CHATHAM, NJ—The Northern New Jersey industrial market remains robust, but activity in the Central New Jersey market is described as “stellar” in the second quarter Industrial Snapshot produced by DTZ.
The Chatham-based real estate services firm says the healthy activity in New Jersey’s industrial real estate is being driven by strong consumer confidence. Improvements in the state’s transportation network, particularly in the Port area, are another key factor to rising leasing activity in that region, DTZ says.
“The state’s economic growth is being propelled by the economic momentum of the country as a whole. Incentive programs are fueling major transactions and helping to increase investor confidence in New Jersey’s economy,” says Larry Casey, senior vice president of DTZ. “Even though the manufacturing industry is just a small portion of the state’s total employment base, it will continue to grow over the next year and will comprise an even larger percentage of New Jersey’s economic output.”
Vacancy in the Northern New Jersey industrial market decreased to 6.9 percent quarter over quarter. For the fourth quarter in a row, the region posted positive absorption. In fact, the 878,847 square feet of positive absorption was the highest recorded absorption since the third quarter of 2011, DTZ says.
The Meadowlands and the Hudson Waterfront led the way in nine of the 10 submarkets that experienced positive absorption. Vacancy declined to 5.5 percent in the Meadowlands, and vacancy declined 150 basis points in the Hudson Waterfront to 6.8 percent. Asking rents slid to $6.33 per square foot quarter over quarter, but were still an improvement compared to Q2 2014.
The Central New Jersey industrial market outpaced Northern New Jersey with 1.9 million square feet of positive absorption and a 100 basis point decline in vacancy to 5.9 percent. Asking rents were up slightly to $5.23 per square foot from $5.18 in Q1. The Exit 12 submarket accounted for 58.5 percent of total absorption in the region, with 1.1 million square feet of net absorption this quarter. The Western 287 submarket had the lowest vacancy in Q2 with a decrease of 160 basis points to 3.8 percent.
In May, DTZ announced it would merge with Cushman & Wakefield and operate under the Cushman & Wakefield brand. The merger is expected to close before the end of 2015.