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If New Jersey can be said to dominate any sector of the New York metro market, it’s the industrial category. New York City doesn’t have enough room for sprawling industry, and land is too expensive in suburban New York State and Connecticut. That leaves the Garden State as the obvious location of choice. And because of the proximity to multi-modal transportation, the logistics business is the hot ticket.

By most estimates, upwards of four million sf of new industrial space has been put on the market in just the last year. That would seem to provide plenty of options for end-users, but “most of that has already been absorbed,” says Hayden Tiger, regional director for First Industrial Realty Trust in Livingston, NJ. “That ‘s leading to a wave of new development that, itself, will most likely be absorbed even before it hits the market. This building-in-check will prevent a glut of space, and vacancies will remain low.”

Because of the market’s tightness, developers are looking for ever more inexpensive land on which to build. Some of the new hot spots, according to Tiger, are in relatively unlikely places like Morris and Somerset counties, largely suburban and rural until now.

Even in the highly industrial NJ Turnpike corridor, things are changing. There, development is moving southward: “Exit 7A has become a hot spot for distribution,” Tiger reports. Exit 7A is south of Trenton, a good 50 miles south of Newark.

Another important trend is that “industrial space is no longer just being used for industrial purposes,” Tiger explains. “All kinds of office and R&D tenants needing large, open bays and flex space are turning to industrial space because their options are limited on the office side. This is creating a new type of hybrid flex building combining office and industrial features.”

How long will current market conditions exist? “For the foreseeable future,” Tiger predicts. First Industrial has an NJ portfolio of about three million sf of industrial space, mostly in Somerset, Sayreville and Lawrenceville.

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