16C — May 27 - June 9, 2016 — Industrial / Distribution Centers — M id A tlantic
Real Estate Journal
www.marejournal.com
I ndustrial R eal E state & D istribution C enters Big box and Class A leasing drive activity as spec development projects break ground Colliers Q1 2016 Report: Northern/Central NJ industrial market continues record-setting run N EW JERSEY — The Northern and Central New Jersey industrial as industrial tenants continue to adjust to the tightest mar- ket on record. A t 1 8 . 6
accounted for over 35% of all activity, while net absorption for the quarter was positive 9.2 million s/f. Availability dropped by 120 basis points to 8.4%. With a dearth of available class A space, developers con- tinue to focus on speculative construction in order to meet the growing demand. Eleven new projects totaling 1.7 msf broke ground in the first quar- ter, bringing the pipeline to 21 projects totaling 4.2 msf. “Demand for space within the Northern and Central New Jersey industrial markets continues to occur at a record
market fundamentals remain positive for Northern New Jersey’s industrial market. The availability rate improved by 70 bps from the previous quarter, to 9.2%. And at 2.7 msf, net absorption was posi- tive due to continued tenant demand for new construction, with Fabuwood Cabinetry and Blue Apron both committing to new construction projects in the Port Market. At 7.7 msf, leasing activity was up 29.4% quarter-over- quarter, with strong demand in the Meadowlands and Port submarkets, which togeth- er accounted for 69% of all Northern New Jersey leasing activity in the first quarter. Increased tenant demand, coupled with a shortage of available space, has led to upward pressure on industrial average asking rents, up 6.3 percent from the prior year, to $6.41/sf. CENTRAL NEW JERSEY Strong leasing activity in Central New Jersey during the first quarter reduced the avail- ability rate to 7.5%, a record low. At 10.8 msf, leasing activ- ity was up 79% from the fourth quarter of 2015, and equal to nearly half of 2015’s total leas- ing of 24 msf. Demand for class A space accounted for 46% of all leasing activity. Amazon, which continues to expand in New Jersey, leased 809,762 s/f at 380 Middlesex Ave. in Carteret, the first quarter’s largest transaction. With a limited supply of big box product, the quarterly av- erage asking rent was $5.03/sf, up slightly from the prior year. And while still below the 2007 peak rate of $5.39/sf, there is strong pricing pressure in the core industrial submarkets, which indicates additional room for growth. “New Jersey’s industrial market continued to exhibit strong tenant demand this quarter, as evidenced by the record leasing activity of 18.6 million square feet,” said John Obeid , senior direc- tor, research, of the Colliers International New Jersey operations. “The overall avail- ability rate dropped to 8.4%, easily the lowest on record. The rapid growth of e-com- merce and logistics companies will continue to drive activity and new construction projects in 2016, especially in the core industrial submarkets along the New Jersey Turnpike.” n
level,” said David Simon, SIOR , executive managing director and market leader for the New Jersey opera- tions of Colliers International. “The five largest transactions completed this quarter were all new leases to relocate and tenants are facing a new reality. Tremendous demand and limited supply is causing many tenants to experience sticker shock when negotiat- ing financial lease terms. In addition, they are forced to react quickly or risk losing out on a desired property.” NORTHERN NEW JERSEY Economic indicators and
market be- gan 2016 the way it ended 2015 , c on - tinuing to set records dur- ing the first quarter both in terms of total quar-
million s/f, leasing ac- tivity in the first quarter of 2016 broke the record of 12 million s/f set just pre- vious quar-
David Simon
John Obeid
ter. Big box tenants drove demand, with 12 transactions over 300,000 s/f, compared to six in the fourth quarter of last year. Leasing for class A prop- erties and new construction
terly leasing activity and availability rates, according to research from Colliers International . Meanwhile, investor demand for industrial properties remains unabated
Construction Managers | General Contractors | Design Build Building Relationships Since 1919
Building Healthy Environments. Holt Construction Corp. has carved out a healthy niche in constructing Medical Office Facilities, Cardio Labs, Emergency Departments, Maternity, NICU and all levels of Nurseries, Physical Therapy Departments, Oncology Additions as well as new infrastructure to support each area of a thriving healthcare system.
www.holtcc.com
New York, NY | Newark, NJ | Philadelphia, PA | Pearl River, NY | Boston, MA
Made with FlippingBook HTML5