N ew J ersey 12B — October 22 - November 18, 2021 — New Jersey — M id A tlantic Real Estate Journal New Jersey | Industrial Market Snapshot Q3 2021
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Consumer buying habits cause pricing & demand to increase at a record setting pace Colliers New Jersey | Q3 2021 Industrial Market Snapshot
N
ew Jersey's industrial market continued to benefit from a shift
Q3 2021
Q2 2021
Q3 2020
5,308,456
5,614,045
5,130,922
Northern NJ
in consumer buying hab- its that has caused pric- ing and de- m a n d t o increase at a record set- t i n g p a c e during 2021.
Leasing Activity
5,883,355
7,755,880
5,817,206
Central NJ
11,191,811
13,369,925
10,948,128
NJ Overall
1005 W Middlesex Avenue in Port Reading Renewals contributed to a large portion of leasing activity, as limited options in the market resulted in occupiers staying in place. Volkswagen of America inked the largest renewal, extending their 929,038 SF lease at 47-49 Station Road in Cranbury. Also staying in place was DSV, who renewed 507,519 SF at 1005 W Middlesex Avenue in Port Reading. Port Terminal Activity Remains Strong as Larger Ships Call on the Port Cargo volumes at the Port of New York and New Jersey (PONYNJ) continued to break monthly records, as consumer spending shifted from services and dining to home goods and e-commerce purchases. While airport passenger volume, train ridership and bridge and t nnel traffic were all down significantly during the (PONYNJ) continued to break monthly records, as consumer spending shifted from services and dining to home goods and e-commerce purchases. While airport passenger volume, train ridership and bridge and tunnel traffic were all down significantly during the pandemic, New Jersey’s sea- ports have set all-time cargo records, led by a significant increase in auto volume. In July, 39,690 autos moved through the port, represent- ing a 79% increase from the prior year’s monthly figure of 22,178. Total TEUs increased 24 . 9% year - over -year to 758,810 TEUs, which brought the year-to-date volume to 5.2 million TEUs and is up 29.7% during the same period last year. These new records can be attributed to healthy consumer spending levels together with the increased number of mega-ships coming de and to increase at a record setting pace during 2021. Leasing activity surpassed the 10 million square foot (MSF) mark for the sixth consecutive quarter, further constraining supply, as the availability rate plummeted 160 basis points The shortage of big-box space in Northern New Jersey resulted in a flurry of pre-leases, that saw Alan Ritchey, Amazon, TJ Maxx, Costco, StockX, A&E Clothing and LG Hausys all commit to development sites pr or to shell completion. In total, pre-leasing activity totaled 2.1 MSF in Q3 2021, which brough t e ye r-to-date f gure to 9.1 MSF, far surpri ing the 5.4 MSF of re-leas activity Net Absorption transactions were pre-leases for development sites, while two of the remaining three committed to space in recently completed developments. Northern NJ Central NJ Availability Rate Northern NJ Available Space Tightens as Demand for Industrial Space Surges Despite the lack of available space, leasing activity remained strong during the third quarter, totaling 11.2 MSF. Demand for Class A space persisted, accounting for 63.2% of the 11.2 MSF leased. However, due to the dearth of available product, users have now focused on proposed development sites in order to fulfil their space needs. Five of the top eight new lease Central NJ NJ Overall Average Asking Rent ($PSF/Yr. NNN) Northern NJ Central NJ NJ Overall NJ Overall recorded in all of 2020. Although not a p -lease commitment, the largest new lease of the quarter belonged to Peloton, who agreed to terms for 840,203 SF at 600 Linden Logistics Way in Linden. The property, which was delivered earlier this year, will be fully occupied by Peloton. pandemic, New Jersey’s seaports have set all-time cargo records, led by a significant increase in auto volume.
a flurry of new development activity. While most projects are still currently in the devel- opment stages, groundbreak- ing on certain projects are anticipated to start prior to the end of the year. Additionally, several office buildings in the area are slated to be razed and converted to industrial use, such as 300 and 400 Atrium Dr., along with 200 Franklin Square Dr., all in the Somerset section of Franklin Township. Millstone, located within Monmouth County, has also captured the attention of de- velopers as developable sites in Exit 8A are limited. Crow Holdings and 2020 Acquisi- tions recently broke ground on a two-building project at 505 Rte. 33. The larger of the two properties will span 1 MSF, while the second will be 220,000 s/f and will be com- pleted early next year. John Obeid, senior direc- tor, Tri-State Suburban, Research. MAREJ Accelerating succ ss. accelerated the acquisition of sites and development of new industrial product. As land in core submarkets along the New Jersey Turnpike remain scarce, year-over-year to 2.9%. This led to record growth in pricing, which was evidenced by the 20.9% increase in average asking rent for industrial space in Northern and Central New Jersey from the prior year to $11.03/SF. Furthermore, select modern product in the Port and Meadowlands submarket are now achieving lease rates north of $20.00/SF. consecutive quarter, and at 5.7 MSF, net absorption surpassed the 5.0 MSF mark for the second straight quarter. Year-to-date net absorption now stands at 10.9 MSF nearly exce ding the 2020 full-year total of 11.5 MSF. The strong net absorption figures are remark ble, given that just 2. of the existing industrial inventory is available. This dynamic, along with relentless demand, has 4.6% In July, 39,690 autos moved through the port, representing a 79% increase from the prior year’s monthly figure of 22,178. Total TEUs increased 24.9% year-over-year to 758,810 TEUs, which brought the year-to-date volume to 5.2 million TEUs and is up 29.7% during the same period last year. These new records can be attributed to healthy consumer spending levels together with the increased number of mega-ships coming into the ports. Supply Shortages Leads to Robust Construction Pipeline in Emerging Markets Net absorption remained positive for the 35th 5.0% 2.3% 3.9% 3.4% 4.5% $10.51 $9.60 $10.05 $8.46 $10.36 $9.12 2,777,102 2,469,209 3,068,640 1,887,980 3.9% 1.8% 2.9% 5,845,742 4,357,189 developers are looking further west long I-287 or east along major throughfares. For example, Somerset County, particularly Franklin Township has seen a flurry of new developm nt activity. While most projects are still cur ntly in the development stages, groundbreaking on certain projects are anticipated to start prior to the end of the year. Additionally, several office buildings in the area are slated to be razed and converted to industrial use, such as 300 and 400 Atrium Drive, along with 200 Franklin Square Drive, all in the Somerset section of Franklin Township. Millstone, located within Monmouth County, has also captured the attention of developers as developable sites in Exit 8A are limited. Crow Holdings and 2020 Acquisitions recently broke ground on a two-building project at 505 Route 33. The larger of the two properties will span 1 MSF, while the second will be 220,000 SF a d will be completed early next year. into the ports. Supply Shortages Leads to Robust Construction Pipeline in Emerging Markets Net absorption remained positive for the 35th consecu- tive quarter, and at 5.7 MSF, net absorption surpassed the 5.0 MSF mark for the second straight quarter. Year-to-date net absorption now stands at 10.9 MSF nearly exceeding the 2020 full-year total of 11.5 MSF. The strong net absorp- tion figures are remarkable, given that just 2.9% of the existing industrial inventory is available. This dynamic, along with relentless demand, has acceler- ated the acquisition of sites and development of new industrial product. As land in core sub- markets along the New Jersey Tpke. remain scarce, develop- ers are looking further west along I-287 or east along major throughfares. For example, Somerset County, particularly Franklin Township has seen $11.41 $10.16 $11.03
John Obeid
Leasing activity surpassed the 10 million s/f (MSF) mark for the sixth consecutive quar- ter, further constraining sup- ply, as the availability rate plummeted 160 basis points year-over-year to 2.9%. This led to record growth in pricing, which was evidenced by the 20.9% increase in average ask- ing rent for industrial space in Northern and Central New Jersey from the prior year to $11.03/s/f. Furthermore, select modern product in the Port and Meadowlands submarket are now achieving lease rates north of $20.00 psf. Available Space Tightens as Demand for Industrial Space Surges The shortage of big-box space in Northern New Jersey re- sulted in a flurry of pre-leases, that saw Alan Ritchey, Ama- zon, TJ Maxx, Costco, StockX, A&E Clothing and LG Hausys all commit to development sites prior to shell completion. In total, pre-leasing activity totaled 2.1 MSF in Q3 2021, which brought the year-to-date figure to 9.1 MSF, far surpris- ing the 5.4 MSF of pre-leasing activity recorded in all of 2020. Although not a pre-lease com- mitment, the largest new lease of the quarter belonged to Peloton, who agreed to terms for 840,203 s/f at 600 Linden Logistics Way in Linden. The property, which was delivered earlier this year, will be fully occupied by Peloton. Renewals contributed to a large portion of leasing activ- ity, as limited options in the market resulted in occupiers staying in place. Volkswagen of America inked the larg- est renewal, extending their 929,038 s/f lease at 47-49 Station Rd. in Cranbury. Also staying in place was DSV, who renewed 507,519 s/f at 1005 W Middlesex Avenue in Port Reading. Port Terminal Activity Remains Strong as Larger Cargo volumes at the Port of New York and New Jersey
3,217,645
2,465,808
5,683,453
New Jersey's industrial market continued to benefit from a shift in consumer buying habits that has caused pricing and demand to increase at a record setting pace during 2021. Leasing activity surpassed the 10 million square foot (MSF) mark for the sixth consecutive quarter, which added to the New Jersey Industrial Market Overview J ' i i l i i s ift i cons r yi g its t t c used pricing a d
Significant Industrial Lease Transactions
SF Leased
Lease Type
Property Address & City
Tenant
Submarket
47-49 Station Rd, Cranbury
929,038
Volkswagen of America
Exit 8A
Renewal
600 Linden Logistics Way, Linden 840,203
Peloton
Port Market
New Lease
39 Strykers Rd, Philipsburg
511,200
Alan Ritchey Inc.
Warren County New Lease
1005 W Middlesex Ave, Port Reading 507,519
DSV
Exit 12
Renewal
Source: Colliers
Market Snapshot| Q3 2021 | New Jersey / Industrial
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