Northern and Central New Jersey recorded 8.2 million square feet of leasing activity during the second quarter, the fourth-highest figure on record, according to CBRE’s Q2 2021 New Jersey Industrial MarketView, released July 9.
As a result, New Jersey’s availability rate for all classes dropped to a historic low of 5.0%–50 basis points (bps) below the previous quarter and 100 bps year over year.
Overall average asking rents for Class A industrial space ended the second quarter at $13.45 per square foot, 28.3% over the first quarter of 2021. Net absorption was also strong during Q2 2021, posting a positive 4.4 million square feet.
According to the report, demand for industrial space was insatiable, with leasing mixed between new construction – pre-leasing accounting for 1.7 million square feet – and large blocks of space on the market. As a result, leasing activity, which includes new leases and expansions, was 34% higher than the five-year quarterly average.
“New Jersey’s industrial market continues to break records as demand shows no signs of slowing,” said CBRE Vice President Larry Schiffenhaus. “The market posted the fourth-highest leasing activity on record, strong net absorption and climbing rents—all signs of an extremely robust and healthy market.”
Industrial leasing activity in New Jersey was dominated by several large new lease transactions including OMLog’s 607,279-square-foot commitment at 1000 Rand Blvd. in Phillipsburg; a 480,740-square-foot lease by World Distribution Services at 500 Linden Logistics Way in Linden; and a 539,077-square-foot transaction by Dream on Me at 47 Veronica Ave. in Somerset.
Seven new industrial facilities were completed in New Jersey during the second quarter totaling 2.2 million square feet and were 98% pre-leased prior to completion.
Currently, there are 44 properties under construction across the state totaling more than 13.6 million square feet, 28% of which is pre-leased.
On the investment sales front, activity in Q2 2021 surged by 79% from the previous quarter, totaling $562.8 million. The largest transaction of the quarter was HN Gorin’s sale of two industrial properties totaling 733,304 square feet. The largest sale by price during the quarter was the $75 million acquisition of a newly completed, Class A industrial property at 10 Princess Road in Lawrenceville by Black Creek Group.