18B — May 31 - June 13, 2013 — Industrial / Distribution Centers — Mid Atlantic Real Estate Journal www.marejournal.com I ndustrial R eal E state & D istribution C enters

Cushman & Wakefield of New Jersey New Jersey industrial market strengthens, office remains flat


AST RUTHERFORD, NJ — The industrial sector continued to

formance dependent on job growth – which has yet to take hold in the Garden State. New Jersey Industrial Heats Up The Northern and Central New Jersey industrial mar- ket posted 2.3 million s/f in positive absorption during the first three months of 2013. More than 5.0 million s/f of new industrial leases were signed, a slight increase com- pared to 4.6 million s/f one year ago. “Demand has intensified, especially in the Northern counties, where the Meadow-

lands and Port submarkets combined for more than 1.0 million s/f – nearly half – of the state’s total absorption,” noted Gualberto “Gil” Medina , Cushman & Wakefield’s New Jersey executive managing di- rector. “More than 2.4 million s/f of leasing activity closed in that region, the highest quarterly total since the third quarter of 2011.” Meanwhile, Central New Jersey posted almost 2.7 mil- lion s/f of new leasing, its high- est total since mid-year 2012. The most active submarkets during the first quarter was

Lower I-287 with 1.3 million s/f of signed deals. “Deals in excess of 100,000 s/f continued to drive new ac- tivity during the first quarter; 15 transactions of this size and larger closed,” Medina said. “This activity effectively offset nine blocks of space in excess of 100,000 s/f coming online during the past three months, which is pretty impressive.” This resulted in a marked dip in the Northern New Jer- sey vacancy rate, which fell from 10.1 percent at year-end 2012 to 9.3 percent currently. The Central New Jersey va-

cancy rate remained flat, at 8.2 percent. Combined, the Northern and Central mar- kets ended the quarter with an overall vacancy rate of 8.7 percent. On the sales front, activity was up considerably during the first three months of 2013, with almost 7.0 million s/f of industrial properties trading hands. For context, 12.8 mil- lion s/f industrial product sold in all of 2012. “We expect the industrial market to remain our region’s ‘good news’ story moving into the heart of 2013,” Medina noted. “Performance here re- flects strong fundamentals nationwide, and particularly around the ports of the East and West coasts.” Status Quo for Office Markets New office demand contin- ued on a slow pace through the first three months of 2013, reflecting sluggish trending reported at year-end 2012. For the second straight quarter, Northern and Central New Jersey experienced negative net absorption (-633,792 s/f). Just more than 1.75 million s/f of leasing activity did not offset the notable blocks of space that came online, especially in the Northern counties. With approximately 800,000 s/f of leasing, Northern New Jersey’s performance has been weak compared to last year, when 932,447 s/f of deals had closed by this time. Central New Jersey fared better, ac- cruing more than 900,000 s/f of new leasing volume during the first quarter, its highest total in a year. “Activity has been spread throughout much of the state thus far in 2013, with seven submarkets exceeding 100,000 s/f of transactional volume,” Medina said. “The Route 10/24, Woodbridge/Edison and Princ- eton submarkets are the most active currently.” Pharmaceutical and finan- cial services firms drove first quarter leasing, accounting for 45 percent of new transactions. “Notable pharma deals were completed by Covance, Dr Red- dy’s, Otsuka and Celgene, all of which took place in Central New Jersey,” Medina noted. “Financial services firms also have been active, with large transactions involving Cenlar Federal Savings Bank and The Bank of Tokyo-Mitsubishi UFJ, Ltd.” n

pick up pace dur i ng the first quarter of 2013, po- sitioning it as the bright spot for New Jersey’s com- mercial real estate indus-

Gil Medina

try, according to Cushman & Wakefield, Inc.’s East Ruth- erford-based Research Services team. The office sector remains sluggish, with improved per-

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