10C — July 27 - August 9, 2018 — Brokerage Directory — M id A tlantic
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Colliers International releases Second-Quarter Regional Market Snapshots NJ industrial leasing demand outpaces supply in Q2 2018; Office activity jumps
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quarter 2018 Market Snap- shots, which reports that office leasing during the past three
by LA Enterprises at 1 Costco Way in Monroe Township and a 318,389 s/f sale-leaseback by Freeze at 473 Ridge Rd. in Monmouth Junction. “During the first half of the year, ongoing demand for stra- tegic distribution locations helped drive rental rates to historically high levels,” said David A. Simon, SIOR , ex- ecutive managing director and New Jerseymarket leader. “Our research revealed a decline in leasing activity during the past quarter; however, the reason for the decline was only based on the fact that there is not
enough space to accommodate the demand.” During the sec- ond quarter, 13 new buildings totaling 5.4 million s/f were de- livered, 75% of which had pre- lease commitments. Even with the wave of new deliveries, the availability rate remained flat, closing at 5.3% and helping to spur a 9.3% rise in asking rates from last year, to $7.62 psf. Northern New Jersey’s indus- trial net absorption maintained a strident pace, as 3.5 million s/f of leasing activity outpaced the new space that was delivered to the market. Positive net absorption rose to 1.9 million
s/f, representing the highest level in more than a year as the availability rate improved by 50 basis points during the quarter to 6.1%. Central New Jersey continued to capture the bulk of the demand in the first quarter, notching 5.1 million s/f of industrial leasing activity de- spite having less than one-half of Northern New Jersey’s avail- able space. The robust activity coupled with limited available space spurred an 11.1% rise in asking rents to $7.19 psf. “As demand for same-day deliveries intensifies, the Mead- owlands and other submar- kets within close proximity to New York City will continue to receive strong interest from occupiers,” Simon noted. ”Con- sistent demand and limited sup- ply has caused pricing to rise, up 6.7% from last year to $7.69 psf. As a result of these market conditions, the pool of investors focusing on the industrial sector within New Jersey is expanding as well.” “Fundamentals in Central New Jersey remain positive”, he added. “Despite 5 million s/f of new deliveries, Central New Jersey’s availability rate was only 4.4% in the second quarter, remaining below the 5% thresh- old for the third consecutive quarter.” Of the 5 million s/f of new deliveries, 3.8 million s/f were pre-leased, increasing tenant occupancy and driving net absorption to a positive 3 million s/f for the quarter, and 7 million s/f through the first half of the year. The Northern New Jersey of- fice market activity remained constrained as net absorption in the quarter fell to negative 385,427 s/f, dragging the mid- year total to negative 362,075 s/f. Large blocks of newly avail- able space brought back to the market during the quarter, in- cluding Newark Public Schools’ 161,399 s/f at 707 Broad St. in Newark, increased the avail- ability rate by 40 basis points from the last quarter to 20.6%. The Central New Jersey mar- ket was strikingly different with leasing activity achieving a 33.6% improvement from last quarter, fueled by transactions like National Union Fire Co.’s 243,960 s/f renewal at 100 Con- nell Dr. in Berkeley Heights. A series of large new trans- actions, including Integra Life continued on page 11C Office Posts Strong Gains, Thanks To Central New Jersey
ARSIPPANY, NJ — New Jersey registered 8.6 million s/f of indus-
months rose by 31% equat- ing to 2.9 mil- lion s/f. Strategic Distribution Facilities Drive Industrial A 449,880
trial leasing activity dur- ing the sec- ond quarter of 2018 – down f r o m 1 0 . 6 million in the previous pe- riod as a lack of available
David A. Simon
John Obeid
s/f lease by Clutter, at 1065 Cranbury South River Rd. in South Brunswick led the sec- ond-quarter activity, followed by a renewal for 371,995 s/f
space slowed leasing activity, according to Colliers Inter- national NJ LLC. The global commercial real estate services firm today released its second-
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