6B — November 8 - 21, 2019—Central New Jersey — M id A tlantic
Real Estate Journal
www.marej.com
C entral NJ
ccording to CBRE, demand for industri- al space in New Jer- CBRE 3rd quarter average asking rents for class A industrial space in Northern & Central NJ climb to $9.28 psf A
Jersey also saw record high asking rents of $9.28 per square foot in Q3. The avail- ability rate for Class A space in most submarkets is under one percent, while the avail- ability rate for all classes continued downward to end the quarter at 5.9 percent, the lowest point in CBRE’s historical industrial data go- ing back to 2001. Given the lack of desirable industrial space available in the market, leasing activity of 5.49 million sq. ft. decreased by 18 percent from Q2 2019 and eight percent from Q3
2018. In addition, net ab- sorption declined 15 percent to 530,000 s/f from Q2 2019, marking the second straight quarterly decline in net ab- sorption. “Demand for quality in- dustrial space in New Jersey remains very strong as more e-commerce and last-mile logistics companies look to either expand or relocate their operations in the state,” said William Waxman, ex- ecutive vice president, CBRE. “Unfortunately, demand has once again outstripped sup- ply. More new construction is needed to keep up with the demand that shows no signs of abating.” The third quarter saw construction starts for five buildings and 2.63 million s/f. These new projects are all located in Central New Jersey, with three buildings and 1.93 million s/f in the Route 287/Exit submarket. Completions in Q3 2019 to- taled over 989,000 s/f, com- posed of four buildings with almost 839,000 s/f pre-leased. Approximately 150,000 s/f in two buildings was completed in Northern New Jersey in Q3 2019. Interestingly, most of the new product was pre- leased upon delivery. Major leases in New Jersey during Q3 2019 included a 1.15 million s/f renewal by Barnes &Noble at 1 Barnes & Noble Way in Monroe Town- ship and a 977,616 s/f new lease with The Home Depot at 225 Elm Street in Perth Amboy. On the investment sales front, overall industrial sales increased slightly by three transactions and almost 300,000 s/f compared to Q2 2019. Notably, the biggest dif- ference between the two quar- ters was in the type of buyer. The confluence of demand for large blocks of space and a deep supply of cheap capital has attracted more investor and institutional interest into the New Jersey industrial sales market and has crowded out owner-users. Investors accounted for 22 transactions in Q3 2019, seven more than Q2 2019. Owner-users ac- counted for 12 transactions, at nearly 887,000 s/f. Sale- leaseback transactions are also increasing as user-own- ers are looking to capitalize on their rapidly appreciating assets.
sey continued to be extremely robust during Q3 2019. The market’s overall strength was illustrated across all metrics with the exception of leasing velocity, as a lack of high- quality space on the market inhibited deal making. The average asking rent for all classes of industrial prop- erties climbed by $0.15 psf and set a new high of $7.54 psf to end the third quarter. Class A industrial space in Northern and Central New
Building Quality, Value and Trust
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TJ Maxx Woodbridge, NJ
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Bed Bath and Beyond Manhawkin, NJ
Greenleaf Howell, NJ
4900 Route 33, Suite 101, Wall Township, NJ 07753 732.933.0707 www.gerardconstructioncorp.com
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