun 2020 on a strong note, according to CBRE. The brokerage reports that supply fundamentals should remain stable this year, as already 33% of the 309 million square feet under construction nationwide is already accounted for.