C&W Says Industrial Vacancies to Remain Stable in NJ

EAST RUTHERFORD, NJ—Despite more than 3 million square feet of new speculative construction expected to be coming on line during the second half of this year in Northern and Central New Jersey, Cushman & Wakefield predicts industrial vacancies to remain stable.

The brokerage firm in its quarterly report on the Northern and Central New Jersey industrial markets predicts that the state of New Jersey will see more than 8.5 million square feet of industrial construction (spec and build-to-suit) completions by year's-end, making 2014 the most robust industrial construction period in the last 13 years.

The overall industrial vacancy rate for the Northern and Central New Jersey markets fell from the 8.9% rate posted at the end of the second quarter of 2013 to 8.0% at the end of June of this year. Direct asking rents have increased from $5.86 per square-foot to $6.19 per square-foot during the same time period.

In its report, C&W noted that while most of the major submarkets continued to experience healthy demand, the Exit 8A corridor recorded more than 1.7 million square feet in deal volume during the second quarter. The volume by Exit 8A was fueled by more than 1 million square feet in leases inked by OHL and Tyler Distribution Centers. In total, there were 13 transactions of 100,000 square feet or greater signed during the second quarter, the majority of which were concentrated in the central part of the state.

C&W also foresees that as quality space along the Turnpike dwindles, direct asking rents will rise further as competition increases and demand for Class B space rises. With both online retail sales and manufacturing expected to trend higher in the new few years, the New Jersey industrial market is poised to strengthen further due to it strategic location, the brokerage firm maintains.