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.”
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.