8B — May 11 - 24, 2018 — New Jersey — M id A tlantic
Real Estate Journal
www.marejournal.com
N ew J ersey
NJ industrial leasing climbs in Q1 2018, office activity mixed Colliers International releases first quarter regional market snapshots
ARSIPPANY, NJ — New Jersey registered 10.6 million s/f of indus- trial leasing activity during the first quarter of 2018 – 9% high- er than the five-year quarterly average, according to Colliers International NNJ LLC. The global commercial real estate services firm released its first-quarter 2018 Market Snapshots, which also reports that office leasing during the past three months achieved an incremental improvement to 2.2 million s/f. Industrial Pace Accelerates A 975,000 s/f lease by Ikea at P
tributed to positive net absorp- tion,” Simon noted. “Activity in Central New Jersey is being driven by tenant demand for new construction, particularly along the turnpike corridor and the Exit 10 submarket. New Class A properties in Central New Jersey are achieving an average of approximately $7.17 per square foot, which is nar- rowing the pricing gap between the Central and Northern New Jersey industrial markets.” Office Improves Incrementally The Northern New Jersey office market was a mixed bag, with overall improve- ment constrained by positive absorption in only six out of the 13 submarkets. The avail- ability rate improvement was limited to 20 basis points over the prior quarter, to 20.2%, as large new blocks of space – in the Meadowlands submarket, 176,000 s/f at 9 Polito Ave., and in the Western Morris submarket 102,000 s/f at 100 Enterprise Drive — hindered further improvement. Leasing activity in the Central New Jersey market pushed past the 1 million s/f mark for the first time in three quarters as health care companies and the TAMI (technology, advertising, media and information) sector drove demand. Extensions by Niksun in Princeton and Tata Commu- nications in Matawan illus- trated this trend within the TAMI sector, while new leases by Summit Medical Group in New Providence and Robert Wood Johnson in Bridgewater led the way in the health care sector. The availability rate im- proved by 10 basis points from last quarter to 19%, led by the removal of 153,000 s/f at 100 and 200 Headquarters Park Drive in Montgomery after the property was purchased by the local government for use by the municipality. “The lack of large transac- tions slowed New Jersey office leasing activity during the first quarter of 2018 to 2.2 million s/f,” said John Obeid , senior director, Tri-State Suburban Research for Colliers. “While this figure is up slightly from last quarter, activity is down 26% from the five-year quar- terly average of 3 million s/f. Renewals were a major driver in leasing activity, accounting for 40% of the total square foot- age leased.” Despite the lack of large new continued on page 10B
586 Gulf Ave. in Staten Island’s Matrix Global Logistics Park grabbed headlines, followed by a 459,500 s/f lease by TJ Maxx at 50 Bryla St. in Carlstadt and a 369,000 s/f lease by One Stop Logistics at 83 Stults Rd. in South Brunswick. “Following strong leasing activity at the end of 2017, steady demand continued in the first quarter, driving the overall availability rate down to 5.3%, representing a year- over-year improvement of 120 basis points,” said David Si- mon, SIOR , executive manag- ing director and New Jersey
market leader. During the first quarter, six new development projects totaling 1.9 million s/f broke ground, bringing the con- struction pipeline to 34 proper- ties comprising 14.1 million s/f. The growing construction pipeline in conjunction with limited available space spurred a continued rise in the industri- al average asking rates, which reached a record high of $7.56 per square foot at the end of the quarter, compared to $7.23 psf at the end of 2017. Northern New Jersey main- tained a run of healthy indus- trial absorption, with 5 million
s/f of leasing driving positive absorption to 1.2 million s/f, representing the seventeenth quarter of positive absorption and a record-low availability rate of 6.6%. Central New Jer- sey continued to post strong activity in the first quarter, recording 5.7 million s/f of in- dustrial leasing activity as mar- ket fundamentals remained positive and new benchmarks in availability and pricing were set. “In the northern counties, higher-than-average leasing volume coupled with new deliv- eries that were pre-leased con-
GH-MAREJ East Essex Ad 0418 HP v2.indd 1
4/30/18 5:22 PM
Made with FlippingBook Annual report