New Jersey’s industrial sector continued to break records during the second quarter of 2019, according to a new report from CBRE.
The market’s overall strength was best exemplified by the continued rise in rents, with transactions approaching $13.00 per-square-foot in northern New Jersey and $10.50 per square foot in central New Jersey, well above average asking rates. As the majority of newer product is offered without a published asking rent, the spread between average asking rents and actual taking rents will continue to expand.
In addition, the market experienced a 20-basis-points drop quarter over quarter to 6.2 percent – the lowest rate seen in the New Jersey industrial market since Q1 2005.
Leasing activity of 6.7 million square feet, while robust and the highest ever recorded for a second quarter since CBRE began tracking the market in 2001, was slightly lower than the 6.9 million square feet posted in Q1 2019. Net absorption, at 3.6 million square feet ended more than 900,000 square feet below the first quarter, but marked the 10th consecutive quarter with a positive result.
The second quarter ended with seven buildings added to inventory, bringing 2.1 million square feet of new industrial space to the market. Over 45 percent of the new product was pre-leased upon delivery.
“As market fundamentals remain incredibly strong, although fluctuating, New Jersey’s industrial market continued to break records with higher asking rents and very low availabilities for quality product,” said Mindy Lissner, executive vice president, CBRE. “Given New Jersey’s central location, at the epicenter of the Northeast distribution corridor, and strong demand by e-commerce and logistics users, the market is poised to remain robust for the foreseeable future.”