24C — May 30 - June 12, 2014 — Industrial / Distribution Centers — M id A tlantic
Real Estate Journal
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I ndustrial R eal E state & D istribution C enters
16,000 s/f lease signed at Alfred Sanzari’s industrial portfolio
Cushman & Wakefield research reports healthy 1Q NJ industrial market off to a strong start in 2014
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Meadowlands, Lower 287, and Exit 8A each exceeded 1.0 mil- lion s/f in volume. The Northern New Jersey industrial vacancy rate inched down from 8.0 at year-end 2013 to 7.9% at the end of March, with just more than 800,000 s/f of overall net ab- sorption recorded. Meanwhile, the state’s central counties experienced a more notable decline, with vacancy falling by 0.3 percentage points to 8.2% since year-end, with space users absorbing al- most 2.0 million s/f. Notably, three out of the five major Turnpike submarkets expe- rienced sharp improvements in vacancy during 2014’s first quarter. Lower 287 dropped from 9.4% to 6.4%; Exit 7A dropped from 8.1 to 6.6%; and the Meadowlands dropped from 9.6 % to 8.6 %. Looking at the warehouse/ distribution sector, exclu- sively, overall vacancy fell 0.5 percentage points during the first three months of the year. “Both Northern New Jersey and Central New Jersey now boast warehouse/distribution vacancy rates below the 8.0% mark, at 7.9% and 7.7%, re- spectively,” Brennan said. “This vital sector accounted for almost all of the market’s space absorption during the first quarter.” These improved funda- mentals have pushed direct weighted average rents up to eclipse the $6 per-s/f mark for opment activity along the Turnpike Corridor as the New Jersey industrial market nears pre-recession vacancy rates,” said David Knee , senior managing director at JLL . “First quarter leasing figures compared favorably versus historical first quar- ters, especially in the Turn- pike Corridor in Central New Jersey, theMeadowlands, and the niche industrial markets along Interstate-80. I ex- pect these trends to continue through 2014, driven by large commitments from several tenants that have circled the market in recent months.” New Jersey’s industrial market posted total net ab- sorption of 1.0 million s/f in the first quarter of 2014, compared with 2.2 million s/f
the first time since early 2009, according to Brennan. “Within the warehouse/distribution sector, the average rental rate has risen by 4.8% since one year ago.” Since the close of 2013, four of the five major Turnpike submarkets recorded increas- es in the average direct rental rate. The Lower 287 submar- ket saw the most significant rise (+0.42 per s/f) as qual- ity space dwindled. Only the Meadowlands submarket saw a slight decline in its average rate during the first quarter. On the construction front, more than 2.1 million s/f of industrial product was deliv- ered during the first quarter of 2014. Of that, 727,244 s/f was completed on a specula- tive basis. Meanwhile, more than 6.5 million s/f of product is currently under construction in the Garden State, concen- trated within the Lower 287 and Exit 7A submarkets. “New Jersey’s post-recession momentum really comes as no surprise,” Brennan said. “The state’s central Eastern Sea- board location and resulting proximity to dense population centers, position as home to the nation’s third-largest port, and vast, 614 million-s/f industrial inventory have long placed it as one of the most attractive destinations for industrial users. Looking ahead into the heart of 2014, we expect noth- ing but a continuation of the market’s current progress.” n in the fourth quarter of 2013 and negative net absorption of 0.8 million s/f in the first quarter of 2013. The Northern New Jersey market witnessed flat net absorption, while the Central New Jersey market recorded 1.1 million s/f of net absorption in the first quarter of this year. Approximately 7.6 million s/f of industrial construction was under way in New Jersey in the first quarter of 2014, compared with approximately 6.5 million s/f at year-end 2013. “Big box” industrial product in close proximity to New York, the Port of New York and New Jersey, and Newark Liberty International Airport remained in short supply in early 2014. n
AST RUTHERFORD, NJ — The New Jersey industrial real estate
i s o f f t o a strong start in 2014, with market sta- tistics trend- ing positive a c r o s s t he b o a r d , a c - c o r d i ng t o commercial
Kim Brennan
real estate services firm Cush- man & Wakefield . The com- pany’s East Rutherford-based Research Services team this week released its first quarter findings, which show healthy leasing, declining vacancies and upward movement in rental rates. “New Jersey posted its high- est quarterly leasing total since the second quarter of 2011, with 6.4 million s/f of transactions completed dur- ing the first three months of 2014,” said Kimberly Bren- nan , Cushman & Wakefield’s New Jersey market leader. “Nineteen deals in excess of 100,000 drove this activity, accounting for 57% of the total volume.” This included commitments by Home Depot in Edison (470,000 s/f), Hyundai in South Brunswick (309,000 s/f) and Port Logistics Group in Secaucus (154,000 s/f). All five major submarkets along the NJ Turnpike recorded increases in leasing activ- ity quarter-over-quarter. The EAST RUTHERFORD, NJ — Although New Jersey’s industrial sector began 2014 at a tepid pace relative to the flurry of activity witnessed over the prior three quarters, year-over-year metrics dictate that the market was consider- ably stronger than it had been in previous years. Capital markets activity in New Jersey also slowed in the first quarter compared with previous quarters. How- ever, Russo Development is reportedly in contract to sell 680 Belleville Turnpike in Kearny to an investor, and the transaction could poten- tially set a new high-water mark in terms of pricing for the market. “We have recently wit- nessed more bullish devel-
385 Chestnut St.
and parking lots to how the buildings are kept, inside and out, is impressive.” The Norwood portfolio of- fers logistical advantages to companies seeking to consoli- date or expand their manu- facturing and distribution op- erations, according to Jerry Barta , Alfred Sanzari Enter- prises’ vice president/director of leasing and marketing. “We are excited to have GlobalSoft Digital Solutions join our ten- ant roster, and look forward to serving their current and future needs with efficient space in a premier Bergen County location,” he said. Alfred Sanzari Enterprises’ Norwood industrial portfolio is located near The Palisades Interstate Parkway; Route 9W; the New York State Thru- way; and George Washington and Tappan Zee bridges. Recent building upgrades include new office windows, new front awnings and load- ing dock improvements. The properties are functional for a variety of business purposes including light industrial, warehousing, high-tech or R&D tenants. n to push pre-recession levels and companies flocking to a plethora of new product on the market. We expect industrial to continue be the most attrac- tive property type in 2014 and beyond. So, be proud, New Jerseyans. Your industrial routes may not be your most aesthetic or olfac- tory attributes, but they are what set you apart and keep your state competitive. William Forcello is a co- head of CBRE’s New Jersey Research Team. He co-man- ages a team of seven mem- bers. William authors and publishes CBRE’s quarterly market reports reflecting market statistics and trend analysis. n
NORWOOD, NJ — Glo- balSoft Digital Solutions, an international digital market- ing company, has signed a long-term lease for 16,000 s/f at Alfred Sanzari Enter- prises ’ industrial complex in Norwood. The transaction was negoti- ated by the brokerage team at NAI James E. Hanson on behalf of Alfred Sanzari Enterprises. Nina Bianco of NIA National Realty Inc. represented the tenant. The six-building Norwood portfolio is located at 335, 355, 375 and 385 Chestnut St., and 10 and 50 Maple St. GlobalSoft Digital Solutions will utilize its new space at 385 Chestnut St. for storage and distribution. “We looked at more than 50 industrial properties, and the Norwood portfolio was heads and shoulders above the rest. It’s a great location relative to the accounts we serve in Northern New Jersey,” said Christopher Petro , GlobalSoft Digital Solutions’ president and CEO. “Appear- ance is very important to us. From the exterior grounds notable given that class A product accounts for only 7.7% of New Jersey’s total inventory. As demand remains strong, the large blocks continue to be in short supply. Currently, only 10 class A properties can accommodate a requirement of 200,000 s/f or greater. This has given way to an uptick in building activity, and now, 9.05 million s/f are under construc- tion in New Jersey, much of which is in the central part of the state where larger blocks of land exist. All these ingredients fore- shadow a positive 2014 for the New Jersey industrial market, with lease rates continuing
JLL reports: New Jersey industrial market builds momentum despite tepid 1st quarter
continued from page 3C Industrial leads the way in NJ...
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