In northern New Jersey, demand for Class A warehouse and distribution space is soaring. Industrial vacancy is shrinking. And shovel-ready construction sites are at a premium.
Executives at Hartz Mountain Industries know this as well as anyone.
So they know it’s a rare opportunity to have more than 1 million square feet of big-box, newly renovated industrial space to offer would-be tenants. That’s exactly what the Secaucus-based developer will have in the coming months, thanks to new availabilities at three large North Jersey buildings that hadn’t been on the market in decades.
The facilities — located in Secaucus, Elizabeth and Jersey City — had each been occupied for 30 years or more, but became available last year when their respective tenants cleared out. Hartz is now jumping on the chance to modernize the buildings and capitalize on the teeming demand for industrial space just outside Manhattan.
“I think the timing is very good,” said Ernest Christoph, the firm’s senior vice president for sales and leasing. “We’re actually going right into a very strong market.”
The available sites already have started to see activity. Hartz announced last month that Ferguson Enterprises Inc., a plumbing supplier, had leased 450,000 square feet at 100 Meadowlands Parkway in Secaucus, a warehouse that was used by Panasonic Corp. for some four decades.
The deal resulted from a $20 million renovation project that began last fall — as soon as the electronics maker left the property and relocated its U.S. headquarters to Newark. By that time, Hartz had already developed plans to modernize the facility on a speculative basis, “so we began demolition and construction immediately,” said Gus Milano, the firm’s managing director.
Hartz still has another 220,000 square feet available at the site. And it’s likely to see considerable demand, as are its other properties that are undergoing renovations.
That’s because the region’s industrial market has been riding high, experts say. In 2013, the overall North Jersey market recorded its greatest net absorption since the onset of the recession in 2008, according to research from the brokerage firm JLL.
And despite what it called a “holiday hangover” that tempered first-quarter leasing volume, total industrial vacancy in North Jersey was still only 7.3 percent, JLL found.
Experts say such activity is being driven in part by a limited supply of large, quality spaces.