The vacancy rate for industrial properties came in at an all-time low of 3.3 percent during the second quarter, according to a report on commercial real estate activity during the period issued July 8 by Cushman & Wakefield.
The firm also said industrial rents hit a “historically high” of $9.27 per square foot. The vacancy rate in the office market fell to 17.1 percent — the lowest level since 2007. Class A rents increased by 1 percent year-over-year to $33.84.
“The continuous flight to quality has proved that many owners who invest capital and upgrade their assets will see better results,” said Jason Price, Tri-State Suburbs Research director for Cushman & Wakefield. “The suburban office market in New Jersey has seen a slow and steady recovery as a whole, which could be somewhat due to millennials beginning to make their moves back to the suburbs as they age and have families.”
Jason Price, director, Tri-State Suburbs Research, Cushman & Wakefield. – CUSHMAN & WAKEFIELD
The firm said large deals drove the numbers higher in the industrial segment, finding 15.1 million square feet of new transactions during the first half, a 27.9-percent increase over the same period a year ago.
“New Jersey industrial conditions remain among the strongest in the nation,” said Andrew Judd, Cushman & Wakefield’s New Jersey market leader. “Growth in online sales and the need for next-day and same-day delivery persists for retailers. This was a major driver in year-to-date leasing activity reaching its highest total in three years.”
Among the companies making deals for build to suit warehouses were Arizona Iced Tea, apparel retailer H&M and small appliance maker De’Longhi.
The top new deals in the second quarter included a confidential tenant leasing more than 593,000 square feet in South Brunswick, Performance Team taking a new 444,940-square-foot facility in Cranbury, and CEVA Logistics leasing more than 338,000 square feet in Hillsborough.
