Avison Young released its Second Quarter 2021 Industrial Insights Report for New Jersey on July 29, which reveals industrial demand remained strong.
Throughout the second quarter, annualized leasing activity hovered 7.8% over the prior 20-year annual average and vacancy rates dropped to a 15-year low of 3.2%.
“The New Jersey industrial market maintained a solid performance throughout the pandemic and continues to be a hotbed for end-users and investors alike,” said Jeffrey Heller, principal and managing director of Avison Young’s New Jersey office. “Asking rents have continued their upward trajectory, increasing by 83.3% over the last six years, creating landlord-favorable market conditions that have caused concession rates to steadily decline.”
The industrial sector saw $3.9 billion in investment volume since the beginning of 2020, however, the market continues to be hindered by lack of supply.
“While the industrial sector’s strong fundamentals accelerated during the pandemic continue to lure investors, the lack of supply on the sales side may prevent dollar volumes from escalating in the near term,” said Jason Bloom, a Northeast insight analyst based in Avison Young’s New Jersey office. “This has also translated into higher valuations, which increased by 31.4% since the first quarter of 2020.”
Big-box demand continued to drive construction activity in the second quarter, with approximately 47.1% of buildings under construction greater than 750,000 square feet.
Industrial jobs have risen 9.5% since 2020 with mining, logging and construction leading with 14.2% growth. Additionally, total year-to-date cargo volume is up 31.4% at the Port of New York and New Jersey compared with the prior five-year year-to-date average.