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Regional leasing is picking up pace in the already active industrial sector.

That’s according to Cushman & Wakefield‘s first quarter 2022 industrial statistics for New Jersey, Long Island and New York, released April 1.

In 2022, New Jersey’s industrial sector has strong demand and is continuing to experience historically tight vacancies as rents move up. “Despite a short lull in leasing activity, we’ve seen high demand in all our markets – with logistics and ecommerce continuing to be the most significant driver,” said Senior Research Director, U.S. Industrial & Logistics Jason Price in a statement.

In the central and northern part of the Garden State, the vacancy rate for warehouse space stayed at its all-time low of 1.8%, CushWake found. As lower quality space found its way to the market, however, it did offset demand totals. But, with Class A space still scarce, Cushman said the vacancy rate at the end of Q1 was just 0.4%.

Following a slowdown in new leasing at the close of 2021, Cushman reports that demand has bounced back, to the tune of more than 6.8 million square feet of warehouse and logistics space leased in the first quarter – more than double what was seen in Q4. According to Cushman, leading they way with new leasing activity in the start of the new year were:

• The Meadowlands – 1.6 million square feet
• Lower 287 Corridor – 950,000 square feet, and
• Port Region – 850,000 square feet.

Scarcity is causing rents to tick higher, as developers continue to try to build up properties to feed demand. According to Price, rental rates are up more than 10% since the end of 2021, while that average for the past year is up by 31.3%.

“With elevated levels of demand, supply chain issues and record-high levels for occupancies, landlords continued to push asking rents for warehouse and distribution space to new heights,” he said, adding that the Lower 287 Corridor saw the biggest quarterly increase, at 27.6%.

To satisfy demand, Cushman says that more than 11 million square feet is currently under development, as firms work to satisfy demand for Class A options in the sector and region.

In the surrounding areas, Cushman found average asking rents in the New York Outer Boroughs was up 5.3% from the end of 2021 to $21.70 per square foot. The vacancy rate held steady, meanwhile at 4.0%. On Long Island, the vacancy rate held at 2.3%. Again, Cushman reported that low vacancy and high demand is driving rental rates, with those numbers reaching $14 per square foot for warehouse and distribution buildings.